microfinance Archives - Friendship Bridge

Tag : microfinance

August 23, 2016 / Comments Off

Social and Institutional Ratings from Microfinanza

by Cole Folwell, Treasury intern

This year, Friendship Bridge made a strategic decision to have MicroFinanza Rating, a third-party microfinance rating agency, conduct social and institutional ratings for the purpose of gaining insight into our practices. Since its founding in 2000, MicroFinanza has conducted over 900 ratings on various microfinance institutions. Their rating process is extremely thorough and involves a desk review in addition to an on-site review of operations. The complete review process allows MicroFinanza to appropriately assess all aspects of Friendship Bridge’s institutional and social performance. The ratings provide an external look at Friendship Bridge, which can be used to understand strategic areas of opportunity, benchmark against peers, and provide impartial insight into operations.

Friendship Bridge’s previous rating was conducted in 2012, and we have used those results to grow and improve, which was confirmed by the most recent rating. The final social rating improved from a B minus in 2012 to an A minus in 2016. The new rating reflects good social performance management and client protection systems. It is also indicative that Friendship Bridge’s social mission is likely to be achieved. Similarly, the institutional rating improved from a B minus in 2012 to a BB plus in 2016. We hope to use the new ratings as we have in the past to improve and expand.

Friendship Bridge’s social rating was in general very positive and noted areas where we have excelled such as outreach, client protection and retention, and the quality of our non-financial services. We continue to reach out to areas with below-average national poverty levels and lower education rates. The rating notes that we treat our clients in these regions fairly and respectfully, which can be materially seen in our retention rate and client protection systems. This combined with Friendship Bridge’s quality non-financial services were all contributors to our strong social rating.

Friendship Bridge’s institutional rating noted our credit policy and methodology, internal controls, staff productivity, product offerings, and governance as strong components of the organization. The positive factors of the report were a result of well-formalized policies, quality management of non-performing loans, and geographical diversification of loan operations. Additionally, the ratings report found that the Board of Directors is well aligned with the mission and is well equipped to help Friendship Bridge achieve its objectives.

The report provided Friendship Bridge with additional information on areas where we have opportunities to grow as an organization. For the social rating, there were two primary opportunities – loan transparency and environmental responsibility.

Friendship Bridge uses a flat interest rate, primarily because our clients can easily understand it. Our clients are given a payment schedule that includes the interest and portion of the principal they will pay each month. As a result, the effective interest rate our clients pay each month is higher because they are amortizing the principle while paying interest. The practice is standard, simple, affordable, and clear to our clients. Yet, MicroFinanza would prefer that MFIs include the percentage of principle paid back each month in addition to the nominal interest rate when listing the loans. Mandatory disclosure of the effective interest rate a client would pay would be a tremendously progressive policy microfinance regulators should consider. The policy would ensure that all MFI loans are easily comparable for interested clients and there is increased transparency across the entire MFI landscape. Despite regulatory shortfalls, we as an organization believe that using this analysis of our lending transparency can greatly improve our operations.

The second area for improvement is Friendship Bridge’s commitment to environmental protection. MicroFinanza believes that Friendship Bridge should adopt an environmental policy that can be implemented in its lending activities. The quality of Friendship Bridge’s non-credit activities such as education and health services are high. Adding an environmental component to the organization’s work would certainly be a bonus to the already established and effective social work.

Friendship Bridge’s institutional rating found transparency, financial projections and targets, and reliance on donations and grants as areas of opportunity. By industry standards, our reliance on donations and grants suggests we have not reached full sustainability. However, non-credit activities such as education and health are integral parts of Friendship Bridge’s mission and the nature of the activities is inherently capital intensive. The result is an increased reliance on donations and grants.

Overall, while the MicroFinanza rating shows that Friendship Bridge has some areas of opportunity to grow, the ratings largely showed that the organization is on a very stable trajectory and continues to work towards its strong social mission.

