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Non-Formal Education 4Q16: Trust Bank Board Responsibilities, the Solidarity Guarantee, and the Facilitator’s Role

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

Zoila says that the topic of solidarity guarantee is very important within the trust bank. This allows the women to create bonds of trust by getting to know each other and their businesses better. Trust is key to practice solidarity during payments and to support groupmates in difficult circumstances. Each woman understands that to be a part of a successful trust bank, she must have the commitment and responsibility of payment.

Each month the members of every Trust Bank travel, most likely by foot, to their designated meeting places to make payments on their loans and receive a Non-Formal Education lesson in their native languages on one of the four pillars – women, family, business, and health. During the below three education sessions, building group structure and trust are key components to a healthy support system and Trust Bank.

October – Board Responsibilities

The Trust Bank’s elected President, Secretary, and Treasurer face the group and kick off the meeting! They are the topic of discussion this month. To get the women thinking about leadership, they are asked to recall a leader they admire greatly and to come up with some characteristics that describe that person. Next they are read the story of a perfectly run, fictional Trust Bank, whose board does everything required in a friendly, respectful manner. The meeting ends with each board member reading a pledge of the duties she commits to perform during her term.

November – The Solidarity Guarantee

Each member of a Trust Bank commits to paying the entire loan even when one member defaults. This is called the solidarity guarantee. The concept of solidarity is made real to the women when they are asked to visualize how they feel and what they do when they learn a member of their community has experienced a birth or a death. Reciprocity, responsibility, empathy, respect, and common experience are ideas that come to mind. Since those feelings are made stronger the better known the affected individual is, the women are reminded of the importance of getting to know one another. As a final application of the concept, the women are asked at the end of the meeting to produce 20Q of their own money. Of course, not everyone will have it. The lack or possession of the money produces a set of feelings towards themselves and one another that should give them something to reflect on.

December – The Facilitator’s Role

A Facilitator at Friendship Bridge has a very big job. They assist in the formation of new Trust Banks, prepare for and teach a new lesson each month to dozens of existing groups, travel, often by foot, to remote areas to meet with clients, and they do all this in the rain or shine! This month the Trust Bank members are asked to describe their experiences meeting their Facilitator for the first time. At the end of the meeting, they discuss among themselves what medal they will award their Facilitator… gold, silver, or bronze… and why he/she deserves the medal received. It is intended to be an opportunity for the Facilitator to gain feedback on the important work they do.

 

Friendship Bridge Featured as Standout Institution

Friendship Bridge Featured as Standout Institution

In a special edition of the SPTF Spotlight, social performance management industry leader, Social Performance Task Force, highlighted several standout intuitions with strong social performance management practices – including Friendship Bridge.

Read more about Friendship Bridge’s social performance here.

Non-Formal Education: Trust Banks, Budgets, and Food

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

Each month the members of every Trust Bank travel, most likely by foot, to their designated meeting places to make payments on their loans and receive a Non-Formal Education lesson in their native languages on one of the four pillars – women, family, business, and health.

July – Building a Strong Trust Bank

Each Trust Bank is comprised of women, voluntarily organized, who support each other in the receiving and paying of loans to be invested in each woman’s own business enterprise. A strong Trust Bank requires that all members understand and maintain their responsibilities to one another. In July, after the women were reminded of these responsibilities, they were asked to compare the health of a Trust Bank to the health of a tree…. which parts are the trunk, the roots, the fruit? How could they make each part stronger? The discussion was followed by a reminder of the duties of the Trust Bank’s Board of Directors.

August – Creating a Working Budget

In August, the women learned how to create a budget for the second time this year. This lesson was originally delivered in January. However, a survey revealed that budget creation was the one lesson that clients struggled to remember. It was taught again to reinforce the topic and highlighted the importance of measuring information retention of our clients.

September – Understanding the Food We Eat

Food security, or permanent access to nutritious food, is a luxury for the poor. September’s lesson sought to teach the appropriate food to prioritize when money is scarce and how much each of those items costs. The women warmed up by playing a musical chairs type of game called Fruit Basket. Next they were shown a chart covering the nutritional benefits and risks of eating different foods: meat, fish, soft drinks, fruits/vegetables, sausages, junk food, and salt. The meeting closed with each woman compiling pictures of a typical day’s menu and then identifying the cost associated with each menu item. By doing so, the women saw what they spend on food in a day and how they might make economical and nutritious substitutions.

