2.1 Background

2.2 Strategy

• Local economic development

3.1 The post-conflict economy

3.2 The LED methodology

3.3 Local economic development agencies

3.3.1 Objectives

3.3.2 Geographical coverage

3.3.3 Organization

3.3.4 Activities

3.3.5 Credit

• Lessons learned

Bibliography

Annex LEDA fact sheets

Preface

This paper outlines the important role of Local Economic Development Agencies (LEDAs) in PRODERE, a multi-disciplinary, multi-agency UN programme for displaced persons, refugees and returnees in Central America. PRODERE, which was funded by the Government of Italy, was implemented between 1990 and 1995 as part of the international community's efforts to consolidate the peace process in Central America. Within the framework of PRODERE, the ILO was responsible for the promotion of LEDAs. An evaluation of PRODERE undertaken by the Oscar Arias Foundation and the OECD found that the LEDAs had been a crucial factor in the success of PRODERE.

The paper shows that LEDAs can play a key role in rebuilding local economies following a period of civil conflict. Aiming at job creation through the promotion of economic initiatives by the local population, mostly in the form of small enterprises and cooperatives, LEDAs are an effective local-level mechanism to tackle the threats and exploit the economic opportunities which present themselves in the period of rapid economic, technological and social change which usually follows conflict. LEDAs not only help jump-start the local economy but can also play a important part in the reconstruction and rehabilitation of local infrastructure, in the process of peace-building and reconciliation, in reintegrating returnees and in restoring essential services in such areas as health and education.

The LEDA approach is based on building a capacity among stakeholders in the local economy to articulate their interests, organize themselves, plan, implement and supervise economic initiatives that help improve their living conditions. Since the approach has proven to be highly effective in providing an immediate response to the needs of conflict-affected countries to create employment, rebuild communities and achieve reconciliation, the ILO's Enterprise and Cooperative Development Department is currently promoting a similar approach in such conflict-affected countries as Angola, Bosnia, Cambodia, Croatia, Djibouti, Mozambique, Somalia and Tajikistan. In most of these countries ILO operates under the umbrella of the global UNOPS Programme for Reconstruction and Social Sustainability (PROGRESS).

The paper was written by Alfredo Lazarte, ILO adviser in PRODERE, with the help of Hans Hofmeijer and Maria Zwanenburg, both of the ILO's Enterprise and Cooperative Development Department.

Acronyms

CIREFCA International Conference on Refugees in Central America

FMLN Frente Farabundo Martí para la Liberación Nacional

LED Local Economic Development

LEDA Local Economic Development Agency

MINUGUA United Nations Mission Guatemala

PRODERE Programme for Displaced Persons, Refugees and Returnees

UNDP United Nations Development Programme

UNHCR United Nations High Commissioner for Refugees

UNOPS United Nations Office for Project Services

WHO World Health Organization

1 Introduction

Most countries in Central America have, at one point or another, suffered from civil conflict. Social inequity and a lack of democracy are usually seen as the causes of these conflicts. The issue of land ownership is particularly important in this respect. The heavily skewed land distribution had the effect of excluding large parts of the rural population from sharing in the economic benefits of agriculture. Guatemala is a good example. According to the World Bank, the agricultural census of 1979 indicated that 2.5 percent of Guatemala's 5.3 million farms controlled 65 percent of agricultural land, while only 16 percent of the land was cultivated by 88 percent of the smallest farms (World Bank, 1995). The World Bank considers the persistence of this inequality an important cause of the high incidence of poverty in Guatemala. Account also needs to be taken of the fact that industrial development in the region is limited to a few urban areas and thus has benefitted only a small percentage of the population.

In addition, socio-economic differences have traditionally been exacerbated by violence on the part of mostly military governments, making peaceful change almost impossible. This situation eventually led to armed conflict when opposition groups began to organize themselves as guerrilla movements in Nicaragua, El Salvador and Guatemala.

In 1979 the Frente Sandinista de Liberación Nacional in Nicaragua, which enjoyed wide popular support, overthrew the dictatorship of the Somoza family, seeking social and economic reform. Its ability to implement reforms however, was seriously undermined by violent strife provoked by the so-called contras, which received support from the United States. This lasted until 1990 when Mrs Violeta Chamorro of the opposition party UNO gained the presidency after general elections. Small guerrilla groups (recontras and recompas) remained active until final peace agreements were signed in 1994.

The 1970s saw the emergence of a guerrilla movement in El Salvador, after it became clear that peaceful protest against the lack of democracy did not have any results. A number of different guerrilla groups expanded rapidly and in reaction army and paramilitary death squads became more active in their attacks on opposition groups. At the end of 1980 the different guerrilla groups unified into the Frente Farabundo Martí para la Liberación Nacional (FMLN) and started a guerrilla war which was to last twelve years. Although the FMLN never succeeded in instigating a nation-wide insurrection, considerable parts of the country, particularly the North and East, suffered serious violent conflict, with the departments of Chalatenango and Morazán being practically controlled by the FMLN.

In Guatemala violent confrontations between the armed forces and indigenous groups started even earlier than in Nicaragua and El Salvador. Since 1954 Guatemala was governed by a succession of right-wing civilian and military governments which suppressed any left-wing and centrist political parties and trade unions. This situation led to the formation of guerrilla groups in the 1960s. Confrontations between guerillas and the army became ever more frequent and violent during the 1980's. Large groups of civilians, especially among the Maya population suffered from harsh repression by the military. The departments of Huehuetenango and El Quiché were particularly affected. These are also the poorest regions of Guatemala. Peace negotiations started in 1990, but a peace accord was not signed until December 1996.

Although in Honduras guerrilla activities never turned into a civil war situation, large numbers of people suffered from violent repression on the part of military or military-controlled governments. Honduras was also confronted with large numbers of refugees from El Salvador and provided a staging area for Nicaraguan contras .

The peace process in Central America took off in 1987 with a peace treaty proposed by the president of Costa Rica, Oscar Arias. The treaty was signed by the leaders of the five Central American republics in Esquipulas, Guatemala. By signing this treaty governments committed themselves to start a dialogue with the guerrilla groups and initiate a process of democratization.

A subsequent summit in Tela, Honduras led to the agreement that the anti-Sandinista contras should demobilize and that El Salvador's FMLN guerrillas should cease fire and negotiate with the government.

Although the US administration was unwilling to stop supplying aid to the contras until elections had been held in Nicaragua, the defeat of the Sandinistas in the February 1990 elections finally heralded the disbanding of the rebel forces in Nicaragua. The Salvadorian government and the FMLN finally agreed to end El Salvador's civil war through a peace accord signed in Mexico in January 1992. Since then the FMLN has been completely demobilized and recognized as a legitimate political party, participating in all elections since 1994. A Truth Commission has reported on human rights abuses during the conflict while the Salvadorian armed forces have been reduced in size, purged of a number of officers accused of human rights violations and relieved of responsibility for internal security. The old Policía Nacional was replaced by a civilian police force in December 1994.

In Guatemala, during the government of the former human rights ombudsman Ramiro de León Carpio, a timetable for discussions was agreed upon in March 1994, with the intention of achieving a firm and lasting peace settlement in December of the same year. This proved to be too optimistic, but in 1994 the Guatemalan government agreed to the demands of the Unidad Revolucionaria Nacional Guatemalteca (URNG) for human rights verification and the establishment of a Truth Commission. A UN mission (MINUGUA) arrived in November 1994. The two sides were unable to find sufficient common ground to reach a final peace accord in December, but they signed an agreement on indigenous peoples' rights and identity in March 1995 and an accord on socio-economic issues and the land question in May 1996. The final peace accord was signed in December 1996.

The peace process in Central America received wide backing from the international community. Initially support came from the Contadora group, which supported the initiatives of President Arias, while in May 1988 the United Nations General Assembly approved the Special Economic Cooperation Plan for Central America.

2 PRODERE

2.1 Background

In the context of the Special Economic Cooperation Plan for Central America, the United Nations launched two major initiatives. One was the International Conference on Central American Refugees (CIREFCA), for which UNHCR took responsibility. The other was the Development Programme for Displaced Persons, Refugees and Returnees in Central America (PRODERE). The Government of Italy decided to funding PRODERE through UNDP to the tune of $115 million to facilitate the reintegration of those who had been forced to seek refuge in neighbouring countries or more stable areas of their own country. In view of its innovative and multi-disciplinary approach UNDP charged UNOPS with the execution of PRODERE. UNOPS in turn subcontracted ILO, UNHCR and WHO for specific components of PRODERE. The programme, approved in 1989, started operations in 1990. It was mainly active in El Salvador, Guatemala, and Nicaragua but also undertook some activities in Belize, Costa Rica and Honduras, countries which had offered asylum to those fleeing conflict.

PRODERE concentrated its activities in regions averaging 250,000 inhabitants. These were either areas hard hit by violent conflict or those hosting great numbers of refugees. For the most part, the areas covered followed departmental borders and included municipalities, villages and hamlets. The areas selected were characterized by high rates of social and economic exclusion. Central government institutions were mostly unrepresented, most basic infrastructure facilities had been destroyed and the areas were under military control. People who fled their homes because of ongoing conflicts were often held in transit camps, such as Xemamatze in Ixil, Guatemala, and then forced to resettle in communities controlled by the military. At the same time, central governments were undergoing a process of restructuring and reduction, thus weakening even more the government's capacity to be a partner in the implementation of programmes for returnees.

Most people in the areas covered by PRODERE used to rely mainly on self-employment in small, family farms and to a lesser extent in non-agricultural micro-enterprises. Salaried employment in the private sector was practically non-existent. The already high pre-conflict levels of poverty had become even more dramatic because of the fact that many farmers had abandoned their land and crops during the conflict. The land tenure issue, one of the root causes of the conflict in the first place, was further complicated because of numerous disputes over small holdings. Social coherence was also affected since almost every family counted one or more deceased, disappeared or refugees amongst its members. Widows, orphans and war victims of all ages were highly visible in many villages.

2.2 Strategy

PRODERE set itself the following objectives:

• promoting human rights;
• building a consensus around development issues;

• facilitating the reintegration of returnees;
• restoring basic services in such areas as health, education and housing;
• reactivating the local economy.

In order to achieve these objectives, PRODERE developed a strategy rather different from traditional technical cooperation programmes. Instead of intervening at the central government level or targeting one or more specific groups, PRODERE adopted a local development strategy based on a decentralized, integrated and bottom-up approach to development in limited geographical areas. The decision to adopt this strategy was based on the consideration that the civil strife in Central America affected particularly those regions that were poorest as a result of their neglect by national governments in the pre-conflict period. In fact this neglect was one of the main reasons for the outbreak of the conflict in the first place.

In addition it was felt that the transition towards a more democratic and participatory society should start at the community or municipality level since it is at this level that government policies and interventions have an immediate impact on the daily life of citizens and that citizen participation in decision making can be more easily achieved. The community level also offered PRODERE a chance to build a consensus of the local population around common interests following a period of conflict which had often pitted neighbour against neighbour. Furthermore the governments of Guatemala and Honduras had just decided to implement decentralization policies, which PRODERE could build upon.

An important consequence of the adoption of a local development strategy by PRODERE was its non-discriminatory approach, not favouring one group over another. For example, PRODERE activities for returnees would also include the population that had stayed behind during the conflict, while in the municipal technical committees promoted by PRODERE in Nicaragua ex-combatants from both sides joined mayors and producer associations to determine who would benefit from PRODERE investments and define a development plan.