February 11, 2016 / Comments Off

Zika Virus, a Reminder for Women’s Empowerment

by Jessica Kutz, Friendship Bridge field intern

As the magnitude of the Zika virus increases, we are left with a question: What do we do now? In the case of women in the United States that means visiting your local gynecologist, deciding on a contraception option, and being thankful you don’t live in Central America. Grupos de Chupol 053 (2)-4

Why thankful? Because many women in Central America face numerous obstacles to controlling their reproductive health. The two main barriers are a culture of discrimination toward women and lack of access to adequate healthcare and contraception. This means that battling Zika and taking the correct precautions isn’t necessarily an option for most women in Central America

With a strong patriarchal culture in countries like Guatemala, women have few choices in regard to their reproductive health. Husbands often feel that they should be in control of their family size, and therefore they restrict whether a woman is able to use contraception. There is also a widespread sentiment that women are being unfaithful if they feel the need to use contraception, and this can anger husbands. Unfortunately, anger usually translates into domestic violence. In fact, gender-related violence is at an all-time high in Guatemala, which ranks third in the world for femicide – defined as “the murder of a person based on the fact that she is female. ”

In addition to this inherent discrimination against women, healthcare access is also a major challenge that disproportionately affects women, particularly those in rural communities. Staff in health clinics do not generally speak the local Mayan languages, making health education and access to resources particularly difficult for Mayan women who speak one of Guatemala’s 24 indigenous languages. As a result of this lack of education and access to women’s healthcare, Guatemala also has the lowest contraception usage rate in all of Central America. Guatemala was one of five countries that actually ran out of contraception in 2015.

This is why Friendship Bridge believes so strongly in working solely with women, especially indigenous women in rural communities. Friendship Bridge aims to empower women through microcredit, education, and health services. In particular, our Salud para la Vida program for women’s preventive health is overcoming obstacles like those mentioned above through health education and access to culturally sensitive preventive health services for our clients. Salud para la Vida provides women with family planning options, which allows them to take control of their reproductive rights. We are ensuring our clients are empowered to remain in control of their health when health crises like Zika hit.

November 18, 2015 / Comments Off

Empowering women leads to more children in school

Women are changemakers. When women are empowered, the impact extends to their families, their communities, and even their entire regions and countries. Earlier this month we shared Ana’s story – how she was empowered through Friendship Bridge loans and education to create a better future. But not only is her own future more hopeful, but with her newfound confidence and resources, Ana is empowered and equipped to change her family’s future.

Ana’s success means better outcomes for her two children, Abner (age 15), and Nicolle (6 months). “I want my kids to live well. I want them to succeed and I want to be a good example to them,” Ana says.

Ana’s son Abner (pictured at right) says his goal is to finish his education. He says he wants to follow the example his mother has set – of hard work and providing for her family. “I want her to feel proud of me, as I do of her,” Abner says.

Friendship Bridge’s Non-Formal Education program emphasizes family care topics like keeping children in school. These trainings, along with Ana’s increased business income, have motivated and allowed her to keep Abner in school. He is currently in 8^th grade, which is remarkable considering only 60% of children in Guatemala finish the 6^th grade. With his education, Abner will be equipped to realize his own dreams for his future. As far as making his mother proud – well, Ana practically radiates pride when she talks about her son.

Friendship Bridge recognizes that education is a critical component of breaking the cycle of poverty, especially for indigenous populations in rural areas. To empower our clients to keep their children in school, we offer a CrediEscolar loan to offset the costs associated with school enrollment – such as uniforms, school supplies, and other fees.

Last year, more than 1,000 students were supported with Friendship Bridge CrediEscolar loans. Clients who took out the loans say they would have had to sacrifice in other areas if they had not received the loan. Remarkably, 26% of the clients who invested in education through a CrediEscolar loan had no education themselves, but through this loan are making a commitment to their children’s growth and education. From 2013 – 2014, school enrollment of our clients’ dependent children between ages 7 and 13 increased 17%. You can read more about the impact of CrediEscolar in our 2014 Impact Report.

We invest in women because they reinvest 90% of their income back into their family – prioritizing things like health and education. Investing in women and providing them loan options that fit their individual objectives means children like Abner stay in school and entire families and communities enjoy better futures. Investing in women means investing in generational change.

Support children like Abner in November and double your impact! A longtime supporter of Friendship Bridge believes so strongly in the power of our work that he has offered a challenge gift of $30,000 if Friendship Bridge can raise more than $30,000 in new or increased gifts through November 30th. Can you help us unlock this challenge gift by giving today?

October 27, 2015 / Comments Off

2014 Impact Report – Expanding the Bridge: Opening Pathways of Empowerment

This month we published our second annual Impact Report, a document that shares a variety of results from our Microcredit Plus program – some suggestive, some positive, and some from which to learn. This document guides our strategy toward fulfilling our social mission of empowering impoverished Guatemalan women to create better future for themselves, their families, and their communities through microfinance and education.

In 2014, our results show Microcredit Plus is increasing the agency of our clients. With increased agency our clients know what they want, believe they can achieve it, and are able to take action to realize it. Read our online report to learn more about outcomes related to our clients’ capacity over financial decisions, for economic change, and to aspire for a better future.

