How To Help Invest In The Future Of Guatemala

Friday, October 5, 2012

In the current presidential election there is a lot of talk about safety nets. Without being political, I’ll say that the most in the developed world have them, and they tend to be pretty effective overall.

In the third world, these nets often don’t exist, or are filled with human-sized holes. What this means is that when things go bad, they get worse and the sinking often doesn’t stop until things hit rock bottom. Rock bottom may mean homelessness, disease or, at the severest, loss of life. This is nothing new. The sick often become poor and the poor often get sick.

People at the bottom rung of the economic chain live day-to-day doing whatever they can to survive. On a bad day they might earn nothing; on a good day maybe they’ll earn $10. In my experience working with these populations, I’ve seen that the same family one month might earn $100 and the next month earn $300. What those two months have in common is how much is left over at the end of it: typically nothing.

The reason is often the result of lack of financial education. The poorest populations typically have little by way of experience handling finances. For many who are able to save,  money is likely to be stashed in a mattress where it is vulnerable to thieves. The poor, more than any other population, would benefit dramatically by having a meager savings to help them over rough months when they don’t earn enough to even properly feed themselves or provide for needed medicine or school supplies. I’ve encountered families who chose not to send their kids to school simply because they couldn’t afford $20 in school supplies.

In the development field, most would agree that for many poor people with some regular income, having a savings would benefit them greatly. The question that results is: How do you do that? How do you get people with no financial education to learn how to manage their finances?

In Guatemala The Integral Heart Foundation is currently micro-testing an answer to this question by implementing a pilot project called The Third World Savings Project. The project consists of three simple parts:

1) Teaching impoverished families who have had no formal education how a bank savings account works.

2) Pairing them up with a mentor (local Guatemala university students), who can help them understand their finances better and make better financial choices.

3) Opening a bank account with them and then offering them the following incentive: If they make a deposit of any amount every week for six weeks in a row, $50 will be deposited into their savings account.

The end goal of this project is to help participating individuals see the value of having the safety net of a savings account and continue to use their new account. Even if 10% of the families in the pilot program continue after the pilot period, the program could be considered a success.

So will it work? We’re not sure. But we’re excited to find out and to learn how this idea pans out in the real world.

And this grassroots program needs your help. We are looking for 10 sponsors to sponsors 10 families in order to fund the program. If you are able to be one of them, please click here to learn more and help rewrite the rules of the game for one poor family in Guatemala.

By Luke Maguire Armstrong


About the Author

LukeArmstrongAfter setting out to hitchhike from Chile to Alaska, Luke Maguire Armstrong stopped in Guatemala where he spent four years directing the social service programs of the charity Nuestros Ahijados. He is the curator of the high energy humor site Rabble Rouse The World and his book of poetry, iPoems for the Dolphins to Click Home About (available for sale on is especially enjoyed by people who “don’t read poetry.” Look for his next poetry book, “How We Are Human,” this fall, and his novel “How One Guitar To Save To World” whenever he finally finds an agent. 

(Follow Luke on Twitter: @lukespartacus). 

  • Tom Porter

    Luke, I just can’t agree with Americans doing things like this, not when we have enough homeless people in this country living under bridges to raise an army.
    And look at all the lies the U.S. govt. has been telling us for the last four decades, that “investing in third world countries develops *markets* that we can sell to.” Yeah and our goods and services get paid for with U.S. taxpayer dollars!
    We end up buying luxury villas and Mercedes Benzes for foreign despots and dictators, THAT’s where the money goes!
    I’ve been to Haiti (a 4th world country!) six times while in the U.S. Coast Guard and nothing, …*nothing* has changed there after pouring Billions of taxpayer dollars in there.
    The thing is, Western countries simply can’t be “giving” money to foreign countries.
    It “dissapears” and the stealing starts right in D.C. with the “lobbyists” on K street who make obscene amounts of money from foreign aid!
    If we tried to stop it it’d be *they* who’d start running the “starving children ads!”
    The corruption right through “foreign aid” is ~staggering!~
    They might as well pile up $100 Billion dollars, throw gasoline on it and light a match.
    Countries are poor for a few reasons, they don’t have the rule of law, that’s the biggest one, they simply don’t care about their own people.
    One thing is for sure, you can’t “give” people things! They take it for granted and then don’t want to “do” anything for the next check.
    I met a teacher who went to an African country to teach the local villagers how to “teach.”
    She said she spent more time going from house to house rounding up the people she was supposed to “teach” than she did teaching them. She said that (she) was there to teach (them) how to teach but they just expected her to do all the work!
    She said that they just couldn’t understand the concept.
    Regards, Tom Porter

    • Hannah

      Hi Tom, the issue you are talking about is a highly complex one and not something that can be simplified as “us” giving to “them” and this model not working. In lots of ways, you are right. But perhaps we have to be more careful in considering if this isn’t working, then WHY this isn’t working, and also the role “we” have played in the so-called underdevelopment of the global south. If you are interested, I would be happy to point you in the direction of some books you could read about it, or to talk to you about some of my own experiences which might offer an alternative to the above argument.

    • Tom, you’ve obviously arrived at your stance through rich experiences, study and thought, but I think there are other viewpoints those same experiences can take you to.

      The “we have homeless here to” is an old one and one I’ve thought about a lot. In the end I find it an unconstructive and defeating one. People need help anywhere you look, and neither government failing, nor much else should cause the hopelessness of of our relative small influence on the big picture make us feel powerless on the small scale where the individual reigns.

      While there are problems everywhere, (and in my experience loads of inspiring people making a difference in any corner of globe) the problems of the third world are a whole different animal. It’s true that some NGOs are ineffective and at worst make things worse. But if they all followed your lead there would be millions of people in gangs instead of school, on the streets instead of in good families, and without the opportunities provided by people leaving their hometowns with the empowering thought that maybe they can do something.

      I’m speaking from personal experience here. These aren’t abstract concepts. They have names, Maria, roger, Calvin, Joash, Jose, Mercedes, etc.

      I appreciate your thought though, one very essential trait in development is being able to ask yourself if you are making a real difference and answer honestly.

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