FINCA: Small Business, High Hopes
hroughout the develooping world, employment opportunities in business and industry are scarce. Because the poor lack skills, they can seldom compete for such jobs. For women, finding work is especially difficult; cultural norms may require women to work in or near the home, and in areas where unemployment is high, hiring preferences are frequently given to men.Yet the poor cannot afford to wait for social and economic change. For them, the best hope may be to start microenterprises, thereby creating their own jobs.
Microenterprises are small-scale, individually or family-run operations; they are usually unlicensed or unincorporated, and profits are typically small. Large numbers of the poor already engage in microenterprise as their only means of survival; in developing countries, microenterprise accounts for half of all urban jobs and 25-55 percent of all employment for women. And in the United States, the number of cottage industries has increased dramatically over the last decade.
As tools to fight poverty, microenterprises offer unique benefits; they can provide employment for one person or several, they can develop new markets by providing goods or services that were not otherwise available, and they can help the economies of small, rural, or depressed areas to grow and diversify. For mothers, particularly, small businesses run from the home can provide the flexibility they need to care for their families and the income needed to bring them out of poverty. Yet like other businesses, microenterprises rarely succeed on hard work alone; they require capital investment to make them viable.
Through village banking, FINCA provides small business loans of $50-$500 to help the poor create or strengthen their microenterprises. The village bankers themselves supply the initiative; they choose their own income-generating activities, decide how to invest their loans, and run their own businesses. Yet with a small infusion of capital, many such microentrepreneurs have been able to change the future.
Seven Enterprising Women
- IN GUATEMALA, Maria del Carmen Cholotio worked as a weaver for many years, producing and selling cloth for dresses, skirts, vests, shirts, and jackets. With a small loan, Maria was able to buy supplies in bulk, increasing her margin of profit and her income.
- IN MALAWI, Catherine Mtope struggled to support her family by selling home-made doughnuts; with a FINCA loan, she was able to expand her business to sell used clothing, and to re-enroll her sons in school.
- IN NICARAGUA, Edicsia Juarez sews uniforms for baseball teams and schools, as well as outfits for baptisms and first communions. Because of the demand for her services and a village bank loan allowing her to purchase several sewing machines, she now provides jobs for three of her neighbors.
- IN EL SALVADOR, Rosa Elena Aguinada de Miranda knew that the soil in her town was perfect for making bricks. So she and her two daughters started a brickmaking business. By creating a family enterprise, Rosa Elena has saved her daughters from probable unemployment.
- IN MEXICO, Maria Lujan Mendoza used a village bank loan to purchase a refrigerator in which to store the chickens she raises and sells. As a result, she has been able to raise and sell more chickens, increasing her family's income. Now her husband calls her "la ejecutiva."
- IN THE UNITED STATES, Trinette Chase has started a doll-making business; she sews and stuffs the dolls, and her daughter paints the faces. With a FINCA loan, they are buying stuffing and material in bulk so that they can expand production.
- IN PERU, Maria Godoy trades goods. She has used her loan capital to buy sugar, bread, soap, candles, and matches in the city, which she brings to rural fairs; there, she exchanges the items for grains, meat, and cheese, which she brings back to the city to sell. In her mind, her greatest accomplishment has been the addition of meat to her children's diet.
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