The country of Nicaragua boasts some of the world’s most beautiful beaches and stunning volcanic landscapes. As a communist country until the fall of the Berlin Wall, there is tremendous opportunity for entrepreneurs with access to capital within this nation experiencing a sudden rise in capitalism.
Unfortunately, nearly 3 million Nicaraguans (about half its population) live in poverty and earn just $2 to $3 a day. Nicaragua is the second-poorest country in the Western Hemisphere, and much of this population lives in homes with dirt floors and tin roofs. With this gap between the rich and the poor, some families are finding a sustainable way to overcome poverty: by creating small businesses. On our most recent Under30Experience trip to Nicaragua, we had the opportunity to see how microloans are changing the lives of people in poverty and allowing them to build real businesses at the grassroots level.
Microloans Improving Lives in Nicaragua
On these trips to Nicaragua, I met with entrepreneurs who had received microloans of just a few hundred dollars. I had the chance to speak with an illiterate farmer who received one of these loans to plant a patch of crops. After a handful of profitable harvest seasons later, he employed more than 20 people from his village and can now afford to give them health benefits. He was also able to send his daughter to a university, where she earned a degree and became an economist. Now, the education is coming full circle as she comes home and teaches her father to read and write — all because of this microloan.
Our Under30Experiences group also witnessed the positive effect a microloan had on a woman who can now afford to send her child to preschool. Because of her loan, she was able to send her child to school with a neatly pressed uniform — something she described as a big barrier to an education. So many aspects of her life were improved because of this small loan, including being able to repair her roof and grow her neighborhood soup business.
Loans such as these are repaid 99 percent of the time, and they help recipients start artisan, agricultural, and food businesses. Many organizations and nonprofits provide microfinancing to Nicaraguans. The country has more than 315,000 active borrowers who had received nearly $273 million in loans by 2011, according to Mix Market, a nonprofit organization that tracks global microfinancing. I saw firsthand the need for economic development among poor communities, as well as Nicaraguans’ desire to grow their own businesses, during a trust group meeting of 27 loan recipients who discussed leadership and accountability. We witnessed Opportunity International and their microfinance institution partner on the ground, ASODENIC, promote the healthy repayment of loans.
There are massive opportunities for small businesses in Nicaragua because of its widespread poverty, but the country is in desperate need of further financial support and entrepreneurial training. Microfinancing programs barely register as a blip on the government’s radar, which leaves it to other organizations to provide these much-needed resources.
A Growing Tourist Destination
Nicaragua boasts some of the best beaches and surfing in the world, as well as amazing resorts, yoga retreats, and ecotourism opportunities. An article in The Economist last year declared Nicaragua safer than Costa Rica or Panama, and The New York Times recently named Nicaragua third in its “46 Places to Go in 2013” feature, citing the country as an ideal site for a “relaxing, high-end, spa-filled vacation.”
Most travelers head to the coast or to the cities of Leon or Granada, which are places where the economic effects of tourism are obvious. Regions that attract expats, surfers, and backpackers tend to have less poverty than the rest of Nicaragua. In these places, most of the poverty is pushed outside the city, and tourists only glimpse true poverty on their way from one place to another.
While Nicaragua is still incredibly beautiful, and not yet what most Americans would call “touristy,” many attractive areas of the country are vulnerable to overexpansion in communities that can’t support a flood of tourists. These places can easily become dirty and polluted, which is a death sentence for a tourism industry based on natural beauty. This cycle can destroy the environment, and it ultimately leads to increased poverty, drug trade, and prostitution.
As Nicaragua’s tourism industry grows, so does the potential for harm and for benefit. All this potential for growth and untapped natural beauty screams out for responsible, sustainable tourism that takes a long-term view of investment in Nicaragua. I encourage you to think about how traveling will positively affect Nicaraguans. Seek out microloan investment opportunities that encourage small business growth, and be conscious of how your tourism can positively affect small communities.
Instead of asking what Nicaragua has to offer you, why not think of what you have to offer Nicaragua? I guarantee you’ll have a richer experience once you know that your once-in-a-lifetime vacation is helping a nation out of poverty.
Matt Wilson is Co-founder of Under30Media and Adventurer in Residence at Under30Experiences, apply to their members-only travel platform for ambitious young professionals today.