Adelante Foundation Microfinance

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Adelante Foundation Microfinance

Honduras
Project Stage:
Established
Budget: 
$500,000 - $1 million
Website:
http://www.adelantefoundation.org
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Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

On October 28, 1998, Honduras suffered the greatest catastrophe in the nation’s history when Hurricane Mitch made landfall on its northern coast. Over three million citizens (51% of the total population) became homeless through the complete obliteration of 25 villages and 30,000 homes. The $3.8 billion in damages included 70% of roads, the destruction of 92 bridges and 90% of banana crops. The damage left in the wake of Hurricane Mitch prompted Stanford graduate, Tony Stone, who spent most of his childhood years in La Ceiba, to return to Honduras and start up Adelante operations in 1999. Based on the lending methodology established by the Grameen Bank of Bangladesh, Adelante’s mission is to improve the standard of living of the rural poor in Honduras by providing small loans and education to women so they can invest in micro businesses.
Our headquarters is located in La Ceiba and we have five branch offices that offer our integrative microfinance-education program to over 6,000 rural women across eight Honduran departments with a total loan pool exceeding $1 million: Atlántida, Colon, Islas de la Bahia, Cortes, Yoro, Intibucá, La Paz, and Choluteca. Honduras' fertility rate is 3.01 so we can speculate that with 6,000 clients we are reaching over 18,000 children. Our combination of microcredit and small business education ensures that our clients become successful entrepreneurs, and our repayment rate of over 97% proves it.

About Project

Problem: What problem is this project trying to address?

In Honduras, 67% of the country's 8.2 million population lives below the poverty line while the country ranks as one of the most unequal in the world. Hondurans suffer from underemployment rates of over 50%. Rural Hondurans face poverty with much greater prevalence than urbanized Hondurans. Just under half of Hondurans live in rural areas but 72% of the rural population lives in poverty. The neglect that rural Hondurans endure from government results in continued poverty in rural communities. Further, studies have found women to experience poverty more intensely than men, leaving women to hold the greatest burden.

Solution: What is the proposed solution? Please be specific!

Adelante focuses its integrative microfinance-education program in rural areas of Honduras and over 99% of clients are women. We provide them with small loans to invest in their micro-businesses so that they and their families can enjoy an improved standard of living. Our combination of small business loans and business development education ensures our clients become successful micro-entrepreneurs. The majority of our loan pool is dedicated to our solidarity group loan product. Clients do not need to own a home or have another form of collateral; instead the pressure involved in the solidarity group loan structure affords eligibility to those who need it most. Once a client develops a solid credit history they become eligible for individual loans, for business investment and also home improvement.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Aida Zulema is an example of one Adelante client who has seen a dramatic increase in economic opportunities since taking out her first loan five years ago. Although her children are older, she is now responsible for raising two grandchildren as her own children and is also partially responsible for three more. With the help of Adelante, Aida began her own convenience store after selling lottery tickets in local communities for more than 25 years. Although she continues to travel to sell lottery tickets on the weekends, she is grateful that she and her husband have a steadier source of income with the grocery store. Her husband helps her with the store and also grows his a couple local crops to feed his family. Her first loan was for about $26.00 and her eleventh, most current loan is for about $633.00. The growth that Aida has experienced demonstrates that many women only require very small loan amounts in order to get started on a successful business venture and expand the economic opportunities for their family. Aida’s story is only one from the over 6,000 clients Adelante currently serves and 54,983 clients since beginning in 2000. Like many of our other clients, Aida hopes to pursue a Home Improvement Loan in the future. This product was launched last year and is designed for clients who have been with us for at least 3 loan cycles and have demonstrated their ability to make payments on time, regularly attend their bi-monthly assembly meetings and invest diligently in their businesses. These loans are taken simultaneously with their solidarity group loans, allowing them to maintain their place within their group, continue to invest in their business and receive business education.
Sustainability

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

Adelante's competition includes 23 other microfinance institutions that operate within Honduras. We take pride in maintaining our focus on poor rural women, who have less access to economic advancement than others in Honduras. Due to our own commitment to maintaining our mission, Adelante considers it to be a disadvantage to us and to all microfinance institutions when one institution operates irresponsibly. This behavior reduces the confidence that we have built in our own clients and the overall perception of microfinance around the world.