The overcast sky cooled what would have otherwise been a hot and muggy day in the La Concha village in Guanajuato, Mexico. Twenty women gathered on the dirt road as they did every week. The Treasurer they elected to safeguard the key opened the plastic toolbox and removed twenty beautifully hand-knit pouches, laying them to the side. The Secretary, also elected, then opened the village’s green ledger. One by one, the Secretary read the names of the women who volunteered to participate in the village’s savings box program. As her name was called, each woman took her pouch and deposited at least 100 pesos, the minimum amount they all agreed would be required to save each week. The Secretary recorded the amount deposited and called the next name. When everything was done, the President reported the grand totals to the participants. The Treasurer then returned the pouches to the savings box and locked it.
This savings box program is a fundamental building block in Choice Humanitarian’s approach to rural village development. First, it creates a reason for the villagers to gather every week to focus on developing their village. This recommits them to work together to increase their standard of living . Second, it creates a governance council for village development that the villagers themselves, not the humanitarian agency, operate. The villagers elect their leaders and vote on the decisions. Third, it creates access to capital. A village will typically run a weekly savings box program for a year or two before using the savings to make small businesses loans in the village. At that point, a villager can request a loan from the council that is funded from the pouches in the savings box. Using the loan, the villager might start a small strawberry farm, purchase chicks to raise to chickens, or any other number of income producing ventures. The savings box is self-sustaining from the interest on the loans.
La Concha has been with Choice for three and a half years. They have diligently run the weekly savings box program that entire time. Now, they have advanced to the point that they can finance small businesses. Juanita, pictured below, runs the village grocery store out of a small cinderblock building. She used a loan from the savings box program to cover the costs required by the government program that enabled her to buy a tortilla machine. Her family grows the corn, cooks it in a wood burning stove, presses it, and uses the meal to create hundreds of tortillas a day which she sells to surrounding villages. Prior to the machine, she would make tens of tortillas a day, only enough for her own village.
This gives you a feel for how Choice works with a villages to fight extreme poverty. Choice has evolved its programs over 30 years. Today, Choice operates in a thousand villages across seven countries. You can visit villages in Nepal that operate savings boxes in similar ways to Mexico, Ecuador, Kenya, Guatemala, Bolivia, and Peru.
It’s a grind. Villages like La Concha are typically underserved by local governments and non-profit organizations. Governments focus on urban development because it’s more cost effective monetarily and often in terms of electoral votes too. Non-profits, for similar economic and access reasons, are likewise more likely to be found in small municipalities than in the rural villages where Choice operates. These villages are typically sustained by small farms. Village life is defined by coping with poverty. There is little access to running water, medicine, sanitation, and often, a balanced diet. One of the early exercises Choice does a village council is to ask the villagers to describe what success would look like if the village came out of poverty. One village woman wrote, “I just want a dignified bathroom”.
Choice sees itself as a sponsor for village development. They design the programs and train the villagers to execute them in a way that is tailored for their specific needs. The donations I’ve made to Choice over the years have largely gone to pay the salaries of full time in-country staff, often hired out of Universities in the state. Choice staff members, hired at a ratio of one staff per village served, work full time in teams with the villages for five years. When a village “graduates”, the Choice staff steps away from the council and the staff moves to the next village. Successful villages then provide support and training to the new villages.
In Mexico, there is around a 70% graduation rate of the villages. This means that 70% of the villages arrive after five years at a point where they would no longer be considered to exist in extreme poverty. The have access to clean water, balanced diet, sanitation and other basics. There are villages in Mexico who graduated fifteen years ago who remain transformed today. In fact, Choice in Mexico has a waiting list for villages who have requested their help. They no longer recruit.
Here is a picture of the staff at Choice headquarters in Mexico. In addition to working with villages in their region, they oversee the work of the other several regions where additional staff work with villages. Juan, the handsome man in the middle, is Choice’s director in Mexico. What an amazing person. With his doctorate in economics, he taught in a few Universities in Mexico before joining Choice to build the program there. He has had such an impact in the country. The villagers and the staff absolutely adore him.
One parting thought before I wrap up this post. A couple of weeks after I returned from Mexico with Choice, I listened to this podcast episode that interviewed Joe Studwell about his book, How Asia Works. Allegedly, Bill Gates named this one of his top 5 books of 2017 and required the agricultural division at the Gates Foundation to read it. I’m adding this book to my list.
What struck me from the Studwell interview was his description of how land reform was successfully implemented by governments in East Asia to grow their economies faster than the West. As I understood it, governments in East Asia financed small farm ventures in an attempt to leverage the available labor to produce higher yields than big agribusiness. It worked and it made a significant impact on the GDP in these countries. Studwell’s description of land reform reminded me of Choice’s savings box program. The savings box creates a pool of capital for villages to finance small agribusinesses that put to work the underutilized available labor in the villages. This in turn enables the village to produce income and escape extreme poverty. What I heard described in Studwell’s book seemed like a variation on that theme, performed at scale by central governments.