CEF Goes Global

CEF was started in the summer of 2009 and began recruiting to the larger student body that fall semester. Within this first round of newly recruited CEF-ers, were a few students from the Carolina Microfinance Initiative who in addition to being new to microfinance, were passionate about international development and empowering low income communities to access to financial products and services. Inspired by the personalized work and experiences in CEF, this small, but riveting group set their eyes on taking CEF’s name globally.

At its roots, microfinance was developed, has a prominent presence, and is typically known for being a powerful tool for economic development internationally. In practice, the number of microfinance groups, clients, and funding in developing countries dwarfs those of domestic microfinance. Nonetheless, this group of CEF-ers saw several industry deficiencies they believed a CEF-esc student driven model with relationships at its core, could take microfinance to the next level: A model where the people, not the finances come first.

During this time, these students were beginning to form a partnership with a Raleigh NGO, Lemonade International, who operates two elementary schools in Central America’s largest urban slum called La Limonada located in Guatemala City. While Lemonade International is having a significant impact in La Limonada working with children, they saw a need to engage and work with the adult population with entrepreneurship education and financial services. After failing to target an MFI willing to operate in the community due to the slum community’s violence, social stigma, and lack of profitability, Lemonade International met this group of CEF-ers wanting to do just that.

La Limonada, the Largest Urban Slum in Central America

La Limonada, the largest urban slum in Central America

A “red zone” in the city, La Limonada, is notorious for murder, gang violence, drug addiction, and more to the point that the government itself refuses to enter. A common phrase thrown around by the local kids say that, “not even Santa goes into La Limonada”. Armed with a small library of books on microfinance, an abundance of educational materials, and a myriad of hope and doubt, three UNC students traveled to Guatemala to explore the feasibility and applicability of a CEF-like program in La Limonada.

On ground, the three students soon realized that huge need and potential for CEF International (known as FAC in Spanish)—there were countless entrepreneurs wanting access to capital and education to jump-start their businesses, but couldn’t find it at fair and affordable rates. After hearing horror stories of the different predatory lending schemes practiced by local and national Guatemalan MFI’s, El Fondo de Apoyo Comunitario Internacional officially launched in August 2010 with support from CEF, the Carolina Microfinance Intiative, the UNC Campus Y and the Carolina Center for Public Service. This 2010 pilot program consisted of 1 loan officer, 1 education coordinator, 2 borrower groups—two joint liability 5 to 6 member loan group—and 1 savings circle—a 6 member solidarity group that strives to build assets and community.

The second FAC borrower group at a weekly meeting where they discuss topics ranging from budgeting to managing a small business

It’s been a long year for us, full of trials and triumphs the whole way, and we thank CEF for all its continued support. Aside from the name, organizational structure, and focus on relational support, CEF and FAC have something else in common: a propensity for growth, change, and empowerment. As CEF has recently acquired 501(c)(3) status and continues to enlarge its ever-growing database for meeting clients’ needs, FAC is also renovating and expanding. We’ve recently started up a CEF-inspired Savings Program with a 20% match for those who meet their savings goal. Our nine savings clients are all teachers at the Limon School in La Limonada, allowing us to build relationships with various community partners and change agents. On the loans side, our third borrower group is starting to materialize, and our two current groups who have seen their income and savings increase significantly, are set to receive their next round of loans in the next few weeks.

As we formalize our Operations Manual, the web of FAC services and products is starting to interlink nicely, and a newly developed Emergency Fund will dedicate 10% of all incoming donations to those of our clients whose emergency needs are the greatest, such as one of our borrowers whose husband recently had his appendix removed and was bedridden for a month. Finally, our Business Incubator program transforms clients’ ideas for a logo and marketing strategy into advertisement vinyls using UNC volunteer resources and local connections. As FAC continues to mature, we at “The Community Empowerment Fund International” can never forget the parental guidance we received from domestic CEF-ers as we took our first baby steps. Check out CEF’s international arm at www.facinternacional.org.

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CEF: Community Empowerment Fund

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