Origins of the GSP Microloan Fund and AMMID ‘Creditos Verdes’
Since 2011, the GSP has built up a microloan fund of $22,000.00 with the AMMID organization in the municipality of Comitancillo. Part of a larger fund with other international donors, this program has been highly successful in helping several hundred families a year to improve their incomes. The GSP contribution is an initiative of long time GSP volunteer, Jim Nuyens, and many generous donors.
Most banks will not loan money to subsistence farmers. The AMMID microloan fund is a modified version of the Grameen loan system. Individuals within established agricultural and artisan groups of AMMID are offered the opportunity to obtain a loan, usually to improve agricultural outputs or small commercial ventures. The loan repayment period is one year and includes repayment of the original amount plus a one-time interest fee of 15% to fund administration costs. The small loans, from Q1,000 or $160CAD to Q3,000 to $500CAD, enable families to buy livestock such as sheep or pigs which are then raised and resold, or to support commercial ventures such as small business startups. AMMID supports its members by providing training in improved farming and animal husbandry techniques to help ensure success. Since 2017, AMMID has implemented a new requirement for a loan – a commitment to planting trees or grasses to help combat deforestation and soil erosion in the region. As an incentive, AMMID has reduced the interest percentage to 11% for those families that comply with these ‘Creditos Verdes’ or ‘green credits’ aspect of the loan.
A Microloan Success Story
Salaried and wage paying jobs are scarce in rural Guatemala, particularly for the indigenous Maya who historically have had very limited educational opportunities. Most families earn their living through self-employment and subsistence farming work.
Breaking the cycle of poverty doesn’t happen over night. It’s a slow, difficult process but it can happen, under the right circumstances.
Microloans or microcredits are one of the proven ways to help alleviate poverty and the story of Micaela, a Maya Mam woman from a mountain community in Comitancillo, San Marcos is an example of this. We first met Micaela in 2012 when she started to participate in the AMMID microloan program. She received a first loan of $130.00, which she used for the purchase of candle-making supplies and the purchase of ingredients for making ‘chuchitos’ and other food products for resale.
We met up with Micaela again in Comitancillo during a 2020 visit with a group of women working on sewing and artisan projects. Micaela is one of the respected leaders of this group and proudly updated us about how she has improved her sewing and entrepreneurial skills. After a series of loans, Micaela now owns her own sewing machine and makes and sells embroidered ‘huipil’ or blouse collars and belts. Her products are highly sought after and often spoken for and sold before they are even made. She makes and sells about 6 collars a week, adding about $30.00+ to the family income through this enterprise alone. She has also taught her daughters how to sew. She has now passed on the small candle-making business she started to her husband. According to North American standards, Micaela’s family still lives in poverty, but significant improvements have been made in their quality of life.
Micaela explained to us how much she has learned from her 27year association with AMMID. She has learned how to plant and care for fruit trees and nutritious vegetables in a family garden, how to stand up for herself as a woman in her community and family, how to sew and do embroidery work to sell and how to manage her own income. Before,
Micaela said, she had no idea that these things were possible. One of the biggest indicators of improved quality of life for Micaela and her extended family is that they no longer have to go to a ‘finca’ every year to earn money to survive. Life at the ‘fincas’ or farming plantations is both hard and degrading. All members of the family must work long hours to pick and process coffee or fruit, while living in substandard conditions in order to earn money to buy food back in their home communities. Health workers often report high levels of malnutrition among babies and young children when they return from the coastal ‘fincas’. Children also miss weeks of schooling when they accompany their families.
Micaela’s improved quality of life can be attributed to a number of factors. As well as receiving a series of microloans, Micaela received a GSP funded masonry cooking stove in 2012, giving her a cleaner, healthier kitchen and a reduced need for firewood. Micaela used these opportunities and the improved farming techniques she learned, to improve life for her family. With her increased income, Micaela is able to help pay school expenses for her children and grandchildren. In our eyes, Micaela’s story is a success story.
“To me, the poor are like Bonsai trees. When you plant the best seed of the tallest tree in a six-inch deep flower pot, you get a perfect replica of the tallest tree, but it is only inches tall. There is nothing wrong with the seed you planted; only the soil-base you provided was inadequate.
Poor people are bonsai people. There is nothing wrong with their seeds. Only society never gave them a base to grow on.”
AMMID member Maria Julieta has purchased pigs with her loan. She makes a special nutritious blend of mashed corn and organic feed to increase their size and health. She uses the pig manure to fertilize her fields and increase crop production. She has used the profits from the sale of her piglets to purchase additional land for planting corn and other crops. She is slowly building a better life for herself and her family. Her GSP funded loans and improved cooking stove will improve her children’s chances of a healthier, better future. That’s sustainable development!
Fabiana used her microloan to purchase sheep to breed and resell for wool or meat. The extra income will help her pay expenses for the grandchildren she is helping to raise or for repairs to her house from earthquake damage.
Juana used her micro loans to purchase seeds and hire extra help to harvest her cornfield.
Creditos Verdes” or ‘green microcredits’ is a new component of the AMMID microloan program since 2017. One of the key mandates of AMMID is to promote harmony and protection of ‘Madre Tierra’ or Mother Earth, an important part of the Maya Cosmos Vision. This involves sustainable agricultural development in an ecologically friendly way, promoting protection of the forests, waters and soil.
Every microloan recipient is expected to plant 50 tree seedlings by the end of their loan period or the equivalent in deep rooted, fast growing grasses. Recipients are also expected to sign an agreement that they will not use chemical fertilizers or other products.
AMMID workers and members show the healthy variety of tree seedlings that are grown in one of the ‘viveros’ or greenhouses sponsored by the organization – pine, cypress, oak and alder are the most common. The women of the group meet once a week to organize the care of their trees and to make a schedule for watering. This also provides an invaluable support network for the women to share experiences and talk about daily struggles.
Romelia has planted over 100 pine saplings on a piece of land washed out by landslides in an effort to prevent further loss of forests. She hopes to eventually terrace some of the land for planting crops and to regrow valuable trees for woodcutting.
Grasses planted alongside terraced fields help prevent soil from blowing away or eroding during heavy rains.