Ben Hess is a CRS international development fellow living in Guatemala and working with savings-led microfinance programs.

On November 17, Colombia declared a state of emergency to deal with the riots that engulfed various towns after an illegal investment company collapsed. Millions of Colombians had invested in pyramid schemes promising to pay interest rates as high as 150 percent a month. They included many of Colombia’s poorest citizens, who in some cases had handed over their life savings.

In addition to the offer of easy money, a Reuters article attributed the success of the pyramid schemes to high banking fees on regular savings accounts and low levels of financial literacy among the population.

(more…)

Ben Hess is a CRS international development fellow living in Guatemala and working with savings-led microfinance programs.

I just returned from a site visit to our savings groups in San Marcos. Three women’s saving groups have already been formed in two communities of San José Ojetenam. Two other groups in a third community are slated to begin after the Christmas holidays. In addition, two representatives from a women’s association in another community recently attended one group’s meeting to observe how it functions. Their association plans to implement the savings-led method as soon as possible.

The secretary of the Nuevo Amanecer (New Dawn) savings group takes attendance during a meeting in San Marcos, Guatemala. The group is one of three women’s savings-led microfinance groups formed with help from CRS in San Marcos. Photo by Ben Hess/CRS.

The group names represent their members’ aspirations and motivation: Nuevo Amanecer (New Dawn), Avances de Mañana (Tomorrow’s Advances), and Ahorrando para Crecer (Saving to Grow). Each group has approximately 20 members.

I observed a Nuevo Amanecer meeting during my visit. This group had the great idea to meet weekly on “market day.” Since many of the members sell their wares at the market, they set aside a portion of their earnings for the savings group. Most were saving between 20 and 50 quetzals a week (approximately $2.70 to $6.70). The group’s fund has already grown to more than $200 in a single month.

Several children were present at the meeting. I learned that a couple of the children had already started saving by contributing small amounts of money to their mothers’ accounts.

The most exciting part of the visit, however, was learning that the project coordinator has also discussed the savings-led microfinance methodology with youth groups. Representatives from four groups were present for the first discussion, but there are a total of 24 groups in the municipality’s Youth Pastorate. Forming savings groups among youth would be an exciting new direction for us here in Guatemala.

Ben Hess is a CRS international development fellow living in Guatemala and working with savings-led microfinance programs.

A key component of a successful savings-led microfinance program is the animator.

Commonly referred to as promotor in Spanish (or promotora, in the case of a female animator), the animator’s main role is to organize, train, motivate, and accompany the savings groups from their initiation until they feel comfortable operating without outside help. It’s a difficult task, especially because the animator walks a fine line between providing guidance to the group while respecting the group’s autonomy and empowering members to make their own decisions.

The animator is generally a respected member of the community where the project will be implemented. Since savings groups are often formed as a complement to ongoing CRS projects, the local partner usually selects individuals who have been volunteer trainers or community organizers.

CRS provides training-of-trainers workshops for the animators to acquaint them with savings-led microfinance, provide an introduction to the way the savings groups operate, and present simulated dilemmas to prepare them for their role. Often timid and unsure of themselves at the start, the animators soon capture the concepts and develop their own unique methods to promote and facilitate the groups.

The women we trained in San Marcos are impressive. The animators’ children receive scholarships to attend school through CRS’ “Women’s Empowerment and Girls’ Education Project”, which began in 2002 in order to reduce the endemic poverty and malnutrition in the region.

The women are offered literacy classes, and the two most advanced ones are already in 2o. básico, the equivalent of 8th grade. Furthermore, they motivate other parents to become more involved in supporting their children’s education and encourage these parents to enroll in literacy courses that culminate in a diploma when they complete primaria (6th grade).

The animators’ commitment to their communities and experience in local development made them perfect candidates to form savings groups. Not surprisingly, the animators were able to organize new groups within a few weeks of the CRS training workshop. I cannot wait to visit them later this month to see how the groups are progressing.

Rev. David H. Garcia serves as Senior Advisor for Clergy Outreach for Catholic Relief Services. He also supports the agency’s Global Fellows program, a grassroots speaking initiative for Catholic priests and seminarians. He recently accompanied a group of Global Fellows to Nicaragua to see CRS programs in Fair Trade and microfinance.

