Education and Microfinance Project Approved for Guatemala

Benjamin Hess is a CRS international development fellow living in Guatemala and working with savings-led microfinance programs.

Great news! We just learned that new three-year CRS Guatemala project that integrates access to education with savings-led microfinance has been approved. Based in the predominantly indigenous municipality of Tajumulco in western Guatemala, the project will provide 160 scholarships to youth, mainly older youth and girls, since they are more likely to drop out; establish five community libraries; offer literacy training to 100 adults, principally the mothers of the scholarship recipients; and form at least 20 savings groups among the scholarship recipients, adult literacy participants, and other community members.

Recently, CRS Guatemala has also been working with the Latin America and Caribbean Regional Office (LACRO) on a proposal for a community development project in a rural municipality located near beautiful Lake Atitlán. The primary economic activity of the target communities is coffee production, but these communities suffer from an educational deficit, low diversification of income-generating opportunities, and a lack of access to savings and credit.

One of the chief problems of communities dependent on coffee production is that income is often unstable; while it can be high during the peak harvest season, farmers may earn nothing during some parts of the year. The particular coffee association that CRS is working with sells its coffee on the Fair Trade market, so the farmers are guaranteed a certain price for their product. However, heavy winds at harvest time caused this year’s yield to be about 40 percent lower than last year’s output. As a result, some farmers have been forced to migrate to work on other farms.

The project would promote integral human development by improving and diversifying livelihood strategies at the family and community level, providing vocational training to youth, and organizing savings groups. The savings component is important because it can encourage families to set aside part of their earnings for leaner months, their children’s education, or unanticipated expenses. The availability of loans can spur investment in microenterprises or help farmers purchase seeds and livestock at affordable prices.

As I’ve mentioned before, the benefits of savings-led microfinance are its low costs, impressive effectiveness and potential for replication, and sustainability. These make it an ideal addition to almost any CRS project. In other parts of the world, CRS has successfully integrated savings-led microfinance into HIV/AIDS, agro-enterprise, disaster relief, child trafficking, education, and food security projects.

I’d love to hear from CRS colleagues and readers about development projects that have effectively included savings-led elements, or innovative ideas about how to incorporate savings groups into new program areas.

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One Response to “Education and Microfinance Project Approved for Guatemala”

  1. Lotte Z Says:

    I would really like to get in contact with the writer of this article, as I am a Master Student in CSR and I would like to do my final research thesis about Micro Finance in Guatemala. Please send me an email.

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