ECONOMIC DEVELOPMENTIN HONDURAS October 2012–September 2013 Report

World Vision’s CampaignFOR EVERY CHILD

Prepared April 2014

Presented toColumbia-Willamette Women of Vision

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ECONOMIC DEVELOPMENT

HONDURAS

World Vision’s CampaignFOR EVERY CHILD

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Program Update

3,697people provided

access to fi nancial and business

services

2,152 people accessing fi nancial services

2,254 female clients assisted

1,545 people saving through savings groups

Life-of-Program ProgressOctober 2011–September 2013 (VisionFund) March 2013-September 2013 (Savings Groups)

Five-Year Target: 10,000

Five-Year Target: 11,394

Five-Year Target:9,411

You Are Making a DifferenceSupport from Columbia-Willamette Women of Vision benefi ted hundreds of Honduran children in fi scal 2013 as their parents gained access to microloans, savings groups, and business and livelihood training. Your generous giving directly assisted 33 microentrepreneurs, of whom 20 are women. This improved their ability to meet their families’ basic needs, such as education, healthcare, and food.

Felicia Santos, at right, has used the resources available to her to establish a successful pottery business. She is proudly displaying some of her work at a business fair. On behalf of Felicia and others, thank you for your support of the Honduras Economic Development Program. May God richly bless you.

LEGENDECONOMIC DEVELOPMENTADPs

CAPITAL CITY

MAJOR CITY

PROVINCE OR DISTRICT BOUNDARY

AREA DEVELOPMENT PROGRAMS

123

4

5

6

7

8

9

10

11

1213

14

1516

17

18

19

20

21

2223

La CeibaLa CeibaSan Pedro Sula

Tegucigalpa

1 CERRO DE PLATA

2 COLINAS DE ORIENTE

3 EL ALFARERO

4 ESMERALDA

5 GRACIAS

6 JOCÓN

7 LAS CABEZAS

8 MARCALA

9 MAYA

10 MONQUECAGUA

11 NUEVO AMANECER

12 PERLA DEL ULÚA

13 RENACER

14 SABA JIREH

15 SAN ISIDRO

16 SAN JUAN

17 SAN MARCO

18 SAN MATÍAS

19 SHALOM

20 TEUPASENTI

21 TRAPICHE

22 VILLAFRANCA

23 YAMARANGUILA

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Goal and Outcomes

FIVE-YEAR GOAL:

Access to fi nancial services will benefi t

and

Form and strengthen business relationships between small-scale producers and both

suppliers (of materialsneeded for production)

and buyers of the products

Increase access to financial services,

particularly savings groups, tailored to the needs of producers and

microentrepreneurs

Improve families’ understanding of

nutrition and the best practices for feeding

their children

EXPECTED OUTCOMES

WORLD VISION’S MICROFINANCE STRATEGY

World Vision works in 35 countries with microfi nance institutions (MFIs) overseen by our affi liate, VisionFund, to provide fi nancial services to those with little means. Th e program targets families that are living on around $2.50 a day. VisionFund provides small loans and fi nancial training for business-oriented clients who may also be interested in the benefi ts of a traditional savings account.

Unless they use loan sharks, the majority of the people served by microfi nance have no access to credit or formal fi nancial services. For people without valuable assets, credit history, or formal employment, microfi nance is the only way to obtain capital to start a small business.

SAVINGS GROUPS/VALUE CHAIN

Beginning in March 2013, this program began implementing a new outreach to six ADPs in western Honduras. Th is work supports the formation of savings groups—groups of 10-15 people who make regular deposits into a joint account managed by the group, occasionally take out loans, and contribute to a social fund for local emergencies. At the end of a year, each person’s savings, plus interest and fees, is returned. About half of savings group members will graduate to larger VisionFund loans within fi ve years.

Group members also learn about access to markets; business practices; and ways to improve their yields, production, and the value of their products.

HondurasThis map shows where VisionFund Honduras is providing microfinance services in 23 World Vision ADPs. Six ADPs in western Honduras (Gracias, Mercedes, San Isidro, San Juan, San Marcos, and Yamaranguila) have access to savings groups and other activities aimed at improving their business ventures and profits.

21,394 ADULTS

58,821 CHILDREN

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707 savings group members participated in workshops on topics such as identifying business opportunities, market trends, business plans, and setting financial goals. They also visited other communities to learn from their successes.

The program provided support that included materials to build irrigation systems, production equipment, and inputs for vegetable production, prepared food ventures, and pottery production. This will help 117 participants improve their ventures and their income.

Seven growers associations began negotiations with grocery stores to supply a variety of vegetables. This will have an impact on 451 growers and their families.

VISIONFUND HONDURAS

Th e Campaign For Every Child funds World Vision’s microfi nance work in 23 community development areas in Honduras, reaching 82 percent of the communities where we carry out long-term development work.

