By Gasper F. Lo Biondo, S.J. (Woodstock Theological Center) with Rafael A. Pleitez (Universidad Centroamericana, E.S.) Copyright © 1997 Woodstock Theological Center All rights reserved This article was presented at a symposium hosted by the North-South Center of the University of Miami on February 4, 1995. It was published in Spanish in Realidad, (Revista de Ciencias Sociales y Humanidades), No. 44, Marzo-April, 1995, Universidad Centroamericana José Simeón Cañas, El Salvador, Central America. The Study was made possible by a grant to the Woodstock Theological Center from the North-South Center, University of Miami, Coral Gables, Florida. The Woodstock Theological Center, located at Georgetown University, Washington, D.C., is a non-profit research institute established by the Jesuits to address topics of social and political importance from a theological and ethical perspective. Introduction One of the most important advances made by microenterprise programs in the past several years has been their ability to improve the delivery of finance capital to people for whom access has been virtually impossible. There have been significant innovations which use nontraditional approaches that reduce risk and administrative costs. (Otero and Rhyne 1994, 3). The support group (also called solidarity group) and the village banking methodologies carry these innovations. However, while mechanisms have been developed that make access to credit a real possibility, some village banking programs geared to poverty alleviation have found that "additional assistance is necessary in order to help women entrepreneurs develop their businesses beyond subsistence levels" (Holt in Otero and Rhyne 1994, 161). Hence, the model has been broadened to include a technical assistance or education component. A "minimalist" approach to training is less effective in programs whose beneficiaries have comparatively lower levels of education (McKean in Rakowski 1994, 205). In September 1994, the Catholic Relief Services/El Salvador (CRS/ES) urban microenterprise program began the process of incorporating a more dynamic training component into its field operations (CRS/ES, Marzo 1994). The term used for this new component is "popular economic education" (PEE) (Thys and Painter 1994, 17). The idea behind PEE is that as current training programs become more effective, they will be more sustainable. This study is a response to the need for "more careful analysis of the potential of different types of nonfinancial forms of assistance" (Boomgard, AID Microenterprise Stocktaking 1989, 83) in the field of microenterprise development research. The PEE programs needs to be designed so that training and technical assistance is better geared to the entrepreneurs, a high percentage of whom are women in poverty. "Training and technical assistance programs should be supported, but only when they respond to the identified business needs of microentrepreneurs" (Boomgard 1989, 83-84). In particular, the emphasis of the village banking program on microentrepreneurial decision making, analysis of situations, resolution of problems, and self-esteem, contributes a new and potentially important factor to traditional policies which attempt to reach the poor. Funded by the University of Miami North-South Center, this study addresses the question by describing the population being served by the CRS/ES microenterprise program. It yields two major sets of results. First, it has provided a set of guidelines which can be taken into consideration in designing and implementing more effective training delivery for the nascent CRS/ES village bank popular economic education program. Second, it provides data that will serve as a basis for comparative analysis once the PEE program has been functioning for a year or more. Conceptual Issues In this study the term "village banking" refers to the particular form of communal social cooperation among borrower/savers that characterizes the methodology by which CRS/ES structures the delivery of financial services. The term "value" refers to that which is judged to be worthwhile for oneself and for the common good. It involves a human judgement that is autonomous, responsible, and free (Lonergan, 1993, 36-38). The term "informal education" refers to the CRS/ES training approach called PEE. It stresses those elements that are suited to people who are illiterate, pre-literate, or innumerate (those persons who are unable to count mentally). In this study then, PEE is a function of changing values, not of static transcultural business skills that are exclusively technical. People with little or no education resolve business problems when they take circumstantial factors into consideration appropriately. Thus, in the process by which people learn to become better microentrepreneurs, data describing their experience can serve as a starting point for PEE program designers. The informal approach to education in poverty settings stresses group discussion. It assumes that the more the curriculum is adjusted to actual circumstances of strategic microenterprise decisions, the more adequately it will meet the training needs of those microentrepreneurs — especially those who are illiterate and innumerate. At root, this study deals with the learning process by which microenterprise development becomes capable of being sustainable from an endogenous point of view. This is true if one conceptualizes development not primarily as the accumulation of financial capital, but as an increase in practical knowledge (Razeto 1990, 150). Therefore, crucial to the solution of this research problem is the way in which the training needs of microentrepreneurs are conceptualized. If the skills needed are seen as merely technical operations, programs will emphasize content. However, if problem-solving skills are sought, programs will tend to put more weight on decision-making