Small Business in Guatemala “Grows” with Micro-finance
Etelvina and her husband have twin seven-year-old boys. Making a living is not easy in rural Guatemala – for years, Etelvina traveled around the country looking for work opportunities, with no luck – but now she has help. The Episcopal Diocese of Guatemala, in partnership with Episcopal Relief & Development, is providing micro-finance loans to help people like Etelvina and her husband establish small businesses.
Micro-finance helps families raise themselves out of poverty by providing access to banking and financial services like credit and savings. Trying to build up savings by storing cash in a safe place at home is a common practice, but not the most secure. Investment capital for small business development can be difficult to come by, especially for people in rural areas or those who might not have sufficient collateral to apply for a bank loan. Providing secure, accessible and affordable financial services in the communities where they are needed is what micro-finance is all about.
Micro-finance organizations tend to be community-based, cutting down on travel time for people seeking financial services and increasing the chance of successful outcomes – whether a family is saving up for improvements to their home, or growing a small business to help provide a better future for their children, like Etelvina and her husband are doing. Episcopal Relief & Development’s partners, the Church and often local micro-lending institutions, cooperate with the communities they serve to identify good candidates for loans and other opportunities.
Sometimes an organization will provide services directly to individuals, and other times through community groups, such as Mothers’ Unions and cooperatives. Often, community groups will take out a loan on behalf of its members and divide it among a number of people, while taking responsibility for administration and repayment. One of the keys to micro-finance is the mutual accountability that comes from being part of a close-knit community, where personal relationships and knowledge of a neighbor’s circumstances can help ensure that no one gets in over their head, and that loans are repaid in full so that the next person can have the same opportunity.
Episcopal Relief & Development supports micro-finance initiatives in countries throughout Latin America, Africa and Asia. “Creating economic opportunities is one of our core areas of activity,” said Karla Avila, the organization’s Program Officer for micro-finance and small business development. “Micro-finance, especially when a loan program enables and incentivizes saving, can be an incredibly effective way to stimulate economic growth and community development. Our programs also seek to uplift and empower women, since we have seen repeatedly that when a woman becomes a breadwinner in her household, she becomes a more equal partner in decision-making with her husband and earns greater respect in her community.”
When Etelvina received her loan through the Church of Guatemala, she used part of it to buy ingredients and equipment to start a tortilla-selling business, and the other part she invested in seeds for her husband to plant in their garden. He used to grow just a few crops, but with the new investment he is now producing cucumbers, radishes, cabbage and cilantro to feed his family. Etelvina sells her husband’s surplus produce in the market, along with her tortillas. Soon they will be able to pay back their loan in full, and then they will be eligible to take out a larger loan if they like, to continue growing their business.
Etelvina and her family are very thankful for the opportunities that their loan has afforded them. “It will improve our living conditions, and the profit we make will help us provide for our children’s education,” she said.
To learn more about how Episcopal Relief & Development is creating economic opportunities and strengthening communities, click here. To make a difference in the life of a family like Etelvina’s by supporting micro-finance initiatives, please make a donation online, by calling 1.855.312.HEAL (4325) or mailing a check to Episcopal Relief & Development, PO Box 7058, Merrifield, VA 22116-7058.