My recent trip to Nicaragua with a Global Fellows group of seven priests, permanent deacons and seminarians along with Ted Miles from HQ put me through a roller coaster of emotions. This was my introduction to learn about CRS first hand for my new position as Senior Advisor for Clergy Outreach, which I began July 1.

Consuelo Alvaro of the FEM Cooperative in Yano Uno, Nicaragua, shows Fr David Garcia an organic coffee plant. Photo by CRS staff

It is hard to not be depressed by the sea of poverty all around you as you travel Nicaragua. Over 70% of the people in this country, second poorest after Haiti in the hemisphere, live on less than $2 a day. Yet the price of many items is similar to the United States. Gas is higher than in the US, hovering at $5 a gallon, while inflation this year is approaching 22%. People live trying to decide what they can and cannot do about the basics of life for themselves and their families.

Recent history has not been kind to this country. Managua has yet to recover from an earthquake in 1972 that devastated the capital city, destroying the downtown area, including the old cathedral. Although a new cathedral was built away from the city center with funds from donors in the U.S., the downtown has not come back. The Sandinista overthrow of the the Somoza regime in 1979 and the Contra War in the ‘80’s, along with Hurricane Mitch, which soon followed, have taken a harsh toll. Over half a million Nicaraguans have migrated to neighboring Costa Rica looking for work. There they are often treated harshly by the residents. Some have made their way to the United States in a desperate bid to provide for their families.

What we saw gave us hope in a sea of poverty. Hard-working people had received micro loans through Catholic Relief Services, as well as technical, educational and resource assistance. With this help they had organized their farms, small businesses and cooperatives into viable income-producing projects that have helped change their lives.

In one area, Yano Uno near Matagalpa, a group of 12 women told us how they began the FEM (Fundacion Entre Mujeres) cooperative as part of Proyecto ACORDAR with a CRS loan, which helped them rent land to grow coffee and other crops. They also received help from the local diocesan Caritas through a CRS grant to address issues of education, literacy, health, violence and domestic abuse. While we visited they showed us a new wet mill, which is a machine that separates the coffee bean from the fruit pulp. CRS provided it and we were asked to bless it, as they looked forward to a more efficient processing of the coffee crop this year. The women now have a growing business selling Fair Trade organic shade-grown coffee, which is among the highest quality possible. They have paid back the initial loan and their children are now dreaming of going to the university. It was impressive how much they are aware not only of good business practices, but also marketing, prices, organic methods, and preserving the environment. These women never had much chance at formal education and now are changing the future for their entire village.

The women of the FEM Cooperative in Yano Uno, Nicaragua, share their Fair Trade coffee with Fr. David Garcia. Photo by CRS staff

Fe Y Esperanza (Faith and Hope) is the name of a cooperative of men and women in a small rural community near Esteli. They spoke of organizing to produce organic fertilizer. Other individuals in other rural areas spoke of increasing their crop yields through improved farming techniques like drip irrigation and organic practices. All told us they were doing their work to preserve the environment as they raised their crops. CRS had helped with micro loans and technical assistance through Caritas.

We were perhaps most moved by one man, Don Juan Alberto, who was helping build a home for his family of five children, including two who were disabled and one he had adopted. The materials were donated by the local Caritas, with CRS help.

Like I said, it was a roller coaster of emotions all week. I saw and experienced personally that the work of CRS changes lives. I heard from the people their extreme gratitude for our help. I felt the solidarity of our common brotherhood and sisterhood with them. The group of Global Fellows became more committed to our preaching ministry.

There was tremendous poverty and wonderful examples of hope. I chose to believe in the hope and the people who shared it with me.

Debbie DeVoe, CRS’ regional information officer for East Africa, shares the latest from Gulu in northern Uganda.

Some days in the field wear you down. Others make your spirits soar.

Recently, I spent an incredible day talking to people from two camps in the Gulu area of northern Uganda. I heard many inspiring tales, but one particular gentleman simply floored me with his drive.

