Kiva conducts regular, ongoing monitoring of all Field Partners, but only posts status updates here in response to relevant, major changes at the partner.
Status Update - June 11, 2018
On June 3rd, Volcan Fuego in Guatemala erupted sending pyroclastic flows down its south-eastern slopes which engulfed several villages such as San Miguel de Los Lotes and El Rodeo. More than 100 people have lost their lives and more than 200 are still missing as search & rescue efforts are on-going amidst renewed volcanic activity emanating from Fuego. 4,000 people have also been evacuated. We have contacted our partners in Guatemala and both field staff and their families are safe. Our partners are in the process of contacting their clients to ascertain the gravity of the situation and initiate disaster relief activities. We will be in touch with our partners to assess how best we can help their borrowers recover in the event some of them have been affected.
Friendship Bridge (FB) was established in 1990, having first worked in Vietnam and then shifting its focus to Guatemala in 1998. Headquartered in Lakewood, Colorado, Friendship Bridge has a staff of seven in the U.S. and a team of 83 at its six branches, two satellite offices, and headquarters office in Guatemala. Intentionally employing staff that represents the demographics of its clients, FB’s employees are 67% women and 60% indigenous. In addition, 9% of staff members are former clients.
Friendship Bridge currently provides microcredit and education to women throughout 10 departments in Guatemala.
Friendship Bridge Microcredit Plus Program
Friendship Bridge’s Microcredit Plus program offers Guatemalan women renewable microloans – averaging $350 for a four-to-twelve month loan cycle – and non-formal, participatory education lessons on business, money management, self-esteem, women’s rights, health and children’s education.
FB targets impoverished women living in rural areas of Guatemala that are characterized by extreme poverty and high levels of illiteracy. The majority of Friendship Bridge’s client households live on less than US$3.52 a day and depend on income from temporary employment. 42% of clients self-report being pre-literate (according to a 2011 PPI study). Friendship Bridge’s facilitators (loan officers) speak both Spanish and the local Mayan language of their communities (currently nine of the 24 indigenous languages spoken in Guatemala).
While participating in the Microcredit Plus program, Friendship Bridge clients start, expand or diversify their businesses, which range from weaving to raising livestock or poultry to roadside vending to growing fruits and vegetables for sale at the local markets. Friendship Bridge clients borrow as a group, forming Trust Banks – groups of 7 to 25 women who serve as co-guarantors of the loan and act as a self-regulating network of support.
As loans are repaid, they are re-loaned, creating a continuous cycle of opportunity for Guatemalan women, their families and their communities.
Friendship Bridge’s Microcredit Plus program is a hand-up, not a handout, offering many benefits for women. Loans provide self-sufficiency, income generation and consistent cash flow. As a result, women gain self-confidence and respect from their families and communities.
This access to capital for women, who would not normally be eligible for loans at traditional banking institutions, provides them with the opportunity to participate more fully in the economy and to gain self-worth. Many of Friendship Bridge’s clients have stated that their husbands support their involvement with Friendship Bridge, because the husbands themselves are unable to access capital.
Friendship Bridge’s average microloan is $350 for a four-to-twelve month loan cycle with a 2.6% monthly flat interest rate, including all administrative fees. Friendship Bridge maintains a loan repayment rate of 98%. During 2011, Friendship Bridge clients used their loans in the following ways: commerce – 61%; textiles (production/sales) – 23%; animal husbandry – 8%; agriculture – 3%; services – 3%.
Trust Bank Leadership
Friendship Bridge's Trust Bank model provides participants with an opportunity to practice and develop leadership skills. All members of the Trust Bank are involved in determining a regular, monthly meeting time and location that accommodates them all, as well as electing its own board of directors – a president, vice president (optional), treasurer and secretary. Responsible for the management and leadership of the larger group, the board helps address attendance and/or repayment issues with individual members, ensures that meetings are run effectively, and handles banking tasks on behalf of the group.
An important distinction in Friendship Bridge’s model is that the loan officers do not collect loan payments, but rather the Trust Bank board of directors is responsible for the collections role. Two members (rotating monthly to mitigate risk), including one officer, take all of the collections to the bank for deposit. This structure provides decision-making roles for Trust Bank members, further aiding in their empowerment and leadership development.
Non-Formal Education Program
Friendship Bridges monthly loan repayment meetings are coupled non-formal participatory educational trainings – offering lessons on topics previously determined by FB’s clients. In 2008, clients were surveyed and determined the primary curricula topics that interested them, which have since been developed into Friendship Bridge’s educational program. The topics include business, money management, health, business management, and self-esteem.
In 2011, Friendship Bridge added training on violence against women in response to a UNICEF report that cited Guatemala as "one of the most dangerous places for women in all of Latin America... where 98% of crimes against women go unpunished." In 2012, the organization added another topic on over-indebtedness -- how to calculate, how to avoid, and the perils -- for which it won an award from Citi Bank.
