Motorbike Musings in Guatemala

Toner - Research in Guatemala - CLACS at NYUEveryday I ruffle plastic overalls over my jeans when whisperings of rain saturate our senses and afternoon water darkens the clouds. Our rides can be long, bumpy and wonderfully gritty; occasionally I daydream I’ve made it to the final tryout for an international development/microfinance biker gang. Granted, I’m not actually driving, I wear the cheapest and therefore least-macho rain suit available, and internally complain when my lower half goes numb after 30 minutes, but John Fogerty seems to continually rasp me into bigger and bigger ideas as I realize coach has essentially put me in and I’m ready to play.

Beyond trying to savor every cloud drift, every volcano in the distance, every pastoral postcard that is my life, the long hours I’ve spent on the bike allow for what one rarely has in New York: time to problem solve through contemplation. And so, as I seek to validate my happiness and make use of my privilege, I give in to the puritanical rejection of pleasure and muse.

Last Thursday, for example, I completed my only client interview of the day around noon, but still accompanied the loan officer, Fernando, on five individual visits in sporadic small towns all the way back to Totonicapán about an hour and half a way. Unlike communal banks of 15-20 people, individual loans are “easier” since you don’t have to wait for latecomers or deal with on-the-spot crises when someone doesn’t bring their payment.

That day, as with others recently, I continued to develop ideas. One topic I’ve been considering is incentives both for loan officers and clients. Many organizations have incentives for opening new accounts or for when a certain percentage of their clients remain solvent.

From conversations with those who have worked for more than one organization, the monthly salary of some loans officers in micro finance can reach up to 5,000 Quetzal (about $625 USD). This might be the case, for example, if the organization has an incentive program for opening new accounts, clients remains solvent, and the organization provides officers with a stipend for gas and motorbike repairs. At the same time it might be as low as $375 USD if those elements are not in place. These figures are still significant, considering most families of 4 or more in rural areas survive on 100-200 Quetzals a week. What if officers were given incentives to strategically link clients to social services or if clients were given opportunities to grow their loan amounts if they or their children pursue education opportunities?

Some organizations like Pro Mujer in other countries provide comprehensive services beyond credit that including health and educational programs. Some governments such as Brazil offer conditional cash transfers to poor populations. A family, for example, that can show their children are enrolled in and attending school might receive up to $7 USD a month for up to three children. Other transfers include women’s health and cooking gas credits.

It is not, however, common practice for many micro-credit organizations to provide these extra services. One loan officer told me there are as many as 30 to 40 micro credit groups just in Sololá, a department with only about 423,000 inhabitants. I now am researching how to better coordinate between existing social and health support groups, governmental and non governmental, to provide these services. Micro credit organizations would benefit as clients further their education and can grow businesses, lower costs through preventative health visits, and can link to savings groups.

Anyone involved in development would highlight the need for these comprehensive services in order for communities to thrive and become self-sustaining. Any urban planner or USAID director would highlight that broad consensus and piggyback services are essential. Yet, how does one create such agreement? Perhaps more importantly, how can we facilitate competition and empowerment for rural clients to choose?

Essentially, given a weak government with limited resources, I’ve been considering how might one “privatize” economic and social development at the scale and rate of success of Brazil. I’m well aware of the baggage the word carries, particularly in Latin America after the oft-criticized shock therapy and neoliberal reforms. Yet, I’m a realist. Micro-loans did not originate from governments nor should we always turn to government for development.

Microcredit groups might or might not be responsible and interest rates might or might not be competitive. Why is it that people in the developing world can log onto the internet and receive 4 to 5 quotes for car insurance, health insurance, and even educational loans, yet the poorest of the poor rely upon sporadic outside help? I am developing strategy ideas for putting the demand for micro-credit and relevant educational and health services into the hands of those who need it. Just as Brazil’s bolsa familia began at the local level so too might we proceed with coordinating social and economic development. How can we better link communities to competitive services then?

One way is to use mapping and qualitative studies, much like my research here. Imagine you go online and see a map of Guatemala and then can see concentrations of poverty, even topic specific poverty such as areas where there is no water coverage, poor health care, or a certain income threshold. Then you, as a globally aware citizen or ED of a business development non profit, could locate, say, microcredit groups who need business training for their clients and present the group with an offer. Ideally, it would also facilitate competition and small groups/communities would have options themselves, not having to rely on the micro-credit middleman.

It might also keep a profile of groups and coverage in the area. That is, lets say an area or community has a lot of microfinance and business training groups, but lacks basic education and potable water. On the map, you’d be able to see if an area has a “complete link” of minimum coverage so communities are given the full range of comprehensive development, not just piecemeal.
So government entities, NGOs, even individuals could target where the need is in a very specific way – you could even use the database for relief efforts, as one could incorporate interactive elements to see where landslides or flooding occurred.

Some of the technology is available, but not being used to these ends. I’m just working out how to make it overtly profitable and to sift through the ridiculous amount of consensus needed to implement it/ the clear drawbacks such as intrusion of international and agenda-based groups into culturally sensitive or vulnerable areas. Also, one might argue it could either detract from the strength of the state or enhance it, depending on how the consensus comes along.

I have plenty of time, of course, to think about these issues while buzzing along mountain roads. More importantly, I’m making a mental list of who to contact when I get back to make it happen. If you or anyone you know are involved in similar projects or ideas, please let me know.

John Toner is an MS Candidate in Global Affairs at NYU

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