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Central America

Map of Central America

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Guatemala & Nicaragua

A woman in Central American operates a small business baking bread. By receiving a Spark Grant and training, she now has the skill-sets to run a successful microenterprise that enables her to save and plan for the future.


BACKGROUND:

Although only a short plane ride from Florida, Guatemala has the fourth highest rate of malnutrition in the world. Right in the United States’ “backyard,” people live in conditions we are more likely to associate with Sub-Saharan Africa than our Caribbean neighbors. Guatemala and Nicaragua are the second and third poorest countries in the Western Hemisphere, after Haiti, and during the past thirty years have suffered economic, political, social, and natural disasters. For these three countries, trouble comes in battalions.

The average Central American lives and supports their family as a subsistence farmer, much as their forefathers have for centuries. After generations of division, family land has been whittled into tiny plots that can barely produce enough corn and beans to last between three and nine months. To supplement their income, people work as day laborers, or rent land and work as share croppers, or seasonally migrate to work on sugar and coffee plantations. Women sometimes work in the field, and in Guatemala most women do some form of weaving on a back strap loom as wide as their waist. Layered on top of this meager existence have been the following:

  • With the help of a Trickle Up Spark Grant, Guatemalan women can start or expand weaving businesses making elaborate traditional blouses called huipiles.Wars that have lasted over ten years in both countries, in Guatemala it has resulted in the death of 800,000 people, 85% of whom were indigenous.

  • Due to the geographic instability of the isthmus, earthquakes, volcanic eruptions, droughts, hurricanes, and mudslides are relatively common occurrences, wiping out crops, homes and entire communities.

  • Very dependent on a few products like coffee and sugar, the countries’ economies are highly volatile. The recent global economic downturn has resulted in escalating food prices, with domestic food prices around 60% higher than they were in 2005.

  • A decline in remittances, a source of income sent home from relatives working abroad, on which over 30% of the population depends on, has further limited the ability of the poorest to put food on the table.

  • Weak government services and infrastructure, leading to widespread illiteracy, (approximately 80% for Guatemalan indigenous women), high levels of maternal mortality, chronic malnutrition, and stunted growth.

  • The drug wars of Mexico have penetrated Guatemala, leading to skyrocketing rates of violent crime and a homicide rate of 18 people a day, higher than that of Iraq.

In Guatemala, Trickle Up’s works in small rural communities consisting of 30 to 500 families in two of the three poorest regions of the country, Alta Verapaz and Quiché. Trickle Up participants are primarily from the Queqchi and Quiché indigenous groups and live in remote rural communities, often an hour’s walk or a once a day bus ride to the nearest market. Their homes have dirt floors, they fit 6-8 people in one or two rooms, and their diet consists primarily of beans and tortillas, with chicken soup once a week when they are doing well. Between three and six months per year (known as the 'hungry season'), many of our participants do not have enough to eat, and must migrate or borrow against next season’s harvest to survive. Without conventional employment options, self-employment is the only means of survival, which is why Trickle Up has a vital role to play.

In Nicaragua, Trickle Up also works primarily in remote, rural communities, outside the cities of Matagalpa and Leon, and the Atlantic Coast region of Bluefields. According to the United Nations 2009 Human Development Report, an estimated 2.5 million people out of a population of 5.5 million still live in extreme poverty. In Nicaragua the majority of the rural poor rely on seasonal agricultural work that brings in as little as $100 per month, which may be supporting a family of six. The country's tropical dry zone results in periodic drought and other extreme weather conditions that place further strain on agricultural production and employment. For the poorest, household coping strategies include selling productive assets, withdrawing children from school, or drastically reducing food intake: measures that push households deeper into chronic poverty and compromise health and well-being.

Trickle Up is helping the poorest people in these two countries establish microenterprises that diversify their income streams, broaden goods available in local markets, and build savings that can provide a buffer against economic shocks in uncertain times.

THE PROGRAM:

The program contains three central components: a Spark Grant to jump start or expand a microenterprise, basic business training, and integration into an autonomous savings group.

  • Participants use their Spark Grants to launch or develop a wide range of enterprises in a variety of sectors, including: artisan or textile work; growing new products; petty trading; animal husbandry; tailoring; and selling used clothes and prepared foods.

  • Basic business training builds their skill base and improves their ability to sustain and increase the profitability of their enterprises. Training topics include market analysis, cost calculation, price determination, and commercialization. Depending on the needs of the community and the capacity of the partner, some participants receive additional training on livelihood skills (e.g. organic agriculture), social issues (e.g. gender awareness), and healthcare (e.g. basic nutrition).

  • All Trickle Up participants join a group of 15-25 program participants and are trained in how to run their own savings and credit groups. Through these self-governed groups, participants learn to save, have a safe place to keep their savings and lend to each other, charging an interest rate of 5-10% that builds the group fund while also providing ongoing access to loans.


Like poor people all over the world, what Trickle Up participants want most of all is a chance to feed and educate their children, so that they may grow up to live a life easier than their parents.

EVIDENCE OF LASTING CHANGE (2012 DATA):

  • The number of participants who have savings that would cover their household expenses for more than a week more than doubled, from 32% to 79%. 
  • Households reported doubling their average monthly consumption of protein-rich foods.
  • All women are contributing to their household’s income versus 28% at the start of the program.
  • 57% of women who have taken out a loan from their savings group have done so to maintain or expand their business.
  • 89% of women report having their own money for purchases.


To learn more about Trickle Up's impact, click here.


The Guatemala program is made possible in part by the generous support of the American people through the United States Agency for International Development (USAID).
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