A guiding principle behind PRODERE was the practical application of the Universal Declaration of Human Rights. The promotion and protection of human rights, apart from being a specific component of PRODERE, permeated many of its activities. PRODERE thus contributed to providing individuals with proper documentation and assisted in securing property titles. It promoted the organization of local branches of human-rights offices and facilitated the local administration of justice.

In the area of health care PRODERE promoted local health systems. Instead of dealing separately with each dimension of basic health care such as health care planning, infrastructure, mother and child care etc., an integrated plan was designed to improve health care in each area dealing with all technical, administrative, management and infrastructure issues involved. The health system centered around a central point, normally a hospital and usually covered several municipalities.

PRODERE also promoted departmental planning councils. These dealt with all local development issues in the area covered and aimed at a more integrated planning of local development. These councils considerably facilitated establishing the necessary linkages between the different subject areas covered by PRODERE such as health, education, local economic development, human rights and regional planning. This integrated approach was based on the conviction that social and economic development are necessarily interdependent. The planning councils thus managed the complex relation between different sectoral investments introducing consultation processes involving all concerned. They coordinated the plans formulated at municipal, departmental, regional and national levels, defined minimum development objectives and decided on the projects to be financed from national and international resources.

Initially, PRODERE had to overcome considerable mistrust on both sides. Each party in the conflict considered that the programme was supporting the other side. In El Salvador, Guatemala and Nicaragua the opposition considered the programme a government instrument to counter insurrection, while the military considered it as supporting the opposition. As a result PRODERE activities in each area were defined following a careful needs assessment, trying to enure that they covered the needs of the population as a whole. In many cases this meant that considerable time was spent to gain credibility as a neutral operation and to achieve at least a minimum consensus on what were considered the most urgent needs.

The most effective way for PRODERE to gain the confidence of both sides was to show concrete results. This often meant concentrating in the beginning on restoring basic services and infrastructure. In Nicaragua for instance, the programme organized various meetings with the local population with whom an emergency plan was designed. The plan focused on basic food production and with financial and technical assistance returnees could start to cultivate maize and beans again as well as recuperate abandoned coffee plantations in several municipalities. Access roads to the production zones were urgently repaired, provisional health care was provided and schools were rebuilt. It was only later that PRODERE started to organize the so-called municipal technical committees as instruments of agreement and decision making.

3 Local Economic Development

3.1 The post-conflict economy

As described earlier, the post-conflict economy in rural areas of Central America was mainly a subsistence economy. Most people in the affected areas relied heavily on self-employment in small, family farms and to a lesser extent in informal non-agricultural micro-enterprises. Micro- and small enterprises faced the usual obstacles: lack of finance for investment, difficult market access, lack of information, lack of technical and basic management skills, resulting in low productivity and competitiveness and inhibiting their effectively linking up with the modern sector. They had also been negatively affected by the conflict itself. Returnees and ex-combatants faced tremendous difficulties to restart their productive activities as a result of the destruction of resources and infrastructure, the loss of perennial crops and the disappearance of village markets. In addition, the land property question had become more complicated because of numerous disputes over smallholdings between returning refugees and new settlers. This in turn resulted in a subsistence agriculture less diverse than before the conflict, leaving the farmers even less room for manoeuver than before. Displaced persons who settled in urban areas flooded the urban informal sector thus reducing even further the already meager income of existing informal sector operators.

3.2 The LED methodology

In this post-conflict context PRODERE introduced a local economic development (LED) strategy. It invited the ILO to implement this component of the programme in view of its experience and mandate in this area. LED aims at employment creation and income generation through an optimal use of human and other resources in a determined geographical area, the so-called "economic catchment area". An important aspect of LED is that groups traditionally excluded from the economic development process have a chance to become active members and beneficiaries of the local economy. A key principle of this approach is that the planning of resource utilization is done by the population itself through their own institutions. This means an emphasis on strengthening existing capacities through institution building, consensus and coordination as well as on providing new services. Usually this is achieved through the creation of a Local Economic Development Agency (LEDA). The LED methodology thus involves: consensus building; strengthening local capacities; a bottom-up, participatory approach; a strive for synergy; acting as catalyst; linking the local economy to the national and global economies; and raising public awareness.

Consensus can only be achieved through an effective participation of the local socio-economic actors concerned. This means that a process needs to be undertaken that brings together and links local actors across political lines and ensures a constructive exchange of ideas and opinions with the aim of designing policies for sustainable economic development in the area. This process is in itself an important part of the reconciliation and peace building process. Capacity building is essential in order to guarantee the technical sustainability of the initiatives to be developed. A bottom-up and participatory approach is required to mobilize to the fullest possible extent the local human potential, thus ensuring local "ownership" of the LED process. In order to achieve this it is important that concrete and visible results are achieved in a short period. Such results contribute to raising the level of motivation and awareness of the target population. An important way of ensuring quick results is to strive for synergy with other development efforts in the area. To ensure their longer term viability local initiatives also need to be linked to the national and global levels. It is therefore necessary to establish a dialogue with the relevant institutions at the national and international levels and inform them about local level initiatives. Public awareness raising is important to show the importance of entrepreneurial initiatives for the local economy.

3.3 Local economic development agencies

3.3.1 Objectives

Local economic development agencies (LEDAs) aim at achieving a consensus among their members on the local economic development strategy most appropriate to the area. This consensus is usually arrived at following an analysis of the economic opportunities, constraints and potential of the area. LEDAs also provide technical and financial assistance to their members and others to help start, reactivate and strengthen enterprises, particularly those that have a potential for employment creation and are environmentally friendly. Since LEDAs facilitate a decision-making process based on the problems identified by the area's population itself, they can become a key instrument for the economic development of the area. LEDAs can also play an important role in channelling and coordinating international technical cooperation, which often intervenes in an area in a rather uncoordinated and arbitrary fashion.

Although in general LEDAs focus their activities mainly on the economic development of an area, in the case of PRODERE LEDAs were also key instruments in promoting consensus building, conciliation, democracy and popular participation. Many of the LEDAs set up in the framework of PRODERE, operate in geographical backward areas characterized by an 'institutional vacuum'. They were often one of the few, or even the only active institution in the area. Also, as compared with the Church or the local administration, LEDAs more easily gained acceptance as a neutral entity. Moreover, since some of the actors who were involved in the LEDAs also played an active role in health issues, education or general community development initiatives, some LEDAs found themselves involved in and functioned as catalysts for many other activities and events with a more social character. The main focus of the LEDAs however remained on economic development.

3.3.2 Geographical coverage

LEDAs vary in their geographical coverage from one or more municipalities to the level of a department. They also vary in terms of their composition. Although local in the context of PRODERE often meant provincial or departmental, the geopolitical unit was not the only criterion for the territorial definition of a LEDA. Others were cultural homogeneity, socio-economic coherence, income generation capacity (to improve the chances of financial sustainability) and possibilities for effective community participation.

A good example of the application of the above criteria is Guatemala where the regions Ixil and Ixcan are part the department of El Quiche. Ixcan however, is separated from the rest of the department by a mountain range reaching 4000 meters. Between Ixil in the highland and Ixcan in the lowland there is no cultural or socio-economic coherence, thus making effective community participation impossible. The municipality of Ixcan (being only one municipality) therefore created its own LEDA, while the Ixil LEDA extended its area of influence from the original Ixil-Triangle to other highland communities in eastern and southern Quiche.

It is also important to note that the word "local" in the title does by no means indicate that LEDAs restrict their activities to the local level. Very often they deal with institutions at the national level to solve specific problems, obtain funding or know-how.

With direct assistance from PRODERE LEDAs were established in Ixil and Ixcan in the department of El Quiché in Guatemala, in Morazán and Chalatenango in El Salvador, in Jinotega and Nueva Segovia in Nicaragua and in Intibuca and Ocotepeque in Honduras. In addition, through parallel bilateral interventions also funded by the Italian government, LEDAs were created in Granada and Leon in Nicaragua and three others in San Salvador. With funding from the EU another LEDA was established in Huehuetenango in Guatemala, while in Costa Rica an existing entity in Brunca which already was undertaking some activities similar to those of a LEDA was converted into a fully-fledged LEDA using its own resources and some support from PRODERE. Altogether these LEDAs serve an area of close to 35,000 square kilometers with over 3 million people (see map). Among them they have some 350 member institutions.

The map on the next page shows the location and geographical coverage of the LEDAs in Central America.

3.3.3 Organization

The LEDAs supported by PRODERE were designed as membership organisations, made up of representatives of the public sector (including local administration and decentralized national government agencies) as well as of civil society (including peasant associations, cooperatives, private sector employers, workers' organizations and other non-governmental organizations). In this context, the role of PRODERE was limited to promoting the constitution of LEDAs and providing technical assistance. For the LEDAs to function properly, they had to be independent bodies, with a proper legal structure. It was therefore important that the local actors assume responsibility for the process of creating LEDAs right from the start. In order to ensure that the local community would not consider a LEDA as an institution imposed from the outside, but rather assume "ownership", the LEDAs were constituted only after an intensive, participatory process of promotion and preparation, involving ad-hoc committees on which most of the institutions mentioned above were represented. Ideally, LEDA membership should reflect the whole range of organizations and agencies active in the area, including local authorities, decentralized central government agencies and organized civil society. In practice however different LEDAs establish different membership criteria. One LEDA for instance did not accept farmers as members, since they were not organized. Many farmers however are part of other organizations which are LEDA member. Their interests are therefore represented indirectly.

The constitution of a LEDA in Honduras In October 1991, the municipality of San Marcos de Ocotepeque proposed to the patronatos comunales (traditional grass roots organizations at village level) of the 17 villages in the municipality to create a patronato superior", under presidency of the mayor and made up of the presidents of each patronato comunal which would be representative of the whole municipality. Parallel to this initiative an inter-institutional coordination committee was created to coordinate the activities of the community, local government and other locally active institutions. In 1992, PRODERE stimulated the dialogue between municipalities and institutions by providing a coordination forum. In the same year a workshop was organized concerning on an integrated local development approach, in which public and private institutions, farmers organizations, cooperatives and the municipality of San Marcos participated. The meeting resulted in the creation of a municipal development organization to orient the development process and study the feasibility of the installation of a local economic development agency. After discussions with the productive sector at the grassroots level in the 7 municipalities of the Sensenti Valley, and with the mayors of the respective municipalities a local development agency was then created. Overall conditions in Honduras were also favourable since new legislation on the functioning of municpalities foresaw greater decentralization and democratization. Following the example of San Marcos, PRODERE also promoted municipal development councils in the 6 other municipalities of the Sensenti valley. These councils included representatives of the local government as well as of the patronatos comunales. The process of promoting the councils and the LEDA was simultaneous and interlinked with the councils representing the grassroots level in the LEDA. At the end of 1992, the 7 councils agreed to the establishment of the LEDA, which was installed in January 1993. In addition to the councils a number of other public and private institutions, including farmers' organizations joined the LEDA.

In PRODERE the average cost of creating a LEDA was about $120,000. This amount includes not only the cost of equipping the LEDA but also the running costs for the first year of operations and the cost of training LEDA staff.

It is further worthwhile to note that in 1994 the 15 LEDAs mentioned above decided to create the Central American LEDA Network. This network has enabled the LEDAs to be represented at international meetings, exchange experiences, exploit trading opportunities, develop joint services, realize economies of scale, undertake joint training activities and mobilize external resources. National networks have also been set up in Guatemala, Honduras and El Salvador for similar purposes.

