The rural population of Honduras accounts for 48% of the total population, and yet 72% of rural Hondurans live in poverty. Social programs are inadequate to support the population, especially in rural areas that are less addressed than the more densely populated urban areas. Women, in particular, are not provided with enough equal opportunities to better themselves. In the absence of local opportunities, bright, motivated young people must leave their communities in search of work, thus depriving these towns of another valuable resource. Additionally, migration of the uneducated to the cities simply shifts the scenario of poverty from a rural to an urban setting, contributing to high levels of crime in the cities. Developing rural economies through the use of natural and human resources is crucial to poverty alleviation in poor countries like Honduras.
Microfinance plays an important role in stimulating local economies. Micro-entrepreneurs bring products and services to their communities that would often not be available otherwise. Community members are able to support their local businesses since the products or services demanded have become accessible. The income generated from micro-businesses regularly gets reinvested in the local economy. This reinvestment has a multiplier effect, as micro-entrepreneurs spend their income at each other’s stores, eateries and other small businesses, enabling these enterprises to continue growing. The cycle of spending spurs economic development in an otherwise excluded rural area.
Besides contributing to local economic development, microfinance also strengthens ties of trust and relationships within the community. The lending methodology adopted by Adelante brings women together in assemblies on a bi-monthly basis to receive technical and moral support. Women tend to form their solidarity group from existing bonds, such as neighbors or friends, but bringing together groups in assemblies often results in the formation of new connections. Relationships transcend assembly meetings, fostering greater social cohesion in the wider community.