Nicaragua: Using Micro-enterprises to Rebuild a Nation

From under the wreckage of twelve years of hellish war and economic disaster, a glimmer of hope poked through the darkness with Violeta Chamorro being elected to the presidency of Nicaragua in 1990. After twelve years of economic free-fall under the Sandinista regime, Nicaragua began free market reforms in 1991. Despite some setbacks, the country has made dramatic progress: privatizing 351 state enterprises, reducing inflation from 13,500% to 12%, and cutting the foreign debt in half. The economy began expanding in 1994 and grew a strong 5% in 2000, with overall GDP reaching 2.3 million in 2000.¹ Despite this growing economy, Nicaragua still remains the second-poorest nation in the western hemisphere.¹

Micro-enterprise Loans
In 1991, through Mario Aviles, a childhood friend of Mrs. Chamorro, Children's Hunger Relief Fund (CHRF) was given an open door to minister among the ruins by giving a new hope to families via Micro-enterprise loans, a building block for a broken and devastated nation. The unique Micro-enterprise fund was started, and CHRF with its affiliate FUNAD (headed by Mario Aviles) has been giving small business loans ever since to qualified families giving them hope for the future.

How does CHRF qualify recipients for loans when almost the entire country is sunken in rubble with many still scavenging for existence? They start with networking through the people in the neighborhoods and their families. People know people. They know who is a hard worker, who has the knowledge or experience to run a business, and who is honest and has a good work ethic.

Next, collateral or a guarantee is established for the loan to be paid back. Sometimes the collateral can be a family horse or perhaps a refrigerator, or a bike. If the prospective recipient doesn't have anything, it may be a friend who has something to offer and who will sign for the borrower. Many loans start as low as $300, but in Nicaragua, $300 goes a long way to start a small family business.

After collateral and perhaps a co-signer is established, paperwork is filled out, references checked, and a contract is drawn up by an attorney stating duration of the loan, interest rate, late fees, and an agreement for the recipient to meet with our staff once a week for training, problem solving, and fellowship.

Business Training
What is this training? Loan recipients are taught life and business development skills such as: effective planning, the benefits of hard work, the importance of financial integrity, leadership, forgiveness, understanding others, communication, justice, and personal motivation, which build families, which builds communities. Generosity, a major key in the growth of the community, is taught to encourage recipients to give back to the community by volunteering to help others in need and/or by giving a portion of their earnings to needy causes. Many start small groups of their own and teach others in the community about these principles for the successful building of their families and their communities.

While visiting our orphanage in Nueva Guinea, I saw this principle at work. I was being served dinner by Josephine whom I recognized as the owner of one of the produce-stand enterprises we loaned money to a few years before. She volunteers her time at the children's home to help take care of the orphans and their many needs. As I visited more of the sites in the area, I began to see numerous forms of giving back to the community.

One example occurred while I visiting Hotel Nueva Guinea where I met Segunda and her husband Cruz. Eight years earlier, they had received a small $300 Micro-enterprise loan to start a pulperia (small store) that would be set up in a corner of their war-torn, dilapidated hotel. Because of their experience prior to the war and along with their training from our staff in Nueva Guinea, the pulperia began to flourish. They paid off their loan in a short period of time and decided to expand their product line. As business continued to grow, they received a few more loans and began to rebuild the hotel.

Currently they are building a new wing with beautiful air-conditioned rooms, which also have their own bathroom (a luxury in Nicaragua). They were presented the "Best Hotel" award in Nueva Guinea in 2000. Segunda and her husband give back to the community by conducting a small community discipleship group once a week in their hotel, teaching the same principles they were taught by our staff.

Giving Back
Rodiver, co-director of our orphanage, Hogar de Reposo, in Nueva Guinea gives back to the community by teaching life and business development skills to the micro-enterprise recipients in that area. He and his wife,  Victoria, acquired these important skills when they became one of our first micro-enterprise recipients years earlier. As time went on, they were overcome with a burning passion to take care of orphans they found wandering in the neighborhood. They sold their business and helped establish our orphanage in Nueva Guinea.

