Jo Ann Swahn is the Executive Director of Honduras Good Works, an education and health development organization that works to empower Hondurans to break the cycle of poverty. Honduras Good Works is introducing an economic development component to their holistic approach to poverty alleviation, and Jo Ann recently visited Oikocredit’s Honduras Office to learn more about the microfinance landscape there.
If Reyna Isabel Rodriguez had an eco-stove, she could make more tortillas, faster, and maybe make enough money to send her daughter, Tattiana, to a university for her teacher’s certification.
Tattiana is one of our scholarship students and is graduating from high school this year. Her dream is to become a teacher, an enviable position in Honduras that will enable her to in turn support her mother and two sisters. Her mother Reyna, a single mother of three, could be seen as the textbook profile of a woman in need of a micro loan for her tortilla business.
How does a US-based nonprofit like Honduras Good Works, whose core programs are health and education, go about creating microfinance in a third world country known for its entrenched poverty and corruption?
Honduras Good Works takes a holistic view of its charitable activities, believing our good works mean enabling Hondurans to help themselves. Health is our core program, and since 1999 we’ve taken medical missions to remote, rural villages, providing treatment for communities with no access to medical care. In 2003 we added Education to our programs, providing scholarships for youth from these communities to continue their education beyond the sixth grade. Helping with economic development is a natural progression to alleviate poverty in these villages and having sustainable impact.
Introduced to Oikocredit by Megan Fielding of MicroPlace, an Oikocredit partner, I found myself in the Tegucigalpa offices of Gerardo López, Oikocredit’s Country Manager for Honduras. Gerardo explained the lay of the land for MFIs in Honduras and introduced me to staff at Instituto para el Desarrollo Hondureno (IDH), an MFI that is willing to work in these isolated villages.
Microfinance in Honduras is complicated. Bank loans through traditional sources to well-heeled and credible clients come with huge interest rates. Imagine the pitfalls of finding willing, understanding and forgiving capital for a population with no credit history and no collateral. There are MFIs in Honduras eager to charge astronomical interest rates to what they consider a new revenue stream. It was a relief to find a partner like IDH who looked at microfinance for alleviating poverty as its first mission, and making a return on the investment second.
Connecting the dots is all about finding the right partners – otherwise, you can become part of the problem rather than the solution. Oikocredit takes this to heart, which is why they implement a stringent ESG Scorecard (environmental, social, and governmental) as well as other measures to ensure that the MFIs they support are mission-based as well as financially stable. I was grateful to share in some of George’s insight into the microfinance environment in Honduras, and I am encouraged that Honduras Good Works takes a similar holistic approach in our current efforts in education and health, and our future endeavors to create an economic development and microfinance mechanism.
In Reyna’s case, a microloan would not just mean a new stove. That loan translates into so much more – a better business; more income; Tattiana’s education; Tattiana’s future; the future of the students Tattiana educates; and so on. This is what motivates us to start a microfinance mechanism, and it’s what motivates Oikocredit to continue working to change the lives of 28 million people worldwide.
Jo Ann Swahn is the Executive Director of Honduras Good Works.
All photos courtesy of Jo Ann Swahn and Honduras Good Works.