Microloans making a difference in Paraguay
Estela lost everything to a fire. When her small business burnt down in the marketplace, she thought that her life would be over. Her only option was to turn to a loan shark who charged her 500% interest. She ran a small grocery store out of her home, selling to her neighbors and community.
Estela is the mother of 10 children, and the main provider in her home. Because of the high interest rate she was paying every month, she had never been able to move ahead. Through Diaconia ADP, she has formed a association with 14 woman in the community to take a group loan.
With reasonable interest rates and a savings program, she is now able to grow her business. Estela has successfully paid her first three-month loan and is now receiving her second loan. Not only has she received a loan, but also during the four months in the program, she has received financial literacy training that helps her to better administrate her business.
According to recent data (2009), 35% of Paraguayans are living in poverty, and almost 1 in 5 lives in extreme poverty. Many women are the sole providers of their families, yet they receive little opportunity to succeed within the formal work force. Diaconia ADP is taking on the challenge of empowering woman to overcome these cultural barriers, and become financially productive.
From Feeding to Funding
In 2008, working with a program called Transforming Paraguay Together, Judah Mooney began a program in squatter communities that grew from a handful of soup kitchens to a program that helps feed 12,000 children every week. The success of this program brought him directly into contact with over 4,000 families. While continuing to alleviate the hunger of the children, he developed a program to help parents (mostly mothers) develop the vocational skills that would help them to better provide for their own families.
In 2010 he started a program to teach vocational skills, offering training as bakers, seamstresses, hair stylists, and motorcycle mechanics. In the first year over 300 people received vocational training. As people received their diplomas for new skills learned through the vocational training program, a new problem arose. The graduates needed to buy flour, sugar, ovens, hair blowers etc. and did not have the capital necessary to start their enterprises and they turned to Judah for help.
In early 2011 Judah and Roberto Hernandez, a former World Vision staff member with extensive background in finance and working with micro loan projects, received training from a Bolivian organization with more that 20 years of experience in micro-finance with the indigenous people of La Paz.
They started a pilot project in June 2011 with a group of 34 women, and today have over 130 women who have received financing for their micro-businesses. Many of these women have completely refunded their initial loans, and are currently on their 2nd and 3rd loan cycles.
This led Judah and Robert to the launch of Diaconia ADP with the vision of bringing holistic development to the poor in Paraguay with a strong program of small business and economic development. Today Judah and Diaconia ADP continue to work with the Transforming Paraguay Together Project through:
- Feeding 12,000 children in 180 nutrition centers where today he works as the project liaison to integrate the partnership of International Organizations. He is also involved in the strategic planning and monitoring of the nutrition centers project, and organizing international volunteer projects.
- The Vocational training program PRODEI (Project for Holistic Development) coordinated by Diaconia ADP, and focused on providing vocational skill training for the parents and communities surrounding the nutrition centers.
- Providing financing through Diaconia ADP to women who come together as associations (commonly known as community banking). These women are primarily mothers of the children in the nutrition centers who have received vocational training and can now request a loan to help them start a business using their new skill sets.
Diaconia ADP wants to see every squatter zone and impoverished area in Paraguay serviced by Diaconia ADP. Their goal is to reach the poorest people in Paraguay, giving them the opportunity to develop holistically. They want to help 1000 woman in the next 2 to 3 years by financing their projects.