3.3.4 Activities

The first task of a LEDA after its constitution is to assess the area's potential in terms of the available natural, economic, human and financial resources and institutional presence. The outcome of this assessment then serves as basis for strategy planning and coordination of activities. All LEDA members should be involved in the assessment for which normally the SWOT (Strengths, Weaknesses, Opportunities, Threats) method is used. This method is often also used to anlyze the strengths and weaknesses of LEDA member organizations.

Following this assessment an investment opportunity study for the promotion of micro-and small enterprises is usually carried out. PRODERE developed a special method for this, the so-called diagnostico preliminar de oportunidades de inversion (prelimininary investment opportunity analysis). This method is participatory and involves all sectors of the community concerned in the identification of economic needs and in the possibilities to satisfy them through entrepreneurial activities.

Both the SWOT analysis and the investment opportunity study are used to design an economic development plan. This is essential since the strategic planning concept is essential to the LED methodology. Local development should not be incidental or accidental. Spontaneous and natural evolution processes are important but it is even more important to ensure that local and external players focus their attention and energy on an analysis of the situation and then jointly develop a strategy and undertake the activities necessary to implement the strategy. LEDAs do not only function on the basis of their own strategic plan however. Their activities are also guided by an overall economic development for the area. This plan defines the long term strategic direction of the development of the local community, practical projects to be implemented, financial, material and technical support required to achieve the goals set and the involvement of individual LEDA members and others in its implementation.

As mentioned before, LEDAs aim at achieving synergy and complementing other ongoing activities in order to make an effective use of the limited resources available. This means in practice that LEDA staff often works together with the staff of government agencies and NGOs. A LEDA with only two or three agricultural extension workers of its own, can thus easily mobilize additional ones if this is necessary for a certain activity.

Another example is the active involvement of commercial banks in the implementation of credit schemes for small farmers and entrepreneurs, instead of the LEDA itself carrying out credit operations. In one case PRODERE was able to persuade a commercial bank to open a branch office in an area where the LEDA was involved in credit operations and where no bank was present. In another case, the bank which had custody over the LEDA guarantee fund, while financing all credits from its own resources, detached one of its employees to the LEDA so that the LEDA and the bank together could follow on the credit portfolio.

Essentially, LEDAs carry out two types of economic development activities. On the one hand they provide direct support in the areas of entrepreneurship promotion and business development services. On the other hand they provide indirect support by promoting a more favourable climate for the creation and growth of small enterprises. Direct support is provided in such areas as information on technology and markets, basic business management and vocational training, counseling and financial assistance. LEDAs also help identify business opportunities and assist in the preparation and formulation of business plans to facilitate the start-up of small enterprises and cooperatives. They thus provide a comprehensive range of support services and help introduce new management techniques and new technologies. They also help mobilize resources and facilitate access to credit.

In terms of indirect support LEDAs can play an important role in facilitating ongoing processes of local planning and decentralization, promoting sectorial public and private investment in the area through lobbying and marketing campaigns and attracting international resources and investments.

The LEDAs promoted by PRODERE paid particular attention to entrepreneurship promotion to help transform business ideas into entrepreneurial ventures. Entrepreneurship promotion was necessary since most actors in the local economy were subsistence farmers, traditionally excluded from the wider economy. Entrepreneurship promotion prepared them to access credit, training and information about markets and technology which in turn helped them improve their productivity and thus become an active participant in the market economy. Awareness raising was fundamental in this context. Through training and information potential entrepreneurs became acquainted with such basic concepts as: competition, commitment, willingness and ability to take risks, initiative, creativity and accountability.

3.3.5 Credit

Since in many of the areas covered by the LEDAs commercial credit was (hardly) available PRODERE also dedicated considerable efforts to facilitating access to credit and introducing new credit mechanisms as appropriate. The credit programmes of the LEDAs promoted by PRODERE provided small farmers and entrepreneurs an opportunity to access credit at market rates and establish a credit record that would eventually enable them to become regular customers of commercial financial institutions. In PRODERE resources amounting to some $17.7 million were channelled through the LEDAs it helped to establish. LEDA staff were trained in screening loan applications by checking whether they were considered good credit risks by their peers. Once an applicant had passed this screening, the LEDA assisted the applicant in preparing a loan application and business plan. Between September 1991 and June 1995 some $15.2 million in credits was actually disbursed to 334,062 direct beneficiaries. More than a quarter of the beneficiaries were women. A little over half of the loans were short-term, mostly for basic staple production and micro-enterprises. The rest was for longer term projects such as livestock raising, coffee production, crop diversification and agro-industry.

The LEDAs used different lending mechanisms to channel PRODERE credit funds. These include loan guarantees, direct lending through administrative agreements with established credit institutions such as banks and credit unions, seed banks, revolving loan funds, materials, usufruct, bridging operations, co-financing and credit lines. The use of these different mechanisms enabled the LEDAs to both meet the diverse credit needs of their constituents and use its funds as leverage with existing financial institutions.

The different credit programmes all shared a set of common goals. First of all, they sought to expand lending to help satisfy the unmet demand for credit in the areas covered by the LEDAs. In Honduras and El Salvador for example, it was not necessary to set up new credit mechanisms in all of the municipalities served by the LEDAs since in some case existing credit programmes could meet the needs of PRODERE beneficiaries. Secondly, they strived at increasing the effectiveness of the programmes by increasing their economic impact and reducing loan losses. Thirdly, they aimed at increasing the profitability of the borrowers, which should help expand employment opportunities. Lastly, they aim at providing a source of income for the LEDAs from the administration of their loan portfolio to cover the cost of providing business development services to farmers and local businesses.

The credit activities undertaken by PRODERE produced a wide range of benefits. Not only were small farmers able to improve the diets of their families by increasing production, but more importantly, individual farmers and groups of farmers used the loans to introduce non-traditional crops and invest in processing technologies that helped improve added value. The introduction of such new technologies could eventually transform the production system of the areas covered and bring about a qualitative improvement in living standards.

The credit funds made available through PRODERE also enabled the LEDAs to establish themselves as serious partners for development efforts funded by others. Thus, during and after PRODERE, the LEDAs were able to mobilize resources for their activities from, among others, Canada, the European Union, Germany (GTZ), the Netherlands, USAID (incl. Peace Corps), a number of UN funds and agencies and a wide range of NGOs. Additional funds fro credit activities were provided by the IDB's Multilateral Investment Fund, the Central American Bank for Economic Integration and the World Bank. In the case of El Salvador the LEDAs became partners in financial institutions created especially with the aim of providing credit to small and medium-sized enterprises.

The table below summarizes the overall size and impact of PRODERE credit activities, while the examples that follow the table describe in more detail the credit operations of individual LEDAs.

The case of the tinsmith in Ocotepeque shows the impact that a LEDA loan can have on an individual and the community. When the LEDA in Ocotepeque had its first contact with this borrower, he was making small items such as buckets, bread pans, and gutters from his farm several hundred meters from the nearest road. The LEDA approved a loan to finance his participation in a course on manufacturing grain silos for use by small-scale farmers. He then invested another portion of the loan in the construction of a new home and workshop in a more visible and accessible location and used the rest to buy enough high quality galvanized metal to respond to the growing demand for household silos. By moving closer to his customers and diversifying his product line, the tinsmith greatly improved sales volume and profits. He then received a second loan to buy more materials to allow him to keep up with orders. The credit not only had a positive impact on the lives of the tinsmith and his family, but also benefited families in the entire area of Ocotepeque, who can now buy low-cost, durable, galvanized metal silos to store their crops, keeping them fresh for later consumption or for sale during periods when the prices for their crops are at their peak.

In Ocotepeque, which was home to 14,000 Salvadoran refugees from 1980 to 1992, the LEDA made close to 1,400 loans. The loans ranged in size from $100 to $2,000, averaging $533. At the end of June 1994, the $736,200 in disbursed credits had resulted in the creation of 3,600 jobs. Ninety percent of the loans were for agricultural production, particularly coffee and basic food crops. Six per cent was for fish farming and four per cent for small agro-industrial, manufacturing, or service businesses. Many agricultural loans were made to groups of farmers who pooled their resources to lease large plots of land, which they farmed collectively. These farms produce mostly cash crops and some subsistence crops to supplement those produced on the small plot of land owned by each member of the group. So far, the default rate is below 10% and no loan funds have had to be written off. This low default rate is due in part to the LEDA's creative and effective loan policies that incorporate both character and peer lending techniques.

In Ixcan, the LEDA lent to farmers' cooperatives, peasant associations and small entrepreneurs. At the end of June 1994, the Ixcan LEDA had approved almost $400,000 in loans, varying greatly in size depending on their purpose. For example, the average size of loans for the cooperative production of organic coffee was $17,765, while loans to small-scale coffee farmers averaged $178. These loans generated over 1,000 new jobs. All credit beneficiaries received training from the LEDA in basic business management as part of an effort to increase the success rate of the ventures. The loan repayment rate to date is 95%.

In Ixil, the LEDA focussed on diversifying the agricultural sector by introducing profitable cold-weather crops that withstand an eight-hour trip over bumpy roads to the market in Guatemala City. It also approved a loan of $254,465 to the Association Chajulense to help finance the production of organic coffee. The credit was used for crop maintenance, drying and storage equipment and facilities. The directly benefited 2,207 farmers and indirectly benefited another 11,185. The LEDA also supported a number of small enterprises, including two brick and roof tile manufacturers and a carpentry shop, with credits of between $1,000 and $2,000. At the end of June1994 the LEDA had approved slightly over $700,000 in loans. These loans had an average size of almost $90 and were used mainly for coffee production, bee-keeping, and vegetable crops. Some 85% of the loans were for periods of three to five years. Given the Ixil Indian's tradition of communal activities, it is not surprising that 53 per cent of the loans were made to groups of farmers.

At the end of June 1994 the LEDA in Chalatenango had approved loans for a total amount of some $1.5 million. These loans helped create roughly 5,500 jobs. Half of the loans were to women, as compared to an overall PRODERE average of around only 10 per cent. The high proportion of loans to women in El Salvador reflects the large number of women-headed households after the civil war that killed so many young men. The default rate on these loans is currently below 10 percent.

In Morazan, which experienced some of the heaviest fighting during the conflict, a total of $2.8 million in loans was disbursed to area farmers and small entrepreneurs. These loans covered several sectors including traditional agriculture, livestock raising, diversified crop production, service, manufacturing and trade. By far the largest investment was in the area of trade. Most loans were made to individuals. The loans, which averaged $350 each, created roughly 10,000 jobs. The Morazan LEDA targeted specific sectors of the local economy in an effort to encourage the formation of peer groups of small entrepreneurs engaged in similar businesses, facilitating joint purchasing and marketing.

In Nueva Segovia farmers traditionally had a hard time getting loans from financial institutions. In part, because so many did not hold clear title to their land. Farmers either borrowed from informal sources at interest rates of more than 200% a year or had to sell their crop to intermediaries at below market prices before the planting season to obtain the cash required to buy seeds and other necessary inputs. To overcome this situation, the LEDA set up a network of savings and loans associations to serve the needs of farmers and small entrepreneurs in Nueva Segovia.

4 Lessons learned

From the outset PRODERE aimed at ensuring the sustainability of the LEDAs it helped establish. The experience of the programme has shown that to achieve sustainability attention needs to be paid to social, political, technical and financial aspects.

