Microfinance Brigade FAQ
What is the objective of Microfinance Brigades?
The objective of microfinance brigades is the establishment and growth of community owned savings and loan institutions which will stimulate the local economy and foster micro-enterprise. This would then raise the overall living conditions for the community and provide Global Brigades communities with a long term development solution.
What are the major needs the program is addressing?
The goal of Microfinance Brigades is to raise the entire economic level of a community so that this may have tangential effects on all other facets of development. Why can’t these people afford preventative care or nutrition, which would lead these kids away from medical brigades? Why can’t they afford to buy pure water instead of drinking from the same river people wash their dirty laundry in? Why can’t they afford to construct for themselves some basic sanitation? Wherever people are clearly not capped by their work ethic or ability, but solely by their location of their birth, this is when microfinance is needed.
Who gets involved in Microfinance Brigades?
Although many finance, econ, and business students have participated in MFB’s, students and volunteers of all kinds are able to participate on the brigade, from Anthropology to Marine Biology majors. Like all great ideas, microfinance is beautiful in its simplicity. Passion and dedication are the most important requirements for our brigaders.
How much Microfinance experience do volunteers need?
None at all. In fact, this is exactly what the program was designed for- to provide the tangible representation of the development theories learned in the classroom. It’s an experience that is designed as a lesson in itself.
What does the Program Lead do to prepare for a Microfinance Brigade?
Microfinance is all about community participation, and the brigade represents this. The community bank and its board work with the Program Lead to coordinate in-house visits to potential borrowers, and to create agricultural activities demonstrating community members’ way of life. Program leads work with brigade coordinators in brigade prep to make workshops and come up with a potential focus for the brigade, whether that is savings, membership or simply community awareness.
How are projects/communities chosen?
We concentrate on communities with an established Global Brigades presence, in order to take advantage of our already established reputation. Community leaders have even contacted the MFB program to establish the program in their community. From there, we will use the excellent data collected by our research and evaluation team to choose a new community based on economic need.
What does a volunteer do to prepare for a Microfinance Brigade?
The pre-departure packet contains a number of additional resources covering a number of subjects relevant to microfinance in Honduras. Reading these to attain a basic understanding of the concepts in microfinance is highly recommended. Also since microfinance is all about community interaction, some rudimentary spanish vocabulary would be useful on the brigade as well, although not required. Each brigade will be assigned a topic to focus on along with an education manual to prepare workshops and activities with the community. With the topics a group is assigned it is recommended that brigaders prepare workshops/activities, posters and signs for our week ending community event, surveys for data collection in the community, and questions on our model/for our presenters.
What does a community do to prepare for a Microfinance Brigade?
The community bank and its board work with the Program Lead to coordinate in-house visits to potential borrowers, and to create agricultural activities demonstrating community members’ way of life. They also fit their brigade in around their daily work schedules, and commitments to other global brigade disciplines present in the community.
Is there a minimum or maximum for groups?
There is a 15 person minimum and smaller groups are even conducive to more intimate interactions with the community bank. However larger groups have the advantage of bringing a larger CIF pool, expanding their project possibilities. Either way Global brigades will accommodate adequate staff to make the brigade a success.
Do students need to bring any materials?
Notebooks and writing utensils are recommended, and workshop specific materials may be requested. Different types of apparel and shoes are also recommended for the activities of the brigade. Donations are best utilized as great incentives for the community to participate in activities throughout the week. We discourage brigaders from freely giving out donations to only certain families because it creates inequality among community members if not everyone will receive a donation.
What kind if any preparation should a group go through before a brigade?
In addition to the recommendations listed above, Skype calls with the program advisor are recommended. And group meetings to go over questions and concerns are a good way to get everyone involved early.
What does a student do on a Microfinance Brigade?
The basic itinerary for a student on a microfinance brigade is designed to a) establish an intellectual and emotional bond to the community and b) demonstrate firsthand the effects and possibilities of microfinance. To accomplish this, students will be visiting homes and farms to learn about the agriculture and finances of potential borrowers, meeting with the Caja Rural (community bank) on a daily basis, learning about various microfinance models from presenters, and a number of interactive activities designed to educate the students on community life.
What does the community do on a Microfinance Brigade?
Microfinance prides itself on involving the community in the process. Whether it is opening up their homes to foreigners or freely discussing their personal finances, MFB requires a special level of trust from the community. The community also will cook food for brigaders and provide the brigaders with educational agricultural experiences. Finally the community bank members are crucial in mobilizing the rest of the community’s involvement in our week ending event.
How is the Caja Rural (community bank) formed and who is forming them?
In our model, community members themselves are the ones running and owning the community bank. We train and provide technical assistance. A dedicated commitee within the community banks board is in charge of collecting loan payments.
How are payments on loans made?
These are small villages that on average, lack access to electricity and therefore unable to process credit transactions. This means that all bank transactions are done using cash.
If there is a failure to pay, how are these defaulters being actively pursued and by whom?
The aforementioned commitee is in charge of collecting on payments. Default is rare, and they are pursued with housevisits, fines, collection of collateral (livestock etc) and public declaration.
