Longterm Accompaniment: Indigenous Entrepreneurs

by Highland Support Project
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs
Longterm Accompaniment: Indigenous Entrepreneurs

In the months of September and October, we implemented our full focus on the Virtual Merchant program in Guatemala, Marchante Línea. Continuing through our circle empowerment method, a team consisting of a marketing director, business administration director, and graphic designer trained Guatemalan women in each field providing them with the knowledge and means to conduct their own product management through the creation of business cards, market photography, Webdesign, and business and contingency plans. In doing so, we have edited this project, previously titled "Jobs & Peer-to-Peer Counseling" to "Longterm Accompaniment." 

In efforts to move past only experimenting with micro-investments, and with the support of the United Nation's International Organization for Migration (IOM) and the United States Agency for International Development (USAID) we have pushed forward with a long-term accompaniment program for ingenious social entrepreneurs fostering resiliency in the face of climate change. Accompaniment methods persist in the values of external but horizontal support whereas other methods may lose sight of these values and that of the community’s knowledge and history of social organization (Taylor et al., 2008). “The accompaniment model also seeks to support the political negotiation capabilities of communities and their leaders, in large part through development and strengthening of social networks.” In other words, micro-investing under an accompaniment method will nurture a relationship between investors and businesses, fortifying business owners’ autonomy over the creation and implementation of their business models. 

Key differences between micro-lending and micro-investing are the opportunities for wealth growth, the risk of market saturation, the debt-to-profit ratio, and creative freedom. Micro-lending, though lucrative for intermediary organizations, fails to protect lendees who must repay loans back to the intermediary – not the lender – alongside interest. In Guatemala, lending systems are already in place. Agriculturists may borrow money or seeds in return for the harvested crop which usually results in little to no remaining crop for individual business profits. Direct money loans exist where borrowers may receive day funds which must be repaid within the day with interest. These types of fast-paced and seasonal loans rarely leave opportunities for wealth growth as profits are immediately used to repay loans, interest costs, and routine business expenses. Micro-lending brings new loaners but no new opportunity for sustainable profit increase for borrowers. Additionally, the risk of market saturation with international micro-lending is perpetuated. This is because loans generated by micro-lending often require specific business models or products for qualification which leads to multiple businesses promoting the same product or service increasing competition and decreasing creative freedom. 

The long-term accompaniment program will reinstate individual freedoms for business owners, allowing for sustainable business ventures and maintaining a serious recognition of community values and social structures. As mentioned, we have initiated a training program in four locations where women were trained and equipped with product management and advertisement skills. 25 businesswomen will be chosen to receive a $1000 investment with the goal of a follow-up investment of an additional $1000 for successful businesses at their first-year mark. Implementing micro-investing will support individual businesses to avoid market saturation and debt disbursements as seen in micro-lending. With micro-investments, you only pay back if it's successful after you have already paid yourself. Also, micro-investments go straight to entrepreneurs rather than to an intermediary which reduces risks. Altogether this will address the problem of fear-based business models and reinstate power to businesswomen manifesting social and political strength and security.

 

Taylor, P. L., Cronkleton, P., Barry, D., Stone-Jovicich, S., & Schmink, M. (2008). Models of External Assistance. In ‘If You Saw It with My Eyes’: Collaborative Research and Assistance with Central American Forest Steward Communities (pp. 29–36). Center for International Forestry Research. http://www.jstor.org/stable/resrep02098.10


Program launch and celebration in San Marcos
Program launch and celebration in San Marcos
Program launch in San Marcos
Program launch in San Marcos
Banquet at Solola program initiation
Banquet at Solola program initiation
Program launch in Solola
Program launch in Solola
Program launch in Totonicapan
Program launch in Totonicapan
Program launch in Xela
Program launch in Xela
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Over the last six months, we have developed a theory of change concerning wealth creation in rural communities chronicling problems that impede women of the Western Highlands of Guatemala from accessing opportunities in this century. These conclusions form the basis of the logical framework in our proposal to the United Nation's International Organization for Migration (IOM) and the United States Agency for International Development (USAID) program to address the fundamental causes of migration from Central America to the United States. We proudly announce that USAID/IOM selected our proposal titled the Virtual Merchant in a competitive selection process to finance a pilot project addressing critical obstacles to wealth creation for Highland Indigenous Women.