skills. Consequently, these programs will emphasize process. This is the approach taken in this study. The study establishes a conceptual relationship between training needs (informal education) in the CRS/ES village banking program, and changing values. Therefore, the question becomes, what kind of knowledge-based skills best serve microentrepreneurs? Knowledge is understood here as experience-based and also as involving information that changes these microentrepreneurs, so they can make decisions that result in wealth creation, empowerment, and greater freedom (Drucker 1989, 251). The change comes from replacing the kind of habit that "consists of decisions in which what we decide has such an overwhelming value for us that we usually are not even conscious of the alternatives" (Boulding 1985, 77). To the extent that microentrepreneurs build their knowledge on the consideration of alternative courses of action, they are changed because their values are changed. Thus, the variable in the title of the study, "changing values." Three basic components or core values can serve as the conceptual basis and for understanding microenterprise development (Goulet 1971, 87-94) in the context of poverty alleviation through village banking. First, the human need for sustenance gives rise to the use of economic logic which can contribute to sustainability. In this study, economic logic is related to the concept of opportunity cost. Second, human empowerment through participation in microenterprise programs can contribute to self-esteem and enhanced personhood. The result would be an improvement in risk management capabilities. Finally, the human need for autonomy gives rise to responsibility which in this study relates to the concept of strategic decision making. This contributes to creative innovations — the heart of autonomous microenterprise development. Background The context of this study is that of microenterprise development financing in El Salvador's newly open economy. First, it should be noted that in the formal economy some attention has been given to the matter by banks. "It is estimated that approximately 6 percent of all commercial bank loans go to small and micro-enterprises. Small enterprise is defined as having assets of $11,500 to $88,000 and microenterprise as having assets under $11,500" (Interdisciplinare Project Consult GmH 1993, 52). The tendency in recent years for privatized banks has involved a high increase of volume of credit for these kinds of enterprises. The explanation for this is not so much the greater number of credit contracts but that the average amount of loans has doubled. This implies a further degree of exclusion of very small microentrepreneurs like those in the CRS program by commercial banks in the formal sector of the economy. In other words, the increase in volume of credit has not been able to meet the demand for working capital in the informal sector for most microenterprise activity. For this reason, new financial institutions are being created whose target population will be small and microenterprise. The Inter-American Development Bank is one of the main suppliers of capital for these new financial institutions. Microenterprise has come to constitute a separate area of social development policy (1994-1999) in El Salvador (FUSADES October 1993). According to the Director of Economic and Social Policy in the Ministry of Planning (MIPLAN), the current Salvadoran government has not yet formulated a microenterprise policy, in view of the fact that the traditional approach of expanding access to microenterprise credit and technical assistance has not resulted in sustainable microenterprise development. Between 1988 and 1990, urban poverty tended to increase. For example, the proportion of households below the poverty line in the metropolitan area of San Salvador went from 46.1 percent to 49.5 percent (Briones 1992, 50). In this context, microenterprise development initiatives such as the CRS PEE program become particularly relevant in terms of poverty alleviation efforts. At the time of this study (1994) the CRS/ES Village Banking Program is subdivided into three complementary groupings. Each socially supportive grouping of microentrepreneurs employs the same basic CRS/ES village banking (poverty lending) methodology involving credit "cycles" which at the same time offer access to stepped (progressively higher) levels in each microentrepreneur's borrowing and saving process. The three groupings are called 1) "communal banks," 2) mutual support "subsistence" groups, and 3) mutual support "simple accumulation" groups. "Communal banks," have an average of 25 members, with initial loans of $50 (400 Salvadoran colones) which are progressively increased over 2 years, over four-month loan cycles at 3 percent monthly interest. A requirement of 20 percent monthly savings rate based on the amount of the loan makes it possible for the group to create an "external account" which the members of the group administer themselves. Mutual support "subsistence groups" have approximately 6 members, with initial loans of $125 (1,000 Salvadoran colones) which are progressively increased over two and one half years, over 6-month loan cycles, at 3 percent monthly interest. There is also a required 20 percent savings rate based on the amount of the loan during a given 6-month cycle, and with the same arrangements as the "communal banks." In order to qualify, these microentrepreneurs must have assets of $115 to $1,140. Mutual support "simple accumulation groups" are made up of approximately 5 members, with initial loans of $780 that can be progressively increased through 6-month loan cycles, at 3 percent interest, with 20 percent savings on the amount of the loan during each cycle. Microentrepreneurs must have assets of $1,140 to $2,845 in order to participate in this type of group. Research Method