HSP partnered with AMA is forming a co-op holding company to facilitate micro-investment in Guatemalan and US small businesses.
In addition to direct investment, the co-op would supply personalized training, technology, and administrative support. Steps such as integrating e-commerce for these businesses would expand demand by opening access to markets in the U.S. and internationally.
Cooperative investment divides financial risks, empowering entrepreneurs to take chances tweaking business plans and developing skills to boost their income in the long run, a more sustainable approach to long-term wealth creation.
Nonprofit philanthropy should contribute more than marginal economic improvements.
Micro-investments
A more holistic approach is needed for transformational outcomes, enabling marginalized groups to sustain their own economic prosperity. Through micro-investment, partners are in a cooperative partnership, rather than a lender-borrower relationship, with small-business entrepreneurs. Micro-investing through Common Good Trust (CGT) will divide financial risks, empowering entrepreneurs to take chances tweaking business plans, and developing skills to boost their income in the long run, a more sustainable approach to long-term wealth creation. In limiting risks to business owners CGT encourages more robust involvement in the formal market ultimately leading to sustainable economic growth.
Micro-loans
Economics studies have agreed that micro-lending has produced marginally positive effects, but has been far less transformative than initially suspected. While micro-loans can have some positive short-term effects like increasing business activities, they seldom led to profit increases in existing businesses. Additionally, micro-lending has not proven to increase income or consumption in the long run for the average borrower. Loan repayment agreements are often far too rigid to promote risk-taking and innovation and typically repayments are due immediately and without much flexibility. To stay on top of loan repayments, businesses need to bring in consistent weekly cash flow, a difficult ask for new entrepreneurs who are testing business strategies.
Meet some of the small business owners in our first launch