Perspectives from the Field
A Guest Post by Bob Sample
For the past three years, I have been privileged to serve on the Board of Directors of the Adelante Foundation, a small but inspiring microfinance institution operating with about 7,000 borrowers in rural and peri-urban Honduras. Adelante was founded in 2000 to combat the devastation of Hurricane Mitch. Adelante’s initial loans were disbursed in 2000 to impoverished women whose communities had been impacted by that terrible storm. Today, Adelante continues to be one of the few microfinance institutions in Central America that focuses almost exclusively on poor and extremely poor women and their families. The lending format is modeled after the Grameen Bank with 3-8 member solidarity groups that meet twice per month with other nearby groups in what is called an “asamblea” (assembly).
Honduras is the second poorest country in Latin America (Haiti is the poorest). With over 8 million people, more than 60% of families in Honduras live in poverty and over 36% live in extreme poverty (percentages are higher in rural areas). The average household income throughout the country is about $2,180 per year.
While theoretically education through the 6th grade is free and mandatory, large numbers of Honduran children start dropping out to work before then, with less than half of children continuing on to secondary school.
On my recent visit to Honduras, I was able to visit a number of assembly meetings in the El Progreso area. El Progreso is a mid-sized city in central Honduras located about half-way between the financial capital of San Pedro Sula to the south and the coastal town of La Ceiba to the north. In one assembly, I met a family that showed the strengths of the microlending system to provide basic micro-loans for self-employment as well as a variety of other services and supports for struggling clients.
Meet Claudia and her husband, Julio. They have three young children aged 12, 8, and 2. The family’s rented house is very basic. It has a leaky tin roof (metal sheets are held down by rocks and logs on the roof). The house has cinderblock walls, three rooms, partial cement floors, a wood cookstove outside in the back, , and no plumbing or water. Drinking water must be carried in from a nearby river. There is a simple outhouse and pit latrine a few feet away from the house.
Life is a constant struggle for Claudia and her family. Julio used to be a laborer, but about 10 years ago, he and Claudia started a bicycle repair business together. Their “shop” is a simple table in front of the house, with a small three-shelf storage area inside the house for tools and parts. The business generates an average profit of about $100 per month or $1,200 per year. Unfortunately, the family has to pay $48 per month in rent, leaving only $52 for food, school costs, clothing, transportation, parts and equipment for the business, and everything else. So it is very difficult to cope with emergencies.
They faced such an emergency two years ago when they lost all of their tools and spare bicycle parts in a robbery. This was a very low point for the family. At first, they had to turn to their church for food and moral support. Luckily, Claudia’s friend heard about her plight and told her about Adelante. Soon, Claudia joined a borrowing group in her neighborhood. In January 2014, she received an initial loan of $190, which she used to replace the tools and parts for their bicycle repair business to get it started again from scratch. She and Julio worked very hard and were able to make a profit from the business and to make the loan payments on time.
After one year, in February 2015, Claudia was able to take out a second loan of $290, which was used to buy better quality tools and more spare parts. Claudia now keeps the parts on three shelves inside the house where she can lock the door to avoid another robbery.
Claudia never attended school because her father “liked to drink” and she had to work to help her mother. She has worked since childhood in a variety of agricultural and laboring part-time jobs. Julio dropped out of school after the sixth grade. Claudia is illiterate. Her loan officer noticed that she was signing documents with a thumbprint and he suggested that she get help from her kids. So Claudia asked her daughter for help. She can now sign her name and her daughter is teaching her how to read and write.
Claudia also learns through the educational lessons she receives at her assembly meetings to help administer her family’s business. She not only learns from her credit officer, but also receives advice and support from the other borrowers in her assembly.
Claudia and Julio’s dream now is to save enough money to buy a little house for the family. When that happens, Adelante will be there to help out with a Home Improvement Loan to fix it up. Claudia also dreams of her kids finishing high school and maybe even college. Adelante will offer opportunity there, as well, with its Education Loan program.
Adelante is proud that it can help brave and hardworking women like Claudia to achieve financial self-sufficiency. But Claudia will tell you that the emotional and moral support that she receives from her loan officer and her solidarity group is also very important in her life, and gives her great hope for the future.