Social and Institutional Ratings from Microfinanza

by Cole Folwell, Treasury internLOGO_microfinanza_rating

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.

Reflections on my experience as a Friendship Bridge intern

by Cole Folwell, Treasury Intern summer 2016 IMG_0481

I grew up in the People’s Republic of Boulder and loved the sheltered, inclusive, and safe environment. When choosing colleges I thought that seeing another part of the country would be enlightening and intellectually riveting. For that reason, I chose Northern Indiana and for those who have not been blessed with the opportunity of laying eyes on this beautiful region, I’ll provide some insight. The regions elevation change is about as consistent as its weather forecast. The gloomy clouds, lack of mountains and the invigorating town of South Bend were all great reasons to hit the books extra hard. In general, Indiana is a most modestly impressive state and if it weren’t for Notre Dame (which is pretty much in Michigan), there’s a good chance Mike Pence could have been out of the job. Despite my opinion of the crossroads of America, I had a fantastic first-year at Notre Dame and learned so much. I am looking forward to going back this fall as a more knowledgeable, curious, giving and driven person thanks to a wonderful experience as a Treasury Intern at Friendship Bridge.

Working alongside Treasury Manager, Rebecca Cueto, my experience at Friendship Bridge was predominantly focused on the financial component to the organization’s operation. Whether that was monthly liquidity reports, monitoring currency risk, or analyzing economic data, it all had an impact on the thousands of clients Friendship Bridge serves.

I’ll admit that sometimes it’s easy to forget the actual impact of my work when focused on a spreadsheet containing masses of data. However, every number has a story behind it, importance to it and a purpose going forward. Capital markets have always fascinated me and I find that versus appreciating their ability to move capital to where it is needed, people simply write it off as a useless mechanism, wrought with peril and moral hazard. I cannot completely remove myself from my Boulder beginnings so here is a quote from Karl Marx about capital’s importance: “Capital is money, capital is commodities. By virtue of it being value, it has acquired the occult ability to add value to itself. It brings forth living offspring, or, at the least, lays golden eggs.” Microfinance brings together people and business that are seeking capital with those who have it. After being with Friendship Bridge, I definitely have a greater appreciation for the ability of capital to create positive change in a world that can easily be dismissed as hopeless.

Anyway, I am not usually that deep and down to earth (must be the Boulder in me I tried to kill off) so I’d like to get back to what I did for Friendship Bridge. I worked on several large projects throughout the summer such as a state of Guatemala report, a presentation on Friendship Bridge’s currency exposure and risk management that would be used at a conference in Italy, and an indicators board to help us benchmark our performance against other Microfinance institutions using a platform called ‘Mix Market.’

The state of Guatemala report was a comprehensive summary and analysis of all major political and economic events that had recently transpired in Guatemala. As you have seen already, I have a fairly elaborate and inefficient way of summarizing something that could be said in maybe a sentence or two. This gift of mine helped produce a 23-page report that was downright excessive (I learned a lot though). Fortunately, Rebecca helped me cut down that mountain of information into a very detailed and concise boulder (sincere apologies, I have an endearment for particularly terrible jokes). As my internship progressed I became more efficient in boiling down information into the essentials. An invaluable skill I hope to keep with me well into the future.

Overall, my internship was a positive experience as I learned an extensive amount about the interworking’s of Friendship Bridge’s operation. Some things I did were as simple as updating economic indicators and others as complex as understanding the implications of an increase in remittances on the quetzal and how that might impact Friendship Bridge’s liquidity going forward.

Over the course of my internship I also decided to participate in the weekly Spanish class, which was a humbling experience. However, much of the class was in jest and I managed to pick up some of the language while having fun. I also decided that my self-proclaimed wit was perfect for a morning email updating staff on current U.S., Latin American, and Guatemalan events. Thus, ‘Good Morning Guatemala’ was born and I know for a fact that it made me laugh while providing relevant news (did it make others laugh? Not sure). My experience at Friendship Bridge was rewarding, educational and enjoyable.

Here is a random parting hair-pulling thought from me that Rebecca and I attempted to solve on one of our daily commutes:

“There is a single light-bulb in a windowless room that cannot be observed from the outside. On the outside of the room there are three light switches. You can enter the room only once to observe the light bulb. How do you find out what light switch controls the light-bulb?”

Good Luck. Go Irish. And thank you for the opportunity and experience Friendship Bridge.

