Microloans

 
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We have partnered with a Oaxaca-based microfinance organization that administers microloans, business and financial education through socially responsible tourism. En Via began in 2008 with the idea that tourism and philanthropy could work together to improve people’s lives. They host tourists on philanthropic visits to Oaxaca where they interact with En Via projects and participants who are funded by their visits.

Proyectos began an emergency microloan program in early 2014 supporting agricultural needs created by events beyond the participants’ control (hail, frost, drought etc.). Proyectos began a partnership with En Via in order to supplement the immediate equipment/materials needs of our participants with skills needed for long-term success in business and finance.

While the agricultural needs for financing differ greatly among our participants as compared with those currently being served by En Via, together we are developing a new program that will be targeted to their unique microloan needs. Currently, En Via participants are given business education training (6 one-hour sessions) before they receive any loan money and then are walked through a stepped-loan program of increasing amounts. They must form support groups of three persons, whereby the individual and the group are held responsible for repayments and meeting attendance with En Via staff once a week. The first-round loan is $1,500 pesos and must be repaid over a 10 or 15 week period. The second and third-round loans are $2,500 and $3,500 pesos respectively and the terms are developed in cooperation with En Via staff. All of these loans are interest free.

If participants go on to seek additional loans they are placed in an interest bearing program and are allowed to borrow up to $6,000 pesos. Charging interest serves the dual purposes of slowly introducing participants to principles of finance they would face if looking for a larger loan from a financial institution later and helping En Via slowly grow the loan fund.