Entrepreneur Mark Ojok used profits from a good peanut harvest to buy a sewing machine for rental and open a bike repair shop. Photo by Debbie DeVoe/CRS

Mark Ojok lives in Opit camp. His home is about 6 miles away, but insecurity in the area has forced him to live in the camp since 2003. When Mark was born, his feet were folded inward and backward. He has a rolling walk, but rubber shoes with a simple strap slipped over the top of each foot let him get by just fine.

Last April, Mark received some peanuts to plant at a European Commission-funded CRS seed fair. Due to his disability and other criteria, he also received a “labor voucher,” which let him hire some laborers to help him clear one acre of his land for planting.

Four months later, going back and forth between the camp and his field to care for his crop, Mark harvested three big bags of peanuts. He ate some of the nuts from one bag, saving the rest of the bag to sow this past season (which is going poorly due to a long dry spell in the area). He sold the other two bags, using the profits to buy a sewing machine to rent out. At this point, I was already impressed, and since Mark had stopped talking, I thought his story was finished. But, as always, I asked my closing question: “Is there anything else you’d like to share with me?”

Mark launched into a stream of Acholi, the local dialect. When he finally came up for air, I learned that his sewing machine rentals had gone so well that he used some of those profits to buy a bicycle repair kit. He then started fixing bikes, and business was so good that within a few months, he enlarged his shop and hired a couple of helpers. But he wasn’t ready to stop there. He rounded up a group of other entrepreneurs—6 men and 14 women—and started a savings and loans group. As my smile grew, an even larger grin burst across Mark’s face.

Now Mark is looking forward to this fall. While many others still in camps are planning to move back to their homes this December or January after the grass grows tall enough for roof thatching, Mark’s pretty certain he’ll have grass for his roof in October.

Score one for self initiative, zero for entitlement. Mark, I tip my hat to you.

On the third day of the Frontiers of Justice visit, the group traveled over two hours from Kaya to Manni to visit a CRS-supported microfinance program with women in one of the poorest regions of Burkina Faso. This entry was written by Jeff Goldsmith.

(more…)

Mary Oldham is a Catholic Relief Services volunteer working in Uganda. Far away from her hometown in Iowa, she is working with village microfinance groups. Her blog is part of a series of personal reflections our volunteers are sharing from their journey and experience overseas.

(more…)

Most Rev. George Thomas and Constance Proctor, members of the Catholic Relief Services (CRS) board of directors, have been visiting CRS Senegal this past week. They recently visited a microfinance lending institution and the women it helps. Lane Hartill, the CRS regional information officer for West Africa, filed this dispatch:

Bishop George Thomas and Constance Proctor talk with a member of a village bank in Thies, Senegal. Photo by Lane Hartill/CRS

Maybe it was the explosion of color. Or the lizard skin drums. But Constance Proctor, a member of CRS’ board of directors, couldn’t help herself. She just had to dance.

She wasn’t alone. A gaggle of women, their smiling leader with henna-painted hand and a set of pipes Aretha Franklin would have been proud of, moved rhythmically to the music. Covered in sequins with babies bucking on their backs, these women — members of a village banking group in the town of Tivaouane — had something to celebrate: an organization that lent them money so they could lift themselves and their families out of the slow economic vortex that sucks in so many Senegalese.

They were celebrating Caisse Autonome pour le Renforcement des Initiatives Economique par la Micro Finance (CAURIE-MF), a microfinance institution. CAURIE-MF grew out of a microfinance program that CRS has nurtured since 1999. It became autonomous in 2005. It’s no Bank of America or Chase Manhattan. CAURIE-MF isn’t interested in credit ratings or cash flow. All of its 13,500 borrowers are women. Most of them have never had a bank account.

CAURIE-MF benefits poor women, those who sit on buckets in the sand, under a relentless African sun, selling everything from millet porridge and melons to peanuts and whisk brooms. They lend money to women who really need it. An infusion of cash — loans range from $50 to $3000 — is like a shot of pure adrenaline into their businesses. They take off, humming with possibility.

Angel Diédhiou is an elegant lady with perfectly painted eyebrows and a gentle voice. Her loans from CAURIE-MF have allowed her to grow her chicken business from 50 birds to, at its peak, close to 300. That’s not all. She now takes orders for beauty products from local businesses and travels to neighboring Gambia and Mauritania, loads up, and then sells them at a profit. Call it Avon, Senegal style. Business is booming, she says, and it’s only going to get better.

