One of the two communities where the Society of the Good Shepherd concentrates its work in Honduras is Taulebé. The main income for people in the Taulebé area comes from small businesses and rural farms. Getting loans for these businesses has always been difficult. Most of the people don’t qualify for bank loans. In the last few years, a number of Columbian “investors” have started to infiltrate the community. They will loan money more willingly than the banks—but at a high rate of interest. When the people fail to pay back their loans on time, they end up forfeiting their businesses to the Columbian “investors,” and often their houses and lands as well.
To help combat this situation, the mayor of Taulebé, Denis Membreño, and his wife Brenda, have worked hard to set up numerous small savings and loan cooperatives. Each co-op consists of about 10 to 16 members. The Society has made interest-free loans to many of these co-ops to provide the initial seed money. In addition to our seed money, each member puts in a small amount of money to build up the co-op’s capital.
The members of the co-op can then request a business loan from their co-op. Since the co-op cannot loan money to all the members at once, loans are decided by random lottery. The loans are typically for a few hundred dollars and are for a period from three to six months. So the members typically apply for a loan at a time when they can turn the loan around very quickly. Some examples are at holiday time or at harvest time for farmers.
This money is loaned at an interest rate of 5% per annum. However, the interest remains in the co-op, enabling it to grow its capital. In other words, the members are paying interest back to themselves collectively.
The mayor’s wife, Brenda Membreño, pours herself into organizing and managing these co-ops—working without pay. Last year, the Society got involved in this venture on a small scale. Soon we saw the good fruits coming from it. So we have continued to provide seed money for new co-ops. Between the seed money we have provided and the funds from repayments of loans, there was a good supply of cash reserves on hand for loans at the end of the year.
The reason this was important was that most of the co-op participants wanted to invest in their businesses in preparation for the Christmas holidays and for the coffee harvest starting mid-November. The Christmas season is the highest selling point in the year for most small businesses. One reason for this is that the Honduran salary system is based on 14 payments per year. Workers get paid once per month. In addition, they get a double payment in the months of June and December. So the population has extra money to spend during the months of June and December.
In addition to the retail businesses, a lot of agricultural activity happens between the months of November and January. If a person wakes up early during those months, he will be able to see on the roads large, open-air trucks jam-packed with men, women and children. They are all heading to the coffee farms in the mountains to pick coffee. Thankfully, in November, the co-ops were able to provide 16 people with extra funding for their small coffee farms. This helps the farmers to pay the extra laborers. Then when they sell their coffee, the farmers are able to quickly pay back their loans.
The co-ops also provided loans to fourteen small sugar cane growers. In the flat Caribbean coastal region of Honduras, a person can see miles and miles of large sugar cane farms. These are usually owned by corporations, and their sugar cane is processed into white sugar. However, in the poor, mountainous regions like Taulebé, small farmers grow sugar cane on the hillsides. This is made into panela—large blocks of unrefined brown sugar. Creating panela is a basic process that has changed little since the 1600’s. Workers cut the sugar cane by hand with machetes. The cane is then separated, crushed, and cooked in massive brick ovens for hours until it forms a thick syrup. This syrup is then filtered for impurities and poured into square molds for cooling. The final products are blocks of panela, which are sold year-round.
However, the largest season for panela use is during the Christmas holidays. One special Honduran tradition around Christmas is a dessert called torejas (a type of French toast covered with syrup). The syrup is made by melting large blocks of panela.
We have been extremely encouraged by the results of these small savings and loan cooperatives. We hope to expand our work in this area of ministry, as it is proving to be one of the best ways to help the rural poor.
We want to thank all our donors for making these ministries possible and blessing so many of the poor in Honduras!
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