How Rotary is Succeeding with a Global Grant for Microcredit in Honduras
The idea behind an ongoing microcredit project,
is that the funds are loaned out, often in amounts as small as $100 to $500,
paid back with interest within a short time period (often 3 to 6 months), and
loaned out again, creating the successful, sustainable cycle.
A portion of the loan interest is used to cover small loan losses and the costs
of training and educational materials, with the remainder added into the
growing loan pool.
Statistics show that most microcredit borrowers are women. In the absence
of collateral, the borrowers cross-guarantee each other in what is known as a
'trust group', like the group of Honduran women shown here who we had the
pleasure to meet during our trip there in January 2013.
Within this trust group for example, one lady sold clothing, another sold
jewellry, another skin products and another sold specialty food
products. They are supportive of each other in their community and learn
as a group, building success and confidence along the way.
The 'trust group' participates in weekly training sessions arranged by the
microfinance institution (MFI) that is handling the loan portfolio under the
direction of the Host Rotary Club.
It's important for each Rotarian involved in the project to work hard to build
strong relationships within the team, to generate good communications and
ongoing discussions, and to gain a solid understanding of the commitments made
in the Foundation Grant application.
It's also important to understand that solid teamwork makes all the difference
in the success of your project. All parties, including the participating
Rotary Clubs, the Rotary Foundation, and the MFI principals and staff who
must monitor and report on a regular basis, are responsible for the ongoing
sustainability and success of the project.
Our team's diligence enabled us to succeed in securing the microcredit Global
Grant we applied for and we have now dispersed half of the funds to local
Hondurans to date. The total project, including matching grants, is
$135,000.
Bev Chinnery, International Chair
RC Airdrie, Canada
D5360