4.1 Social sustainability

To achieve social acceptance public awareness raising turned out to be essential. The regions where the LEDAs were introduced were not only the least developed economically but had also been the most affected by violent conflict. As a result PRODERE needed to gain acceptance and achieve a change of mentality before even being able to introduce the local economic development concept. The small farmers and entrepreneurs who were the direct beneficiaries of the programme as well as local policy makers had to be made aware that in the post-conflict situation they themselves were responsible for getting the local economy on track. In this context it was necessary to create faith in their own capacities and to demonstrate that by using their own local resources more effectively they could attract outside resources without waiting for support from the central government.

The programme also had to work on policymakers at the central government level, especially since it was operating in politically conflictive areas. At the national level, decision makers had to understand that the activities carried out at the local level were by no means subversive but rather were in line with national policy and that some of the local level initiatives could become elements of national policies.

The key to ensuring social acceptance and sustainability of the LEDAs was the identification of needs by the local population. Although a time-consuming process it was essential to ensure local "ownership" of the LEDA and arrive at a consensus on priorities. It is only in this way that the LEDA will be perceived as a legitimate organization and receive the necessary support as witnessed by growth in membership, active participation by members in LEDA activities and the effective provision of services.

4.2 Technical sustainability

Technical sustainability refers to the capacity of the LEDA staff and member organizations to handle effectively most of the day-to-day services the LEDA provides. The key to technical sustainability of the LEDAs has been local capacity bulding. To this end most LEDAs set up technical committees to advise and guide LEDA staff. Training LEDA staff in technical areas, instead of relying on outside organizations for the provision of services, contributed significantly to the independence of the LEDAs. In addition, the fact that most services were provided by local staff was much appreciated by the members of the local community. Often, local staff is able to solve technical matters in a more appropriate (and understandable) way than external consultants, who do not necessarily speak the local language and may be unfamiliar with local customs.

Technical sustainability was also strengthened through a process of networking with similar institutions inside and outside Latin America. For instance, it was only after a study tour to Europe in 1992 that the methodology and the principles of local economic development were fully accepted and became the basis for PRODERE's later interventions. In this respect it is significant to note that even after the end of the programme the network of LEDAs in Central America continued to function and at the time of writing this paper had just set up its own website (address), including a detailed profile of each LEDA (see also the Annex to this paper).

4.3 Financial sustainability

Financial sustainability was a fundamental objective of the programme since it was the only way to ensure that the LEDAs would continue to function after the end of the programme. LEDAs, given their membership structure, their participatory character and their comprehensive range of services, are relatively expensive to operate. Even in industrialized countries similar agencies often receive considerable external subsidies since it is not realistic to expect that LEDA members and clients can finance all operations. The PRODERE experience has shown that during a period of at least two to three years external support is necessary to guarantee a minimum of services and work towards full financial sustainability.

The main source of income for the LEDAs in the case of PRODERE was through their participation in the credit activities, particularly guarantee funds. The administrative income derived from the LEDA's involvement in credit operations is usually sufficient to finance a number of basic services. LEDAs can generate additional income by charging membership fees, becoming executing agency for international and national technical cooperation projects, charging for services (incl. training) provided and mobilizing external resources. In this latter respect it is important to note that after the end of the programme LEDAs in Central America have received support from a variety of agencies and organizations, including the Inter-American Development Bank's Multilateral Fund for Investment, the Central-American Bank for Economic Integration and the German Agency for Technical Cooperation (GTZ). In fact, the income the LEDAs have received through such partnerships has exceeded the amount involved in the support they received from PRODERE. It is also worth noting that the LEDAs in El Salvador have become partners in a new financial institution specializing in micro-credits.

As mentioned in the paper, one of the reasons that LEDAs entered into credit operations was the fact that in many of the areas in which they operated there were practically no commercial credit facilities available to the farmers and small entrepreneurs. The PRODERE approach to credit operations was based on the following principles:

• services had to available in close proximity to the clients;
• character references played an important role in the appraisal of credit applications;
• collateral requirements were kept flexible;
• documentation and repayment modalities were kept as simple as possible;
• credit applications were processed and approved locally.

Bibliography

Arias Sanchez, O.; El PRODERE: Una cooperación novedosa y efectiva en apoyo a la paz y al desarrollo en centroamerica (Hombre de Maiz n°31, pp. 40-42, March 1995)

Italian Cooperation; PRODERE, Le strategie, i metodi ed i resultati di un Programma per lo Svilupo Umano, la Pace e la Democrazia in America Centrale (1996)

Danieri, F. and Mancinelli, G.; Situational Analysis of the system: LEDA (ILO/UNOPS/Red Centroamericana de ADELs/AIESEC, 1997)

Fundación Arias para la Paz y el Progreso Humano (Coordinador), Refugee Policy Group, Friedich Ebert Stiftung, Centro Internacional para el Desarrollo Económico, OECD; PRODERE, Informe de Evaluación Externa (1996)

Gambo, N., Diaz, M. and others; Especial DESARROLLO HUMANO: PRODERE, un modelo de cooperación al desarrollo (Hombre de Maiz n°36,pp. 6-52 August-September 1995)

Gibbons, C., Conway, M., O'REGAN, F.; Regional Strategies for Employment and Poverty Alleviation. Domestic discussions and international models (The ASPEN Institute, 1994)

Lazarte, A., Paredes, P.; PRODERE: Central American Programme carried out by UNDP/UNOPS, ILO, UNHCR, WHO/PAHO and other UN organizations (In : Building a Consensus on International Cooperation for Social Development. World Summit on Social Development.pp. 11-14 Copenhaguen, 1995)

Lazarte, A., Cruz, R.; La experiencia de credito en PRODERE: Informe Final al 31 de Julio de 1995 (1996)

Martens, J., van Boekel, G.; ILO Local Economic Actions in Central America: the case of PRODERE in: The design and implementation of strategies for local employment and economic development (ILO/Commission of the European Communities, 1993)

PRODERE, Coordinación Regional; Informe Final (1996)

PRODERE Edinfodoc; PRODERE, Programa de Desarrollo para Desplazados, Refugiados y Repatriados en Centroamérica (1993)

Red Centroamericana de ADELS; Agencias de Desarrollo Económico Local. Una red centroamericana en camino (1995)

Revilla, V.; Examen Crítico de la participación de la OIT en el Programa PRODERE (ILO, 1994)

SICA (Sistema de Integración Social/Comisión Regional de Asuntos Sociales; Propuesta Centroamericana: de Esquipulas al Desarrollo Social Sostenible. Cumbre Social sobre Desarrollo social. Copenhaguen (1995)

UNOPS; Informe de la Reunión Tripartita Regional Final del PRODERE de Julio 1995 (UNOPS, 1996)

Annex: LEDA Fact Sheets

CAC Perez Zeledon (Costa Rica)

Location

The local economic development agency CAC Peréz Zeledón covers the Región Brunca in the southern part of Costa Rica, along the border with Panama. The area consists of 8 cantons: Peréz Zeledón, Buenos Aires, Corredores, Golfito, Ciudad Nelly, Cotobruz and Osa. The LEDA is in the capital, San Isidro, which is located 135 km from San José, along the Interamerican Highway.

Population and area

The total population of the municipalities covered is 236.000, over an area of 9.528 km². The population of San Isidro is 50.000. The region has a tropical climate, hot and humid, but the mountainous part is fresher and cooler. Two volcanic mountain chains cross the region, namely the Cordillera Talamanca in the north and the Cordillera Costeña in the south, reaching the altitude of 3.820 metres with Cerro Chirripó, the highest peak in the country. The region is bordered to the south-west by the Pacific Ocean and counts with several rivers, the most important being Río Grande de Terraba, which represents the largest river basin in the country. The region is multicultural, having known a strong immigration from Nicaragua, Panama and Europe. It is also characterized by the presence of various indigenous groups. The region has 7 small airports, open to private aviation. The Interamerican Highway crosses the region, running south-west from San José to the border with Panama, providing an easy access to the capital as well as to Panama. The region also includes Puerto Golfito, the most important commercial port of the southern part of the country.

Economy

The most important crops of the region are coffee, sugar cane, fruit, vegetables and timber. Cattle breeding is also remarkable. Coffee is of excellent quality, being mainly organically cultivated. It processed and refined at a local level, with the best technology available in Central America. Infact, Costa Rica's agricultural policy of concentrating not on quantity, but on quality and technology has been quite successful, especially for coffee. The production is normally destined to national and international markets. Sugar cane is also refined at a local level and new processing plants are under construction. The production is destined to national and international markets. Fruit (pineapple, banana) is cultivated extensively in the region and mainly devoted to export, as well as vegetable (yucca, tiquisque, ñame, ñampi), which are destined to the Hispanic market in the United States and the Caribbean. Timber exploitation is rising, thanks to the great availability of forests, but is accompanied by reforestation. It will probably be one of the most important business in the future. Manufacturing is scarcely present in the area, while agro- related activities basically concern coffee and sugar cane processing, vegetable and fruit canning and milk production. There is also a great potential for introducing activities of fruit and timber processing. Local indigenous groups normally dedicate themselves to handicrafts. Distinctive handicrafts include woodcarving, leatherwork, bamboo furniture, threads, ropes and textiles. An artisan activity of gold exploitation takes places in several rivers of the region, but the feasibility of industrial explotation has not yet been investigated. There are several national parks are present in the area, the most important being Chirripó, La Amistad, Corcobado and Piedra Blanca. They have great biological diversity and have long attracted the attention of ecotourists, and protect the best Pacific coastal rainforest in Central America. Several fine beaches on the Pacific coast (Golfito, Puerto Jiménez, etc.) also represent an important attraction for tourism.

The area is endowed with several universities, as well as with research and training centres in agriculture and cattle breeding. The region also counts with sectorial Chambers of Commerce and producer associations in the following fields: trade, sugar cane, tourism, cattle breeding, timber and agriculture.

LEDA Activities

The LEDA provides the following services:

• business and market information;
• credit;
• training in agriculture and reforestation;
• technical assistance in agriculture and cattle breeding.

The LEDA handles a $50.000 credit portfolio for direct lending

Enterprises supported

The LEDA has promoted and supported 200 small enterprises in the following sectors: agriculture ( 180 enterprises, mainly cattle breeding, forestry, rice, wheat and bean production), manufacturing (10 enterprises, mainly construction), handicrafts (10 enterprises).

This support has resulted in the creation and consolidation of 600 jobs.

Projects

• reforestation of 1000 hectares in the Région Brunca, funded by Ministerio Ambiente y Energía (MINAE);
• forestry conservation in the Región Brunca, funded by Ministerio Ambiente y Energía (MINAE);
• a trade fair for local farmers, funded by Ministerio Agricultura y Ganadería (MAG) and own resources;
• support to plantain commercialization, funded by PRODERE and internal resources;
• support to vegetable and fruit commercialization, funded by internal resources;
• reforestation of 5 hectares in Palmares. Funded by internal resources;
• support to vegetable and fruit commercialization in the southern part of the region (under negotiation);
• acquisition of a storage facility (under negotiation);
• creation of a centro de acopio for agricultural products in San Isidro (under negotiation).

