Microfinance: First Step Out of Poverty for Women

A solution to empowering indigenous women in Chiapas is through microfinance. Microfinance are financial services such as loans, savings, insurance, and training to help people who are living in poverty. This is a relatively new sustainable solution in alleviating global poverty but has proven to be quite successful. Many microfinance nonprofits have emerged and focus on agriculture and rural development.

One nonprofit is Chiapas-International. This nonprofit provides funds to help women in poor areas in Latin America. The loans help these women start self-sustaining businesses in their communities. The loans, which range from $25 to $200 dollars, help these women and families take the first step out of poverty. The women of Chiapas submit an application, which is then evaluated by Chiapas-International. Once approved, Chiapas-International appoints a loan officer to meets with these women. The loan officer provides educational tips on how to make their business successful. Women sell their products and earn money and repay the loan with their earnings. There is a small interest for each loan; the interests accumulated help pay for administrative costs and an opportunity for more loans to be distributed. Once the first loan is repaid, the women may apply for a second loan.

Chiapas-International works with three microcredit institutions: AlSol, Esperanza International and Grameen Foundation, and has helped over 47,000 women with a 97 percent repayment on these loans.

Microcredit has proven to be successful. In 2005, the United Nations declared it the year of Microcredit. In 2006, Muhammed Yunus, the founder of Grameen Bank, received the Nobel Peace Prize for “their efforts to create economic and social development.” Yunus established Grameen Bank in 1976 during a famine in Bangladesh. Grameen Bank borrows money to over 6 million people – of which 97% are women.

Microfinance is not the only solution to end poverty. There are many factors that need to be taken into consideration. Nonetheless, microcredit has proven to be a great stepping-stone for people to get out of poverty. The goal is to get the indigenous women of Chiapas started and on the first step on the ladder to end poverty.

"Give a man a fish, he'll eat for a day. Give a woman microcredit, she, her husband, her children and her extended family will eat for a lifetime."

- Bono

Photo: MorningStar Institute

For more information please visit:

http://www.grameenfoundation.org/

http://www.youtube.com/watch?v=Tvhx9KjfFIA

http://www.kiva.org/about/microfinance

http://www.ifad.org

Poverty Among Indigenous Women in Chiapas

There is little data on indigenous people around the world. Nonetheless, it is estimated that “indigenous peoples make up 15 percent of the world’s poor,” according to the UN Permanent Forum on Indigenous Issues. Indigenous people are a highly marginalized group and are often neglected. This is the case of Chiapas, Mexico.

The state of Chiapas is one of six states with the highest indigenous populations in Mexico. According to the Instituto Nacional de Estadistica y Geografia (INEGI), there are five predominant indigenous groups in Chiapas: the Tzeltal, Tzotzil, Ch’ol, Zoque, Tojolabal. Fifty percent of the indigenous women in Chiapas are illiterate compared to 28 percent of the indigenous men.

Many indigenous homes do not have running water or electricity, and have dirt floors. Most of the indigenous population live in rural areas and work in agriculture. The indigenous population in Chiapas face discrimination with in their own country. However, the indigenous women are the most affected group. These women are limited to land and decision-making, thus limiting their economic prosperities. In 2005, a group of indigenous women gathered at the United Nations and said, “indigenous women in Latin America feel that they are discriminated against by their governments and society”.

In his book, The End of Poverty, Jeffrey Sachs said many countries fail to achieve economic growth due to several factors. One is the demographic trap: a high fertility rate in which families cannot afford to invest in their children’s health and education. One way to avoid the demographic trap is to educate girls and women. “Education, law, and social action empower women […but] all of this requires money.”

In my next blog I will discuss an NGO or nonprofit that focuses on empowering women. These women deserve an opportunity to learn the basics of business and how they can sustain for themselves and families, whether it is by selling artifacts or purchasing land to grow crops to sell. Empowerment of women and education are key components to the reduction of poverty.