Semi-structured interviews involving one hundred and twelve microentrepreneurs and four extension workers in eight different parts of the country provided qualitative data. These relate not only to the concept of economic rationality but also to the concepts of empowerment and autonomy. Responses to these questions provide the basis for a fuller understanding of the results of the survey. A survey questionnaire (fifty-three questions) was constructed with strategic enterprise decisions in mind. (See Appendix A) The survey covered thirty-three out of a total of three hundred and thirty-seven village banks involving one hundred and eighty-five microentrepreneurs with a survey sampling error of +/-0.065. An "opportunity cost index" was created to determine the practical grasp of opportunity cost and hence the level of economic reasoning concretely employed by microentrepreneurs. Three indices were developed and tested for association with type of group, cycle of operation. The first was the opportunity cost index, created by combining the results of questions fourteen, fifteen, and seventeen of the questionnaire. The index was given a range of one to six, with the highest value of six given to those respondents whose answer to all three questions reflected a practical grasp of the concept of opportunity cost. The average value of 2.94 indicates that on the average microentrepreneurs have a practical grasp of the concept of opportunity cost in their decision making. The second index was that of income growth and the third was that of employment creation. It should be noted that the concept of "opportunity cost" is perhaps the most fundamental concept in economics. A practical grasp of the opportunity cost of a strategic enterprise decision (about how much to borrow, save, invest, buy, sell, etc.) involves an understanding of the value of the foregone alternative action. It is used in this study to detect whether any given village bank member uses economic rationality instead of some other criteria for strategic decisions. It is an essential element in business decisions.. Findings The lower credit level grouping called "communal banks" by CRS/ES here comprised 42 percent of those surveyed, while the next level, those in subsistence support groups made up 32 percent and accumulation support groups 27 percent of the sample population. (Figure One, Type of Group) Figure 1: Informants according to group types Table 1: Distribution of the interviewed population according to demographic variables and group type (In percentages) VARIABLES   GROUP TYPE   TOTAL   Communal Banks Subsistence Groups Accumulation Groups   SEX         Female 94.7 94.8 85.1 92.3 Male 5.3 5.2 14.9 7.7 AGE GROUP         18-25 9.2 12.1 8.2 9.8 26-40 43.4 34.5 38.8 39.3 41-55 35.5 37.9 36.7 36.6 56 or older 11.8 15.5 16.3 14.2 EDUCATION LEVEL         None 34.2 22.4 18.4 26.2 First cycle 28.9 29.3 22.4 27.3 Second cycle 22.4 27.6 28.6 25.7 Third cycle 10.5 13.8 22.4 14.8 High School 3.9 5.2 6.1 4.9 Higher Education 0.0 1.7 2.0 1.1 VOCATIONAL EDUCATION         No 75.0 74.1 67.3 72.7 Yes 25.0 25.9 32.7 27.3 TYPE OF VOCATIONAL EDUCATION         Garment Making 78.9 56.3 57.9 64.8 Craft Making 10.5 18.8 5.3 11.1 Cooking 5.3 0.0 0.0 1.9 Other 5.3 12.5 21.1 13.0 No Response 0.0 12.5 15.8 9.3 MARITAL STATUS         Single 14.5 22.4 16.3 17.5 Married 36.8 29.3 36.7 34.4 Cohabitating 31.6 31.0 34.7 32.2 Widowed 10.5 8.6 6.1 8.7 Separated 6.6 6.9 6.1 6.6 No Response 0.0 1.7 0.0 0.5 ORGANIZATIONAL MEMBERSHIP         None 56.6 60.3 61.2 59.0 Social 6.6 1.7 6.1 4.9 Sports 0.0 0.0 4.1 1.1 Religious 35.5 34.5 26.5 32.8 Cultural 0.0 1.7 2.0 1.1 No Response 1.3 1.7 0.0 1.1 Demographics (See Table One). Of those surveyed, 92.3 percent were women. The mean age is forty-one and only 10 percent were under the age of 26. This means that the program is dealing with a relatively older population in the Salvadoran context. The fact that 42 percent are principle providers for their households affects the variables which are operative in their strategic microenterprise decisions. This holds across the board for all three levels of village banks (Table Two). In addition 67 percent were living with a spouse or a companion and had an average of three dependents (Figure Two). Table 2: Person who maintains the homes of the informants PERSON   GROUP TYPE   TOTAL   Communal Bank Subsistence Groups Accumulation Groups   Informant 42.1 41.4 40.8 41.5 Spouse 23.7 15.5 24.5 21.3 Both (informant and spouse) 25.0 20.7 24.5 23.5 Other family member 9.2 20.7 10.2 13.1 Who is the principal breadwinner in the household? The illiteracy rate is 26.2 percent. Another 27.3 percent completed only third grade of elementary education. If we add the percentage of those who claim to be illiterate and those who state that they finished third grade, we arrive at an estimate of a 53.5 percent rate of functional illiteracy in the population surveyed. Finally, 59 percent do not belong to any other civic organization, though 33 percent claim to belong to some religious group. Normally people pick up information and get socialized by belonging to groups outside the family. This does not seem to be the case for the majority of village bankers. Consequently, it puts more weight on the social potential of the training program. Figure 2: How many people depend on you economically? Business Experience The medium number of years experience in business is 2.9. This indicates little experience. Hence, the pressing need for introductory training. In general, the interviews reveal that the predominant logic reflected in the responses of members of communal banks is one of survival (basic goods) while among members of support groups there is a clearer indication of interest in accumulation (financial). This is an indicator that can help us to identify those microentrepreneurs for whose business there is a greater probability