Th e chart below represents the countrywide fi nancial performance of VisionFund Honduras, World Vision’s

microfi nance affi liate. Th ese results include the 23 ADPs funded through the campaign.During fi scal 2013, the outstanding loan portfolio grew slightly, but a year of political turbulence, presidential elections, and extreme fl uctuations in exchange and interest rates hampered progress in other areas.Coff ee producers, who represent a signifi cant number of VisionFund clients, were especially hit hard in

Activities

Annual Highlights

2,152 VisionFund clients in World Vision program areas took out loans totalling $696,925 to start or grow their businesses.

HONDURAS PERFORMANCE TO DATE (SEPTEMBER 2013)Performance Indicator Sep 2010 Sep 2013 Change (#/%)Outstanding loan portfolio ($) 6,718,119 6,723,668 5,549 0

Active borrowers 13,601 11,594 -2,007 -15

Female clients (%) 53 60 7 12

Portfolio at risk over 30 days (%) 6.1 9.8 3.7 38

Operational sustainability (%) 105 94 11 -11

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fi scal 2013 by a bacteria called la roya, or leaf rust, which ruined crops and caused severe fi nancial setbacks for many farmers.

Still, these loans and business training provided to VisionFund clients have been successful in making a positive impact on the quality of life of approximately 5,380 children in FEC communities. VisionFund loans played a signifi cant role in creating and sustaining 25,187 jobs throughout Honduras (including communities not funded by FEC) where microfi nancing was available.

VisionFund began collecting data on the social and fi nancial impact of VisionFund loans and training on the well-being of children and their families. Th is information will be loaded in to a new information management system beginning December 2013 (fi rst quarter of fi scal 2014) for analysis.

SAVINGS GROUPS/VALUE CHAIN

World Vision identifi ed more than 1,600 families in 68 villages in six of our rural ADPs, that could benefi t from savings groups and business and agricultural training as well as developing better access to markets for their products.By the end of the year, 1,545 people—54 percent of them women—had joined one of 78 local savings groups. In addition to the accomplishments noted on the previous page, the project helped farmers establish fi ve grain banks to safely store their crops, which improves profi ts. Each bank has fi ve silos that hold nearly a ton of grain (mostly corn) each.

In Gracias ADP, 95 corn fi elds were established after farmers attended workshops focusing on soil preparation, seeding, and fertilization.

World Vision staff members in the San Juan ADP present a demonstration on nutrition and healthy feeding practices for infants and young children.

FOCUS ON NUTRITION WILL IMPROVE HEALTH AND WELL-BEING OF CHILDRENIn conjunction with training on savings methodologies and business practices, the savings group/value chain program extended a focus on good nutrition and best feeding practices for infants and young children.

During the year, 1,145 women and 90 men took part in educational sessions on nutrition and community-based care of children. As a result, 533 families established new gardens to grow vegetables that will improve diversity in the diets of children, increase the availability of nutritious food, and improve the nutritional status of boys and girls. It is estimated these training sessions are making a positive impact on 816 children and their families.

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VALUE CHAIN IMPROVEMENTS INCREASE PROFITSQuestion: What’s it worth?

Answer: It depends on its place in the value chain.

Consider the mango. Ripe mangos in a field have value only for people willing to pick them, or as fodder for goats.

They have more value if they are already picked and ready to be purchased at a farm stand. Further value is added by taking the mangos to town and selling them in the local market.

And even more value is added if the mangos are washed, sorted, neatly packaged, and sold in stores in urban centers many miles from the mango fields. But the value of mangos increases

exponentially if transformed into a package of dried fruit, a bottle of juice, or a jar of chutney.

Each link in the chain adds value, and World Vision—through its access-to-markets training— helps small-scale farmers develop the local value chain.

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Loans Help Make Dreams a Reality

Dina’s Hair Salon Creates Jobs and Supports FamiliesDina knew she had a future in hair care even as a child. “As a little girl I enjoyed combing my friends’ hair. I was absorbed by making people prettier.”

Th anks to opportunities to study cosmetology, Dina honed her skills and began cutting hair in her home. But before long, her business began to outgrow her house.

Dina learned of VisionFund from her mother and neighbors who were clients. Her fi rst loan of $250, along with business training, helped her move into a more commercial setting. Today, Dina’s business is thriving in an even larger shop, and she has had to hire other beauticians to keep up with demand. A $1,000 loan helped her expand the shop.

“I thank all those people who support us to start our own business,” which helps entrepreneurs like her provide jobs that help support other families, she said.

Th ank you for your faithfulness to the ministry of World Vision, which is a huge blessing for us, and also a huge [responsibility] to be effi cient managers of the funds entrusted to us ... be assured that they are being used in strict accordance to the project proposal, contributing to transformational development of families and communities with whom we work.”

—Miguel Ernesto Briceño Torres, project coordinator

Dina takes care of one of her customers.

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Above, Felipe Benitez shows off some of his prize tomatoes, which helped save the family’s coff ee farm. At right, is his family, which will benefi t for years to come from his eff orts.

