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El Salvador

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New Grants

Fundación Segundo Montes (FSM), $313,700, over two years, to strengthen civil society organizations, upgrade technical skills, create jobs and diversify agricultural production. FSM will provide the training and technical assistance necessary to organize local development councils, diversify agricultural production and establish micro-enterprises in the municipalities of Meanguera, Jocoaitique and Arambala, thereby benefiting 750 people. (ES-202)

Asociación Fundación para la Cooperación y el Desarrollo Comunal de El Salvador (CORDES), $317,580 to implement a three-year economic development project in partnership with two community-based organizations and four municipal governments. CORDES plans to organize 300 milk producers, provide training and technical assistance for 50 of them, buy new herds, improve milk quality, and create a facility for marketing directly to processing plants. (ES-203)

Asociación Cooperativa de Ahorro, Crédito y Agrícola Comunal de Paraíso de Osorio (COPADEO), $313,457 for a three-year earthquake recovery and economic development project in cooperation with municipal governments in the departments of La Paz, Cuscutlán, San Vicente and Cabañas. Nine hundred small businesses, the majority in areas devastated by the quakes, will benefit from a revolving loan fund. A new training center will assist clients. COPADEO will modernize its information systems and training materials and, by building capacity in 30 other credit organizations, strengthen the credit sector’s support for small businesses. (ES-204) 

Comité de Repobladores de Cuscatlán (CRC), $349,408 for a three-year economic development and environmental preservation project with 10 rural communities and the municipal government of Suchitoto in the department of Cuscutlán. With the award, CRC will improve agricultural production, set up a business to market produce, operate a credit fund and support local democratic practices. (ES-205)

Fundación Promotora de Productores y Empresarios Salvadoreños (PROESA), $346,456, over four years, for a community-based rural economic development pilot project in partnership with Asociación para el Desarrollo de Productores y Comercializadores Centroamericanos (ADEPROCCA) and the municipal government of Guazapa in the department of San Salvador. Activities include construction of 20 diversified agriculture demonstration plots and creation of an agro-industry. Improved food security, better business skills and more decentralized governance will directly benefit 100 families. (ES-206)

Fundación Salvadoreña de Apoyo Integral (FUSAI), $100,000 for a one-year project to disseminate the “Counterpart Fund for Local Development” model created through previous grants to FUSAI (ES-174) and the Fundación Nacional para el Desarrollo (FUNDE, ES-175), which both worked in consultation with the municipality, private sector and community organizations. The establishment of a regional network on multisectoral alliances will allow several hundred representatives of various entities to participate in educational fora, seminars, conferences and courses. Thousands of people will be able to access additional information through publications, Web sites and Internet conferences. (ES-207) 

Supplemental Grants over $10,000

Asociación Coordinadora de Comunidades Unidas de Usulután (COMUS), $100,000, over one year, for training, technical assistance and low-income loans to improve the production and marketing of 160 small-scale farmers hit hardest by the earthquakes of January 2001 in the communities COMUS serves, and to raise their families’ income and living standard. (ES-182-A3)

Fundación Campo (FC), $10,000 to conduct post-earthquake relief efforts in food security and housing for 39 of the communities participating in the Corredores de Desarrollo project. (ES-187-A3) 

Looking Ahead after Civil War and Earthquakes

By Kathryn Smith Pyle, Foundation Representative for El Salvador

With the end of El Salvador’s civil war in 1992, the country’s small and medium-sized enterprises increased dramatically. Sixty percent of the Salvadoran population has a small business, and the demand for loans up to $4,000 far exceeds the capacity of the lending sector. Most loans are made by nongovernmental organizations: church groups, community-based groups, and local and national level savings and loan associations such as Asociación Cooperativa de Ahorro, Crédito y Agrícola Comunal de Paraíso de Osorio (COPADEO), based in Cojutepeque, Cuscatlán, with a satellite office in Paraíso de Osorio, La Paz. Since beginning operations 32 years ago, COPADEO has extended loans to more than 3,500 owners of small and medium enterprises.

In response to the earthquakes of 2001, COPADEO now plans to implement an economic development project in cooperation with municipal governments in the departments of Cuscatlán, La Paz, San Vicente and Cabanas. Nine hundred small businesses, half of them owned by women, will receive loans from a revolving fund, resulting in the creation of 500 new jobs. Priority will be given to the severely damaged municipality of Paraíso de Osorio, where 80 percent of the housing was destroyed and many families are still living in “temporary” shelters of plastic or sheet metal.

Loans averaging $1,000 each will be extended to individuals and to organized groups for small shops and for businesses offering services or producing handicrafts, baked goods, other processed food and consumer goods. The owners will receive assistance in obtaining legal status as part of the project’s goal to formalize the sector. Loan clients will be offered workshops on norms and procedures for operating small businesses. Sessions will highlight best practices drawn from the project and explore the potential role of remittances at this scale of economic development.

Through this project, COPADEO has deepened its long-standing relationship with Paraíso de Osorio’s municipal government. Past collaboration has included co-funding various infrastructure projects such as school and road construction, the development of a library, and the introduction of potable water and electricity. This year, encouraged by a special technical assistance project for IAF grantees, COPADEO joined the mayor’s office, other local groups and community residents in an alliance to capture remittances for development projects. As a new member of the Comité de Enlace de Paraíso de Osorio (CEPOLA), COPADEO works with the other local actors to connect with Salvadoran migrants in the U.S. Because of CEPOLA’s link with the Committee of Paraíso de Osorio Residents in Los Angeles (COPORLA), a Salvadoran hometown association in California, a cement block manufacturing plant envisioned in the municipal plan is under construction. COPORLA and CEPOLA secured funding from the national government’s Social Investment Fund for Local Development and these funds will be matched by the municipality and COPORLA. The plant will initially produce blocks for housing reconstruction and later will operate as a business, marketing its product commercially.

COPADEO’s successful experience led the organization to initiate the creation of a Local Development Committee composed of municipal government and civil society representatives. The Committee’s plan for the next three years has already been approved.