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Shoemaker
Oscar Arturo Raudales started his own business
five years ago in the town of Los Pata de Pluma.
After a year, he decided to expand, but found
that Honduras’ traditional banking system provided
few opportunities for small businesses in need
of credit. He turned to the USAID-funded Covelo
Foundation and was able to secure a $400 loan.
Today, Mr. Raudales’ business is thriving. "Covelo
has helped me in many ways," he said. "I
have purchased polishers, ovens, molds and prime
materials. I’ve been able to grow thanks to
the money and the training that (Covelo’s) consultants
have given me. I’ve had some setbacks, but they
have stuck with me all the way."
During
2001, USAID-supported microfinance institutions
disbursed $52 million, including repeat loans,
to more than 100,000 clients, 79 percent of
them women. About 39 percent of small and micro-enterprises
are now receiving USAID-supported financial
services. As a result of improved management
and oversight, several microfinance institutions
have reduced an already low repayment delinquency
in their loan portfolio.
But
expanding access to markets and services for
small and micro businesses is just one way that
USAID is fostering economic growth and, as a
result, a reduction of poverty in Honduras.
The agency also is providing analysis and support
for policy reforms that are improving the investment
climate and creating a policy environment conducive
to growth. This includes a recent, comprehensive
review of monetary, exchange and fiscal policy,
trade and labor policy, the export incentive
framework, and export finance mechanisms. The
introduction of dollar-denominated Monetary
Absorption Certificates and the reduction in
banks' reserve requirements helped lower commercial
interest rates from 30 percent to around 20
percent.
USAID
also helped establish a National Statistics
Institute (INE) that consolidates and analyzes
statistical information from various ministries
and produces economic statistics for decision-makers.
A
return to healthy economic growth rates in the
wake of Hurricane Mitch and the Honduran government’s
commitment to implement the Poverty Reduction
Strategy developed with USAID support suggest
that policy efforts are on track.
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