Who are the guarantors of the loans? Who is conducting all of the underwriting?
Loans will either have cosigners or collateral backing them, there is no formal underwriting process in these small communities.
Do we act as a caja ourselves or are we acting through one already set up?
We are assisting the caja, and our funds will act through this structure.
How many caja rurales exist in Honduras (approx)?
Approx 650 exist as of June 2010.
Who are the major players (MFIs) present in Honduras?
WorldVision, Procredit, FINCA and FUNDER.
How many households will a group of brigaders get to visit in a one-week brigade?
On a one week brigade a typical first time brigader will visit six households.
Will the home visits entail a tour of the farms or just time to ask the family members questions about their farm/business?
Typically both. It all depends on the relationship and comfort the volunteers build with the household member. It cannot be approached as an awkward inspection- it should instead be for the community member a proud display of generational work.
How will volunteers participate in the final community meeting?
Each brigader will have different parts in the presentation, coming up with their own examples, songs, and skits to emphasize their topic for the meeting, such as savings.
How will volunteers participate in funding a caja rural? Direct to farmers?
Volunteers will be funding the caja rural as a whole. $100 from each volunteer’s Program Contribution is allocated to the Community Investment Fun (CIF). At the end of the week, the volunteers determine if the CIF should be allocate towards general capital in the Caja Rural or to a more specific cause. This allows for a) a respect for the autonomy of the Caja Rural, which is community owned and operated and b) us to fund overall caja projects (such as caja businesses) or make recommendations which cover our entire investment (for example lending only to young female borrowers if we see that need in the community).
What type of consulting opportunity is available for volunteers?
Upon first house visits, volunteers have a couple of hours to quickly assess the family’s household income and expansion opportunities. As our cajas mature and people pay back loans, the plan is for more advanced, weeklong consulting to become a possibility for those farther along in their financial development. This ia great opportunity to touch on our upcoming hybrid model.
How many community members will a volunteer meet during a typical brigade?
Including household visits, meetings with the Caja Admin Board, and the community meeting, typically about 75-100.
What are the greatest barriers for getting community members to save, to qualify for a loan, to take a loan?
1) credibility – getting community members to buy into the fact that their neighbours they grew up with, are now qualified to hold, manage and grow their funds.
2) knowledge – community members are used to instant transactions, the concept of interest, payments are foreign. Also there are plenty of preconceptions about who exactly is benefitting.
3) collateral – because house records are rare, and tangible goods such as lifestock are also uncommon, savings and or a cosigner are often needed
4) initial loan size/term – agricutlural loans are larger scale and longer term than the caja can initially provide with its startup capital.
The objective of microfinance brigades is the establishment and growth of community owned savings and loan institutions which will stimulate the local economy and foster micro-enterprise. This would then raise the overall living conditions for the community and provide Global Brigades communities with a long term development solution.
What are the major needs the program is addressing?
The goal of Microfinance Brigades is to raise the entire economic level of a community so that this may have tangential effects on all other facets of development. Why can’t these people afford preventative care or nutrition, which would lead these kids away from medical brigades? Why can’t they afford to buy pure water instead of drinking from the same river people wash their dirty laundry in? Why can’t they afford to construct for themselves some basic sanitation? Wherever people are clearly not capped by their work ethic or ability, but solely by their location of their birth, this is when microfinance is needed.
Who gets involved in Microfinance Brigades?
Although many finance, econ, and business students have participated in MFB’s, students and volunteers of all kinds are able to participate on the brigade, from Anthropology to Marine Biology majors. Like all great ideas, microfinance is beautiful in its simplicity. Passion and dedication are the most important requirements for our brigaders.
How much Microfinance experience do volunteers need?
None at all. In fact, this is exactly what the program was designed for- to provide the tangible representation of the development theories learned in the classroom. It’s an experience that is designed as a lesson in itself.
What does the Program Lead do to prepare for a Microfinance Brigade?
Microfinance is all about community participation, and the brigade represents this. The community bank and its board work with the Program Lead to coordinate in-house visits to potential borrowers, and to create agricultural activities demonstrating community members’ way of life. Program leads work with brigade coordinators in brigade prep to make workshops and come up with a potential focus for the brigade, whether that is savings, membership or simply community awareness.
How are projects/communities chosen?
We concentrate on communities with an established Global Brigades presence, in order to take advantage of our already established reputation. Community leaders have even contacted the MFB program to establish the program in their community. From there, we will use the excellent data collected by our research and evaluation team to choose a new community based on economic need.
What does a volunteer do to prepare for a Microfinance Brigade?
The pre-departure packet contains a number of additional resources covering a number of subjects relevant to microfinance in Honduras. Reading these to attain a basic understanding of the concepts in microfinance is highly recommended. Also since microfinance is all about community interaction, some rudimentary spanish vocabulary would be useful on the brigade as well, although not required. Each brigade will be assigned a topic to focus on along with an education manual to prepare workshops and activities with the community. With the topics a group is assigned it is recommended that brigaders prepare workshops/activities, posters and signs for our week ending community event, surveys for data collection in the community, and questions on our model/for our presenters.