Rodiver also coaches a soccer team. He meets with the team on a regular basis, not just for soccer practice, but also to train the young high school men the principles of successful human development and giving back to the community. Some of these boys meet with other friends from the community and disciple them as well.

The network does not stop there. CHRF through FUNAD's director Mario Aviles, oversees a furniture-making trade school. This training is conducted in Mario's church building in Managua. During the week the tables, tools, and saws are set up, and interested young men and women from the neighborhood (many homeless, abused, or neglected) are trained in woodworking and other skills, along with the same human development skills taught to our micro-enterprise owners. The trades they learn help them get off the streets, and the life skills strengthen the family and the community. Some of these young men and women become recipients of micro-enterprise loans themselves.

Renting a small area on the opposite side of the same church building is a small Micro-enterprise called CORDISA a small chemical company. They mix and bottle cleaning chemicals, which are sold to hotels, schools, and stores. Felipe started this enterprise with a small loan from CHRF three years ago. Felipe was found by Mario barefoot and selling water on the streets. After working with Felipe for quite some time, Mario considered him a good risk for a Micro-enterprise loan.

Now CORDISA employs a five-person sales force comprised of four women and one man. The chemical area has a staff of four.

Felipe meets once a week with his staff and teaches them professional and personal development skills along with the principle of giving back to the community. Phillipe sometimes employs street youth in the neighborhood that are looking for a way out. Felipe and Carlos (who runs the wood working shop) are highly respected in the neighborhood because of the positive influence they bring to the community.

Besides reaching out to the community, Felipe supports his family of four with his successful business and also attends school in the evening. He has one more year at the university and he will receive his degree in business administration.

Now that you have seen one side of this amazing network, it's time to show you the other. With Mario as the hub, there is a different dimension of the network called La Red (The Net). It is comprised of a group of 12 professional men — lawyers, professors, lawmakers, and businessmen. They meet once a week working the familiar life and business development principles that are taught to the Micro-enterprise owners, but at an executive level.

Additionally, these twelve professionals conduct their own small groups that branch out into the professional community. They meet regularly to teach in their respective cities and specialized areas. Again these groups are taught the same development principles including the important philosophy of giving back to the community. They are teaching others and sharing their resources with the needy as well as bringing about change through their professional networks in their corporations, in their colleges, and universities, in their law practices, and even within the judicial arena. They are building up families, communities, and finally their nation.

Mario also holds popular leadership training seminars on a frequent basis, further spreading the good news for building a nation. These training seminars use books like Colonel Doner's Samaritan Strategy and Thomas Shirrmacher 's God Wants You to Learn, Labour and Love, which includes a chapter on social responsibility through love. The attendees include professionals like Hernaldo Zuniga, Congressman; Oscar Rivas Haslam, Supreme Court Judge; Hasman Pineda, Vice Dean of Upoli University.

As you can see, there is a large and unique network connected to our Micro-enterprise loan program. It starts from the streets and moves through the various channels of society all the way to the upper class of professional businessmen, professors, lawmakers, and judges. Accordingly, not only are poor families and individuals receiving loans to help them start a business, but with our specialized training permeating throughout all levels of society, many are seizing a unique opportunity to rebuild their future, the future of their community, and finally the future of their nation.

Current Status: Mario needs $10,000 to help another 10 to 20 families build Christ-centered businesses. An average loan of $500 to $1000 is "rolled over" every year. The same $500 or $1000 can start a new business year after year.

Send Donations to:

Children's Hunger Relief Fund
Nicaragua
P.O Box 5366
Santa Rosa CA 95402-5366

Make sure you mark your check "Nicaragua." You can give online at: www.childhunger.org.

Notes

1. U.S. Department of State: Background Notes: Nicaragua, March 1998; Released by the Bureau of Inter-American Affairs.