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—Felipe Benitez, tomato and coff ee farmer

Felipe Benitez struggled through hard times that included facing the sale of his family’s coffee farm to pay off debt, and the complete failure of a venture (growing eggplants) that he hoped would help pay off the loans he had taken out for the farm.

“I had lost faith, but God will not forsake his children and those who serve him,” he said.

Thankfully, program staff guided Felipe toward training and education on agricultural techniques and business practices that restored his faith in himself.

That support helped Felipe establish a new tomato crop, and his very first season brought in strong returns—enough to retire two of the loans on which he still owed. That meant he would not have to sell the coffee farm.

“This is a great joy, to be able to get out of this problem we had, because the coffee farm had been a vision we have had with my children and my wife,” Felipe enthused.

Felipe also has used what he learned from training received through this program to expand his role as a

… if I had not established this crop, we would certainly no longer have the small coff ee farm. Th ere is now more hope for my children and family.”

respected leader in his village of 160 families. He now is leading his neighbors by motivating them to broaden their horizons, and contribute to the development of La Campa, which is mostly agrarian.

“I have better knowledge that helps me to motivate other producers in my community,” he said.

TRAINING AND SUPPORT HELP FARMER RECOVER FROM LOSSES

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Summary Category Fiscal Year-to-Date Spending

Fiscal Year Budget

Program-to- Date Spending

Life-of-ProgramBudget

Program-to-DateSpending Rate

Activity DescriptionLoan Capital 696,924 696,929 1,813,651 4,272,692 42%Fixed Assets - - 7,888 26,390 30%Operating Costs 30,077 53,071 117,010 400,919 29%Total 727,002 750,000 1,938,549 4,700,001 41%Quality Assurance 50,890 52,500 135,698 329,000 41%Management and Fundraising 259,298 267,500 691,415 1,676,334 41%TOTAL 1,037,189 1,070,000 2,765,662 6,705,335 41%

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*Fiscal year 2013 = October 2012–September 2013

PROGRAM SPENDING

Fiscal year spending expressed as a percentage of f iscal year 2013 budget

SUMMARY

LOAN CAPITAL & PROGRAM

OPERATIONS

Financials for VisionFund Honduras

FISCAL YEAR BUDGET $750,000

Totals may show minor rounding diff erences.

SPENT $727,002 97%

Summary Category Fiscal Year Spending

Fiscal Year Budget

Program-to Date Spending

Life-of-ProgramBudget

Program-to-DateSpending Rate

Activity DescriptionImprove the productivity and food diversity among the families in western Honduras1.01 Families have strengthened their capacities to handle sustainable production technologies. 105,383 107,607 105,383 1,202,745 9%Families improve their knowledge and practices regarding food and infant nutrition 19,340 14,426 19,340 92,598 21%Subtotal 124,723 122,033 124,723 1,295,342 10%Savings groups operating in a constant and sustainable manner responding to the community needsFamilies organized into savings groups 23,958 10,422 23,958 207,037 12%Saving groups strengthened in organizational and management matters 13,106 8,992 13,106 102,298 13%Saving groups have implemented a sustainability strategy 4,778 2,324 4,778 40,388 12%Subtotal 41,842 21,739 41,842 349,723 12%Producers linked to markets through micro and small businesses

Families strengthen their entrepreneurial capacities to improve their market participation 15,532 13,401 15,532 325,680 5%Families develop and implement their micro and small businesses 60,352 111,430 60,352 242,477 25%Strengthen the commercialization capacities of families to facilitate their products and services access to the markets 19,983 31,398 19,983 314,064 6%Subtotal 95,867 156,229 95,867 882,221 11%Total 262,433 300,000 262,433 2,527,287 10%Quality Assurance 18,370 21,000 18,370 176,910 10%Management and Fundraising 93,601 107,000 93,601 901,399 10%TOTAL 374,404 428,000 374,404 3,605,596 10%

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P.O. Box 9716, Federal Way, WA 98063-9716www.worldvision.org

World Vision is a Christian humanitarian organization dedicated to working with children, families, and their communities worldwide to reach their full potential by tackling the causes of poverty and injustice. Motivated by our faith in Jesus Christ, we serve alongside the poor and oppressed as a demonstration of God’s unconditional love for all people. World Vision serves all people, regardless of religion, race, ethnicity, or gender.

PROGRAM SPENDING

Financials for Savings Groups, Improved Productivity, and Market Linkages

MARKET LINKS

IMPROVED PRODUCTIVITY

FISCAL YEAR BUDGET 156,299

SPENT $124,723 (102%)

SPENT $95,867 (61%)

FISCAL YEAR BUDGET 122,033

*Fiscal year 2013 = October 2012–September 2013 Totals may show minor rounding diff erences.

Fiscal year spending expressed as a percentage of f iscal year 2013 budget

SUMMARY