Development programmes active in the area

• Ministerio Agricultura y Ganadería (MAG);
• Ministerio Ambiente y Energía (MINAE);
• Asociación de Desarrollo Forestal de la Región Brunca;
• Coordinadora Indígena, Campesina y Forestal (CICAFOL);
• Junta Nacional Forestal Campesina;
• Project of decentralized cooperation with the city of Bolzano.
• FONAFIFO (National Fund for Reforestation Financement);
• National Council of Production (NCP);
• Instituto Mixto de Ayuda Social;
• GTZ/Emprende
• Foundation Costa Rica-Canada;

General information

LEDA members

Asociación de productores de Santa Lucia de Laurel

Asociación de productores del Carmen del Bioley

Asociación de productores del Aguila de Pejivalle

Asociación de productores del Valle del Guabo

Asociación de productores de la Nubia

Asociación de productores de San Juan Norte de Rivas

Asociación de productores de Volcan

Asociación de productores de Río Nuevo

Asociación de productores de la Cima de Dota

Asociación de productores de Pacuarillo

Asociación de productores de Concepción

Asociación de productores de Tierras Morenas

Cooperativa Santa Lucia

Cooperativa SA

Date of constitution June 1973

Address San Isidro de Peréz Zeledón, Costado Oeste del Estadio Municipal de Pérez Zeledón, Costa Rica

Telephone (506) 771-6497/771-4034

Fax (506) 771-4626

President Rafael Angel Chinchilla Arias

General manager Lidiethe Picado Avirós

ADEL Huehuetenango (Guatemala)

Location

The Department of Huehuetenango is located in the north-west of Guatemala on the south-east border of Mexico and belongs to Region 7, which also includes the Department of Quiché. The capital is Huehuetenango, easily accessible along a fast, asphalted road from Guatemala City (262 Km.).

Population and area

The total population of the municipalities of the department is 816.300 with an area of 7.400 km². The capital has a population of 48.000. The department offers a great variety of microclimates, ranging from tropical to moderate to cold in the mountains. Several rivers flow through the Department, notably the Selegua, the Cuilco and the Lagartero, which support intensive irrigation schemes. The Sierra de los Cuchumatanes, the highest mountain range in Central America dominates the department with its wilderness areas. It is becoming an attraction for visitors interested in the natural environment. The department has seven groups of Maya-speaking Indians: Mam, Jacalteco, Chuj, Cuiché, Tectitecu, Aguacateco and Kanjobal. Huehuetenango has a small airport. TACA and smaller airlines operate daily flights from Guatemala City. The Interamerican Highway, connecting the United States to Central and South America, is five kms south of the City of Huehuetenango. A direct paved road connects Huehuetenango to the port of Quetzal, the principal port of Guatemala on the Pacific coast. The port of Santo Tomás de Costilla, situated on the Atlantic coast, is also easily accessible via Guatemala City.

Economy

The main local product is coffee (20.000 hectares, 30.000 tons per year), probably the best quality in Guatemala and one of the best in the world. The coffee provides the largest export income to the department, the United States and the European Union being the biggest purchasers. Approximately 525 hectares of the department are devoted to garlic production (6.000 tons per year), a local variety exported to the United States and Central America. Several varieties of vegetables (2.000 hectares, 5.000 tons per year) are cultivated in the department under intensive irrigation schemes. They mainly consist of carrots, cabbages, cauliflowers, onions, chili, Chinese peas, French beans and Brussels sprouts. The production is mainly consumed at the local level, but a small part is also exported to Central America and to the United States. Other products with considerable potential are cardamom (5.000 tons per year) and a high quality honey (100 tons per year), produced for the Swiss market. Given the state of natural pasture, the Department is also suited for stock farming, particularly sheep (50.000 units) and cattle (30.000 units). A wide variety of agro related industries are established in the region, concerned with flour producing, vegetable canning, meat processing, coffee toasting, mineral water production and juice canning. There is a flourishing production of different items of handicraft in the region. Leatherwork includes wallets, purses, handbags, briefcase and shoes. Wood items include furniture, kitchen utensils, marimbas (the popular musical instrument) and a variety of carvings and ornaments. Other popular handicrafts are quality hammocks, basketry, ropes, weaving, textile arts and jewellery. A small variety of minerals are mined in the region. The biggest concentration of industries is found in the area of Ixtahuacan, which has an abundance of zinc, lead and lime. A promising activity of oil exploration has started because of the evidence found in the department. The Sierra de los Cuchumatanes is a great tourist attraction because of the scenery and wildlife. The picturesque town of Todos Santos Cuchumatán (altitude 2450 metres) is one of the few in which the traditional Maya calendar is still partially observed. There are also the Maya ruins of Zaculeu, a park-like archaeological zone which is four kms north of Huehuetenango. Because of these attractions, Huehuetenango is endowed with two five star hotels and many others of good quality.

Several universities are located in the Department, offering a wide range of full-time or part-time careers (e.g.) agronomy, business administration, engineering and law. The Chambers of Commerce of Huehuetenango offers a variety of services, providing excellent support to export-oriented activities. Several financial institutions and banks operate throughout the region and enable maximum support and service to clients.

LEDA activities

The LEDA provides the following services:

• business and market information;
• technical assistance with legal matters and accounting;
• business training;
• assistance in accessing credit.

The LEDA does not handle credit itself.

Enterprises supported

The LEDA supports all members, mainly local producers in the following sectors:

• agriculture: 29 cooperatives (mainly involved in coffee production);
• services: 9 cooperatives (credit and finance);
• farming: 6 cooperatives;
• handicrafts: 3 cooperatives;
• housing: 1 cooperative.

Projects

• a survey among cooperatives producing coffee, funded from internal resources;
• a survey on garlic production, funded from internal resources;
• a survey on local productive projects for women, funded by UNDP and the LEDA network;
• feasibility study of agroexport of frozen and fresh vegetables, funded by the project Los Cuchumatanes, a joint UNDP-IFAD-Netherlands-Guatemala activity;
• technical agreement with the Ministry of Agriculture, Farming and Food (MAGA);
• inter-sectorial agreement with the Council of Departmental Development (CDD);
• technical agreement with the project Los Cuchumatanes;

Development programmes active in the area

• FUNDAPAZ (National Fund for Peace): productive infrastructure and credit;
• FIS (Fund for Social Investments): social infrastructure;
• FONAGRO (National Fund for Agriculture): agriculture development;
• FODIGUA (Fund for Guatemaltean Indigenous Development): productive and social projects for indigenous groups;
• IDB (Inter-American Bank for Development): productive credit and social infrastructure;
• EU (European Union): programmes of integrated development;
• Bilateraltional Cooperation Programmes of Japan, Holland, Spain and Italy.

General information

LEDA members

Asoc. Agr. y Des. "Bitenam"

Asoc. De Agr. "Asabapne"

Asoc. De Agr. "Asobagri"

Asoc. De Agr. Tinecos "Adat"

Asoc. De Des. "Adicpar"

Asoc. De Des. "El Progreso"

Asoc. De Des "Yamanonh"

Asoc. De Des y Ser. "Nueva Democracia"

Asoc. De Mujeres "Checoche"

Asoc. De 23 Comites

Asoc. "El Esfuerzo"

Asoc. "Los Chujes"

Asomam

Comité de Des. "El Potrerillo"

Coop. "Agua Dulce"

Coop. "Alfredo Hernandez"

Coop. "Axola"

Coop. "Chichan"

Coop. "Chojzunil"

Coop. "Coatan"

Coop. "El Porvenir"

Coop. "Esquipulas De La Libertad"

Coop. "Flor De Mi Tierra"

Coop. "Habitat"

Coop. "Hoja Blanca"

Coop. "Joya Hermasa"

Coop. "La Encarnación"

Coop. "La Esperanza Chiantleca"

Coop. "La Rafaelena"

Coop. "La Virgen"

Coop. "Los Cuchumatanes"

Coop. "Los pinos"

Coop. "Nenton"

Coop. "Nuestro Futuro"

Coop. "Pena Roja"

Coop. "P'quin"

Coop. "Rio Azul"

Coop. "San Bartolo"

Coop. "San José El Obrero"

Coop. "San José Quixabaj"

Coop. "San Pedro Necta"

Coop. "Santa Teresita"

Coop. "Santo Domingo"

Coop. "Tajumuco"

Coop. "Unión Florecer"

Coord. Interinst. De Serv. y Des. Los Milicianos

Pre-Coop. "Union Cuchumateca"

Date of constitution September 1993

Address 2ª Calle 0-42 Zona 1 Huehuetenango (Guatemala)

Telephone (502) 764-7825

Fax (502) 764-7570

E-mail asdeco@quetzal.net

President Audilio Macario Galicia Rodriguez

General Manager Daniel Efren Palacios Lopez

ADEL Ixcan (Guatemala)

Location

The department of Quiché is situated in north-west Guatemala, bordering Mexico and belonging to Region 7. The LEDA Ixcan is located in the town of Playa Grande, in the extreme north of the department. It covers one of the largest municipalities of the country, Ixcan. The distance between Guatemala City and Playa Grande is about 425 km., an 8 hour trip along a partially unpaved road winding through mountains and cornfields, amidst a wonderful scenery.

Population and area

The total population of the department is about 450.000, spread over an area of 9.000 km². The population of Ixcan is 70.000 and of Playa Grande 6.000. The climate is subtropical, hot and humid, with temperatures determined by altitude. The highlands are a continuation of Mexico's Sierra Madre range, with luxurious vegetation and tropical fauna. Four important rivers flow through the region, namely Chixoi, Tzeya, Xalbal and Ixcan, the last representing a potential tourist attraction because of its beauty and waterfalls. The region is highly multicultural, with almost all the ethnic groups of the country represented. The area is endowed with a small airport, just 20 kms away from Playa Grande. There are daily flights from Guatemala City, a 30 minute trip. The town has direct access by road to the Mexican border, just 20 kms away.

Economy

The principal crops of the Departmant are maize, beans, rice, coffee and cardamomo. Maize (11.000 hectares, 17.000 tons per year), beans (200 hectares, 3.500 tons per year) and rice (300 hectares, 4.700 tons per year) are mainly produced for local and national consumption. The coffee production is relatively limited (100 hectares, 145 tons.), but the quality is good and is mainly exported to the United States and Holland. Cardamom is another important export crop, being exported almost exclusively to the Arab world. There are also excellent opportunities for introducin non-traditional crops in the area, (e.g. pejivalle) and for expanding production of the

traditional ones, presently not adequately exploited because of a lack of capital. Manufacturing is almost absent in the area and agro-related industries are also limited, because most agricultural products are exported for processing elsewhere, except for rice and meat. Nevertheless, the great availability of raw materials is such that agro-related industry represents a serious business potential. Local handicrafts include leatherwork (handbags, wallets, purses, etc.) and art textiles, but the best items are by far the woodcarvings, made out of an excellent cedar quality. Oil exploration and drilling has recently started in the area. Presently, they are in an initial, although promising phase. The area has a great potential for eco-tourism, because of the its biodiversity which attracts nature-loving visitors.

A centre of investigation and training in agriculture and related activities offers several services concerning research and education, while a Chamber of Commerce is being set up. Several banks and financial institutions are present in the area.

LEDA activities

The LEDA provides the following services:

• credit in five different business areas: microenterprise, agriculture, commerce, housing and post-harvest;
• training in business administration, organization, accounting, credit, agricultural and commercial activities, environment, projects design;
• technical assistance in design, implemenation and evaluation of projects, marketing, finance and environmental protection;

The LEDA handles a $350.000 credit portfolio, through the following modalities:

• a guarantee fund with Bancafé ($180.000);
• a trust-fund with Bancafé ($80.000);
• direct lending ($33.000);
• financial intermediation by Banrural ($57.000).