Our analysis begins with identifying the accelerating societal and economic changes interrupting traditional survival strategies and contributing to the development of a culture of dependency. We define a culture of dependency as individuals transferring their agency to outside actors such as government officials or evangelical pastors to satisfy material needs or engaging in risky behavior such as migrating to the United States or participating in illegal markets. The Virtual Merchant project focuses on creating positive coping mechanisms that empower women to identify and take advantage of opportunities. Stress process researchers define coping mechanisms as either positive, identifying and addressing the cause of stress, or negative, emotional avoidance strategies that enable people to function with stress. The project centers on structuring coping mechanisms through financial planning, capacity building, and improving business acumen. A problem we identified is the survival strategy of creating jobs rather than businesses. What we mean by this is that the common practice of Highland entrepreneurs interviewed was to mimic an economic activity perceived as successful. This practice frequently produces income-generating activity comparable to wage labor but does not foster wealth creation. Conservative cultural norms for survival have ingrained behavioral patterns restricting risk-taking and innovative thinking, leading individuals to replicate a successful business venture of a neighbor rather than finding an opportunity in an unmet need or discovering a more efficient means of meeting demand.

The project is grounded in the problem that small informal entrepreneurs cannot participate in electronic commerce because they cannot accept electronic payments, which requires entrepreneurs to formalize their business. Business formalization refers to legally incorporating with the state and paying taxes and registrations necessary. The accelerating rate of consumer choices and government policies reducing the size of informal markets are eliminating spaces for market participation for rural people. Informal surveys conducted by Guatemalan Universities demonstrate that even the most rural consumers prefer packaged and branded products.

This Virtual Merchant pilot project will utilize our circle empowerment methodology as rural enterprise incubators consisting of administrative and marketing accompaniment and facilitation of technical support. We will create turn-key business ventures to eliminate many common and avoidable errors with the assistance of qualified business consultants. The project will house a digital marketing team to assist rural entrepreneurs with branding, packaging, and digital access to harness the migrant solidarity and nostalgia consumer. The migrant community, both internally and internationally, is targeted to address the limited spending capacity of rural consumers. Migrant consumption is differentiated between nostalgic consumption, such as a migrant's desire to have regional ingredients, and solidarity markets which are migrants wishing to purchase goods and services for relatives remaining in the Highlands.

This project's innovative and experimental aspect is forming an investment holding company to facilitate the development of micro-investing to replace micro-lending as the norm of international solidarity engagements. Micro-lending is a very lucrative development model for intermediary organizations that benefit from the annual growth in capital assets under management and the collection of interest. For rural women producers, it represents a perpetual debt trap with recipients frequently taking on more loans to pay off old debts. The simple dynamic is that micro-lending today has rural women working to pay interest to sustain NGOs rather than wealth creation for the entrepreneur or her investors.  

We are experimenting with how micro-investing can encourage long-term relationships to develop accompaniment services rather than short-term transactional relationships based on debt collection. The project's vision is to foster the creation of community-based capital markets, replicating many of the positive attributes of successful cooperatives adapted for entrepreneurial pursuits.    

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During the last three months, the Association of Highland Women (AMA) has been engaged in creating a logical framework for solving issues confronting members in rural communities.  One of the primary issues identified is the growing culture of dependency developing because of accelerating societal and economic changes interrupting traditional survival strategies. We define a culture of dependency as individuals transferring agency to outside actors such as religious leaders or risky behavior like migrating to the United States.  What we are identifying is described as a coping mechanism for stress.  There are three types of responses to stress: 1) addressing the cause, 2) Avoidance, 3) Magical thinking.  Everyone needs to have a source of hope and for many people in our communities, it is the idea of migrating to the United States to earn dollars.   

A related issue is a lack of innovative thinking in business decisions or product development. Conservative cultural norms for survival have become ingrained behavioral patterns that generate jobs but not enterprise. Too frequently, we look to replicate a successful business venture of a neighbor rather than finding an opportunity in an unmet need or discovering a more efficient marketing method.  The effect of this is market saturation accompanied by diminishing returns on investment. 

A significant issue confronting small entrepreneurs is the inability to accept electronic payments, participate in eCommerce or formalize commercial activities. The accelerating rate of consumer choices and government policies are reducing the size of informal markets. Informal surveys have demonstrated that even rural consumers increasingly prefer packaged and branded products. Our solution is empowerment circles that function as rural enterprise incubators with administrative and marketing accompaniment and facilitation of technical training.

Our solution is the creation of turn-key business ventures to eliminate many common and avoidable errors with the accompaniment of qualified business consultants. We will house a marketing team to assist rural producers with branding, packaging, and digital access to resolve the issue that migrant solidarity and nostalgia consumers cannot purchase directly from regional producers because of their inability to accept payments.

