So, last time I talked about savings in La Unión. Recap: nobody does it and it is vitally important since incomes vary drastically at different times of the year. So what can be done to remedy this problem? The two things that need to be addressed are the lack of knowledge and the lack of a good savings facility.
Enter INFOP, the National Institute for Professional Formation in Honduras. This organization provides business training and development to a variety of small businesses, including small agricultural producers, in just this area. INFOP, much like IHCAFE, has professionals ready to teach, and UMF is now coordinating business training sessions for the near future.
Now, when I say, “business training”, this may not be the same thing that most people think about in the United States. The first training that we are looking to coordinate will be on savings. How much do people make during the harvest? How much could they save? What could they do with this money? How will they save it? The next session will be the planning of investment, essentially, planning beforehand how much producers will need to invest in their fields, versus how much they will make during the harvest, in order to decide the right amount of land to plant, how to budget the money they have saved in order to purchase necessary inputs, and how much money to expect to keep after all of their expenses. This will be complemented with several other topics tailored to agricultural business, but these first to sessions – which will teach both how to save and then what can be done with those savings – will serve as the building blocks for anything that will be taught in the future.
As for the lack of facilities to save money, the easiest solution to the lack of savings facilities would be for UMF to take savings ourselves. Unfortunately, as a non-profit rather than a formal bank, we are not legally able to do this. Additionally, we have heard stories of distrust from people in towns who have deposited savings with organizations before, only to find their money gone when they went to withdraw it at a later date. As such, UMF has been looking into other options. So far we have come across two.
One – form community banks based upon the common Caja Rural form. These would allow members to manage savings themselves and would be located in each individual town. However, these come with problems of trust and the potential for mismanagement mentioned in my previous post.
Two – set up bank accounts at a formal bank. To me, this seems the better option, especially with the recent opening of an ATM in La Unión (which consists of a card scanner at a pulperia or small store; the store owners then take money out of the drawer in the amount withdrawn). While basic, this ATM allows bank members to make deposits and withdrawals 7 days per week here in La Unión, thereby fixing the transportation problem previously faced. Taking advantage of this, UMF could coordinate the opening of personal savings accounts with the training sessions in towns so that people could, in a short period of time, learn about the advantages of saving and gain access to a viable savings mechanism.
So where does that leave us? I think that, by coordinating proper training and facilities for savings, UMF can help to implement an effective savings program which will help the people of La Unión save money to be used for emergencies or otherwise productive uses during times when money has not traditionally been available. My hope is that we can at least make first steps to move away from the attitude of “dinero ganado es dinero gastado.”
Until next time, adios.