Enterprises supported

The LEDA has promoted and supported 25 small enterprises, belonging to the following sectors: agriculture: 18 enterprises (mainly wheat and beans production); commerce: 4 enterprises (trade of cardamom), manufacturing: 2 enterprises (production of fertilizers), services: 1 enterprise (credit cooperative).

This support has resulted in the creation and consolidation of 300 jobs and 150 temporary jobs.

Projects

• surveys of about 25 local communities, funded by CHF (Cooperative Housing Foundation);
• decentralized cooperation with Venice aiming at the establishment of a radio station in Ixcan.

Development programmes active in the area

• FUNDAPAZ (National Fund for Peace): productive infrastructure and credit;
• FIS (Fund for Social Investments): social infrastructure;
• FONAGRO (National Fund for Agriculture): agricultural development;
• FODIGUA (Fund for Guatemaltecan Indigenous Development): productive and social projects for indigenous groups;
• DECOPAZ (Community Development for Peace): institution building at the local level;
• AID (Agency for International Development): programmes of social infrastructure and environmental protection;
• Bilateral Cooperation Programme of Holland.

General information

LEDA members P="BR1">

Asociación Promotores Para el Desarrollo

Asociación Promotores Pecuarios

CESIDE

Comité Microregional I

Comité Microregional II

Cooperativa Efrata

Cooperativa Zona Reina

Cooperativa 28 de Enero

Corporación Municipal de Playa Grande

DICA-INTA

DIGESA

DIGESEPE

Escuela de Capacitación INTA

ICTA

Inacop

14 Empresas Campesinas Asociativas

9 Comité de Desarrollo

Date of constitution July 1993

Address Edificio Los Claveles Apto. No. 1, Playa Grande, Ixcan-Quiché (Guatemala)

Telephone/fax (502) 951-3313/ 951-3314

President Mateo Coc Caal

General Manager Elias Heber Cabrera

ADEL Ixil (Guatemala)

The ADEL - Quiché is located in the Department of Quiché in North-west Guatemala, Region 7. The capital of the department is Santa Cruz. The LEDA is located in Nebaj, in the central zone of the Department. It covers the following seven municipalities: Nebaj, Sacapulas, Cunén, Chajul, Uspantán, Chicamán and Cotzal. The 251-km trip between Guatemala City and Nebaj takes about eight hours on a beautiful panoramic road.

Population and area

The total population of the department of Quiché is 450.000 in an area of 9.000 km². The area covered by the LEDA has a population of 285.000 in an area of 3.918 km². The population of Nebaj is 15.000. The region has a temperate climate, but the mountainous interior is much cooler than the lowlands. Nebaj is bounded by mountain ranges containing several rivers, including the Rio Xalbal and the Chixoj, which provide electricity and irrigation schemes to most of the department. The lovely, sparkling blue lagoon of Nebaj lies outside the city limits, attracting a large number of visitors and representing a vast tourist potential for the region. The local culture is an element of attraction of the zone, because of the several maya-speaking groups (Kiché, Ixil, Quechí, Mam, Kanjobal) living in the area and wearing their colourful traditional clothing. A small airport is located just 7 kms away from the town of Nebaj, with daily flights from Guatemala City and Huehuetenango. The Interamerican Highway, connecting the United States to Central and South America, is 140 kms away from Nebaj.

Economy

Agriculture is the basis of the local economy, employing the majority of the labour force. Important crops include maize, beans, coffee, fruit, vegetables, wheat and cardamom. Maize and beans are widely cultivated in the area (45.000 hectares, 31.000 tons per year) and are basically for local consumption. Coffee (18.000 hectares, 20.000 tons) is of excellent quality and represents the principal export crop, being largely sold in the North-American and European market. About 60% of the local production is organic coffee and there are ample opportunities for economic initiatives concerning the activities of roasting and the establishment of dry coffee refiners (beneficios seco). The cultivation of vegetables (mainly tomatoes, potatoes, onions, cabbages, broccoli and cauliflower) is widely diffused in the region,but still there is a great potential for increasing production and developing agro-related activities. The local production is mainly for the Central-American market. Given the excellent climate of the region, there is also a great potencial for fruit cultivation, (e.g.) apples, peaches and avocado. The production is consumed at a local level, but export and agro-related activities such as fruit canning are becoming more and more important. The region also counts with a great availability of wood, mainly conifers, but other species such as bamboo and maize pulps (bagazo de maiz) can be successfully introduced in the area. The actual consumption of wood is limited and the production of celluloid for export might represent a perspective of great interest. Manufacturing, the second largest sector of the local economy, is strongly influenced by the region's natural inclination for agriculture. Agro-related activities are widespread, for instance, sausage and cheese production, meat processing and leather industry (shoes, garments, wallets, etc.). A wide variety of handicrafts is produced in the region. A distinctive local craft is the gold and silver jewellery (earrings, rings, necklaces, etc.), well made and relatively inexpensive. Another typical production is the textiles, including carpets, handbags and briefcases. The local handicrafts, often sold in the most important city markets of Guatemala, can be successfully destined to the export market. Potassium and calcium deposits are widespread in the region, but they have not been exploited and they might be utilized for fertilizer production. Several elements make tourism a prospective rewarding business for the region, among them the scenery, local culture and excellent handicrafts. The availability of tourist infrastructure (hotels, transport, etc.) is consequently rising.

The region has research centres concerned with agriculture, climatology and commerce. There are presently only two banks in the area, but other financial institutions are opening branches and agencies in the region.

LEDA activities

The LEDA provides the following services:

• design of productive and environmental projects;
• surveys and investigations;
• business and market information;
• technical assistance about enterprise administration, marketing, bookkeeping;
• training in business administration;
• credit.

The LEDA handles a $410.000 credit portfolio, through the following modalities:

• a trsut-fund with Bancafé ($230.000);
• a guarantee fund with Bancafé ($180.000).

Enterprises supported

The LEDA has promoted and/or supported 136 micro-enterprises and 2 cooperatives, belonging to the following sectors:

• agriculture: 35 micro-enterprises and 1 cooperative (mainly garlic, potatoes, coffee and cardamom production);
• handicrafts: 34 micro-enterprises (mainly silver handicrafts, basketry and textiles);
• commerce: 30 micro-enterprises (mainly small traders and retailers);
• manufacturing: 35 micro-enterprises and 1 cooperative (mainlygarment and textiles).

This support has resulted in the creation and consolidation of 500 permanent jobs.

Projects

• micro-enterprise promotion for women (in negotiation), to be funded by FIS;
• agro-industrial infrastructure promotion (in negotiation), to be funded by UNIDO;
• broccoli, cardamom, coffee, garlic and potato cultivation, funded by guarantee fund;
• attle breeding, funded by guarantee fund;
• silver handicrafts, funded by guarantee fund;
• micro-enterprise promotion, funded by guarantee fund;
• terracotta handicrafts, funded by guarantee fund,
• sheep breeding for organic fertilization, funded by trust-fund;
• mule transport, funded by trust-fund;
• retail commerce, funded by trust-fund.

Development programmes active in the area

• agreement with the Ministry of Agriculture, Farming and Food (MAGA) for the promotion of sugar cane cultivation;
• agreement with the Food and Agriculture Organization (FAO) on food security;
• agreement with ILO on guarantee fund;
• agreement with PRODERE/BANCAFÈ/UNDP on the trsut-fund;
• FUNDAPAZ (National Fund for Peace): productive infrastructure and credit;
• FIS (Fund for Social Investments): social infrastructure;
• FONAGRO (National Fund for Agriculture): agriculture development;
• FODIGUA (Fund for Guatemaltean Indigenous Development): productive and social projects for indigenous groups;
• FONAMA (National Fund for Environment): environmental protection;
• EU (European Union):programmes of integral development;
• National Cooperation Programmes of Spain and Italy;

General information

LEDA members

Academia de Lenguas Mayas

ACODIA

ADEPA

APRODUS

Alcaldía Municipal de Chajul

Alcaldía Municipal de Chicaman

Alcaldía Municipal de Cotzal

Alcadia Municipal de Cunén

Alcaldía Municipal de Nebaj

Alcaldía Municipal de Sacapulas

Alcaldía Municipal de Uspantán

Asociación de la Mujer Maya Ixil "Nuevo Amanecer"

Asociación de Mujeres Ixiles

Asociación UN q' a Chem Ixil

ASODISU

Casa de la Cultura Chajulense

Casa de la Cultura Cotzalense

Casa de la Cultura Nebajenses

Comerciantes Chajulenses

Comerciantes Sacapultecos

Comité de Agricultores Paraxtut

Comité de Artesanos Salquil Grande

Comité de Artesanos Unión Ixil

Comité de Desarrollo Unión Ixil Chajulense

Comité de Ganaderos Batz-bacá

Comité de Ganaderos PABAQUIT

Comité de Ganaderos Xemanzana

Comité de Joyeres

Comité de Microempresarios Pulay

Comité de Mujeres Cesteras

Comité de Mujeres "Flor de maguey"

Comité de Mujeres Nueva Esperanza

Comité de Mujeres Vida Nueva Las Violetas

Comité femenino de Xix

Comité Las Pacayas

Comité Microempresarial El Verdum

Cooperativa Flor de Caña

Cooperativa Luz y Vida de Cunén

Cooperativa R.L. de Cunén

Cooperativa Sta. María

Cooperativa Todos Nebajenses

Cooperativa Vatzul Kuxho

Empresa Social de Fármacos de Cotzal

Fundación Camino Nuevo

Promotores y Comadronas de la Aldea Salquil Grande

Date of constitution July 1993

Address Barrio Xolacul, Nebaj-Quiché (Guatemala)

Telephone/Fax (502) 755-1053

President Pedro Evito Chel

General Manager Juan Clemente Raymundo

ADEL Ocotepeque (Honduras)

The department of Ocotepeque is located in the western part of Honduras, along the border with Guatemala and El Salvador. The LEDA is situated in San Marcos de Ocotepeque, 53 km away from Nueva Ocotepeque, which is the capital of the department. The distance between Nueva Ocotepeque and Tegucicalpa is about 500 km, along the Interamerican Highway.

Population and area

The department of Ocotepeque has a population of 88.000, spread over an area of 1.680 km², while San Marcos de Ocotepeque has a population of 14.000. The department of Ocotepeque is a mountainous zone, with many highland valleys. The highlands are relatively cool and the few lowlands are hot and humid. Several rivers flow through the department, the most important being Río Lempa, which also crosses Guatemala and El Salvador. The department is characterized by the presence of several natural reserves (Guisayote, El Pital and El Trifinio), with considerable potential for ecotourism. Part of the Maya-Chortís, an indigenous group considered direct descendents of the Mayas, lives in the Department of Ocotepeque, dedicating themselves to agriculture and handicrafts. The Interamerican Highway offers easy access to Tegucicalpa and its international airport. Smaller airports are also located in Copán (200 km away) and San Pedro Sula (250 kms), the second-largest city of Honduras, an important transportation hub and the major business centre of the country. Puerto Cortés is located 300 km from Ocotepeque and is the country's most important port and the only port in the country which can handle big cargo containers.