A few highlights from the 2014 Impact Report:

90% of clients report taking on a leadership role since becoming a Friendship Bridge client
Clients who invested in clean stoves through Friendship Bridge’s CrediSalud loan saved $37/month (72%) in fuel expenditures each month. These clients also saw several positive outcomes related to health and children’s school attendance.
More than 1,000 students were supported through CrediEscolar loans for education. From 2013 to 2014, clients’ enrollment of dependent children between ages 7 and 13 increased 17%.
Clients who utilize a Plus service such as Advanced Training, CrediSalud, or CrediEscolar experience more positive change in their poverty status.
95% of our clients feel their income has increased or stabilized. Over half report they have either started saving or increased their savings.

These outcomes from 2014 are shaping our strategy as we moves forward with our Social Performance Management goals. Our results are leading us to understand poverty with a wider lens – one that encompasses more than just financial outcomes. We are excited to see positive results as clients utilize our Plus services and participate in our program through multiple loan cycles. As we learn from our findings year-to-year we will be increasingly able to expand the bridge and open pathways of empowerment to even more women.

Read the full report here.

October 20, 2015 / Comments Off

Our Dreamer Clients: Cruz

Dreamer: The earliest stage of development on our Client Continuum. Dreamers are often new to the Friendship Bridge program. Most of them are just beginning to experience increased confidence and family decision-making. Their priorities are usually beginning to shift from basic survival to education for their children and healthier standards of living. Not surprisingly, one of the first things they do with their earnings is provide better nutrition for their families and put their children in school.

Born into a poor family of 11 children, Cruz did not have many aspirations for her life. Her father struggled with alcoholism and did not support the family, so rather than attend school, Cruz had to work every day in the fields to ensure her family had enough food to eat.

Cruz’s life followed the typical pattern of a Guatemalan woman, and she married young, at age 18. She had seven children, but two died very young. Because she had not attended school, Cruz learned to weave in order to support her family, like her mother had done. “I had to accept learning my mom’s job, and now it has become my business. I am grateful for my mother’s teachings. She fought very hard for me and my sister to become good weavers.”

However, in order to give her daughters a chance for a better future, Cruz needed more capital to grow her business. She heard about Friendship Bridge from two women in her community who were Friendship Bridge clients, and she applied for a loan and joined a Trust Bank. In addition to her loan, Cruz says the monthly Non-Formal Education sessions have been very valuable, and she has especially benefited from trainings on health, hygiene, family planning, self-esteem, and wise investing.

With her Friendship Bridge loans, Cruz has been able to grow her small weaving business and send her five daughters to school. She is proud of giving them a chance at a better future, and Cruz says her experience with Friendship Bridge has brought her much satisfaction and joy. “Thanks to my small business and my loans, I am improving my quality of life,” she says. Cruz is also proud that she and her husband have been able to build a larger home to create more space for their family and her business.

“Friendship Bridge has been instrumental in my journey to create a business and generate income. My entire family has benefited from my loans,” says Cruz. The loans and the education Friendship Bridge offers have increased Cruz’s confidence as a woman and given her more hope for her future, key characteristics of our Dreamer clients.

August 3, 2015 / Comments Off

Announcing our newest branch location!

Committed to reaching the poor.

We remind ourselves of that every day. As part of that commitment, last month we opened our seventh branch, in the Department of San Marcos. San Marcos was chosen because of the large portion of its population that lives in poverty or extreme poverty. We’ve had a satellite office in San Marcos for the past year, and we are thrilled that it is now fully staffed and operational. Pictured below are Rodrigo (Branch Manager) and José Carlos (Facilitator) with a San Marcos client.

This is the first new branch office in more than six years, a reflection of the strength of the Credit and Operations team in Guatemala. Our 2014-2016 Strategic Plan calls for geographic expansion in Guatemala so we can reach more impoverished, rural clients. This new branch will allow us to do that, along with our satellite office in Huehuetenango, which is set to become a fully staffed branch next year. To read more about our expansion in Guatemala, take a moment to read our newly published 2014 Annual Report. Thanks for your support as we follow through on our commitment to reaching the poor and seeing empowered women eliminate poverty.

July 9, 2015 / Comments Off

Tomassa and Sanidad Divina

photos and story collected by Robert Weigel, Kiva Field Intern

The first thing you notice about Tomassa is the warmth and the pride that practically radiate from her when she speaks. As we waited for her Trust Bank meeting to begin, she welcomed us into her home as if we were long-lost friends.

