Rural Honduras to get more than US$6 million to grow business and jobs

24 Sep 2010

Cajas rurales strengthen business ventures
at the rural level.
(Photo: UNDP)
Tegucigalpa - As many as 80,000 families living outside the bank lending system in Honduras’ rural hinterlands could gain access to credit or mortgage loans through a new government initiative, coordinated by the United Nations Development Programme (UNDP).

The initiative that will make more than US$6 million in funds available to small rural lending groups, called cajas rurales in Spanish, is to be rolled out during the next five years in an effort to cut poverty in one of Central America’s poorest countries.

“We are confident that access to financial services by low-income households brings improvement in the prosperity of these families, and allows them to achieve stability in their efforts to build their businesses, by means of generating income and job creation”, said UNDP Deputy Resident Representative, Luca Renda.

The programme, receiving an additional US$150,000 from UNDP, aims to build on the small-scale rural financial system that the lending groups have established in recent years. Last year, group loans led to the creation of more than 100,000 jobs, both permanent and temporary.

So far the Government’s national rural development program has brought together more than four thousand lending groups, more than one third directed by women. The 4,111 groups currently comprise 85,697 members, including 51,935 men and 33,762 women.

The five-year initiative was agreed jointly between the Government, UNDP and the non-governmental Foundation for Rural Development. The new funds will also help to strengthen rural lending practices through strategic planning, tougher internal controls, new products and technology, and financial and risk management.

It reflects Government efforts to achieve the Millennium Development Goals (MDGs), a set of eight internationally-agreed goals aimed at reducing poverty and improving education, health, gender equality and environmental sustainability.

The MDGs were the focus of a three-day summit at UN headquarters in New York this week to review achievements and agree on how to accelerate progress to meet the 2015 deadline.