Saturday, January 28, 2012

Sweet Economy Changing: No Longer “Informal”

When commercial transactions occur without the regulation of institutions (often governmental) they are said to be part of the informal or secondary economy. For many years Dulcería Abba (Abba Candy Production),maker of typical Honduran candy, was part of the informal economy of Honduras. Helped in part by a business loan from Stewardship of Christian Ministries (part of the Honduras Pella Affiliate), the candy company is registered with the Honduran Government and approved by the Health Department.The change from the informal to formal economy has not been an overnight transformation. Reina Ortiz, the company owner, had to complete many steps to register her business, meet health inspector regulations, design packaging labels and negotiate contracts with new clients such as supermarket chains La Colonia and Wal-Mart Centroamérica. For a North American, these steps seem very natural and necessary but shifting economies is a difficult and often lonely process for Hondurans.

Ms. Ortiz, like most Hondurans, does not have the opportunities that a North American entrepreneur enjoys. There are five microfinance lending institutions and only three mentoring and training options in Nueva Suyapa, Ms. Ortiz’s marginalized poor community on the edge of the Honduran capital Tegucigalpa. Given the community’s location and historic social challenges associate with its poverty levels, night training sessions are not possible and few would want to visit her business to help with business strategies. In contrast there are thirty five institutions listed in the Small Business Resource Guide published by the City of Grand Rapids, Michigan. These organizations offer free or low cost consulting, legal advice, financing and market research. The options available in a medium size city like Grand Rapids with 197,800 inhabitants vastly overshadow those available to the 890,000 residents of Tegucigalpa.

Partners Worldwide is trying to improve the options for Honduran entrepreneurs. The Honduran Affiliate mentioned above, Stewardship of Christian Ministries (, has facilitated small business workshops within the community of Nueva Suyapa in cooperation with Honduran business owners and the governmental organization National Institution for Professional Formation (INFOP). The Honduran Affiliate is also in the process of planning the launch of a community business school to further expand the business services available to entrepreneurs.

 Ms. Ortiz’s goals are to increase production, hire employees to monitor the product display in the supermarkets and sell to immigrants in North America through international distributors of “nostalgic food.” Although she is still anticipating the launch of her newly packaged product in the supermarkets, she is confident that her goals can be reached. A key to the success of Dulercía Abba will be access to consulting, financing and market data. The Honduras Pella Affiliate and Stewardship of Christian Ministries are encouraged by the growth of Reina Ortiz’s business and will continue to help more entrepreneurs change economies.

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