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.

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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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.

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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.