Bridging the Gap Between Qualitative and Quantitative Analysis of Microfinance in Guatemala

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Greetings from Guatemala!
I suppose I´ll give a brief overview of what my research is about/ how everything is going.
Microfinance organizations, when run well, are heralded as a large reason for reducing poverty. Yet, looming questions remain. How can microfinance blossom into increased economic production and growth? How can economic development turn from dependent to endogenous? Is microfinance the answer? Literature and research are not capable of answering such basic questions at the moment.


We have yet to bridge the gap between qualitative indicators of success and quantitative indicators of success. That is to say, one might point to efficiency within an organization and analyze audit reports, yet what are the managerial reasons for such success and how does an organization see its own best practices? What are the cultural and historic factors that play a role in microfinance from the perspective of its clients? What is the future of microfinance?
I was hoping to analyze the top 4 IMF organizations in Guatemala according to Microfinanza Americas to examine the distribution of both their lending and the nature of their lending. Unfortunately when I came during spring break to arrange interviews and establish initial contact only one organization FONDESOL was responsive/ willing to cooperate. I am still going to attempt to contact those other groups while I´m here, but now my proposal will incorporate the same concept just with more depth at the expense of breadth.
After meeting with the management of FONDESOL on Tuesday, we decided to focus on two agencies within FONDESOL, one in Solola and the other in Totonicapan. I will interview the agency leadership and then conduct an internal social impact study of the clients over the next month. I hope to also use GIS technology to examine how microcredit is distributed demographically and geographically, particularly in terms of indigenous populations. I will overlay the following demographic data with the flow and location of funding for specific industries: areas of population growth, areas of growth for Economically Active Populations (PEA), indigenous and gender data, and distribution per zone and municipality. These categories will be overlaid with specific factors of each agency, as well as varying combinations of them. I´m still working out the kinks of my GPS device which, of course, is the crux of this element of my research. If all goes well, however, it should be an interesting visual.
The methodology of MicroFinanzas America did not explore intra and inter-company relationships, social initiatives for creditor-lender cooperation and communication, or how these institutions address post-conflict cooperation. It assumes continuity between countries and regions with extremely different demographic, historic, and economic backgrounds. Ideally, this study will shed some light on the real or at least perceived impact of lending from the clients´ perspective. Though FONDESOL has not conducted an impact study like this, it has grown significantly. This hopefully can serve as a pilot study for the future and/or on a larger scale and better aid in directing their expansion.
John Toner, MS Candidate, Global Affairs

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