Fundación Salvadoreña para la Reconstrucción y el Desarrollo (REDES), a Salvadoran nonprofit organization, got its start in 1989 resettling refugee communities in areas devastated by El Salvador’s civil war. In 2001, the Inter-American Foundation (IAF) awarded REDES a $345,987 grant for a project to improve the quality of life of street vendors at various plazas in the municipality of Mejicanos on the outskirts of San Salvador and to address overcrowding and traffic problems around the municipality’s central market.
In 2005, the IAF awarded a second grant to REDES of $459,000 over four years to foster economic development and increase the incomes of adults and young people in regions with heavy out-migration. Salvadorans have been leaving their communities, many of them headed to the United States, to look for jobs and escape gang-related violence. REDES worked in 12 communities in the rural departments of Cabañas, Cuscatlán, La Paz, and San Vicente. It planned to offer technical assistance in business development and to provide loans and small grants to support development projects and microenterprises, including 15 pilot business projects operated by young adults. The proposed project also included plans to encourage links with hometown associations in the United States to channel remittances toward economic development.
The results of the REDES project were collected and analyzed using the Grassroots Development Framework (GDF), which measures results on three levels: the individual or family level; the organizational or grantee level; and the community or societal level. At the lower level of the cone, the project had a positive impact on the lives of 132 community residents, including 62 young people, as measured by indicators such as training, application of skills, income, and communications. At the middle level, REDES reported on resource mobilization, credit, and dissemination. REDES did not report on any of the indicators at the upper or community level of the GDF cone.
REDES selected the 12 communities based on their potential to attract support from families and hometown associations. Nine of the communities opted to receive such donations, while three others decided not to participate out of concern that family members in the United States may get in trouble with immigration authorities.
Hometown associations in the United States funded 11 projects such as road maintenance and the construction of water catchment systems. The initial construction projects motivated young people to form entrepreneur clubs that received financial support from REDES, hometown associations, local governments, and community development associations (known as ADESCOs) to launch microenterprise pilot projects.
Of the 232 local residents who attended REDES workshops on community participation and needs analysis, 132 continued on to work on related activities. Of those, 62 were young community residents.
Twelve young deportees from the United States established microenterprises with seed capital from REDES. Three of them chose to return to the United States after their businesses failed.
REDES facilitated links with hometown associations in California and Virginia. These associations contributed approximately $6,700 for nine business ventures administered by young people. One of these was Radio Bataneca, a community radio station in San Sebastian that received a startup contribution of $600, supplementing REDES’ contribution of $1,650, which was then matched by the municipality. The radio station benefited seven young community residents. Although it went out of business shortly after the project ended, three of its staffers went on to study journalism at the university, and two of them now have jobs as journalists.
At the Individual Level
For the 62 young beneficiaries mentioned earlier, the most important aspect of their participation was the skills acquired through workshops and pilot projects.
For the deportees, the assistance from REDES to start their microenterprises helped them reintegrate into the community, although as mentioned earlier not all of them chose to stay.
At the Organizational Level
The project provided REDES an opportunity to strengthen its capacity in the areas of microfinance and grant making. The foundation expanded its reach by working with hometown associations in the United States and with populations affected by violence and migration. REDES continues to work to improve the quality of life of vulnerable populations. Its most recent projects have been in the areas of food security and solidarity markets.
At the Community Level
A Liaison Committee established in each of the participating communities works with the community development associations to coordinate local development projects with municipal governments and hometown associations.
In the community of La Mora, REDES helped the young entrepreneur club develop a relationship with a migrant association in Los Angeles, California. This led to the sale of the club’s bamboo handicrafts abroad and motivated the young entrepreneurs to extend their commerce to the municipality of Suchitoto and adjacent communities, as well as sell its handicrafts in shopping malls in San Salvador.
Young people interviewed for this study concur that vocational training in handicraft production, baking, serigraphy, and animal husbandry made them more employable. Although 53 percent changed occupations at some point from the jobs for which they had been trained, they feel that the workshops gave them skills that they were able to transfer to their new jobs.
The young entrepreneur clubs provided young people with employment opportunities and helped them develop business skills. When Radio Bataneca went off the air, three young staff members used their experience in communications to start Hamaca Video Productions.
REDES enabled hometown associations in the United States to strengthen their links with their communities of origin, although the funds raised from those associations to support economic initiatives did not reach expected levels.
What Did Not Work?
It took too long for the committees formed by REDES to select business ventures operated by young entrepreneurs and deportees, reducing the time left to adequately train participants.
The funding available for small grants was not enough to meet the demand for capital to buy seeds, leading some participants involved in farming to withdraw from the project.
The number of micro loans granted was less than half what had been planned. Although REDES awarded small loans to nine microenterprises, the initiative was constrained by widespread gang-driven extortion and violence that hinders business development in the project communities.
The level of financial support from hometown associations for business and community development projects was disappointing. Contributions ranged from $60 to $200. One outlier pilot project received $4,600.
Young participants report that the REDES project met its objectives by helping them improve their employment prospects and self-esteem. But plans to involve migrant associations in the United States in financing microenterprises in their communities of origin did not yield encouraging results. Remittances are generally spent on food, consumer goods, and home improvements. The few businesses that received support from REDES and from the hometown associations eventually failed. Six years after the end of the REDES project, participating hometown associations have not financed any additional microenterprises.