of continuity and growth. With regard to the reinvestment of earnings back into the business, 69.4 percent do so (Table Three). This is seen as very important by 40.4 percent and important by 59 percent (Table Four). This can be interpreted as a sign that economic logic is at work. It also indicates the possibility that credit would be transformed into an instrument that can significantly serve to expand the scope of business activities. Table 3: Use of profits from business (In percentages) PROFIT USE   GROUP TYPE   TOTAL   Communal Banks Subsistence Groups Accumulation Groups   Reinvest in business 59.2 75.9 77.6 69.4 Consume 21.1 19.0 10.2 17.5 Save 13.2 1.7 6.1 7.7 Reinvest and save 3.9 0.0 2.0 2.2 Consume and reinvest 2.6 1.7 4.1 2.7 Consume and save 0.0 1.7 0.0 0.5 How have you used your profits from your business? Table 4: Priority attached to reinvesting business profits (In percentages)   VALUATION   GROUP TYPE   TOTAL   Communal Bank Subsistence Group Accumulation Group   Very Important 25.0 44.8 59.2 40.4 Important 73.7 55.2 40.8 59.0 Not Important 1.3 0.0 0.0 0.0 Reinvesting part of your profits to raise business activities is considered. Training Under the difficult conditions of poverty in which they live, 39.5 percent say they need training in order to improve their administrative skills, 13.2 percent their "human relations" skills, 7.9 percent their literacy skills. In general only 21.1 percent claim that they do not need training (Figure Three). When this is broken down by type of group, we find that of those who want to learn how to administer and manage their business, 52.9 percent of those are in the lower credit level groups and 41.7 percent are in the second level. Only 11.1 percent of those belonging to the third level groups register this desire. Interestingly, 22 percent of the those in the third level look for training in what was called "human relations," taken to mean social graces or salesmanship (Table Five).   Figure 3: What kind of training do you need in order to improve your business and your income? Table 5: Training needed in order to improve business, according to group (In percentages) TYPE OF TRAINING GROUP TYPE   Communal Bank Subsistence Group Accumulation Group Management/Administration 52.9 41.7 11.1 Human Relations 5.9 16.7 22.2 Learn to read 17.6 0.0 0.0 Other training 5.9 0.0 0.0 No response 11.8 25.0 11.1 In nothing, none 5.9 16.7 55.6 At the same time, 82.9 percent of communal bankers completely agree that training in management and administration would help increase income; 17.2 percent of subsistence group bankers say that they are only more or less in agreement with this; and 10.2 percent of accumulation group bankers are in complete disagreement with the proposition (Table Six). This may be due to the fact that the higher the credit level, the more experienced the individual is in management. If this is so, PEE needs to take into consideration the varying degree of interest according to type of group. Further motivational studies should be conducted by social psychologists to test whether and how management training needs differ according to different credit levels and/or type of group. Table 6: Opinion about the adequacy of administrative training to improve income (In percentages) OPINION   GROUP TYPE   TOTAL   Communal bank Subsistence Group Accumulation group   Total agreement 82.9 79.3 83.7 82.0 More or less in agreement 14.5 17.2 6.1 13.1 Total disagreement 2.6 1.7 10.2 4.4 No response 0.0 1.7 0.0 0.5 Do you believe that management and administrative training is sufficient to improve your income? Business Activities The fact that 80.3 percent of the businesses surveyed are commercial in nature indicates that training needs to be geared to merchants for the most part (Table Seven and Figure Four). Figure 4: What kind of business do you have currently? Table 7: Current microenterprise business type, according to group (In percentages) BUSINESS TYPE   GROUP TYPE     Communal bank Subsistence Group Accumulation group Buy/Sell Daily 55.3 50.0 30.6 Buy/Sell inventory/Resell daily 27.6 27.6 49.0 Manufacture of products 17.1 13.8 20.4 Other types 0.0 6.9 0.0 No response 0.0 1.7 0.0 Figure 5: sell your products?Where do you Data on the location of business shows that in general 39.9 percent work at home (Figure Five). A larger percentage of people in the simple accumulation groups (44.9 percent) work at home than do those in the communal bank groups (38.2 percent). For the latter, household and business finances have a greater difficulty in getting separated. But for the former, it may be that the separation has been made and it works. Street vendors make up 27.9 percent of the sample, the majority of whom (42.1 percent) belong to the communal bank groups (Table Eight). While only 21.3 percent of the whole sample have a vending stand at the local market, 30.6 percent of these belong to accumulation support groups. Fewer (24.1 percent) belong to subsistence support groups and a smaller percentage (13.2 percent) belong to communal banks. Table 8: Place where products are sold, according to group type (In percentages) PLACE   GROUP TYPE     Communal bank Subsistence Group Accumulation group At home 38.2 37.9 44.9 Street Vendor 42.1 22.4 12.2 At the Market 13.2 24.1 30.6 In a local independent 6.6 12.1 12.2 No response 0.0 3.4 0.0 The data on those who purchase goods from microentrepreneurs are quite rich with possibilities for interpretations which can help the design of PEE. (Table Nine) Only 8.8 percent of those surveyed sell to factories; 5.5 percent of whom go out of the local community to sell, and 3.3 percent of whom sell to factory salespeople who come into the local community. In general, 40.5 percent sell their materials to wholesalers and 41.5 percent to retailers. Table 9: Client type and location where they buy microentrepreneurs’ products (In