Posted on 11/04/2019 5:04:28 PM PST by KingofZion
The winding roads into the valley of Nebaj are lined with advertisements for cheap loans. Banks and cooperatives and microfinance operations make their pitches: “Credit in three days.” “Funding for your small business.” “We’ve lowered our interest rates!”
U.S. officials have long touted the power of finance to lift people out of poverty — and backed loans to farmers and small-business owners across the developing world. But here in the Guatemala Highlands, the epicenter of the country’s migrant exodus, those loans often fund a different activity, the region’s most profitable: Smuggling migrants north to the United States.
Over the past nine months, the number of Guatemalans who have reached the U.S. border has swelled to more than 250,000. They include many of the country’s poorest people — subsistence farmers who have somehow managed to scrape together up to $12,000 to fund the journey north. What enables those payments is a vast system of credit that includes financial institutions set up and supported by the United States and the World Bank, part of the global boom in microfinance over the past two decades.
The U.S. government and the World Bank have each extended tens of millions of dollars in funding and loan guarantees, money that helped create what is now Guatemala’s biggest microfinance organization, Fundación Génesis Empresarial, and backed one of its largest banks, Banrural.
But in Nebaj and communities like it around the country, those financial institutions now serve Guatemalans eager to migrate.
“Nothing else that most of these households could invest in can compete with those astonishing returns to investment,” said Michael Clemens, a senior fellow at the Center for Global Development and one of the study’s authors. “So it absolutely makes sense that when some families are able to access capital through microlending, they invest it in migration.”
(Excerpt) Read more at washingtonpost.com ...
bttt
bttt
USAID money should be dispensed with a quid pro quo spelling out how the money is to be spent.
Stop lending all together. We have NO obligation to any country to be it’s treasury.
bump... recall Hillary was pushing microfinancing in Bangladesh, etc. Probably Myanmar as well.
This explains a lot. Instead of the poor lifting themselves by the bootstraps, and reinvesting their profits into their own communities, the robbing socialist political systems and criminal situation they are in compels them to keep their profits until they have enough to flee.
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