In January of 2008, Dr. Shawn Humphrey and his students were completing the first phase of their improved cook-stove (ICS) project in Siete de Abril – a squatter community on the outskirts of El Progreso, Honduras. It was during phase one that we had the opportunity to interview a household with a motorcycle – the only household in Siete de Abril with such an asset.
We struck up a conversation with the owner about how he was able to finance its purchase. He proceeded to tell us how a local money lender visited his home, surveyed his wealth, and extended him a loan. This extension of credit was itself unusual because the land titles of every household in Siete de Abril were currently being contested. The local money-lender it turned out extended his credit based upon the provision that if he were to default that he would return and take all of their wealth, which included a car battery that powered a dilapidated television and radio and some broken down mattresses. While the motorcycle owner was telling his story, his wife started to tear up. This was a significant risk that he and his family were taking. His job, however, was running medical supplies in and out of downtown El Progreso. A form of transportation is vital to this task. It was a risk he and his family felt they had to take.
At dinner that night, our ICS team decided that upon their return to UMW that they would begin building a micro-financial institution to assist others who had entrepreneurial ambitions. Before leaving Honduras they had settled on a name: La Ceiba – after the Ceiba tree that anchored the back corner of the hotel where they were staying.
Once at UMW, Dr. Humphrey recruited his Economic Development class to assist in building La Ceiba. That spring, his class utilized the Two Dollar Challenge to raise awareness and funds for La Ceiba. They raised $6,750! With the seed capital raised Team La Ceiba began to organize and structure its group loan program and go on to extend our first set of loans in January of 2009.