percentages) CLIENT LOCATION & TYPE   GROUP TYPE   TOTAL   Communal bank Subsistence Group Accumulation group   FACTORIES         Do not buy 76.3 93.1 85.7 84.2 Outside of community 7.9 1.7 6.1 5.5 In the community 3.9 0.0 6.1 3.3 Outside and within the community 1.3 0.0 0.0 0.5 No response 10.5 5.2 2.0 6.6 WHOLESALE CLIENTS         Do not buy 46.1 70.7 55.1 56.3 Outside of community 31.6 10.3 24.5 23.0 In the community 13.2 5.2 14.3 10.9 Outside and within the community 5.3 8.6 6.1 6.6 No response 3.9 5.2 0.0 3.3 RETAIL CLIENTS         Do not buy 63.2 43.1 49.0 53.0 Outside of community 11.8 22.4 20.4 17.5 In the community 11.8 25.9 26.5 20.2 Outside and within the community 3.9 3.4 4.1 3.8 No response 9.2 5.2 0.0 5.5 PRIVATE CLIENTS         Do not buy 40.8 41.4 40.8 41.0 Outside of community 21.1 13.8 16.3 17.5 In the community 21.1 39.7 38.8 31.7 Outside and within the community 9.2 3.4 2.0 5.5 No response 7.9 1.7 2.0 4.4 OTHER CLIENTS         Do not buy 89.5 87.9 95.9 90.7 Outside of community 0.0 1.7 0.0 0.5 In the community 1.3 1.7 0.0 1.1 No response 9.2 8.6 4.1 7.7 What types of clients and where do they purchase the microentrepreneurs’ products? Indicators of Economic Rationality A statistically significant association between type of group and the opportunity cost index was found. This became an indicator of the validity of the differentiation of groups as a methodological basis for delivering financial and non-financial services in the CRS/ES program. In other words, assuming that sustainable development grows out of the development of human capital through increased practical grasp of basic economic logic, then the progressive and cumulative use of that logic by each type of village bank member contributes to a more effective delivery methodology. The study ran into one anomaly regarding the association of the opportunity cost index and type of group. Members of village banks rate higher in this index than members of accumulation support groups who should be rating higher. The basis for this expectation of finding is that the larger the enterprise the greater the practical grasp of opportunity cost. The limitation of the opportunity cost index as a tool for measuring the relative degree of the grasp of economic logic may be due to the way in which the index was created, and to its being constituted by only three survey questions (See Appendix A, questions 14, 15, and 17). Nevertheless, the concept of opportunity cost is an important tool for analyzing and interpreting data within the parameters of a business approach to microenterprise development. Data gathered from a significant number of survey and interview questions indicate that the microentrepreneurs in this program make their economic decisions on the average with a practical sense of the concept of opportunity cost. It is worth noting that other data were also gathered in order to analyze the economic rationality (calculations involving opportunity cost) of microentrepreneurs including: levels of reinvestment and other factors that microentrepreneurs take into consideration in deciding which product to produce or sell, or what they want to get out of their business. Regarding the stepped credit cycles that each of the three types of groups follow: data reveals that this particular system of cycles is working in relation to growth in terms of 1) increased income; 2) reinvestment; and 3) employment creation. Because they play a part in differentiating the way in which changing values are based on practical knowledge, cycles emerge as critical element in the design of PEE. Most village banks are in the early cycles. The association between cycle and an index of growth was tested and found to be significant. (Table Ten) This is an indicator that the program tends to be successful in the way it moves borrowers along from one credit level to another. The association between index of growth of income combined with cycle and type of group was also found to be statistically significant. (Table Ten) This indicates that there is here a solid basis for differentiating factors specific to cycle and type of group in relation to decisions regarding earnings when designing PEE. The association between cycle and decision to use profits for reinvestment also statistically significant. (Table Ten) The more advanced the cycle, the greater the reinvestment of profits. Hence, the importance of focusing on the specific level of practical knowledge related to each of the developmental stages of this process. Decision-making topics corresponding to each level would then be incorporated into the design of PEE. So too the association between type of group and use of profits for reinvestment is statistically significant. "Simple Accumulation Support Groups" tend to reinvest a greater part of their profit. The association between cycle and employment creation is also statistically significant. The more advanced the cycle, the greater the employment creation.(Table Ten) Table 10 Number Independent Variable Dependent Variable Type of Statistical Test Value Significance Acceptance of null hypothesis 1 Cycle Profit Use Chi-squence 50.25 0.046 No 2 Group Type Cost of Opportunity Index Variance 3.43 0.034 No 3 Cycle Income Growth Variance 2.64 0.019 No 4 Group/Cycle Income Growth Variance 2.29 0.025 No 5 Employment Creation Employment Creation Variance 2.34 0.034 No The acceptance of the null hypothesis implies a lack of an association or statistical relationship among combined variables. In general, when the progressive nature of the cycles is matched up with the cumulative nature of practical knowledge, a PEE matrix can be established by which training themes which are critical to the type of group and level of cycle. Survey results indicate several potentially significant facts about the population being studied. Despite the rate of illiteracy and innumeracy, there is an indication