A Business on the Move

How USAID is supporting economic opportunities in Guatemala.

Gilberto Ramos clearly remembers the night 26 years ago in Huehuetenango, a rural municipality in the Western Highlands of Guatemala, when he decided to start his own business. He had been working all day on his family coffee farm, and he needed to fill up his truck. Pulling into the local gas station he could see it was closed and would not open until again until the morning. "That was when I knew there was an opportunity for me to run gas stations," recalled Gilberto. That same year he founded Kadoshim and opened his first service station. By 2015 he had three stations and decided to invest in a broader expansion. Unfortunately, even long-established small businesses in Guatemala, like Gilberto’s, find it very difficult to get financing.

“It isn’t easy to grant credit to small and medium sized enterprises, especially in the western highlands,” says Karla Stalling, manager of Small and Medium-sized Enterprises Leasing and Supply at the Banco de America Central, “These businesses are often informal, without proper control of their finances,” she continued. Companies like Kadoshim handle more cash than other types of businesses, often lacking collateral and their accountants have less experience handling financial statements and managing the structured information banks require for loan applications.

USAID’s Creating Economic Opportunities Project partners with companies like Kadoshim to identify and strengthen their financial and administrative management so they can present accurate and timely information to support loan applications. This includes analyses of data; development and implementation of tools to track financial data; and training for accountants to use the tools. Through a market-led approach, USAID grows and expands formal businesses to create income generating opportunities for Guatemalans. To date USAID has supported 140 Small and Medium-sized Enterprises to access financing of $41.4 million.

USAID's support has been great, not only for the help in finding credit, but also for the training they provided to conduct business in a more orderly fashion." - Gilbeto Ramos

With this support, Gilberto obtained $600,000 in low interest credit from Banco de America Central that he used to pay off the high interest rate loans that the company had been saddled with. “The new terms helped me save more than $50,000 a year in interest payments,” said Gilberto about the new loan structure he was able to secure. He is investing these savings in remodeling the existing stations.

Gilberto added 73 staff to Kadoshim’s payroll in the last year, including a new accounting unit to improve its ability to handle the expansion. One of the new hires is twenty-one-year-old Daniela Martínez, the manager of the San Rafael station in Huehuetenango. “I started as an accounting assistant, then I was promoted to station manager, with more responsibility and a better salary,” said Daniela “For me, Kadoshim is a great company that provides jobs and allows for promotions," she added.

Man in gas station filling up a motorcycle

USAID Guatemala

Gilberto plans to open three more gas stations this year and ultimately wants to create a network of 25 gas stations in the region. USAID is committed to reduce poverty and improve living conditions of Guatemalans to create a Guatemala in which economic opportunities exist and irregular migration is not necessary. Working together, USAID and business owners like Gilberto Ramos provide real opportunities for young people in Guatemala.


Misael Lopez

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