In response to a meeting with a group of women in Chacraseca regarding their situation and concerns, JustHope started its first microbank project in July, 2009. That first cycle of lending gave 12 women the opportunity to start their own small business. Loans of $50 - 250 were made for businesses as diverse as small stores, growing pigs, selling tortillas, and farming small plots of land.
The women in the group made decisions together about the terms of their bank, including the loan limits, the interest rate, and the repayment schedules. They also agreed that “social collateral” would guarantee their loans – the commitment of each woman to the faithful repayment of ALL the loans. If one woman failed, they agreed, they would all become responsible for her debt.
They also decided together to pay 1% interest per month (12% per year). This rate of interest was chosen because it is both significantly less than any other microcredit organization in the area charges (up to 36%), AND it will provide enough income to grow the bank so that other women can benefit in the future.
By the end of the first loan cycle every single woman had repaid her loan in full, AND made enough profit to improve her family’s life just a bit.
Since the start of the program, US Partners have added capital to microbanks in Chacraseca, Santa Emilia, and La Flor. The kind of small businesses women are starting has expanded, and the repayment rate continues to be 100%. But most importantly, these women are finding they are able to put more food on their family table, pay for medications, buy shoes, and send children to school.