Economy

The principal crops of the Department are coffee, vegetable and fruit. Coffee is of excellent quality, being mainly coffee of altitude, and is exported to the United States. Vegetables (mainly potato, tomato and onion) are produced for the Central-American market, particularly Guatemala and El Salvador. Given the relatively cold climate in the mountains, various kinds of fruit (among them, orange and avocado) are cultivated. The area also counts with a local fishing industry. The fishing production mainly consists of red and gray tilapias for local consumption. There are also ample opportunities for introducing the cultivation of rice, beans and new kinds of fruit e.g. strawberry and apple. Agro-related activities basically concern fruit and vegetable canning, marmelade production, beekeping, coffee refinement and toasting. Manufacturing is scarcely present with the only industrial activity concerning the construction of grain storage silos. Due to the great number of coffee plantatations, the department offers a great potential for introducing the production of organic fertilizer using coffee pulp. A limited variety of handicrafts is produced such as threads, ropes and kitchen utensils in terracotta. The area is endowed with chalk, coal, iron, marble deposits, but investigations and feasibility studies about industrial explotation of these have not been conducted yet. The main tourism attraction of the area are its natural reserves, which represent a great potential for ecotourism.

The department has several universities, offering different careers in engineering, business administration, law and agronomy, a centre of training and investigation on agriculture, a Chamber of Commerce of micro-enterprises, several banks and financial institutions.

LEDA activities

The LEDA provides the following services:

• training in business administration and several productive activities;
• technical assistance in community organization, planning and business administration;
• project design and management;
• business information;
• credit.

The LEDA handles a $600.000 credit portfolio channelled through local financial institutions.

Enterprises supported

The LEDA has promoted and/or supported 660 small enterprises in the following sectors:

• agriculture: 620 enterprises (mainly coffee, vegetable, fruit, maize, rice and beans production);
• commerce: 15 enterprises (mainly retailers);
• manufacturing: 15 enterprises ( mainly construction and mechanics);
• services: 10 enterprises (mainly restaurants).

This support has resulted in the creation and consolidation of 2.500 permanent jobs.

Projects

• support of rural micro-enterprises, funded by the central government and UNDP;
• enlargement of the guarantee fund, funded by the World Food Programme;
• training of women in productive activities, funded by the central government;
• integrated development of 5 municipalities in the northern part of Ocotepeque, funded by the Asociazione per la Partecipazione allo Sviluppo (APS);

Development programmes active in the area

• ageement with APS and the Municipality of Turín;
• FHIS (Honduran Fund for Social Investments): social infrastructure;
• FCH (Honduran Fund for Coffee): productive infrastructure;
• UNFPA (United Nations Population Fund): programs for women;
• APS (Associazione per la Partecipazione allo Sviluppo): integrated development;
• BCIE (Centralamerican Bank for Economic Integration): rural development;
• National Cooperation Programs by Switzerland, Canada and Spain;

General information

LEDA members

16 Consejos de Desarrollo Municipal

Secretaria de Agricultura y Ganadería

Instituto Hondureño del Café

Instituto de Formación Profesional

Instituto Nacional Agrario

Corporación Hondureña de Desarrollo Forestal

Comisión Cristiana de Desarrollo

Hermandad de Honduras

Asociación Ecológica de San Marcos

Programa Comunitario de Desarrollo Integral

Asociación hondureña de Productores de Café

Cooperativa de Ahorro y Crédito "Río Grande"

Colegio de Profesionales de Educación Media de Honduras

Date of constitution March 1994

Address San Marcos, Ocotepeque, Honduras, C.A.

Telephone/fax (504) 663-4163

E-mail adevas@sdnhon.org.hn

President Luis Alfonso Reyes

General Manager Jaime Espinoza

ADEL Intibucá (Honduras)

Location

The department of Intibucá is located in the western part of Honduras, along the border with El Salvador. The capital is La Esperanza, headquarters of LEDA Intibucá. The distance between La Esperanza and Tegucigalpa is 200 km (a 3 hours trip) along the Carrettera del Norte.

Population and area

The department of Intibucá has a population of 123.000, spread over an area of 3.072 km². La Esperanza itself has a population of 6.000. The region has a temperate climate, with temperatures influenced by altitude. La Esperanza, at an elevation of 1600 metres, is fresh and cool. It is bounded by mountain ranges and woods of conifers, amidst a beautiful scenery. The lake of Yojoa, one hour from San Marcos, is a popular tourist attraction, with a great eco-tourism potential. An important indigenous group, the Lencas, lives in the zone, dedicating themselves to agriculture and handicrafts. The Interamerican Highway is 67 km away from La Esperanza and it provides an easy access to Tegucigalpa and the international airport. Puerto Cortés, which handles over half of Honduras's export shipping trade, is 3 hours drive from La Esperanza.

Economy

The most important crops of the Department are coffee, vegetables, rice and fruit. Coffee is of three different qualities: standard (exported to the United States), altitude and strictly high (both exported to Europe). Coffee represents the most important crop of the area but refinement and toasting is mostly done outside the department. Production of vegetables (mainly potato, cabbage, broccoli, asparagus and tomato) is also remarkable and it is mainly destined to the regional market. Given the particular climate of the Department, an ample variety of fruit is cultivated in the zone; the production mainly consists of apples, strawberries and peaches. Thanks to the relatively cold climate, there are also favourable conditions for the introduction of the cultivation of cardamom, ginger and mushrooms. Agro-related activities basically concerns rice processing, fruit canning, wine and marmelade production, but they are scarcely widespread in the area. Manufacturing is also scarcely present and mainly concentrates on construction, mechanics and engineering. Typical handicrafts includes woodcarving and wooden furniture, embroidery and textile arts and leather goods. The mining potential of the area is limited, apart from a great availability of sand and stone deposits, which have been exploited for construction. The department has a great potential for eco-tourism, but proper infrastructure is lacking.

The department has two training centres concerning handicraft and sustainable agriculture. There is also a research centre on agriculture and appropriate technology. A Chamber of Commerce and Industry and several financial institutions are also present in the area.

LEDA activities

The LEDA provides the following services:

• credit to small and medium enterprises;
• training in business administration;
• business information;

The LEDA handles a $400.000 credit portfolio, through the following modalities:

• financial intermediation of funds managed by the local government and cooperatives ($70.000);
• a trust-fund with Banco de Occidente ($330.000).

Enterprises supported

LEDA has promoted and/or supported 100 microenterprises and 10 cooperatives, belonging to the following sectors:

• agriculture: 80 micro-enterprises and 10 cooperatives (mainly coffee, vegetable and fruit);
• commerce: 10 micro-enterprises (mainly retailers);
• manufacturing: 5 micro-enterprises (mainly construction);
• services: 5 micro-enterprises (mainly transport and bookshops).

This support has resulted in the creation and consolidation of 350 jobs.

Projects

• investigation of the productive potential of the department, funded by internal resources;
• investigation of the informal trade with El Salvador, funded by internal resources;

Development programmes active in the area

• agreements with UNIDO, Banco de Occidente, Consejo de Desarrollo Municipal;
• FHIS (Honduran Fund for Social Investments): social infrastructure;
• PRAF (Program for Family Assistance): productive training;
• COHASA (Germany-Honduras Cooperation for Food Security): food security and training;
• CARE: integrated development;
• Save The Children: integrated development;

General information

LEDA members

Colegios de ingenieros agrónomos de Honduras (CINAH)

Unión nacional de Campesinos (UNC)

Banco Nacional de Desarrollo Agrícola (BANADESA)

Secretaria de Recursos Naturales (RR.NN)

Comisión Cristiana de Desarrollo (CCD)

Asociación Hondureña de Productores de Café (AHPROCAFE)

Cooperativa de ahorro y crédito intibucana limitada (CACIL)

Gobernación Política departamental de Intibucá

Comité de Prensa Intibucano

Asociación de Ganaderos y Agricultores de Intibucá (AGADI)

Instituto Nacional Agrario (INA)

Servicio Holandeses de Cooperación para el Desarrollo (SNV)

Asociación Save The Children

Asociación para el Desarrollo y Promoción Humana de Honduras (ADEPROH)

Corporación Hondureña de Desarrollo Forestal (AFE-COHDEFOR)

Centro Nacional de Educación para el Trabajo (CENET)

Fundación Hondureña de Investigación Agrícola (FHIA)

Empresa Asociativa Campesina de Transformación y Servicios Otoreña (EACTSO)

Secretaria Técnica de Cooperación (SETCO)

Cooperativa de Ahorro y Crédito Fronteriza Intibucana Limitada (COACFIL)

Cooperativa Agropecuaria Colomoncagua Limitada (COACOL)

Asociación Hondureña de Productores de Papa (AHPROPAPA)

Cooperativa Agropecuaria San Antonio Intibucá Limitada (CASAIL)

Colegio de Profesionales de las Ciencias Agrícolas de Honduras (COLPROCAH)

Centro Indigenista de Capacitación Artesanal Intibucano (CICAI)

Cámara de Comercio e Industria de Intibucá (C.C.I.I.)

Date of constitution October 1994

Address La Esperanza, Departamento de Intibucá, Honduras, C.A.

Telephone/fax (504) 898-2065

President Ramón González

General Manager Jesús Gálvez Pineda

ADES Granada (Nicaragua)

Location

The LEDA ADES-Granada covers the departments of Granada, Masaya, Carazo and Rivas in South-eastern Nicaragua, a region bordered to the south by the Pacific Ocean. The capital of the region is Granada, the third-largest city in Nicaragua. The distance between Granada and Managua is only 45 Kms., a 45 minute trip along the Interamerican Highway.

Population and area

The total population of the area covered by the LEDA is some 686.000 people in an area of 4.963 km². Granada itself has a population of 56.000 people. The area covered by the LEDA belongs to the Pacific lowland zone, with a subtropicalclimate, quite hot and humid. The area offers some of the best scenery of Nicaragua. It includes the Lago de Nicaragua, also known as Cocibolca, its indigenous name, and as Mar Dulce (Sweet Sea). It is the largest lake in Central America and the second of the continent. It is 177 km long and on average 58 km wide. It covers 8157 sq km and is 70 metres deep at its deepest point. It represents an important regional resorce for fishing and tourism. The most important rivers of the area are Ríos Sapoá, Ochomogo and Gil Gonzalez, all implementing irrigation schemes for the cultivation of rice and sugar cane. Other important geographical features of the area are the presence of the Pacific Ocean and a volcanic range crossing the zone from Masaya to Rivas, with some of the most popular crater lakes and volcanoes of Central America.

Each of the four departments of the area has distinctive cultural interests and attractions. Masaya, known as "the city of flowers", is the folklore capital of Nicaragua and is famous for its handicrafts, probably the best of the country. Granada, founded in 1523 by Francisco Hernandez de Córdoba, is Nicaragua's oldest Spanish city and still retains its colonial character, particularly in architecture. Carazo is famous for its religious and folkloric celebration known as Toro Guaco. It is a complex of festivals in which two towns of the Department, Jinotepe and Chorotega, traditional rivals before the arrival of the Spanish, commemorate their relationship. Rivas is carachterized by the presence of important indigenous groups, living according to their own traditions and lifestyle.

On the Pacific coast, the main ports are Puerto Sandino and San Juan del Sur, easily accessible from all four departments. The Inter-american Highway provides easy access to Managua and to the international airport (45 km away).

