Microloans in El Salvador
El Salvador is the smallest country in Central America. With over 6 million inhabitants, it has the highest population per sq meter in all the American Continent. However, overpopulation it's the slightest of it's problems: Homicide rates that rank the country among the most violent in the world, unemployment, a local economy in crisis are just a few of the setbacks that the country experiences in it's struggle for developtment.
Around 50% of the population economically active in El Salvador work under what's call "informal" businesses. What it means is that they either own or work for microcompanies that don't have a legal structure, or actual access to credit or financial services. These companies offer products and services in the salvadorian market, and struggle each day to subsist.
Many of them, lacking the oportunity to apply for a small start up capital, give up on their intentions of making their businesses grow, and don't seize opportunities to improve their quality of life.
Through the pre selection of a small group of enterpreneurs, MicroredSV wants to implement a new method of microcredits in El Salvador. Where both loaner and enterpreneur can stablish a relationship of "business partners" , which allows these microcompanies to grow.
The loaner will select among a number of profiles, the enterpreneur of his or her pereference and will make her or him a "microloan" (which can be as small as $20, or as big as the total amount the enterpreneur requires). These loan will not generate interest but will be returned to the loaner after a previously stablished time period. Since the small business owner will be commited to returning this money, he or she will make the best of it, and use this resources to generate revenue and help the business grow.
The loaner will also receive updates via email, and will see exactly how the money is being invested, and will be able to see the difference this loan has made in the enterpreneurs' life, and his or her family's.
Getting the money to fund these loans will not be an easy task, it will require the support from people who believe in El Salvador and Salvadorians enterpreneurs. It may take, 10, 20, or more loaners to fund a project, but once it's funded it will make a significant difference in the receiver's life, and will generate a positive impact in our local economy.
This initiative's success will of course depend on the repay rates and the hard work of it's enterpreneurs, when they repay their "investors", the amount they were funded with; as well as their updates, which they will provide so we can walk with them each step of the way.
This is a new path we are just starting, but we have faith that any efforts we put into it will make this initiative grow, and that it will create change in our communities throughout El Salvador.
