CRS regional information officer Robyn Fieser filed this report from Guatemala:

Angel Benjamin “Minchu,” a member of organic coffee cooperative Santa Anita La Union, and Luis Rhor of CRS Guatemala evaluate a young coffee plant. Photo by Robyn Fieser/CRS

I must admit, the prospect of visiting a coffee cooperative formed by ex-guerilla combatants who fought during Guatemala’s 36-year internal armed conflict was exciting. It was enough to make me pack my six-month old and every toy I could find into the Toyota 4runner and head toward the country’s Western Highlands.

I knew Santa Anita La Unión was a community of 32 farming families which had received land the government distributed as part of the Peace Accords in 1996. The largely Mayan community, which grows organic coffee and bananas and runs an eco-tourism program, is well known among the Americans who come to Guatemala to help start cooperatives of female weavers and teach in local schools. There’s a certain mystique surrounding it. I’ve been told, for example, that it’s a model for how communal living cultivates self-reliance and alleviates poverty.
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I wrapped up my International Development Fellowship last week and this is my final post for the CRS Blog. There is so much I could still write about savings-led microfinance. In the end, I decided that since the process of organizing and training savings groups has been a new experience for me, I would summarize some of the lessons that I’ve learned over the past several months. This is not an exhaustive list by any means, but I’ve tried to highlight the main points.
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Benjamin Hess is a CRS international development fellow living in Guatemala and working with savings-led microfinance programs.

Great news! We just learned that new three-year CRS Guatemala project that integrates access to education with savings-led microfinance has been approved. Based in the predominantly indigenous municipality of Tajumulco in western Guatemala, the project will provide 160 scholarships to youth, mainly older youth and girls, since they are more likely to drop out; establish five community libraries; offer literacy training to 100 adults, principally the mothers of the scholarship recipients; and form at least 20 savings groups among the scholarship recipients, adult literacy participants, and other community members.

Recently, CRS Guatemala has also been working with the Latin America and Caribbean Regional Office (LACRO) on a proposal for a community development project in a rural municipality located near beautiful Lake Atitlán. The primary economic activity of the target communities is coffee production, but these communities suffer from an educational deficit, low diversification of income-generating opportunities, and a lack of access to savings and credit.

One of the chief problems of communities dependent on coffee production is that income is often unstable; while it can be high during the peak harvest season, farmers may earn nothing during some parts of the year. The particular coffee association that CRS is working with sells its coffee on the Fair Trade market, so the farmers are guaranteed a certain price for their product. However, heavy winds at harvest time caused this year’s yield to be about 40 percent lower than last year’s output. As a result, some farmers have been forced to migrate to work on other farms.

The project would promote integral human development by improving and diversifying livelihood strategies at the family and community level, providing vocational training to youth, and organizing savings groups. The savings component is important because it can encourage families to set aside part of their earnings for leaner months, their children’s education, or unanticipated expenses. The availability of loans can spur investment in microenterprises or help farmers purchase seeds and livestock at affordable prices.

As I’ve mentioned before, the benefits of savings-led microfinance are its low costs, impressive effectiveness and potential for replication, and sustainability. These make it an ideal addition to almost any CRS project. In other parts of the world, CRS has successfully integrated savings-led microfinance into HIV/AIDS, agro-enterprise, disaster relief, child trafficking, education, and food security projects.

I’d love to hear from CRS colleagues and readers about development projects that have effectively included savings-led elements, or innovative ideas about how to incorporate savings groups into new program areas.

In response to comments about his microfinance “Conversations” post, Ben Hess offers this example from the “Learning Conversation” tool CRS and our partners use with self-help savings groups.

I’ve translated an example of one of the 11 topics that we cover in the savings-led microfinance Learning Conversations guide that CRS developed in Guatemala. The 11 topics are:
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Benjamin Hess is a CRS international development fellow living in Guatemala and working with savings-led microfinance programs. He writes a weekly (schedule permitting) blog post about microfinancing in Guatemala.

In August 2008, CRS Guatemala implemented a new savings-led microfinance project among persons living with HIV in and around Coatepeque, a city in southwestern Guatemala. CRS enjoys a strong partnership with a Catholic organization, Proyecto Vida (Project Life), that is providing services to those living with HIV/AIDS and those at risk of contracting the disease. For the savings-led component, however, we partnered with Gente Unida (United People), a network of persons living with HIV or AIDS who provide support and assistance to others living with the virus.
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Benjamin Hess is a CRS international development fellow living in Guatemala and working with savings-led microfinance programs. He writes a weekly (schedule permitting) blog post about microfinancing in Guatemala.

In previous posts, I’ve emphasized that autonomy is an essential component of a successful savings group. In theory, it sounds easy to promote. In practice, however, providing sufficient information and training to savings groups without coming across as “prescriptive” can be difficult, especially when group members are asking animators for guidance.
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Ben is back! Benjamin Hess is a CRS international development fellow living in Guatemala and working with savings-led microfinance programs. He writes a weekly (schedule permitting) blog post about microfinancing in Guatemala. In this post, a parish priest asks an intriguing question: How can people who make so little hope to save money?
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Ben Hess is a CRS international development fellow living in Guatemala and working with savings-led microfinance programs.

CRS recently commissioned a survey of the communities in San Marcos where the women’s savings groups are operating. The survey was carried out by teenage girls who have received scholarships from CRS that enable them to attend school and purchase materials. Although we have not tabulated the complete results, I wanted to share some of the comments from the participants in the savings groups. The response from them was overwhelmingly positive—out of more than 50 participants, only a couple felt that the experience had not brought any benefits. (Note: We also interviewed community members who are not currently participating in the groups to measure whether they are aware of the groups and interested in joining one.)
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Ben Hess is a CRS international development fellow living in Guatemala and working with savings-led microfinance programs.

The 2007/2008 Human Development Report’s statistics on Guatemala are pretty depressing. Approximately 54 percent of Guatemalan children under age five are under their height for age (a sign of malnourishment), almost one in three individuals over age 15 cannot read or write, 32 percent of Guatemalans survive on less than $2 per day, and 56 percent of the population lives below the national poverty line. CRS addresses these issues through a variety of projects, including nutritional and health monitoring of mothers and young children, technical assistance to small farmers, and educational scholarships for poor students.

Nevertheless, CRS has observed that even when these projects are successful and families improve their economic situations, many Guatemalans do not access formal financial institutions—including banks and microfinance agencies—due to unfamiliarity with the services they offer, fears of being manipulated, or high barriers to entry.
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Ben Hess is a CRS international development fellow living in Guatemala and working with savings-led microfinance programs.

Jania Diaz conducting a mock presentation to a savings group at the training-of-trainers workshop in San Marcos in September. Photo by Ben Hess/CRS.

Soft-spoken and reserved, Jania Díaz is not the sort of person to call attention to herself when you first meet her. I met Jania during the training-of-trainers workshop in San Marcos in September 2008, when she was introduced as the Solidarity through Savings project coordinator.

Although she seemed to understand the concepts well, I had a few concerns about whether she was assertive enough to introduce the savings group idea to new communities, motivate and support the animators, and help coordinate the organization of new groups.

My fears proved to be completely unfounded, as I discovered during a recent visit to San Marcos. Jania has played a key role in the successful formation of three women’s savings groups, presenting the method to community leaders and residents, accompanying the new groups, and helping “scale up” the project by establishing contacts with other groups interested in implementing the savings-led microfinance model.

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