that microentrepreneurs employ economic reasoning - the logic of opportunity cost - in some areas of strategic decision making such as what type of product one decides to sell. Some of the correlations indicating this involve: (1) type of group and type of enterprise expectation; among members of village bank groups a subsistence logic predominates, while among members of simple accumulation support groups a logic of growth and accumulation predominates; (2) type of group and reinvestment decisions; (3) type of group and use of profit. Despite the claim made by half of the number of those surveyed that they do not have time available for training, survey and interview data indicate a significant degree of potential demand for more training and technical assistance (and, therefore, of some sort of educational services). Moreover, the services most sought after are called for in the context of business administration and of problem solving. Qualitative analysis of data gathered from interviews indicates the importance of extension workers in the learning process related to microenterprise decision making both in relation to group activity and in relation to individual activity. Recommendations and Summary Findings carry significant implications for the design of informal educational tools within the complexity of each grass roots situation. Recommendation: locate instances of strategic enterprise decision making which might serve as key "elements" in the design of a more effective training process. Some of these are as follows: start-up decisions; credit decisions (how much to borrow); reinvestment decisions; risk management decisions; and marketing decisions. Recommendation: take into consideration average age, gender, level of education, and level of socialization. Locate ways in which the curriculum is geared to the fact that 92.3 percent of those surveyed were women and that their mean age is forty-one and that 42 percent are principle providers for their households. Recommendation: build on the level of economic rationality that already shows itself to be operative in decision making. The design of PEE might incorporate exercises in which the groups reflect on some of the successful and failed decisions that they have made. Tools for this reflection would include explicit reference to basic elements of economic rationality as embodied in the practical grasp of opportunity cost, etc. Recommendation: given the progressive nature of the credit cycles and their direct relation with the cumulative nature of practical knowledge, a PEE matrix can be established by which training themes that are critical to earlier cycles should be presented during those cycles. Recommendation: in order that PEE be adjusted to actual circumstances of strategic microenterprise decisions, it is recommended that modules be prepared on different topics and at different developmental levels. These modules can then be used in the order that the local circumstances demand. Recommendation: the more flexible the use of modules, the more adequately PEE will meet the training needs of those microentrepreneurs, especially those who are illiterate and innumerate. Recommendation: extension workers should participate somehow in the design process of PEE. They are very significant links in the chain of communication between those designing PEE and village bankers. These field workers are the ones who actually carry out the task of education. If they can detect specific moments of strategic decision making by microentrepreneurs they can more effectively enhance the learning process so that it can build on the practical grasp of opportunity cost which microentrepreneurs already possess. Recommendation: operationalization of the opportunity cost concept as a research tool would enhance the process gathering of grass roots data from extension workers in microenterprise programs. This would help meet the current need for better ways of conceptualizing the microenterprise learning process in data gathering focussed on decision making. Such enhancement of research methodology ultimately has the potential for serving as the basis for the ongoing evaluation of training programs. Research is needed in order to specify and refine this tool. Recommendation: because all factors are not endogenous and village bankers are involved in open markets, knowledge of local economic competitive conditions is essential for decision making. It is recommended that PEE develop discussion tools which increase skills in raising the kinds of questions (not answers) which participants should be asking themselves. Recommendation: consider additional factors are at work in the local and national economy and society that affect the shape of any microenterprise development. Some of these are: (1) the absence of microentrepreneur associations, locally or regionally; (2) the new competitive context for the commercialization of products in an open economy, and (3)the need for technical assistance in marketing in this context; and (4) the need for new forms of local and regional cooperation among microentrepreneurs (e.g., vertical integration in production and/or commercialization). Each of these gives rise to the need for the problems which they must decide how to recognize, confront, and resolve through their business decisions. Recommendation: there is an urgent need for future research on local economies in order to provide village banking programs with tools for learning how to cope with competition in their macroeconomic environment. Village banks increasingly will have to deal with the impacts on the Salvadorian economy that will result from its being opened to the rest of the world. Current measures being taken by the Salvadorian government will bring the entire productive structure of the country into direct competition with the rest of the world. The consequences of this