50 for 50: The Earliest Trust Groups
This essay is a selection from the special edition of UnPoverty by Mark Lutz. The new edition has been released in celebration of Opportunity International’s 50th Anniversary, featuring new chapters from leaders throughout Opportunity’s history. To receive a copy, simply make a donation of any size to Opportunity and we’ll send it to you.
The small squatter community was carved into a barren hillside in Soyapango, near the capital city of El Salvador. I was inching my 20-year-old car along, bottoming out on the deeply rutted roads, searching for a group of poor women who I had heard were trying to start microbusinesses. I hoped I could help, but first I needed to find them. I approached a group of construction workers to ask for directions.
“Young man,” I called out toward one of the mud-covered workers hauling sand, “is it OK for me to park here?”
“Sí,” came the answer in a feminine voice.
My mistake. The worker was actually a woman in her mid-30s with bright eyes, her hair protected by a cloth tucked into a baseball cap.
She knew exactly where I needed to go—she was one of the women looking to start a business.
Later, when I entered the corrugated metal shack where she had directed me, I was greeted by the same woman, now wearing a simple cotton dress in keeping with the custom of the time. Her name was Rosa Maria Rivera. Rosa introduced me to her neighbors—women who sold tomatoes or drinks on the street, made homemade piñatas, and found other ways of eking out a living. Starting from that first meeting, Rosa became my partner and guide in a great adventure of designing a new program to help these hardworking women get ahead.
Back in the United States, a group of 10 women had been inspired by Opportunity International’s microenterprise development model. At the time, Opportunity primarily reached men who needed a hand up to run successful businesses, but these men were not among the poorest in their countries. This group of visionary American women wanted to make Opportunity’s model work for extremely poor women by focusing not only on business success but also on empowerment. Their ultimate goal was holistic transformation for poor women, their families and their communities. The original group of 10 women founded the Women’s Opportunity Fund with their own donations. I had met staff from Opportunity while volunteering with a microfinance institution in Costa Rica. They charged me with giving their vision a try, providing me with a grand stipend of $500 a month—I used my own savings to buy that 20-year-old car!
My arrival in Rosa’s community marked the start of what has now become known as Trust Groups—a model that represents the vast majority of more than 50 million loans Opportunity has offered since Trust Groups were introduced.
Rosa was a widow. She and her four children lost their house and everything they owned when an earthquake rocked El Salvador in 1986, six years before I met her. Rosa was fortunate to be selected for a housing program run by a local charity, but it required each worker to labor three days per week over several years to help build their new homes. Families with two parents managed the difficult schedule, but Rosa and other single mothers were challenged in watching after their children, fulfilling their work requirement, and earning enough to cover food and basic school fees.
When I met her, Rosa was living in a dirt floor shack made of rusted scrap metal, cardboard and plastic. The windowless shack had just enough room for two single beds that they all shared. The family threw their few clothes across twine that hung just below the metal sheets of their roof. They bathed outside in their underwear, dipping rainwater from a barrel, and Rosa bought bottles of water for cooking and drinking. Another outside barrel served as a wood stove. The community latrines were not only far away, but they were also in unspeakable condition. Rosa’s kids used the bushes or the nearby garbage dump. There was no electricity; the mosquitoes were vicious. The night before my first visit, Rosa hadn’t slept, fearing a mudslide from the torrential rains lashing her shack.
Rampant alcoholism was just one sign of the despair in the area. Rosa and the other women in the community worried constantly about violent crime and were especially protective of their daughters. Death squads roamed El Salvador during that time, and this forgotten community of squatters was an occasional dumping ground. One time, while Rosa’s children were playing in the tall weeds near their shack, they discovered a dead body.
Rosa had one thing in abundance: a fierce desire to give her children a better life. The children blossomed under their mother’s loving care. Every time I came to the community, eight-year-old Xiomara would delight me with a huge hug.
At the beginning of my two years in El Salvador, I focused on a business incubator model, offering asset-based loans to create specialized businesses. That did not fly. The women cared so much about honoring their word that they flatly turned down my offer.
“We’re afraid of letting you down,” they said.
Taking any kind of business loan forced the women outside their comfort zones. A loan that required them to specialize in one product, no matter how innovative or how much technical assistance was provided, was just too risky in El Salvador’s unstable economy. I learned I couldn’t take Western business principles and apply them as is to this very different context. I had to build the program around the strengths and needs of the women themselves.
Many of the women were non-literate and did not have the skills to develop extensive business plans. Since they couldn’t keep books in writing, they developed an ingenious work-around: they sold goods in quantities they could calculate in their heads and wore aprons with as many as 20 pockets that they used to keep track of income and expenses for their different products. Rosa and the others in her group taught me the ins and outs of business in El Salvador’s informal economy and helped me create a loan program that fit the uncertainties of their day- to-day existence. Following a mantra of “Start where the women are,” we developed a program offering working capital loans of $50 to $100, with small weekly repayments spread out over four months—a schedule the women felt they could manage.
Rosa also taught me that women didn’t need training in how to invest the money. They never lacked ideas, only opportunity. They knew exactly how to invest a small amount to earn a high return within the local economy. Rosa was smart and loved to learn, but she simply did not have time for classroom-based training. Another nonprofit organization offered what I thought was excellent training in bookkeeping to 50 microentrepreneurs, yet a couple of weeks later, not a single trainee was actually using the new ledgers they had been given. The training had presented good information but had not helped the women build confidence to try something outside their comfort zone and had not made a good case for why the extra work would be worth it. We took note and developed a just-in-time training program focused on practical skills that Rosa and her friends could immediately put into practice.
