Panamanian Women Embrace Microcredit for Improved Livelihoods

Ian Robinson recently returned from a F2F assignment in Panama working with another Partners’ project called EducaFuturo. Below he shares his experience: 

“Located in eastern Panama along the country’s border with Colombia, the Darien region is known for being a difficult-to-access swath of jungle. The northern stretch of the Pan-American highway ends in the town of Yaviza, and reaching most of the surrounding indigenous communities requires a pick-up ride along dirt roads to nearest port and navigating the rivers in boats with an outboard motor. The challenges are the same if residents need to leave their community.

Women participating in the workshop

There are no formal banks in the indigenous communities, and the common strategies for residents if they need a quick influx of cash are to get a loan with usurious interest from a loan shark or to sell off some of their chickens. Furthermore, most community members would not be able to qualify for loans in traditional banks in the cities because they do not have the necessary paperwork or enough assets to apply for them.

In December 2015 and January 2016, Farmer-to-Farmer partnered with EducaFuturo, to empower women in the community of Lajas Blancas to start and maintain their own community bank. EducaFuturo works with communities throughout the region to eradicate child labor through after-school programs. Parents will often take their children out of school in order to have them work in agricultural fields, depriving them of the opportunity to receive an education. EducaFuturo’s work in Darien strives to keep children in school while training their parents with skills to improve their livelihoods.

The community bank that the women started is structurally similar to a village savings and loans association where members make weekly deposits to a common pool of money. After a few weeks, they begin to loan money to each other using that pot of money with a one-month payback at a lower level of interest than they would find in their community. At the end of the year, all of the money in the bank gets divided among the members, allowing them to enjoy the benefits of savings, in addition to credit.

F2F volunteer Ian Robinson and workshop participants
with their new savings box

In Lajas Blancas, the women were starting from scratch. So over the course of the two-week workshop, each member of the women’s group had learned how microcredit works, followed all of the necessary steps in starting a community bank, and made their first $1 deposit into the organization. By the end of January, they will begin to take out loans. In addition to the bank workshops, the Farmer-to-Farmer volunteer also trained the women on how to perform a feasibility analysis and what key questions to consider when starting a small business.

In addition to being an opportunity for savings and credit, the bank represents a chance for women to assume leadership roles. As a self-managing organization, each participant plays an integral role in ensuring that the bank functions as they intend. Furthermore, six women have leadership positions with greater responsibilities to allow the bank to achieve its goals. In a society where women rarely hold formal positions of power, the community bank represents a new opportunity for empowerment.

The members understand that this institution will not be a vehicle to get them out of poverty. But they understand that it can be a valuable tool to support their family’s livelihoods.”