Savings and Loan Cooperatives: Self-empowerment for the Poor
On Wednesdays, the Aanglidesh office goes into the field to work with several savings and loans cooperatives, which encourages mostly women (although there are some men) to manage their personal finances through small savings and loan cooperatives.
I traveled with Fr. Roberto, Allan and Celia, to Yuscarán, the capital of Paraiso, the department (state) to the east of Tegucigalpa, for a day-long trip, visiting the several small cooperatives in the area.
|Fr. Roberto Martinez (far left) |
and Alan Gamez ( far right), Aanglidesh staff,
help two members of the Yuscarán
cooperative with the accounts.
Each group is organized in a similar fashion. A staff member from Aanglidesh gives a short presentation on personal finance, such as saving money, making choices between investment and personal spending, dealing with a friend, who comes begging for money, and other relevant topics.
Then the business part begins. One women acts as chairperson and another keeps the accounts. The chairperson goes around the room, as each member makes a deposit, pays off a loan or borrows money. If a member falls behind on her obligations, she must pay a fine. The staff is in the background answering questions and reinforcing the importance of strictly adhering to the rules.
While members can borrow for personal needs, most of the members borrow to improve small cottage-industries that are run out of the home and help increase the family's meager income. Some examples of loans are: the purchase of chickens or other farm animals, additional inventory for the family pulperia (mom and pop store), selling meat at the market on the weekend and providing wood for sale to the neighbors.
Because each person in the group encourages the others to pay back their loan, the default rate for the groups is very low.