At the start of each year, which correlates with the beginning of the Guatemalan school year, the monthly lesson stresses the importance of children’s education and offers tips on how to be a supportive parent to a child in school. Interactive methods of teaching, including rotafolios, a flip-chart style learning tool that includes illustrations or actual client photographs, are used to deliver the lessons to our primarily pre-literate client base.
By requiring attendance at these meetings, FB creates an opportunity for women to develop bonds with their fellow Trust Bank members, while learning new skills that are applicable in their everyday lives. With most clients having only a few years of formal education, the trainings offer a learning experience that is generally otherwise unavailable to them.
The Building Bridges video captures the impact made by Friendship Bridge’s Microcredit Plus program.
Please visit www.friendshipbridge.org for additional information and to read some of the personal success stories of Friendship Bridge’s clients.
A Note on Friendship Bridge’s Portfolio Yield:
We care deeply about the cost that Kiva borrowers pay for their loans, which is why fair pricing is a core part of our initial due diligence process for Field Partners. With Kiva's 0% capital, many of our Field Partners are also able to add additional value to their loans by reducing interest rates, offering non-financial services or creating new loan products.
For partners with reported portfolio yields or average APRs higher than 50%, Kiva takes steps to check that the high rates are justified by the impact of the loans. Kiva also verifies that the partner is not generating unreasonable profits or paying inflated salaries, and that the partner’s elevated operating costs are justified by its operating environment and/or the design of its loan products.
We seek to support loans that don’t impose an unjustifiable cost burden on hard-working borrowers. We nevertheless recognize that in order to reach vulnerable and excluded people with high-impact products and services, some of our partners incur high costs that necessitate charging higher-than-average costs to borrowers in order to allow for sustainability and scale.
Factors that drive up the costs that this partner organization charges its borrowers include:
- They provide very small loans. This leads to higher operating costs, since providing each individual loan presents a minimum per-unit cost.
- They provide more than just cash to many of their borrowers, including costly wraparound services such as healthcare, financial or business training, agricultural extension services, insurance or access to education.
- They’re based in an area with a high cost of living and doing business. This is often due to the high demand and low supply of adequate housing and goods.
- They work extensively in rural areas, which requires their employees to engage in costly travel to find and serve their clients.
Repayment Performance on Kiva
|This Field Partner||All Kiva Partners|
|Start Date On Kiva||May 7, 2007||Oct 12, 2005|
|Amount of raised Inactive loans||$0||$1,089,525|
|Number of raised Inactive loans||0||1,363|
|Amount of Paying Back Loans||$1,855,350||$147,099,100|
|Number of Paying Back Loans||463||194,261|
|Amount of Ended Loans||$8,676,800||$1,193,050,200|
|Number of Ended Loans||2,392||1,537,303|
|Amount in Arrears||$10,961||$10,136,170|
|Number of Loans Delinquent||24||58,358|
|Amount of Ended Loans Defaulted||$46,411||$20,745,122|
|Number of Ended Loans Defaulted||69||50,803|
|Currency Exchange Loss Rate||0.00%||0.39%|
|Amount of Currency Exchange Loss||$0||$5,195,382|
|Amount of Refunded Loans||$15,575||$7,901,425|
|Number of Refunded Loans||5||7,805|
Loan Characteristics On Kiva
|This Field Partner||All Kiva Partners|
|Loans to Women Borrowers||100.00%||76.42%|
|Average Loan Size||$452||$394|
|Average Individual Loan Size||$421||$609|
|Average Group Loan Size||$3,878||$1,762|
|Average number of borrowers per group||8.6||7.7|
|Average GDP per capita (PPP) in local country||$5,300||$5,773|
|Average Loan Size / GDP per capita (PPP)||8.53%||6.82%|
|Average Time to Fund a Loan||9.29 days||7.13 days|
|Average Dollars Raised Per Day Per Loan||$48.71||$55.26|
|Average Loan Term||10.71 months||11.35 months|
Journaling Performance on Kiva
|This Field Partner||All Kiva Partners|
|Average Number of Comments Per Journal||0.09||0.03|
|Average Number of Recommendations Per Journal||1.33||0.80|
Borrowing Cost Comparison (based on 2017 data)
|This Field Partner||Median for MFI's in Country||All Kiva Partners|
|Average Cost to Borrower||54% PY||31.00% PY||25.13% PY|
|Profitability (return on assets)||6.3%||4.5%||-1.40%|
|Average Loan Size (% of per capita income)||8.50%||18.00%||12.92%|
Country Fast Facts
- Guatemala City
- Official Language:
- Spanish (official) 60%, Amerindian languages 40%
- Avg Annual Income:
- Labor Force:
- agriculture: 38%, industry: 14%, services: 48%
- Population Below Poverty Line:
- Literacy Rate:
- Infant Mortality Rate (per 1000):
- 23.51 deaths
- Life Expectancy:
- 71.74 years
Field Partner StaffTracie Cordeiro
Marta Julia Ixtuc Cuc
Alejandra Mercedes Lemus Mejia
Jose Francisco Meletz Batz