In our world, the poorest segments of society are disregarded from common financial services. These financial services are necessary to maintain stable lives and create opportunities. However, the profit-seeking banks and financial institutions do not offer these life-improving tools to the ones who need them the most: the poor.
FAPE is dedicated to offering microcredit, microspensions, and microinsurance to the poorest in Guatemala regardless of the costs. FAPE is not motivated by profit, but instead motivated to alleviate poverty in a sustainable manner.
Learn more About Microfinance.
FAPE offers three different types of credit.
Communal Banks - 10 or more people gather together to receive loans. Each group member is partially liable to assist the other group members, when one of the group members is having a difficulty in his/her business. Typical loan sizes range from $75 USD to $300 USD. After borrowers successfully pay back initial loans, they are allowed to graduate to larger loan sizes to invest more into their business.
Solidarity Groups - 2-9 people will gather together to form solidarity groups in which the groups are jointly liable to pay back the loans.
Individual - one person receives a loan and he/she uses the loan for business investing purposes. Normal loan sizes range higher towards the $300 USD to $600 USD value.
Each FAPE client goes through an application process to determine which type of loan would be best for the client's needs. Each loan is used for investment into a business and when clients fulfill previous loans they can graduate to larger and larger loan sizes. These processes were put into motion to protect the clients from becoming overly indebted.
New programs have been developed to offer FAPE clients many of the protective services that people in developed countries eagerly utilize. FAPE is planning to offer the following insurance programs:
These programs protect the clients from external shocks that normally destroy a family's financial standing and business. With small premiums, the clients can manage the insurance plans and avoid catastrophe in the face of life emergencies.
Additionally, in cooperation with REDIMIF, FAPE offers a pension program to allow clients to pay premiums each month (usually in the amount of $5 USD), so that during retirement years, they can receive a compounded amount for supporting income. At the moment, Guatemalan retirees are entirely dependent upon children to care for them during retirement years. This causes many families to decide to have too many children, which then continues the poverty cycle. FAPE wants to give its clients the option to have financial freedom during this time of life.