{"id":42626,"date":"2015-05-20T16:03:43","date_gmt":"2015-05-20T20:03:43","guid":{"rendered":"https:\/\/staging21.finca.org\/uncategorized-en-ca\/finca-and-microfinance-30-years-strong"},"modified":"2024-11-04T02:08:15","modified_gmt":"2024-11-04T07:08:15","slug":"finca-and-microfinance-30-years-strong","status":"publish","type":"post","link":"https:\/\/finca.org\/en-ca\/finca-and-microfinance-30-years-strong","title":{"rendered":"FINCA and Microfinance: 30 Years Strong"},"content":{"rendered":"

Forty years ago, before microfinance<\/a> was called microcredit, before it even had a name, I made $50 loans to 800 Guatemalan<\/a> farmers in the form of six bags of 12-24-12 fertilizer, which dramatically increased their yields on the plots of maize and beans they cultivated.<\/p>\n

Of the 800 farmers, 799 of them repaid the loans in full, plus 12 percent interest.<\/p><\/blockquote>\n

Over those two years I lived in San Martin, I came to witness dramatic changes in the incomes and overall standard of living of these farmers. When it came time for me to leave, many of them wept, begging me not to leave. It was a powerful experience that set me on the path I follow to this day.<\/p>\n

When I first started working with these farmers, most were in rags and their families on the verge of starvation. By the time I left, only two years later, their children were eating better, they dressed better, and they viewed the future with optimism rather than despair.<\/p>\n

Years later, John Hatch<\/a> \u2014 my partner in our consulting firm \u2014 and I started\u00a0FINCA International, a nonprofit dedicated to spreading the power of microfinance to poor communities worldwide. Today we have close to 2 million clients in Latin America, Africa, Eurasia and the Middle East<\/a>.<\/p>\n

But when we first started<\/a>, we had to combat a number of myths about poor people and money. The first was that poor people can\u2019t take loans because they won\u2019t be able to repay. The idea was that the poor were starving to death, so they would immediately channel anything you gave them into consumption and not pay you back.<\/p>\n

This thinking overlooked the ingenuity of the poor, like the group of women potters in Siguatepeque, Honduras<\/a>, who, when I asked them how they invested their loans told me: \u201cWe bought groceries.\u201d I was stunned. \u201cBut how are you able to pay us back?\u201d The answer was, the groceries enabled them to break the cycle where they had to sell their ceramics as soon as they produced them, and at a very low price, just to put food on the table. Now, they could afford to wait as the middlemen grew more and more desperate for product, and were forced to pay more.<\/p>\n

\"FINCA