Economy

The area includes some of Nicaragua's most significant agricultural cultivations. In the region around Granada, coffee, rice and sorghum predominate, while the area of Masaya is mainly devoted to the cultivation of maize, beans, cotton, sorghum, yucca and sesame. Carazo is famous for its coffee of altitude, an export crop with a great potential, as well as for the massive presence of non-traditional crops (especially citrus and fruit). Rivas is carachterized by the strong presence of tropical cultivations, particularly sugar cane and watermelon. Fishing is widespread in Rivas and Carazo, and shrimp-farming will probably be one of the most important business ventures in the near future. A great number of agriculture-related and industrial activities take place in the area, including sugar cane processing, wheat flour and cotton seeds oil production. Fruit canning could also play an important role in the local economy, but is presently not widespread in the area. As for manufacturing, the production of soap is extremely important, representing 75% of the whole national production. Other industrial activities concern engineering, construction, textiles and the production of plastic for foodstuff preservation. Masaya is famous for its traditonal handicrafts, representing the principal handicrafts centre of Nicaragua. Local handicrafts include excellent-quality cotton hammocks, colourful basketry, paintings, woodcarving, ceramics, leatherwork and pottery. The area is endowed with several deposits of chalk and stone, which have been exploited for construction activities. Chalk derivates have also been used as colouring in soap and painting production. There are several important tourist attractions in the area. The most notable are Lago de Nicaragua and the cities of Granada and Masaya. Lago of Nicaragua, the largest lake in Central America, is the world's only freshwater lake whith sharks. A great attraction of the lake are its 356 small islands that are just offshore from the city of Granada. The islands were formed by volcanic activity and there is a remarkable variety of wildlife. Granada, which has been designed a museum city by the government of Nicaragua, is famous for its colonial buildings and churches, while Masaya for its folklore and handicrafts.

The area has private universities in Granada and Masaya, and public ones in Carazo and Rivas. Each Department has a Chamber of Commerce and Industry and several financial institutions.

LEDA activities

The LEDA provides the following services:

• business information;
• project design;
• credit;
• training in different activities;
• technical assistance in administration and specific productive activities.

The LEDA handles a $600.000 credit portfolio.

Enterprises supported

The LEDA has promoted and supported some 1100 small enterprises in the following sectors:

• agriculture: 1000 enterprises (mainly cattle breeding, fishing, rice, wheat and bean production);
• manufacturing: 30 enterprises (mainly garment and textile);
• services: 70 enterprises (mainly transport and training centres).

This support has resulted in the creation and consolidation of 5600 jobs.

Projects

• plantain cultivation and cattle breeding on the Island of Ometepe (to be funded from the Fondos de Contravalor Italia-Nicaragua);
• cattle breeding promotion in Cardenas and Granada (same source of funding);
• milk producion in Tisma (in negotiation);
• reactivation of fishing boats (in negotiation);
• microenterprise promotion (in negotiation);
• technical agreement with the bilateral Italian Cooperation on credit provision in the framework of the "Programma Maremoto".

Development programmes active in the area

• PAMIC (Programme of Technical Assistance for Microenterprises);
• Programme to erradicate the gusano barrenador and colera porcino;
• FOSEMAG (Programme of Technical Assistance for Cattle Breeding);
• PNDR (National Programme for Rural Development);
• WFP (World Food Programme): fishing promotion;
• National Cooperation Programmes by Spain.

General information

LEDA members

Alcaldías Municipales de Rivas, Granada y Masaya

Ministerio de trabajo (MITRAB)

Ministerio de Economía y Desarrollo (MEDE)

Cámara de Pequeña y Mediana Industria (CONAPI)

Ministerio de Recursos Naturales y Medio Ambiente (MARENA)

Instituto Tecnológico Nacional (INTECNA)

Instituto de Seguridad Social (INSS)

Cámara de Comercio de Granada

Movimiento de Mujeres Desempleadas de Granada (applied)

Asociación de Trabajadores del Campo (applied)

Asociación de Trabajadores de la Cultura (applied)

Date of constitution June 1992

Address Contiguo a la Alcaldía Municipal de la ciudad de Granada, Granada, Nicaragua

Telephone (505) 552-5622

Fax (505) 552-2843

President Róger Sequeira Mojica

General Manager Noemy Zamuria Centeno

ADEL Jinotega (Nicaragua)

The department of Jinotega is located in the northern part of Nicaragua. It extends north-east to the Honduran border. Capital of the department of the same name, Jinotega is 162 Km from Managua (a 3 hours trip), along the Interamerican Highway.

Population and area

The total population of the department is population: 257.000, spread over an area of 9.755 km². Jinotega itself has a population of 77.000. The department offers a great variety of climates. The northern part is subtropical, hot and humid, while the highland region in the centre is cooler and fresher. Finally, the hilly zone in the south is temperate. About 10 km from Jinotega, the large Lago de Apanás is a popular tourist attraction and provides 30% of Nicaragua's electricity. Rio Coco, a navigable sea flowing into the Atlantic Ocean, is the most notable river. The town and the sorrounding mountains of Jinotega were the theatre of the gestures of the liberal rebel Augusto Sandino, who inspired rebels throughout the Hispanic world in the thirties. A museum is dedicated to him in San Rafael del Norte. From Managua, the Interamerican Highway runs north to the department of Jinotega, providing a fast connection with the capital and its international airport (150 km). Jinotega has also easily access to the main ports of the Pacific Coast, especially Corinto and Puerto Sandino.

Economy

The main crops of the Department are coffee, maize, beans, vegetables and bananas. Coffee (40.000 hectares, 38.000 tons per year) is of excellent quality, probably one of the best of Central America, and is mainly cultivated by small producers, looking for new channels of commercialization. Maize and beans (80.000 hectares, 30.000 tons per year) are mainly devoted to local consumption, while vegetables (cabbage, tomatoes, potatoes, carrots, etc.) are destined to national markets. The production of bananas (2.000 hectares, 100.000 bunches per year) is considerable and is destined for local consumption. Due to the cold climate in the highland region, the Department has a great potential for the cultivation of non-traditional crops, especially fruit e.g. strawberries and apples. Manufacturing and agro related activities are scarcely present, the area being mainly a source for raw materials and produce. Most agricultural products are exported out the department for processing, but coffee toasting, vegetable canning and other processing activities are extremely viable investments opportunities, and confirmed by feasibility studies done by LEDA. Local handicrafts include black ceramics, leatherwork and textiles. An artisan activity of gold exploitation takes place in Rio Coco, but the feasibility of industrial explotation at a departmental level has not yet been investigated. The department has a great potencial for eco-tourism, but the development of this activity has been hindred by the lack of capital and infrastructure.

The department has two universities, four training centres in computing and sewing, and a research institute on coffee production. A Chamber of Commerce and several banks are also located in the department.

LEDA activities

The LEDA provides the following services:

• investigation on cattle breeding;
• training;
• transfer of technology;
• credit;
• information
• technical assistance;
• rehabilitation of roads.

The LEDA handles a $900.000 credit portfolio, through the following modalities:

• direct lending ($750.000);
• financial intermediation by local cooperative institutions ($150.000).

Enterprises supported

The LEDA has promoted and/or supported 850 small enterprises, 150 families and 28 cooperatives, belonging to the following sectors:

• agriculture: 800 enterprises and 28 cooperatives (mainly vegetable and coffee production);
• commerce: 50 enterprises (mainly retailers);
• personal credits: 150 families (mainly housing restoration).

This support has resulted in the creation and consolidation of 3000 jobs.

Projects

• feasibility study on flowers production, funded by IDB;
• investigation on the production of non-traditional vegetables, funded by IDB;
• identification of productive potential at departmental level, funded by IDB;
• training on agricultural activities, funded by IDB;
• transfer of technology to small farmers for the cultivation of yucca, camote, bananas and pasture, funded by IDB
• training in agriculture and cattle breeding for small farmers, funded by IDB;
• transfer of technology for handicrafts promotion, funded by IDB;
• socio-environmental conservation of the basin of Rio Coco, funded by IDB;
• promotion of flower cultivation (in negotiation);
• credit, technical assistance and training for beekeeping promotion (in negotiation);
• credit, technical assistance and training for coffee cultivation (in negotiation);
• non-traditional vegetables promotion (in negotiation);
• credit for housing restoration for low-income workers (in negotiation);

Development programmes active in the area

• agreement with CEI (Centre for Export and Investments);
• agreement with Financiera Nicaraguense de Inversiones;
• agreement with PNDR (National Program for Rural Development);
• agreement with Banco Popular;
• national development programs in the area;
• PNDR (National Program for Rural Development): rural development promotion;
• INTA (Nicaraguan Institute for Cattle Breeding Technology): transfer of technology;
• World Food Programme: rural development promotion;
• EU (European Union): integrated health programs;
• IDB (Inter-american Development Bank): productive and social infrastructure;
• National Cooperation Programs by Japan, Italy, Spain, Sweden and Switzerland.

General information

LEDA members

Ministerio de Acción Social

Programa Nacional de Desarrollo Rural

Banco Popular

Ministerio de Gobernación

Instituto Nicaragüense de Tecnología Agropecuaria

Ministerio de Agricultura y Ganadería

Banco Nicaragüense

Ministerio de Recursos Naturales y del Ambiente

Empresa Nicaragüense de Telecomunicaciones

Empresa Nicaragüense de Electricidad

Instituto Nicaragüense de Reforma Agraria

Instituto Nicaragüense de Acueductos y Alcantarillados

Administración de Rentas

Banco Mercantil

Cooperativa "Flor de Pino"

Cámara de Comercio de Jinotega

Asociación de Ganaderos

Asociación de Cafetaleros

Cooperativa "Metalmecanico"

CARITAS Nicaragua

Instituto Nicaragüense de Desarrollo

Alcaldías de los 7 municipios del Departamento

Date of constitution March 1995

Address Frente al Banco Nicaragüense, Jinotega, Nicaragua

Telephone (505) 632-3149

Fax (505) 632-2043

President Leonida Zunega Molina

General Manager Luis Humberto Zeledon Valenciela

ADEL León (Nicaragua)

Location

The LEDA León covers the departments of León and Chinandega, both located in the north-western part of Nicaragua, along the Pacific Coast. León, Nicaragua's second-largest city, is 92 km away from Managua (a 1 hour and a ½ trip), along the Interamerican Highway.

Population and area

The total population of the area covered by the LEDA is 686.000, spread over 9.800 km². León itself has a population of 80.000. León and Chinandega are located in a region characterized by different micro-climates. The lowlands in the northern and southern part are hot and humid, while the volcanic range in the central zone is fresher and cooler. The volcanic range starts at Lago Xolotan and ends at Golfo de Fonseca; it is the only part of the region characterized by a massive presence of woods, due to the fact that woods have been sacrificed to the cultivation of cotton in the lowlands. Both departments have direct access to the Pacific Ocean and are crossed by several important rivers, such as Río Tecomapa and Leona in León, and Río El Gallo in Chinandega. León, former capital of Nicaragua throughout the colonial period and also after independence until 1857, is traditionally the most liberal Nicaraguan city and today remains the intellectual centre of the country. León and Chinandega are crossed by the Interamerican Highway, which provides an easy access to Managua, as well as to its transport and commercial infrastructure. León and Chinandega count on two small airports open to private aviation and two important ports, Puerto Sandino in León and Corinto in Chinandega. Moreover, the only two geothermal plants of Central America are located in León, one at the foot of the Momotombo volcano and the other in Telica. León will certainly be a "generator" of development for the whole country in the future.

Economy

The area north-west of Managua is rich agricultural country, where the cultivation of cotton, formerly of great importance, has fallen into decline, giving space to a process of productive diversification. In Chinandega, bananas and sugar cane are the most important crops and they give an important contribution to Nicaragua economy, being maiinly destined to international markets. Other typical products are maize, beans and rice, which are devoted to local consumption. The local fishing industry is also very active and there is a great potential for expanding the crayfish culture, a business with ex