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Newsletter - January, 2008


The Least of These My Brethren

January, 2008

Assuredly, I say to you, inasmuch as you did it to one of the least of these My brethren, you did it to Me." Matt. 25:40

Published by the Society of the Good Shepherd, P. O. Box 122, Amberson, PA 17210. (717) 349-7033



New Work Begins in Comayagua

Honduras
Rosa Maldonado, one of our new loan recipients
In last month’s newsletter, we introduced you to Delores Bú, one of our loan recipients in Comayagua, Honduras. In August, 2007, we started a new microloan ministry in Comayagua, headed up by Gary Miller from Ellensburg, Washington. This month I want to tell you more about our program in Comayagua, and some of the new things we are trying there.

During the past five years, more and more Christian ministries, as well as humanitarian agencies, have started using microloans to help the poor in developing countries. The fact that other ministries and agencies are using microloan programs enables us to learn from their experiences as to what they find works best. At the same time, there are some practices used by others that we don’t want to follow. For example, most agencies charge high rates of interest for their loans—such as 15% per annum. These rates are still lower than what the banks charge in developing countries. However, we’re not comfortable in charging such interest, even though it may work effectively. Yet, there are a number of practices that Gary has learned from studying other microloan programs, which we are putting into practice in Comayagua.

Honduras
The group meets with another loan recipient, Gloria Mendez
First, in Comayagua, we are organizing the loan recipients into small groups of up to five persons. It is important that these recipients all know and trust each other, as there is group accountability. Each recipient guarantees the payback of all of the loans in the group. The group meets together one night a week, where they each make their weekly loan payment and discuss matters involving their businesses. If a group member does not make his weekly payment, he must explain to the others in the group why he is unable to make his payment.

Another new step we’re taking in Comayagua is that the loans are being made in increments, instead of all at once. In general, we are first making maximum loans of $200 per person. As in our program in Siguatepeque, the loan recipients have to present us with a reasonable plan as to how they will use this loan to enhance their present business (or start a new business). When each member of the group pays off his loan as agreed upon, then all members who haven’t been delinquent qualify for a second loan of up to $200.00. This gives the group members incentive to faithfully pay off their first loan, so they can obtain more capital to invest further in their businesses. Since everyone in the group is held back because of the delinquency of one member, it creates peer pressure for all to be faithful. Our plan is to continue to make incremental loans up to a total of around $1500 per person, so long as the person has a reasonable method of using the extra funds to enhance their business.

Honduras
Regina Saravia at her pulperia
Because this type of program will take closer monitoring, we have hired a Christian sister in Comayagua named Regina Saravia to organize and conduct the weekly business meetings. This sister is a loan recipient herself, and she has had experience in managing this type of program for a humanitarian agency. The arrangement that has been set up is for Regina to email a report every week to Gary Miller, showing who has made their weekly payments and explaining any difficulties individuals in the group are having. Regina is also reporting to a local pastor in Comayagua, Brother Carlos.

Since this is still in the infant stage, it is too soon to report on how well these new methods are working. Deborah and I will be visiting Comayagua at the end of January, when we will be able to learn more about how things are going there and discuss with the group any problems they are experiencing. Please remember the Comayagua project in your prayers! DB


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