Finally, wage labor does not facilitate wealth creation. We plan an investment holding company to sell women's development bonds to seed a capital market. The opportunity for business investment will incentivize formalization and promote productive saving.

The first stage is the formalization of member businesses.  Formalization refers to the process of assisting our members to legally incorporate their commercial activities and register to pay taxes.  This is a critical step because it is not possible to participate in digital or mobile commerce without being a formal business.  Increasingly, consumers in even the most remote villages are starting to prefer branded and packaged products over informal presentations, and the government is increasingly enforcing laws that limit opportunity in the informal market. 

A significant problem for Guatemalan entrepreneurs is the lack of consumer purchasing power.  Many programs focus on a supply-side strategy to improve financing, administrative capacity, or productivity.   What we understand is that if there is no one able to purchase the goods and services that our members produce, it is a pointless endeavor.  We have identified the migrant community, both domestically and internationally as a market with the purchasing power. 

We have identified two consumer behaviors that we believe can assist in the expanding markets for our rural members.  One is what we call the solidarity market.  These are migrants who wish to purchase goods and services for family members in Guatemala.  The founder of HSP, Guadalupe Ramirez, for example, wanted to purchase Keto products for her mother that has developed a health issue requiring her to reduce her intake of carbohydrates.  Another example is people that wish to purchase food and flower arrangements for a family member's funeral.   The next consumer behavior is referred to as the nostalgia market to describe migrants that wish to purchase products from their home regions. 

We thank our supporters for providing us with the resources to continue innovating effective programming that increases the resilience of Indigenous women to respond to the many challenges they face.  As we say In the land of the Maya, Everyone rises up and works together so that no one is left behind.   

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reforestation efforts
reforestation efforts

This past week, our partners participated in various meetings and workshops on sustainability and fostered community-led solutions for local impacts of climate change. For instance,the AMA circles of Tejutla and Chamac met with AMA’s community facilitators to discuss the potential of reforestation, irrigation, and rain gardens as solutions to the challenges brought by changing weather patterns. 

 

For context, climate change has been causing visible impacts on the weather patterns in the Guatemalan highlands, leading to unpredictable precipitation for many communities where some periods are completely dry and others have intense rain. This results in devastating mudslides for many mountainous communities as the terrain cannot adequately retain the overabundance of water. 

 

One solution that is currently being implemented is our reforestation project as trees help improve the consistency of rainfall as well as mitigate the risk of mudslides by improving soil and water retention. In particular, the women were discussing how to convert old water jugs into a drip irrigation system to be planted next to new saplings and ensure their longevity. 

 

Additionally, our community members met to discuss the potential of rain gardens that will be the focus of our campaign next year to improve water retention and community safety even further. Rain gardens are prevalent in many parts of the world and can be used to reduce runoff and flooding, filter out pollutants, and conserve water. We will be taking volunteers down to support the implementation of this campaign, and encourage anyone interested in traveling with us to click on the link below and fill out our trip interest form!

 

Ultimately, while these efforts are mainly centered around climate change, they further our mission of building empowerment as local women have an opportunity to be actively involved in mitigating the threats facing their communities, and we are excited to keep working with them to find solutions and build community agency.

AMA circles of Chamac and Tejutla meeting
AMA circles of Chamac and Tejutla meeting
carrying trees through the highlands
carrying trees through the highlands

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Thank you again for your continued generosity to the Highland Support Project. 

Although we have not been able to return to Guatemala as we typically could this summer, a wonderful positive has been our team of interns. We have interns working with us from the University of Richmond, Virginia Commonwealth University, Longwood, George Washington, Georgetown, and Williams College. Spending the summer in Richmond with this team has allowed us to explore a lot more creative fundraising, research, and brainstorming. 

We have also been able to spend time discussing and diving into the "how" and "why" of our work in Guatemala, and recently shared a new blog post about empowerment theory written by our intern, Sam Web.

"According to the National Center for Charitable Statistics, there are more than 1.5 million registered nonprofit organizations in the U.S. alone. Picking a select number of charities to support from that total is a very difficult and important task. While making a choice, important questions arise: which causes are most worth supporting, what organizations are ethically using donations for their cause, and, most notably, what nonprofits are making the most significant difference in the world? The latter question might seem easy, the simple answer being the big-name charities with the biggest outreach. However, the largest charities having the most significant impact is a fundamentally flawed line of logic."

Read the full blog post here!

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Highland Support Project

Location: Richmond, VA - USA
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Twitter: @HighlandPartnrs
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BENJAMIN EDWARD BLEVINS
Richmond, VA United States
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