total opening of trade for microentrepreneurs like those in the CRS program can be disastrous in the coming three years, just when the program is begin to show success. The more that microentrepreneurs learn how to make decisions based on economic reasoning in the practical grasp of opportunity cost, in the reinvestment of profits, and in responsible decision making in a variety of situations, the greater will be the probability of success in business. Sustainable microenterprise development depends on the empowerment and autonomy which results from increasingly responsible decision making. References Microenterprise Development in El Salvador: Changing Values, Village Banking, and Informal Education Books Boulding, Kenneth, Human Betterment, Beverly Hills: Sage Publications, 1985. Briones, Carlos, La pobreza urbana en El Salvador: Características y diferencias de las hogares pobres (1988 - 1990), San Salvador: UCA Editores, 1992. Drucker, Peter F., The New Realities, New York: Harper & Row, 1989. Goulet, Denis, The Cruel Choice: A New Concept in the Theory of Development, New York: Antheneum, 1971. Lonergan, Bernard, Insight. A Study of Human Understanding, London: Longman, 1957. Lonergan, Bernard, Topics in Education, eds., Doran, Robert M., and Frederick E. Crowe, Collected Works of Bernard Lonergan, Vol. 10, Toronto: University of Toronto Press, 1993. Otero, Maria, and Elizabeth Rhyne, eds., The New World of Microenterprise Finance, West Hartford: Kumarian Press, 1994. Razeto, Luis, Economia Popular de Solaridad, Santiago, Chile: PET, 1990. Thys, Didier, and Judith Painter, Village Banking with Catholic Relief Services and Partners: A Case Study, Baltimore: Catholic Relief Services, 1994. U. S. Government Publications Agency for International Development, AID Micrenterprise Stocktaking: Synthesis Report, Washington: CDIE, 1989. Agency for International Development, Experiments in Small- and Microenterprise Development, Washington: Metrotec, Inc., 1989. International Organizations Publications Economic Commission for Latin America and the Caribbean UNESCO: Regional Office for Education in Latin America and the Caribbean, Education and Knowledge: Basic Pillars of Changing Production Patterns With Social Equity, Santiago: United Nations, 1992. Interdiciplinare Project Consult GmH, Am Eiseman Schiag, Estudio de Base para un Programa Global de Credito a la Microempresa en El Salvador, Frankfurt: June 1993. Article FUSADES, "Microempresas en un Mercado Competitivo," Boletin Economico y Social, October 1993.   UNIVERSIDAD CENTROAMERICANA "JOST SIMEON CAÑAS" WOODSTOCK THEOLOGICAL CENTER     Encuestador_______________________ Municipio__________________________ Supervisor________________________ Comunidad_________________________ ONG responsable___________________ Banco_____________________________     ENCUESTA SOBRE BANCOS COMUNALES 1. Tipo de grupo: (1) Banco comunal (2) Grupo de subsistencia (3) Grupo de acumulación simple 2. Sexo: (1) Femenino (2) Masculino 3. Edad:_____________ 4. Estado civil: (1) Soltero (2) Casado (3)Acompañado (4)Viudo (5) Separado 5. ¿Sabe leer y escribir? No (00)[pase a 6] Si [siga] 5.1 ¿Cuál es su nivel de estudios alcanzado? __________________ 6. Aparte de la escuela, ¿ha realizado algun estudio vocacional? (1) Si [siga] (2) No [pase a 7] 6.1. ¿Qué clase de estudio vocacional ha realizado? (1) Corte y confección (2) Artesanal (3) Cocina (4) Otro (especifique) _______________ 7. ¿Pertence Ud. a algun tipo de organización? (O)Ninguna (1) Social (2) Deportiva (3) Religiosa (4) Cultural 8. ¿Cuántas personas viven en su casa?___________________ 9. Personas Parerentesco padre (1), hijo (2), conyuge (3), nieto (4), sobrino (5), otros (6). Edad Grado escolar ¿A qué se dedica? trabaja (1), estudia (2), trab. y estudia (3), tareas domésticas (4), desempleado (5). ¿Dónde trabaja? Banco (1), Grupo de apoyo (2). 1.           2.           3.           4.           5.           6.           10. ¿Quién sostiene principalmente el hogar?_______________________ 11. ¿Cuántas personas dependen económicamente de Ud.?______________ II. DATOS SOBRE EL MICROEMPRESARIO 12. ¿Cuántos años tiene de experiencia como negociante?_______________ 13. ¿Qué espera lograr con sus negocios? [marcar sólo uno] (1) Obtiene suficientes ganacias para sobrevivr (2) Lograr seguridad económica (3) Que crezca suficiente para lograr más y más ingresos (4) Otro (especifique)____________________________ 14. Si Ud. tuviera a disposición mil colones, ¿cree que pierde algo al tener ese dinero en la bolsa? (1) Si [siga] (0) No[pase a 16] (9) No contesta [pase a 161 15. ¿Qué pierde?_________________________________________ 16. ¿Qué cosas toma en cuenta para decidir que producto debe vender o producir en su negocio? Dígamelas en orden de importancia a. Frecuencia de venta del producto ( ) b. Utilidad para los clientes ( ) c. Materia prima disponible ( ) d. Rinde más ganacia ( ) e. Facilidad de elaboración ( ) 17. Si le propongo un negocio con el cual Ud. ganaría 200 colones diarios, ¿cuál de los siguientes criterios sería el más importante para determinar si es un buen negocio o no? (1) El costo de la vida (2) Lo que pueda ganar en otro negocio (3) Otro(especifique)________________________________ 18. Con base a su experiencia, ¿cuáles son los principales obstáculos con los que Ud. se enfrenta para el crecimiento de su negocio? Ordénelos según su importancia. a. Falta de acceso al crédito ( ) b. Falta de conocimiento sobre administración ( ) c. Poca venta ( ) d. Mercado controlado por los negocios grandes ( ) e. Falta de apoyo del gobierno ( ) f. Falta de organización entre microempresarios ( ) g. Otro___________________ 19. ¿En qué ciclo se encuentra Ud. actualmente en su Banco/Grupo de Apoyo?