Crowdfunding Q&A with Marty Musselman

Each September, we hold a crowdfunding campaign that raises awareness and money to expand our health program. We call this campaign our Salud-a-thon (salud means “health” in Spanish). Our crowdfunders take on their own health challenges for a month, using these challenges as platforms to spread the word about Friendship Bridge’s health program and expand this program to reach even more Guatemalan women. Last year, Marty Musselman raised over $2,000, which provided preventive health services to 80 women – many of whom had never accessed these types of services before. We sat down with Marty to hear more about her experience and her incredible success.  IMG_0297

Did you have any fears about crowdfunding before you began?
Absolutely. I had a lot of trepidation because I didn’t know anything about crowdfunding, and I’m not very tech savvy. I thought it would be a huge challenge for me. But I was really very happy and surprised with how easy it was. It was so much easier than I expected, and it had so much better results than I expected.

Did you have reservations about fundraising?
I found personally I’m hesitant about asking for money from my friends, but I just decided, you know, people can decide themselves whether they want to participate or not. So I sent emails out to my book club, my walking and hiking groups, family, friends, and neighbors. It was really heartwarming to see who actually participated.

How did you promote your campaign?
I did a couple of updates along the way and utilized some of [Friendship Bridge’s] suggestions about email content. I gave some information about how this would help our clients in Guatemala, some of the misconceptions they had about healthcare, and how little access to healthcare they actually had. I think that information was helpful. It was nice that it was only a month, so you have a short period of time and you’re rolling the whole time.

Can you tell me about your health challenge?
I was going to meditate 10-15 minutes each day, amp up my exercising, and try to eat more fruits and vegetables. But what really struck me as I was reflecting on health was how here, in the U.S., we have the ability and resources to do these things. We have health insurance if we have an injury or illness. We have the resource of time to be able to do meditation or exercise. We have facilities that have fresh fruit and vegetable that are very accessible. And in comparison, I know our clients Guatemala often have none of those things. They don’t have a health safety net. There’s a lot of misinformation about general health issues. And they don’t have the time or monetary resources to do a lot of these health related activities like we do here. So it really made it very clear to me how fortunate we are and how important it is for us to do things like this to help Guatemalan women have better access to healthcare.

What would you say to someone wondering if they should sign up?
I would say that I had a huge amount of trepidation to begin with as well, but if I can do it, then anyone can do it! The ratio of time spent and money received is just amazing, so I think that’s another huge plus. If people think it’s going to be time consuming and frustrating, it’s not. It’s not time consuming at all, and it’s relatively easy to do, especially when you have resources to call upon if you run into problems. It was refreshingly more easy than I anticipated.

If you’d like to join our 2016 Salud-a-thon, create your crowdfunding page today!

Non-Formal Education: Savings, Loan Responsibilities, and a 6-month Review (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 members of every Trust Bank travel, most likely by foot, to their designated meeting places to make payments on their loans and receive a Non-Formal Education lesson in their native languages on one of the four pillars – women, family, business, and health.

April – Getting into a savings habit

We all know that putting a little away for a rainy day is a good idea. In reality, creating a savings habit is hard work. Accordingly, the women start off April’s lesson by listing all the reasons we don’t save. These are the hurdles they will need to overcome if they are going to start saving. Next their Facilitator provides them with a four step plan: 1) Name a specific goal (home, education, health). 2) Estimate how much that goal will cost. 3) Set a date at which the goal is to be achieved. And 4) Calculate how much you will need to save weekly or monthly in order to meet the goal amount. Each woman goes home that day with a liter soda bottle “bank” that has her personal answers to the four steps written on a label on the side of the bottle.

May – Accepting a loan and what that means

In May, the women reviewed the process they underwent to form their Trust Bank: from a single woman’s initial idea, to the sharing of that idea to recruit other women, to the meeting they had with a Facilitator for the first time. The question today is, “Why did you go through so much effort to acquire that first loan?” To answer that question, the women are given four images that represent the stages of plant cultivation and are asked to put them in order: sow, water, sprout, sunshine. Next the women explore the various ways that their loan is like a seed used to grow the fruits of their businesses. The women learn that accepting a loan to finance a cash short-fall does not generate an ability to repay the loan. Using a loan as an investment in a business, however, can.

June – Reviewing the past six months’ lessons

The Facilitator starts the June lesson asking the women to raise their right hands. Lo and behold, they all do. Their actions are the definition of a habit. Changing a habit requires motivation and determination. If the women are going to advance their businesses, discarding old habits is going to be necessary. Accordingly, the women reflect as a group on the goals they have set for themselves since joining their Trust Bank and what might be getting in their way of achieving those goals – it is most likely old habits. The Facilitator asks questions such as: What do you do if someone offers you additional credit? How about when your expenses are greater than your sales? Have you created a budget yet? Or put any money away for an emergency? The women go around the room answering these questions, offering each other advice regarding behavior change.

