On September 15, Guatemala celebrated 192 years of independence with fireworks, balloons, and parades. By the end of the festivities, I was used to the ear-splitting explosions, the crackle in the sky and the pops near my feet. But less than 20 years ago, those same sounds originated from sources of violence: the boom of a machine gun or the hiss of tear gas in a crowd of protesters.
This year, Guatemala celebrates 17 years of peace after the 1996 Peace Accords that officially ended a 36-year civil war, which had claimed the lives of roughly 200,000 civilians. As explained in a 1999 report, “Guatemala Nunca Mas,” the widespread militarization during the civil war “dominated the daily life of every village or neighborhood, trampling local values and culture.” One Génesis Empresarial client I spoke with had been “left as an orphan with my grandmother.” Today, Guatemalans live in a healing society, working individually and collectively to implement lasting improvements in a post-conflict zone.
One of the tools that has come to aid in this process of rebuilding is microfinance. But can microfinance have an impact in communities where social ties have been eroded? I would say yes. In this post, I’d like to establish a basic understanding of the Guatemalan civil war and provide evidence from academic, anecdotal sources in addition to an interview with Génesis Empresarial to assert why and how microfinance is the one of the best tools to revitalize Guatemala.
The 36-year-long Guatemalan civil war (1960-1996) was mostly fought between the Guatemalan government and various leftists rebel groups that were primarily supported by much of the rural poor, including ethnic Mayan indigenous people and Ladino peasants. Both sides recruited extensively, which meant the war impacted all aspects of Guatemalan society. Warfare resulted in widespread disappearances, sexual violence, arson and torture, especially in rural and indigenous communities. The U.N. and recent Supreme Court rulings have confirmed the crimes committed during the civil war were acts of genocide against the Mayan population, and the ruling administration’s primary objective was to break the social cohesion of rural and indigenous groups in order to weaken the rebel support-base. Gregorio, a local leader whose family survived minor persecution during the Civil War, commented “It was impossible to acknowledge your best friends, if you said hello to a friend who may be tied to the guerrillas, government officials would question your connection and sequester you too.”
So, how can microfinance rebuild broken social ties in these communities?
As Laura Messier notes in her thesis “Microfinance and Social Impact in Post-Conflict Environments,” “post-conflict environments suffer from suffer from less social capital and stability, and so microfinance’s social capabilities become more important.” Certain populations are more vulnerable in post-conflict situations; women, for example, may feel less secure and more risk-averse, as might the poor who have seen what little stability they had disappear.
In the process of reconciliation, micro-finance in the form of a solidarity group-lending model can restore some degree of social capital when complemented with a social-performance agenda, such as capacity-building. Rudy Benjamin Chocoj, regional leader of the capacity program in the Northern Petén branch of Génesis, stated “Microfinance in the group format requires participation. Before working with Génesis, a lot of clients were afraid to participate. Capacity-building courses also help to diminish fear because it gives the clients ideas and confidence [sic]. Microfinance groups help clients to strengthen relationships with their community because they need to rely upon each other to move forward.”
Through my work with Génesis far, I have witnessed clients strengthening relationships and shedding fear. Victoria from Nueva Esperanza, a group-lending client, stated, “I never thought I would like working in a group, but it works and I like it. I am building friendships.”
I’ve also seen people share their knowledge from training with each other, dance Marimba with their neighbors, pop balloons on each other’s backs in ice breakers, and nurse the children from other mothers. These women and men have found financial and social support not only in Genesis, but also in each other.
Microfinance, especially in the form of group lending models, has proven to be an effective tool for rebuilding social ties in post-conflict Guatemala. Microfinance does not come without its own caveats and risks, however, and Rudy stressed, “Credit supply drives economic fluidity, but these credits must be handled with low interest in order to make them economically profitable, socially acceptable and sustainable.” Clients in post-conflict situations are more vulnerable to high interest rates and over-indebtedness and most clients are not financially educated in how to handle their loans. This is why it is critical to offer socially-responsible impact programs such as the training supplied by Génesis on investment, financial literacy and skill-based knowledge.
Laura Meissner also notes that microfinance may provide auxiliary benefits in post-conflict zones. However, “If your most important goal is post-conflict reconciliation and the rebuilding of community (rather than providing high-quality financial services to the underserved), consider interventions besides microfinance.”
It’s a judicious and important point: Microfinance is a very powerful tool that has the capability to improve social ties in post-conflict zones, but like any other anti-poverty tool, it alone cannot be depended upon for the restoration of social cohesion. Microfinance must be coupled with socially-responsible impact programs and education in order to help foster flourishing societies and individuals in Guatemala – but it can absolutely have a positive impact on affected communities.