Years of Sustainable Growth and Development

>> Authored by Jake Mendales and Ali McElroy (Global Brigades, Panama)

Global Brigades is an international non-profit that aims to empower local communities to meet their health and economic goals through collaboration amongst university volunteers, local teams, and community members. A brigade is a 7-10 day skill-based volunteer trip where students work with one of ten programs and travel to one of four partner countries: Honduras, Panama, Nicaragua, and Ghana. The ten programs tackle community development from multiple angles, through the holistic model: an approach of simultaneously implementing health, economic, and education programs to meet a community’s development goals.

At the core of the holistic model is the Microfinance Program, which, in Panama, has evolved throughout Global Brigades’ history. Starting as the Business Program in 2007, brigades were brought to rural communities scattered across the country, consulting with micro-enterprises on a variety of basic topics such as bookkeeping, growth strategies, marketing, and even sometimes helping with a business’s infrastructure. At the end of the trip, each volunteer donated $100 to the business they worked with. Although it was never actively promoted, a culture of paternalism was generated, undercutting the mission and vision of our sustainable development organization. Proper follow-up was nearly impossible with the lack of staff and the far distances of the communities. While we felt we were imparting an impact in these communities, it certainly wasn’t sustainable.

After learning from the first couple of years of operations and benchmarking with similar organizations in the country, Global Brigades Panama reevaluated and adjusted its strategy by instead focusing our efforts on a particular region (Panama Este and Darien), rather than stretching ourselves thin across the entire country. Panama has one of the strongest economies in Latin America. With a robust international banking sector and many multinational corporations staking out headquarters in Panama City, the central isthmus posts a regionally high GDP per capita of about $16,000 per year–but this wealth is concentrated almost exclusively in the city. Though the country has a national poverty rate of about 26%, once you leave the city it doubles to over 50%. In indigenous communities the poverty rate is most stark, with rates between 80-90% living below the poverty line–many subsisting on just $3 a day. Our new methodology revolves around the establishment and operation of community banks to bring financial resources and financial education to excluded populations in order to build a foundation for a community’s economic development.

What is meant by excluded populations? These individuals are excluded from traditional banking and financial institutions, whether it be because they are not allowed to enter the bank in their traditional clothing or because they don’t have a fixed income; the small subsistence farmer and kiosk owner in rural communities, who save their money underneath their mattress, but still provide for their family of eight; those that have limited access to markets to sell their product and low levels of education; the entrepreneur that has not yet realized their full potential due to lack of access to financial resources.

How does a community bank address these population’s needs? Through cultivating a culture of saving, the community bank provides financial education, a safe and easily accessible place to save money, and a way to borrow responsibly. A community bank is formed by 10 to 50 members from the same community and offers savings and lending services.  The formation begins by teaching the model, electing the board of directors, and creating rules for the bank.  After the initial formation phase, they continue learning and saving together, through weekly meetings in their casa communal where they deposit their money and participate in capacity building with the GB Microfinance technician.  They also participate in Microfinance Brigades, through which volunteers present financial literacy workshops.

Through the accumulation of the members’ savings and the capital that GB matches, eventually the community bank reaches a point where there is sufficient capital to begin lending.  Loans are only granted to members of the community bank, after they are taught basic topics such as how to save and calculate interest. The guarantee behind the loans is simple: social cohesion and pressure generate the accountability needed to support financial services. It is the community that is responsible for delivering the loan and ensuring that it gets paid back. An individual is part of a group within the community bank, and when they request a loan, the rest of the group will ensure that the funds are recovered. This requires strict monitoring and training, but it develops into a self-perpetuating and self-regulating process, as we have seen with the community that we have established.

At the end of the day, the bank is fully owned and operated by the community—100% of the profits remain within the community bank and can be re-invested into community projects and initiatives.  For this reason, it is at the core of the holistic model.  Once the community bank is operating, community members can utilize loans to build a latrine, buy more seeds to yield more produce, for a medical emergency, or to save for their children’s education.  As one or more of the other Global Brigades programs are implemented in the community, the community bank serves as the mechanism for sustainability—sustaining the projects even after Global Brigades is gone.

The reception to the community bank model has been outstanding.  Now, after more than a full year of implementation, there are nearby communities that have asked Global Brigades for a community bank as they have seen it work for their neighbors. Women have been taking the lead in many of the communities, devoting much of their time to learning and sharing their newfound knowledge with friends and family.  Women make up a majority of the leadership structure within the community banks, and over 70% of all community bank members are women. From December 2013-December 2014, 10 community banks have been established, with 177 associates; of them 168 savings accounts have been opened for a total of $16,654, and 80 loans have been given for a total of $12,000.  In 2015 already, 5 more community banks have been established.

Global Brigades Panama is incredibly excited to see where our Microfinance Program takes us. It has been a breakout year, and in 2015, we look to continue building on our successes to inspire and affect greater change, inclusion, and access in the future. Alongside the Month of Microfinance, we commend all the collaborative efforts from around the world working towards bringing accessible, reliable, and sustainable microfinance services to populations in need.

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Note about the authors:

Jake Mendales and Ali McElroy work in Panama as Sustainable Development and Community Development Program Associates, respectively. They have both been working for Global Brigades Panama for approximately two years. It has been an incredible experience and opportunity to work alongside the motivated and talented team that makes up Global Brigades Panama! Jake works alongside the Business, Microfinance, Environmental, and Human Rights programs within GB Panama, and Ali works with research and evaluation as well as monitoring community data and information. For any questions, please write to or, or visit

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