What does a community do to prepare for a Microfinance Brigade?
The community bank and its board work with the Program Lead to coordinate in-house visits to potential borrowers, and to create agricultural activities demonstrating community members’ way of life. They also fit their brigade in around their daily work schedules, and commitments to other global brigade disciplines present in the community.
Is there a minimum or maximum for groups?
There is a 15 person minimum and smaller groups are even conducive to more intimate interactions with the community bank. However larger groups have the advantage of bringing a larger CIF pool, expanding their project possibilities. Either way Global brigades will accommodate adequate staff to make the brigade a success.
Do students need to bring any materials?
Notebooks and writing utensils are recommended, and workshop specific materials may be requested. Different types of apparel and shoes are also recommended for the activities of the brigade. Donations are best utilized as great incentives for the community to participate in activities throughout the week. We discourage brigaders from freely giving out donations to only certain families because it creates inequality among community members if not everyone will receive a donation.
What kind if any preparation should a group go through before a brigade?
In addition to the recommendations listed above, Skype calls with the program advisor are recommended. And group meetings to go over questions and concerns are a good way to get everyone involved early.
What does a student do on a Microfinance Brigade?
The basic itinerary for a student on a microfinance brigade is designed to a) establish an intellectual and emotional bond to the community and b) demonstrate firsthand the effects and possibilities of microfinance. To accomplish this, students will be visiting homes and farms to learn about the agriculture and finances of potential borrowers, meeting with the Caja Rural (community bank) on a daily basis, learning about various microfinance models from presenters, and a number of interactive activities designed to educate the students on community life.
What does the community do on a Microfinance Brigade?
Microfinance prides itself on involving the community in the process. Whether it is opening up their homes to foreigners or freely discussing their personal finances, MFB requires a special level of trust from the community. The community also will cook food for brigaders and provide the brigaders with educational agricultural experiences. Finally the community bank members are crucial in mobilizing the rest of the community’s involvement in our week ending event.
How is the Caja Rural (community bank) formed and who is forming them?
In our model, community members themselves are the ones running and owning the community bank. We train and provide technical assistance. A dedicated commitee within the community banks board is in charge of collecting loan payments.
How are payments on loans made?
These are small villages that on average, lack access to electricity and therefore unable to process credit transactions. This means that all bank transactions are done using cash.
If there is a failure to pay, how are these defaulters being actively pursued and by whom?
The aforementioned commitee is in charge of collecting on payments. Default is rare, and they are pursued with housevisits, fines, collection of collateral (livestock etc) and public declaration.
Who are the guarantors of the loans? Who is conducting all of the underwriting?
Loans will either have cosigners or collateral backing them, there is no formal underwriting process in these small communities.
Do we act as a caja ourselves or are we acting through one already set up?
We are assisting the caja, and our funds will act through this structure.
How many caja rurales exist in Honduras (approx)?
Approx 650 exist as of June 2010.
Who are the major players (MFIs) present in Honduras?
WorldVision, Procredit, FINCA and FUNDER.
How many households will a group of brigaders get to visit in a one-week brigade?
On a one week brigade a typical first time brigader will visit six households.
Will the home visits entail a tour of the farms or just time to ask the family members questions about their farm/business?
Typically both. It all depends on the relationship and comfort the volunteers build with the household member. It cannot be approached as an awkward inspection- it should instead be for the community member a proud display of generational work.
How will volunteers participate in the final community meeting?
Each brigader will have different parts in the presentation, coming up with their own examples, songs, and skits to emphasize their topic for the meeting, such as savings.
How will volunteers participate in funding a caja rural? Direct to farmers?
Volunteers will be funding the caja rural as a whole. $100 from each volunteer’s Program Contribution is allocated to the Community Investment Fun (CIF). At the end of the week, the volunteers determine if the CIF should be allocate towards general capital in the Caja Rural or to a more specific cause. This allows for a) a respect for the autonomy of the Caja Rural, which is community owned and operated and b) us to fund overall caja projects (such as caja businesses) or make recommendations which cover our entire investment (for example lending only to young female borrowers if we see that need in the community).
What type of consulting opportunity is available for volunteers?
Upon first house visits, volunteers have a couple of hours to quickly assess the family’s household income and expansion opportunities. As our cajas mature and people pay back loans, the plan is for more advanced, weeklong consulting to become a possibility for those farther along in their financial development. This ia great opportunity to touch on our upcoming hybrid model.
How many community members will a volunteer meet during a typical brigade?
Including household visits, meetings with the Caja Admin Board, and the community meeting, typically about 75-100.
What are the greatest barriers for getting community members to save, to qualify for a loan, to take a loan?
1) credibility – getting community members to buy into the fact that their neighbours they grew up with, are now qualified to hold, manage and grow their funds.
2) knowledge – community members are used to instant transactions, the concept of interest, payments are foreign. Also there are plenty of preconceptions about who exactly is benefitting.
3) collateral – because house records are rare, and tangible goods such as lifestock are also uncommon, savings and or a cosigner are often needed
4) initial loan size/term – agricutlural loans are larger scale and longer term than the caja can initially provide with its startup capital.