The success of Good Shepherd Microfinance in Australia has been harnessed to boost a new program helping Central Americans pull themselves out of poverty.
The Good Shepherd program called Solidarity for Financial Inclusion is operating in Nicaragua, Honduras and El Salvador, where 60 per cent of households live in poverty and more than half of them in extreme poverty.
No interest loans and debt consolidation loans are being offered to people trapped by loan sharks or wanting to start a small business.
Tracy Collier from Good Shepherd Microfinance in Australia is working on the program and said there were many regional challenges.
“Unemployment is high, access to affordable, fair finance is limited and the violence and insecurity in the region means people face many hurdles and setbacks,” Tracy explained.
“But we are seeing long-term improvements in the participants’ wellbeing and resilience. Not only are they becoming financially stable entrepreneurs, they are also community leaders who want to share and support others in their journey.”
The life-changing program involves setting up community co-operatives to support and empower the participants, and foster group savings.
“Before I joined the Good Shepherd microfinance project I was too afraid to start anything,” one participant said.
“Simply starting a business was risky for me, there was no way I could support an interest-bearing loan so I didn’t have any options.
“Now I know I can take on anything. I have my savings; my business is growing and I’m excited for what the future has to bring.”
Adam Mooney, CEO of Good Shepherd Microfinance in Australia, said it’s important to share what works.
“We see a terrific opportunity to consolidate and share this approach within the Good Shepherd network and beyond,” he said.
Good Shepherd Microfinance programs have reached more than 400,000 Australians who were previously excluded from mainstream banking access, with repayment rates above 95 per cent.