“It really does change their life,” says Mrs. Proctor. “It’s huge for them.”

After visiting with members of a village banking group, Mrs. Proctor takes the microphone and addresses the crowd. Some of the women nurse babies. Others embroider cloth while she speaks.

“Because you are doing so well, it is going to allow other women in Africa to have similar experiences and to have the possibility to do what you are doing,” she says.

Constance Proctor sits among village banking members in Thies, Senegal. Photo by Lane Hartill/CRS

The women cheer. Drums erupt. The women know it’s true.

The essence of CAURIE-MF’s lending theory is ingeniously tied to African culture. Village banking groups select their own members. Most women start out by contributing around $4. Instead of putting up collateral for a loan, group cohesion and trust is leveraged. When your sisters, friends and neighbors are part of your lending group, you repay. You can’t let them down. That has led to a zero default rate on loans.

“The modest amount of money that CRS and Caritas spend is producing an abundant harvest of hope in these villages,” says Bishop Thomas.

Women who received loans proudly display their wares to the board members. Some hold up sticky fish, grinning as they dangle them under their chins. One lady balances a bowling ball sized melon on her palm. She can’t stop smiling.

Neither can Bishop Thomas. Or Mrs. Proctor. Microfinance works. You can, as Bishop Thomas puts it, see the success “written on the women’s faces.”

The book won’t hit the shelves until September, but a website is already up and running. Solidarity Will Transform the World: Stories of Hope from Catholic Relief Services is a collection of testimonies by the people served by CRS. It was written by Jeffry Korgen, the director of social ministries for the National Pastoral Life Center in New York.

The stories in Solidarity Will Transform the World highlight the lives of people in the developing world and the fight against poverty and injustice. Through these accounts, Korgen explores issues like immigration, HIV and AIDS, and peacebuilding.

Solidarity Will Transform the World will take you on a journey to visit the lives of people in Mexico, Zambia, India, Rwanda, and Nicaragua. Read about people in Mexico who are making a better living through Fair Trade coffee and microfinance programs, or about Zambians who through the miracle of antiretroviral drugs have been given a chance at living with HIV and AIDS and who now fight for the lives of their fellow countrymen.

Visit http://storiesofhope.crs.org/, the official website for the book, to read excerpts from all five chapters. The site also contains multimedia about CRS projects around the world — and will soon feature lesson plans and study guides for use of the book in classrooms.

First Lady Laura Bush meets with Mariika Kostova Petrova, a client of USTOI, a microfinance institution that provides small loans to entrepreneurs in low-income communities in Bulgaria, including marginalized ethnic groups such as the Roma. White House photo by Shealah Craighead.

First Lady Laura Bush is in Zambia today and paid a visit to Chreso Ministries Clinic, a Lusaka-based program that provides key services to more than 5,700 people living with HIV and AIDS. We are awaiting a report from Hilary Roxe, our Baltimore-based communications officer for Africa, who is currently in Zambia.

But in the meantime, this gives us a chance to catch up on a visit earlier this month by the First Lady to a CRS-funded microfinance project in Bulgaria. Mrs. Bush met with four women who are long-term clients of USTOI (a Bulgarian word meaning “basis” or “foundation”), a microfinance institution that provides small loans to entrepreneurs in low-income communities in Bulgaria, including marginalized ethnic groups such as the Roma.

The four women Mrs. Bush met on June 11 participate in a microfinance project called “Inclusive Business Development of Roma Communities in Bulgaria,” a joint venture of USTOI, CRS and USAID. The four USTOI clients exhibited goods at the library that they trade at the women’s market in Sofia. Mrs. Bush had the opportunity to hear an overview of the program and then met with each of the women to hear their stories.

One of the women is Mariika Kostova Petrova, who sells sportswear, shoes and rugs out of two stalls in the city’s open-air market. Mariika is a widow with three children: two sons and a daughter. One of her sons helps her in the business, while her daughter is currently in Greece for seasonal work.

Mariika says she appreciates the access to credit that USTOI provides,  which enables her to regularly change her stock according to the season. She is currently repaying her seventh loan. She has her eye on the neighboring stall, which she’d like to rent to expand her business.