She shared a little bit of her story as we waited for the rest of her Trust Bank to arrive. Tomassa speaks little Spanish, so a translator bridged the conversation from her native language of K’iche. Tomassa is the oldest of five children, and at age 38 she herself has mothered ten children.

One by one the members of her Trust Bank, Sanidad Divina (Divine Healing), arrived at the meeting place. It was obvious the women were excited to be together at their monthly meeting. Tomassa and the rest of the Trust Bank listened intently as the Facilitator led an education session about proper family planning.

As the Non-Formal Education session ended, Tomassa remarked that this topic was one of her favorites that she has learned about so far. “I cherish these meetings greatly,” she said, “because as a child I never experienced any type of formal education.” As the oldest child in her family, Tomassa said she had to mature quickly and take responsibility for household chores as her father tended to the fields and her mother took care of her siblings.

Life as a Guatemalan woman was difficult, she said, but it got better when she met her future husband, a hard-working boy from her village. Tomassa said she and her husband have supported and loved each through many difficult times. She smiled and said he is the love of her life.

Tomassa’s smile widened when she recounted to us how a financial and supportive push from Friendship Bridge gave her the chance to begin her animal husbandry business. She currently owns twelve animals – two pigs, four turkeys, and six chickens. It was clear she took great pride in her work.

With her face constantly beaming with joy and her voice full of pride when she talked about her business and what she has learned through Friendship Bridge’s educational sessions, we couldn’t help but get excited, too. Here was an empowered woman who was creating a better future for herself and her family, a future she could be proud of.

May 14, 2015 / Comments Off

International Day of Families

This Friday, May 15, is the International Day of Families. This year’s theme is gender equality and children’s rights. Globally, discrimination against women is often built into legal frameworks and government policies. Sometimes this can manifest itself in familial violence, whether physical or psychological. In other cases it means denial of access to education – for both women and their children. It could also mean malnutrition, little or no access to healthcare, and a host of other harsh realities.

We can’t deny these sobering facts, but we continue to be committed to changing them.

Our loan products…are promoting gender equality by giving women access to financial services. These loans help women build their businesses, keep their children in school, and invest in health.

Our nonformal education program…is giving women more confidence to build their businesses, know their rights, and care for their families.

Our Health for Life program…is bringing preventative healthcare and health education to rural, indigenous women who are traditionally underserved by Guatemala’s healthcare system.

As we reflect on this year’s of International Day of Families, we’re standing with families in Guatemala and around the world. We’re standing for gender equality, empowerment, and the elimination of poverty. Will you stand with us to help make these things a reality?

September 24, 2013 / Comments Off

Meet the Tzolojya Trust Bank

Location: Sololá, Guatemala
Members: 9
Average age of Members: 44
Average number of Children: 4.5
Average loan size: $655
Average years of education: 1.6 years

Friendship Bridge began working in the Sololá area in 1998. The area is located in the Western Highlands of Guatemala, at a distance of 140 kilometers from Guatemala City. Sololá is one of the larger, more prominent communities near Lake Atitlan.

The Tzolojya Trust Bank, which means Sololá in the Mayan Kakchiquel language, was established about 10 years ago. The group is comprised of nine members with an average age of 44 years old and an average formal education of 1.6 years (only two members have attended school). Additionally, its members have an average of four children per member.

The women of the Tzolojya Trust Bank have varied businesses including: bakeries, flowers, vegetables, tortillas, snacks and concessions, owners of stores of daily consumption (convenience stores), avocados, and handicrafts. The average loan of $655 goes directly into these businesses.

In addition to financial support, the women of the Tzolojya Trust Bank also benefit from training (provided in their own language) once per month by Friendship Bridge staff. They learn about topics such as: business and money management, over-indebtedness, how to market their products, and family and women’s health.

The women say they enjoy the group dynamics and the monthly meetings. They participate actively in the discussions, and always offer support to each other. Last month’s lesson was about the proper uses of the loan, emphasizing strategies to avoid over-indebtedness. The lessons are interactive and encourage discussion, giving the members an opportunity to express their thoughts on the topics. Friendship Bridge incorporates the principles of Adult Learning Theory into its methodology, recognizing the importance of participation and drawing upon the women’s own life experiences in the learning process.

Stay tuned! We will highlight Maria Santos Samines Buch and Marta Julia Yaxon Morales, members of the Tzolojya Trust Bank, next week!

This Trust Bank is supported by a Friendship Bridge donor who prefers to remain anonymous. Thank you for your generous support!

Empower women. Eliminate poverty.