____________ 20. ¿De cuánto fue su préstamo inicial? (1) 400 - 700 (2) 701 - 1,000 (3) 1,001- 1,600 (4) 1,601 - 3,500 (5) 3,501 y más 21. ¿De cuánto es su préstamo actualmente? (1) 400 - 700 (2) 701 - 1,000 (3) 1001 - 1,600 (4) 1,601 - 3,500 (5) 3,501 y más. 22. Para Ud. ¿qué tan difícil es pagar sus cuotas? (1) Muy diflcil (2) Difícil (3) Regular (4) Fácil 23. Cuando ha tenido dificultades para pagar puntualmente sus cuotas, ¿cuáles son las dos principales causas de la demora? (1) No conocer el procedimiento (2) Mala administración del negocio (3) Pocas ventas (4) Emergencias en la familia Otras______________________ 24. ¿En qué ha usado las ganancias obtenidas en su negocio? (1) Consumo (2) Reinvertirlo en su negocio (3) Ahorro 25. Reinvertir parte de la ganancia en aumentar la actividad de su negocio lo considera: (1) Muy importante (2) Importante (3) No importante 26. ¿Cuál es el mayor obstáculo que Ud. tendría para obtener un préstamo en un banco comercial?____________________________________________________________ III. DATOS SOBRE NECESIDAD DE CAPACITACION 27. ¿Cree Ud. que recibir capacitación en cómo dirigir y administrar su negocio es suficiente para mejorar los ingresos que obtiene? (1) Totalmente de acuerdo [pase a 29] (2) Más o menos (3) Totalmente desacuerdo 28. ¿En qué necesita que se le capacite para mejorar su negocio y sus ingresos? ___________________________________________________________________ 29. ¿Cuáles son los mayores problemas personales que le impiden recibir capacitación para administrar su negocio? a. Dificultad para leer y escribir ( ) b. Poca disponibilidad de tiempo ( ) c. Edad, le cuesta aprender o cambiar sus costumbres ( ) d. Otro _________________________________ 30. Las capacitaciones en relación a los problemas humanos y sociales (no técnicas) en las que Ud. ha participado le parecen: (0) No ha participado en ningun [pase a 31] (1) Excelente (2) Muy buena (3) Buena (4)Regular (5) Mal 30.1 ¿Por qué? (1) Por los expositores (2) Por las horas de exponer (3) Otras______________ 31.¿Qué aspectos han sido más satisfactorios al pertenecer al Banco Comunal/Grupo de Apoyo mutuo? Escoja los dos más importantes. (1) Solución de problemas económicos (2) Ingreso (3) Apoyo familiar (4) Apoyo dentro del grupo (5) Otro__________________ 32. Al solicitar su préstamo en el Banco o Grupo de Apoyo Mutuo, ha tenido dificultades en los trámites? (1) Sí (0) No 33. Después de recibir su primer préstamo ha podido llevar el control de su préstamo por Ud. mismo? (1) Sí (0) No 34. Al reinvertir sus ganacias y ampliar su negocio, ¿en qué aspectos desearía los servicios del extensionista? (1) Administración de su negocio (2) Ayuda para resolver los problemas económicos de sus negocio (3) Educación sobre valores humanos (4) Otro ________________________   IV. DATOS SOBRE EL NEGOCIO 35. ¿Qué tipo de negocio tiene Ud. ahora? (1) Compra/Reventa diaria (2) Compra inventario/reventa diaria (3) Manufactura de algún producto (4) Otro ______________________ 36. (Si prepara o elabora algún producto) ¿A dónde prepara o elabora el producto que vende? (1) En la comunidad (2) Fuera 37. ¿A dónde vende sus productos? (1) En su casa (2) En el mercado (3) En un local independiente (4) Venta ambulante (5) Otro ________________________ 38. ¿Qué tipo de cliente y dónde compran sus productos? - Fábricas (1) Comunidad (2) Fuera (0) No compra - Mayoristas (1) Comunidad (2) Fuera (0) No compra - Detallistas (1) Comunidad (2) Fuera (0) No compra - Particulares (1) Comunidad (2) Fuera (0) No compra - Otros ____ (1) Comunidad (2) Fuera (0) No compra 39. ¿Qué tipo de producto vende? (1) Producto que sirve para hacer otro (2) Producto para el consumo inmediato 40. Si mantiene inventarios, ¿en cuánto estima el valor de los inventario de mercadería que tiene actualmente para la venta?____________________________ 41. Incluyendo a Ud., ¿cuántas personas familiares y no familiares trabajan actualmente en su negocio?______________________________ 42. Antes de que perteneciera al Banco Comunal o Grupo de Apoyo, ¿cuántas personas familiares y no familiares trabajaban en su negocio?________________ 43. Durante los siete días de la semana, ¿cuántas horas dedica usted y los otros miembros a su negocio? a. Usted____ b. Persona No. 1____ c. Persona No. 2____ d. Persona No. 3____ e. Persona No. 4____ f. Persona No. 5____ 44. Acualmente, ¿cuánto vende? a. Cantidad de colones diario__________ b. Cantidad de colones por semana__________ 45. Antes de pertenecer al Banco/Grupo de Apoyo, ¿cuánto vendía? a. Cantidad de colones diario__________ b. Cantidad de colones por semana__________ 46. Actualmente, ¿cuanto gasta en compra de productos, materia prima y herramientas para su negocio? a. En un día normal__________ b. En la semana__________ 47. Antes de pertenecer al Banco o Grupo de Apoyo, ¿cuánto gastaba en la compra de productos, materia prima y herrarmientas para su negocio? a. En un día normal__________ b. En la semana__________ 48. Actualmente, ¿cuánto le queda para cubrir sus gastos familiares? a. Diario__________ b. Por semana__________ 49. ¿Cómo hace para saber si hubo pérdidas o ganancias en un día de venta? (1) Cuenta el dinero (2) Calcula con lápiz (3) Calcula con la cabeza (4) Otro_________ 50. ¿Estaría Ud. dispuesto a dejar su negocio si alguien le ofreciera trabajo permanente y bien remunerado? (1) Sí (0) No [pase a 52] 51. ¿Cuánto le tendrían que pagar mensualmente para dejar su negocio?__________________ 52. ¿Usted ha cambiado el tipo de productos que vende o produce, o sólo los ha modificado? (1) Cambiado (2) Variado (3) Ambos (0) Ninguno 53. Para su familia, el ingreso en su negocio es: (1) Unico (2) Muy importante (3) Complementario OBSERVACIONES____________________________________________________________ See also: "Micro-Enterprise Development and the Common Good," by Gasper Lo Biondo, S.J. Where Do We Stand? by Gasper Lo Biondo, S.J. North-South Dialogue: An Interview with Gap Lo Biondo Woodstock's North-South Dialogue Program Woodstock's Program on Global Economy and Cultures