Empower women. Eliminate poverty.


Non-Formal Education: Overindebtedness, Expense Analysis, and Budget Creation (Spring 2016)

A special thanks to our Cada Mes Club – Friendship Bridge’s monthly donors – for supporting our clients on their monthly journeys.

Each month the women in every Trust Bank travel, most likely by foot, to their designated meeting places to make payments on their loans. At the meetings, clients also receive a Non-Formal Education lesson in their native languages on one of four pillars – women, family, business, and health. January, February, and March lessons focused on finances within clients’ homes and businesses.

January – Preventing Overindebtedness

Overindebtedness is a growing problem in Guatemala, and Friendship Bridge has several measures in place to protect its current and potential clients from overindebtedness.* January’s Trust Bank meetings started off with a series of questions that asked the women to reflect on their current debts. The women then watched as one of their fellow Trust Bank members tried to catch one, two, and then three balls at once to demonstrate how demanding it is to juggle multiple loans. The final activity brought home the point that a loan is not income, but in fact a significant expense. The women had to decide which expenses to pay multiple loan payments, food, clothing, or home repairs in a scenario where they had insufficient income to cover them all.

February – Analyzing and Controlling Expenses

February found the women trying to decide which five of ten items (matches, a can of beans, milk, water, aIMG_4406-2 first aid kit, a radio, a TV, a phone, a stove, and a flashlight) they would take with them if they had to suddenly flee their homes in the event of an emergency. The exercise was meant to encourage the women to identify which expenses were most necessary in their own lives. Next the women categorized expenses as daily, future, and unexpected. The women learned that prioritizing expenses requires careful thought and diligence. The results are multiple: quick awareness of expense increases, a benchmark for business growth, and a path toward increased savings.

March – Creating a Budget

A budget allows for more rational decision-making when income and expenses change, sometimes suddenly. To create budgets of their own, the women worked in pairs with beans to represent expenses and corn to represent income. Using a grid pre-printed with income items on one side and expense items (including savings) on the other, the women placed the beans and corn in the corresponding squares. When they were done, they were asked to think back to the prior months’ activity regarding expense prioritization and report back to the group their ideas for reducing the beans (expenses) if there were more than corn (income).Here are a few client reactions:

    “It is essential to develop a budget so I can have a good control over my costs. This way I can see my exact profits and keep myself marketable with the fair prices of my products.”
    - Maria Margarita, age 58

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    “I do my best to save some money. It is important to prioritize our expenses in order to have a balance in our households and our business. It is good that Friendship Bridge reminds us of this.” 


    - Candelaria, age 29 watching the Facilitator scramble the 10 items she might choose in the event of a flood




Our Non-Formal Education program is the backbone of our Microcredit Plus program, and one of the Plus services that we feel truly empowers our clients. Thanks again to our Cada Mes Club for helping support this program!

*Overindebtedness in Guatemala stems from many MFIs, moneylenders, and loan sharks who lend at extremely high interest rates. These types of lenders are generally only concerned with profit and do not have clients’ wellbeing in mind.