HECD Program Phase IV to Develop SME Microfinancing

The HECD Program

The multi-year Honduras Economic and Community Development program (HECD) has been supporting the development of microfinancing in Honduras since 2014. The District 5360 Microfinance Task Force (MTF) has continued to expand its mandate to address new areas of need for financing in Honduras.

Phases I and II of the HECD program have been successfully completed, and Phase III is now entering the implementation stage, having just received funding from The Rotary Foundation (TRF) via a Global Grant. The initial phases of HECD addressed the need for providing small loans to family-based businesses (Trust Groups) through our Honduran Non Profit, Non Government Organization (NGO) - Institute for Development in Honduras (IDH). The HECD program has leveraged its partnership with Opportunity International Canada (OIC) to transfer the loan portfolio funds to IDH. It enabled loans in the capital Tegucigalpa, and a new branch in Santa Barbara. While these loans led to local employment and improved the lives of thousands of families, a new opportunity has been identified through Phase IV of the HECD program to expand the scope of microfinancing to have an even greater positive impact on local economies and families.

What are the Needs and the Impacts?

Through OIC's contacts with IDH, they have identified a growing need for financing for Small to Medium Enterprises (SME).  These are companies that require larger loans and with longer term repayments than the short-term Trust type family-based enterprise loans, and yet fall below the minimum loan size offered by the existing banks. The prime objective of HECD Phase IV is to help develop IDH's capability and capacity to serve this gap in the microfinancing marketplace. This will include helping IDH to develop the SME loan officer expertise, and educating prospective clients on SME financing. By providing loans to SME's for production equipment, expanded facilities, and operating capital to hire more staff, the positive impact on local employment will be even greater than the small Trust loans provided by IDH to date, which will also continue to be offered during Phase IV.

The HECD Phase IV Objectives

Phase IV has several objectives aimed at meeting the immediate recognized local needs:

1.    To provide loan portfolio funds to IDH by April 1, 2017 in the order of US$ 100-150,000

2.    To assist IDH in developing their loan officer expertise in SME loans, and to educate prospective clients in SME financing through an Encounter Day

3.    To achieve measurable benefits from Phase IV by June 30, 2017.

Phase IV will maintain the momentum of the HECD program and will provide a foundation for future HECD phases.

Funding Approach

Phase IV will look to those clubs, governmental organizations, and Rotary International that have generously supported previous HECD phases, to provide continued support. Rotary Club Calgary West has committed C$ 13,000 and High River has already approved C$ 5,000 and submitted a Community Initiative Program (CIP) grant application to the Alberta government to support Phase IV. An application for support has been submitted to the Calgary Downtown club, and other clubs such as the Calgary East and the Heritage club have expressed interest. The Quinte Sunrise club in Ontario is pursuing funding for this phase with the help of OIC. The objective is to secure at least US$ 30,000, or more, in Rotary Club funding which will enable matching grants from Alberta Community Initiatives Program (CIP) and Federal Canada funds - Global Affairs Canada (GAC), as well as The Rotary Foundation (Global Grant). Special event funding will also help to achieve the US$ 100 -150,000 objective.

Current Plans

We are in the process of raising awareness of the objectives and plans for Phase IV, and have several events and activities completed and more scheduled to build support and generate funding:

·         September 6th – Calgary West hosted an HECD reception at the Grey Eagle Hotel

·         September 15th – High River submitted a CIP grant to Alberta Government

·         September / October - HECD Phase IV presentations to 6-8 clubs to raise funds

·         November 26th - joint OIC / Rotary fund-raising curling bonspiel in Banff

·         December - January – submit grant applications to the Government of Canada and The Rotary Foundation

HECD Phase IV Team

The following Rotary members from across several clubs, as well as OIC representatives, are generously contributing their time and expertise to the planning and execution of Phase IV: Steve Rickard, Judy Cochran, Wally Gardiner, Bill Fitzsimmons, Chris Ritter, Duncan Stanners, Don Campbell, Orlin McMillan, DG Jim Louttit, Jannalee Anderson (OIC), and Victor Gutierrez (Real de Minas club in Honduras).

We look forward to your continued support of Phase IV and welcome any new expressions of interest.

Ken Montgomery, Project Lead Phase IV

ken.montgomery@shaw.ca