Around the world, lending is built on collateral and good credit history. Rosa and her community had neither. That made them ideal targets for loan sharks, who charged as much as 360 percent interest per year. But Rosa and the other women already were joining together to solve problems in their community, so it was natural for them to join together in solidarity to guarantee each other’s loans.
Rosa was one of the first women in El Salvador to receive a Trust Group loan of $100. She used the money to buy brown paper in bulk, cooked up homemade glue over her wood fire, and used her fingers to spread the glue and turn the paper into rough paper bags. Although the bags were very simple, local merchants were glad to buy them. With the profit from her sales, Rosa moved into a larger shack where she could work inside when it was raining. She doubled the number of bags she made and expanded her product line to include water containers and sugar containers. Her daily income doubled from $2 to $4 per day.
Rosa’s children were no longer restricted to a diet of tortillas, rice and beans. She bought fish or chicken once a week and fruits and vegetables like mangos, oranges, carrots and greens. But the biggest benefit of her business was that she could afford the basic school fees so that all her children could go to school for the full year.
As Rosa’s business continued to thrive, she eventually was able to buy a cable to bring electricity to her shack and a table to make her bags on.
The benefits of Rosa’s loan didn’t stop with her. Rosa brought her mother, Zoila, into her business. Zoila’s neighbors took note and asked how they could get involved, so Rosa took the time to organize them into a group so they could get loans for their microbusinesses of making planters, fattening geese and selling homemade hair bands. Rosa not only became the president of her own Trust Group, but she effectively became the organizer, trainer and volunteer loan officer for her mother’s community.
Meanwhile, back in the U.S., the Women’s Opportunity Fund board reminded me, “Something special happens when women come together in groups.” The group structure enabled the women to organize themselves in times of crisis. If one woman was sick, the other members of her group watched her children and brought her goods to sell at the market. When a car careened into Rosa while she was in the market, leaving her bed-ridden with injuries for three weeks, her group did her shopping, cooked for her and cared for her children.
Rosa and her group embraced their power to make a difference for others. They arranged for a doctor to provide free health clinics for their community, organized clothing donations, and raised funds for soccer balls and t-shirts so the kids could have a soccer league. One of the group’s activities ended up benefiting Rosa herself. When they organized free eye exams, the optometrist provided her with a pair of used glasses for a token fee. Not only could Rosa see clearly for the first time in years, but her neighbors affectionately teased her about her stylish light-blue cat-eye glasses.
The group’s sense of community fostered social gatherings and celebrations, such as piñata parties. When the women organized a “secret friend” gift exchange, I was honored to be invited. Sonia, Rosa’s oldest daughter, drew my name and was nervous and excited about what to give me. I was touched to open a lovingly wrapped package to discover a small, slightly used bar of soap.
Rosa also taught me a lot about generosity and the vocation for service. With her profits, she bought a pair of dentures for Zoila. Zoila’s inability to chew food had caused digestive problems, and her missing teeth led to bone deterioration and constant headaches. This act of love boosted her mother’s sense of dignity and eased her physical ailments.
I’ll never forget standing on a dirt path and watching an old woman coming toward me from a distance. The woman looked familiar, but I couldn’t place her. As she got close to me, I finally realized it was Zoila. The old, battered, toothless woman I remembered now had a bright white smile. She even looked taller.
Those dentures were not provided by donors in the U.S. Instead, Rosa received a loan that she paid back, and she invested in a business. Profits from that business enabled her to buy dentures for her own mother as well as better food and shelter for her children. Rosa was so proud to be able to provide for her own family.
Before I moved back to the U.S., the women held a farewell party for me. Zoila stood in front of the group and, like the orators of old, raised one arm to the sky as she recited a poem she had written about how God had blessed them through Trust Groups. Then Rosa stood to give her speech. She said, “We love you, and we’ll miss you, but we think it’s great that you are going back to the United States to make this program happen for other women like us. We are sending you out as our missionary and our witness and our voice. We are sending you out from here, and we will pray for you.”
When I went back to visit Rosa three years later, she and her children were living in a three-room concrete block house surrounded by green leafy bushes with big red flowers. Large windows were adorned with teal shutters. Her house had electricity, running water and a toilet. She cooked on a two-burner tabletop stove.
Rosa had grown beyond her paper bag business and was now operating a laundry service with a side business selling frozen chocolate-covered bananas and popsicles, a venture supported by her recent purchase of a refrigerator. Rosa’s oldest daughter—the one who gave me that slightly used bar of soap—had just graduated from secondary school at the top of her class. Her son Rigoberto, unlike many teenage boys, had stayed out of the gangs common in the area. Xiomara and the youngest, named Zoila after her grandmother, were healthy and in school.
Rosa looks at her new life and knows that she, with God’s help, accomplished it. She also knows that she helped shape and inspire a program that has since spread around the world.
Trust Groups broadened Opportunity’s reach. We were able to reach people who were even more vulnerable than our original clients. Trust Groups turned out to be an ideal model for helping ill-equipped women to run small businesses, earn household income, provide for their families and realize Opportunity’s vision of holistic transformation.
In India, where Opportunity has our greatest concentration of clients, hundreds of millions of women meet in “Self-help Groups,” in which they receive loans, share mutual support and bring their savings. As Opportunity continued to multiply group lending around the world and listen to clients’ needs, we learned they also wanted a safe place to save what little money they earned as individuals. How much can these desperately poor people really own? But it was precisely because they had so little that they needed a bank willing to open an account with only a few dollars—a safe alternative to a hole in the ground or sewn between the layers of a garment.