As is the case in many underdeveloped countries, Honduras has often been plagued by dishonest government officials. So it is always encouraging to meet a government official who is both honest and has the best interests of the people at heart. The small town of Taulebé has been blessed with several good mayors, one of whom is the present mayor, Denis Membreño. One of the projects that he and his wife Brenda have taken on is to help form small savings and credit cooperatives. These provide funding for micro-business ventures for many of the poor in the local community
To date, Denis and Brenda Membreño have helped to form 15 different savings and credit cooperatives. The municipal government supports these cooperatives by paying all their legal fees, hosting meetings, overseeing bookkeeping, and training new members. Ongoing training is also offered annually to all the cooperatives to enable them to practice good governance. As Denis has many other municipal responsibilities, Brenda Membreño has particularly donated a lot of time to these cooperatives. The members of these co-ops place a certain amount of their savings into the co-op. As with a bank, the members earn interest on the money they place in the co-op. They can then borrow money from the co-op, paying 5% annual interest on loans. (Banks in Honduras typically charge 30% or more.) The interest earned goes back into the co-op funds.
Needless to say, the hardest part of creating these co-ops is finding the initial start-up funds. This is because the people are so poor. So the mayor and his wife approached the Society of the Good Shepherd to see if we would be willing to help provide seed money for some of these co-ops. We told them that the Society would provide a $3000 loan to start the initial funding for a new small cooperative of ten women. These women are either single mothers or mothers who are having to work in order for their families to survive.
So each mother received a $300 four-month loan to invest in her own business project. They all immediately got busy with different projects. In addition to their regular businesses, all of them decided to also plan certain special projects for the recent Mother’s Day festival. At the festival, some of the women sold tamales, baleadas, and other Honduran foods. One woman sold fruit juices. Another sold commemorative gift pillows. By the time Mother’s Day was over, the ten women had earned enough profit to pay back the entire $3000 loan. Plus, they had an additional $800 left to put into the cooperative permanent fund to provide loans for future projects. The women plan to augment this through ongoing savings.
The $3000 seed money will now be lent to one of the other co-ops. One possible choice is a co-op named Unidos Para Crecer (United to Grow). This is a group of small farmers. The co-op began with each of the 17 men paying in $350 for the initial seed money. Some of these men grow coffee, sugar cane, and bananas. Others raise dairy and beef cattle. They sell their products locally, but struggle in the risky agricultural market of Honduras.
Denis and Brenda Membreño will evaluate whether this co-op can best be benefited by a short-term loan or whether another co-op will be a better choice. For example, there is another co-op consisting of a group of 20 market-based members whose businesses range from making piñatas, to sewing, to selling live chickens, to auto repair parts, to cakes, and even a small pharmacy.
Our hearts would want to simply give the $3000 to these co-ops and try to raise more funds for other co-ops in the future. The problem is that experience has shown throughout the world that external funding to these small, local savings and credit co-ops can often undermine their structures. When small co-ops receive external funding, they tend not to work as hard to raise their own local funding. Also, often they do not manage this external money as carefully as they do their members’ own money.
So we are approaching this project very carefully. But if the results continue to go as well as they did with this first co-op venture, hopefully we will be able to continue to bless these small co-ops and the people who look to them for micro-business funding.
One of the things different about this project (versus our normal microloans) is that the business owners are not necessarily Christians. They are simply men and women looking for a way to provide for their families. I (Julie) noticed the surprise and awe on their faces when they learned that a ministry would trust them with an interest-free loan, with no strings attached, so that they can build up their own cooperatives. They questioned how this is possible.
Fortunately, Luis Vega was close at hand to share the reason the Society of the Good Shepherd is offering this blessing to them. He explained that we want them to see the love of Christ reach into their lives and to show them His salvation. I realize this is a unique opportunity to reach out beyond our normal sphere and to witness about Christ’s love and care for all people. This initiative is already bearing beautiful fruit after only four months, and I look forward to reporting on future successes!
Julie Nyhoff de Valladares
The Society of the Good Shepherd, P. O. Box 122, Amberson, PA 17210 • (717) 349-7033
Click on the following link if you would care to make a donation to the work in Honduras: Honduras Donations