Examining the Impacts of Microfinance Programs in Guatemala: A Case Study of Loan Borrowers in San Antonio Aguas Calientes

The use of microfinance and microcredit as a poverty alleviation and economic development strategy has expanded dramatically since it was first popularized in the 1970s. This study focuses on microfinance programs being implemented in a Guatemalan village and the impacts these programs impart on microloan borrowers. A case study was conducted in the village of San Antonio Aguas Calientes, located in Guatemala's western highlands. An in-depth mixed method case study approach, combining quantitative analysis with personal stories from borrowers regarding their borrowing experiences was used to gain a holistic understanding of the state of the current microfinance system in the study area. Survey data was collected from borrowers working with microfinance programs in the area. Data was collected on (1) borrower demographics, (2) microfinance customer's perceived financial and quality of life impact of the loans, and (3) customer satisfaction indicators. The survey data was analyzed and examined in an attempt to determine if loan borrowers believed these programs were beneficial and provided a valuable service. Results from this analysis reveal several concerns facing microfinance institutions and borrowers stemming from issues of high interest rates, loans used for consumption spending, and multiple borrowing. Findings from this study can be used to guide further policy decisions and regulations regarding the microfinance industry.