Erin Beck: Impacts of Education in Guatemalan Women’s Microcredit Programs
by Erin Beck, Assistant Professor, UO Department of Political Science
Since its introduction in Latin America in the 1970s, microcredit quickly became a powerful force across the region. Today microcredit accounts for 45 percent of all lending in Latin America, reaching 18 million people, the vast majority of them poor women. And yet, there is surprisingly little systematic information about microcredit’s long-term economic and social effects. Instead, most microfinance institutions (MFIs) look at their repayment rates to evaluate their success, assuming that women who repay have benefited from the small loans, and fail to keep track of their beneficiaries after they have left the organization.
As a corrective, I have partnered with Fundación Namaste Guatemaya (Namaste) to conduct surveys on the long-term effects of a microcredit “plus” approach. Unlike minimalist microcredit organizations that only offer women loans, Namaste couples its small loans with educational sessions focusing on business development and financial literacy and one-on-one business mentorship. According to the monthly information that Namaste collects, women’s business incomes increase while they are participating in the program. But, as yet, the organization has lacked the resources to follow up with women after they have left Namaste to see if this positive economic effect is long lasting. A study of Namaste’s former participants was therefore designed to address a gap in the literature on microcredit and a gap in Namaste’s data that it uses for self-evaluation.
Drawing on Namaste’s internal records, I generated a random sample of just under 90 women—who left Namaste’s program two or more years ago—for the purpose of conducting a survey about their lives since they left Namaste. I arrived in Guatemala at the end of October 2013 to finalize the details of the study. Because we did not want to prejudice women’s answers, we decided to hire outside surveyors who were not associated with the organization. I spent my first week in Guatemala training these research assistants with the survey instrument and on ethical research practices and survey methods. We then piloted and revised the survey, drawing on the advice of Namaste’s employees and surveyors, all of whom had first-hand experience in the types of communities in which we were going to work.
Because Guatemala’s rural and semi-rural communities do not use addresses, and women’s phone numbers change frequently (because they use disposable phones), we lacked a reliable means of communication with our potential respondents. We therefore sifted through Namaste’s paper archives to find hand-drawn maps and notes jotted down by Namaste’s business advisors more than two years ago. The amount of work that has gone into locating these women demonstrates why so little longitudinal research is done; it is time-consuming and costly, but it is also essential for understanding the effects of development interventions like microcredit. Without the support of a CLLAS faculty/collaborative research grant, this type of work would not be possible.
After completing our first few days of survey work in hot and humid (and sometimes rainy) Suchitepéquez, we are looking forward to analyzing our results and sharing them with the CLLAS community. It is our hope that this small study can serve as a pilot for future research on the long-term effects of development initiatives aimed at poor women. Only through such studies can we get beyond the hype of development fads to explore the reality of these types of programs that shape the daily lives of so many women across Latin America.
—Erin Beck is interested in gender politics, development, NGOs, microcredit, and social movements in Latin America. Her current research focuses on the everyday practices and experiences of development in the context of development NGOs working with poor women in Guatemala.
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