 

Here are a few client reactions:


  • “The topic about savings is really important. The examples we used today can help us find different ways to implement it with our family. Starting today I want to create a savings plan for one month so I can buy a set of pots that I need to cook fruit that I use in my business.” 
    - Keila, age 26



  • “It is important that every woman has a reserve fund through savings, because our children come first to us for school supplies. Friendship Bridge also makes us realize the value of our own health and to invest in ourselves, so our savings can help us get medical checkups.”

    - Maria, age 47, pictured in middle in red

 

 

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!

 

Celebrate mothers worldwide with us this Mother’s Day

We are partnering with Women’s Worldwide Web (W4)  this Mother’s Day to empower women in Guatemala. When you give on the W4 platform in tribute of a mother in your own life, you can send her an e-card letting her know how she has impacted your life. Every gift empowers the women we serve in Guatemala, and if we raise $20,000 in tributes, W4 will match that amount, doubling your gift’s impact! 

give a gift that gifts back for your mother on mother's day

 

You can find her…

…early in the morning, kneeling on rocks in a nearby river, washing laundry before her children’s eyes are even open for the day.

…in the heat of the afternoon sun, with her youngest child strapped to her back, working in an onion field, only taking breaks to make lunch and dinner for her family.

…late at night, by the light of a fire while the rest of her family is in bed, embroidering to make some extra income to send her children to school.

In Guatemala, mothers like Rosario, pictured above with one of her six children, are the first in their families to wake up and the last to go to bed. In these margins of the day, they are giving of themselves to invest in the futures of their families. In any culture, mothers are driven and selfless, but in the Western Highlands of Guatemala, where women are marginalized and poverty seems endemic, this selflessness and drive is the only way to create generational change.

This Mother’s Day, will you partner with us to empower mothers like Rosario in Guatemala? You’ll be able to send an e-card to a mother in your own life, thanking her for the ways she has impacted you…and you’ll simultaneously be honoring and empowering mothers in Guatemala.

GIVE IN HONOR OF A MOTHER

give a gift that gifts back for your mother on mother's day

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:

  • 1. MARIA MARGARITA SOLIS
    “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

  • IMG_0509

    “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.

Ideas for Hosting a Building Bridges Stay-at-Home Gala Party

Our 2016 Building Bridges Stay-at-Home Gala is just around the corner, on Saturday, April 9th. Many of our friends across the US are hosting parties on April 9th to celebrate! Here are some ideas to help make your party a success:

Prior to your get-together, share the link to the online auction (www.biddingforgood.com/friendshipbridge) with your guests so they can start bidding in the auction prior to your party!

Ways to support Friendship Bridge during your party

  • Welcome your guests with a brief introduction to Friendship Bridge and talk to them about why you support the organization. (See our Friendship Bridge 101 web page for talking points and to rehearse your Friendship Bridge “elevator speech.”)
  • Share the link to the online auction (www.biddingforgood.com/friendshipbridge) with your guests.
  • Have your wifi password handy for guests so they can bring their iPads and phones to make their final bids on online auction items.
  • Make sure your computer or tablet is ready to watch the short online video premiere, which will be emailed to you at 7pm MDT.
  • Provide donation forms for your guests who are interested in supporting Friendship Bridge (Click here to download and print).

Ideas for activities

  • Friendship Bridge Video Premiere Bingo – We’ve created bingo cards with key words about Friendship Bridge’s work, to play during the short online video premiere at 7 PM MDT. Simply print out bingo cards for your guests, grab a pen, and you’re ready to play. Watch and listen to the video about Friendship Bridge’s work and mark key words and images you see in the video! See who can get BINGO first! (Click here to download and print cards)
  • Play marimba music (the marimba is the national instrument of Guatemala). Here is a link to some marimba music you can play in the background.
  • Wear or display any tipica you own (tipica is traditional Guatemalan hand-crafted items).
  • Display photos from your travels to Guatemala.

Menu Suggestions

Drinks and Cocktails

 

We hope you’ll join in the fun and host a party!

If you have any questions, please contact Laura at ljepsen@friendshipbridge.org. If you decide to host a party for the Stay-at-Home Gala, we’d love to hear about it!