A farmer in the western Guatemala village of Comitancillo was the first recipient of a loan that is part of a new, innovative financial program that allows Guatemalan migrants in the United States to act as guarantors for micro and small enterprise loans for family back home.
Romelia Pablo, who is supporting four children while her husband works in the United States, used some of the money to fix a leaky roof. The rest was used to buy some livestock. The William Davidson Institute (WDI), in partnership with Microfinance International Corp., disbursed the loan to Pablo, which was backed by her brother.
For Pablo, this small loan will give her the opportunity to generate income for her family.
“I used the money to buy a cow, a pig, some chickens and feed,” Pablo says. “I will raise them (the livestock) on my farm and they will produce income for me to help feed my children, take them to the doctor when they are sick, buy them school books and pencils to write with.”
Remote village life in Guatemala is very difficult and poverty is widespread. There are few work opportunities for villagers like her to earn a living. Most of the villagers farm and keep livestock to support themselves, but there is little left at the end of the day.
A traditional bank loan for Pablo was not an option. That is why the WDI program is so vital to her and others.
“I have no education, never had a job, and had no bank account and no credit history,” she says.
But Pablo heard about the new program, which allows a family member abroad to act as a guarantor for her loan. Her brother placed 5,000 Quetzals in an account with her local credit union. The credit union then issued her a 12-month loan for 9,900 Quetzals ($1,200).
The livestock Pablo bought will provide a sustainable livelihood for her and her children — something that would not have been possible without the loan program.
“I’m going to fatten that pig five months and take it to market,” Pablo says. “It will fetch a good price and I can use the profits to pay back the loan and buy two more pigs. The cow and chickens will provide milk, cheese and eggs for my children, and I will take the extra to market every day. It will fetch a good price because it’s fresh.”
WDI teamed up with the Academy for Educational Development for the project, which is funded by the U.S. Agency for International Development.
