New Community Bank, La Cima
Sunday, May 20th, 2007
Congratulations to the new Community Bank, La Cima. This new bank consists of 22 micro-entrepreneurs from the colonia Felipe Angeles, which is five minutes away from Anapra (across from Sunland Park, New Mexico). The new businesses include catering, a small restaurant, a clothing store, and a grocery store. FEMAP held a workshop to teach the new businesses how to make arts and crafts, Mexican candies and traditional art. ?The monthly classes have been very well received,? says Eduardo Gonzalez, Community Banks Coordinator. ?We are looking forward to growing the bank concept in this area.?
Modeled after the Nobel Peace Prize-winning Grameen Bank approach, FEMAP?s community bank is a group of ten to thirty members who set up a community financial organization providing small loans for supporting the creation of financially productive occupations, encouraging self-employment, and development the savings capacity of its members. The community bank represents the first level of the economic development program. That is, most of the people participating have not previously been involved in any kind of formal economically productive occupation. The community members themselves are responsible for the operation of the community bank. They appoint their own board of directors who are responsible for approving loan applications, granting loans, collecting payments and savings, keeping proper records, and maintaining the concept of groups with ?shared liability? for loan payment. Monthly workshops cover topics regarding administration, accounting, sales, marketing, and self esteem.
Community bank operations consist of nine financing cycles. Depending on the community bank?s success, the bank may continue for up to 13 cycles. Each cycle is a 3 to 6 month period (27 months total). Once the community members have been trained and organized to manage the bank, the FEMAP Foundation, in partnership with SADEC, provides a start-up capital loan to initiate the first cycle.
Since its 1987 inception, the program has assisted in the development of 7,223 micro-entrepreneurs through 600 community banks. In 2005 alone, 990 micro-entrepreneurs were formed with the financial support of 3.5 million pesos (approximately $300,000 US). In 2006, the community banks provided 1,099 loans in Mexico utilizing six million pesos (approximately $550,000 US).
Each year, the program utilizes $600,000 in resources with a 95% recovery rate and 65% participant graduation rate. Sixty-three percent (63%) have established their permanent small business. This figure is very encouraging, especially because the majority of these people had not previously engaged in any productive work.
In 2006, the success of the program garnered the attention and visits from the First Lady of Mexico, Martha Sahagun de Fox, First Lady of the State of Chihuahua, Claudia Saenz de Reyes Baeza and First Lady of Juarez, Patricia de Murguia.