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It's low cost financing for a group called the "productive poor" which includes poor small farmers, micro entrepreneurs, and poor sectors of the rural population including women and youths. The project is novel because it is financed by the government of Belize with assistance from multilaterals, but it is being disbursed through credit union. Ervin Perez, is the Program Manager and he told us that bike shop owners, barber shops and others can qualify.

Jules Vasquez
"Those who the funding is intended for have been sort of systematically excluded from the formal banking system for many years."

Ervin Perez, Program Manager
"Very true, we actually call them unbanked population of the country where the last draft country poverty report found that about 40-42 percent of the population is poor. A lot of that is in the rural areas. Generally those individuals have no access to banking and financial services. They are unbankable. The banks consider them too risky and too expensive to do business with and generally too difficult to manage their portfolio."

Jules Vasquez "And this is who the program is for?"

Ervin Perez
"Yes, the program is trying target that particular group but the productive poor."

Jules Vasquez
"Explain that term 'productive poor.' You keep saying that. What does that mean?"

Ervin Perez
"'Productive poor' means that a person is poor but they are working to generate an income for themselves. Either through being self employed or forming a partnership or a group, being a part of an association trying to generate income for themselves. So they are not just sitting home and saying 'I am poor, I need a handout.' These are individuals who are actively trying to make a better life for themselves. Let's just think about a taco vendor and just think about the rainy season. In the dry season the taco vendor might make a lot of sales. But on a rainy day when only a few people might want to stand outside and get wet, they might have no sales. They might need a savings product that they can save some of their money in the good times for the bad times."

Jules Vasquez
"Or alternately, you can invest in some sort of cement structure or some sort of semi-permanent structure."

Ervin Perez
"They can improve their service."

Jules Vasquez
"So if I am a participant in the people's economy, which may mean selling food, delivery service, weaving. This is real, is there access is there hope for those people?"

Ervin Perez
"Clearly their target is the informal of the people's economy, people that we might call some hustle business. So a legitimate business, it might be informal, meaning it may not be structured as how we would operate a small scale business or a medium size business. But it has to be afforded the opportunity to obtain micro finance services. That business like you said might be, 3 months of doing a particular type of trade, 3 months of doing something else, when in rainy season you do one thing, in dry you do another thing etc."

Jules Vasquez
"I will list a few things and then you just say if that can qualify: Barber shop, crafts stall on the street, tableta vendor, taco vendor, small restaurant owner selling rice & beans out of a little shack, tire repair, bicycle repair shop and fish market vendor."

Ervin Perez
(nods head for all above)
"All micro entrepreneurs should be able to access this particular fund."

Jules Vasquez
"Plastic bottles recycler, the people who collect all our plastic bottles from the streets."

Ervin Perez
"Definitely, I don't see why not If you and the credit officer can understand the business and understand his/her operation, how much income they are generating, then you can say, 'You know what, I can understand what you are doing and I can create a product or service that will meet your need.'"

"For the time frame by which you apply and be approved has to be extremely shortened. One of the fundamental characteristics of micro-finance is accessibility and speed. If you are a micro entrepreneur and if you have to be waiting 2, 3 weeks for something, it's not going to happen. It's not any value to you. You want to meet a field, credit officer, he looks at x,y,z and within the same time says you are going to get this money tomorrow. So it has to be speed."

Jules Vasquez
"We see the draft poverty assessment is at 43 percent. When the next assessment is done - I think it is done every 3 years - will this program have had a diminishing effect on the alarming poverty level in Belize?"

Ervin Perez
"We expect and hope from our work plan that there will be an impact, how significant that impact remain to be seen."

The fund is 6 million US dollars - a portion of that will go to administrative costs and 4.5 million US is for loans. It is set up as a revolving credit fund meaning monies borrowed from the fund are paid back plus interest and it turns over.

As we noted at the top, the programme will not fully roll out until the end of the year. That is because the Credit Unions involved will have to do significant training - particularly for field officers who will go out into rural and dispossessed areas to offer the loans.

So far, 7 credit unions have expressed interest and 5 have signed letters of intent.