small-scale forestry: the case of the community forest enterprises of Petén, Guatemala

Ruth Junkin is Rural Finance Specialist, Center for the Competitiveness of Ecoenterprises (CeCoEco), Tropical Agriculture Research and Higher Education Center (CATIE), Turrialba, Costa Rica. Globally, the past few decades have seen exponential growth and development in the microfinance sector. The worldwide movement to promote small-scale financing for micro and small enterprises has reached over 94 million clients (González and Rosenberg, 2006). Despite this significant outreach, large segments of the population in many developing countries continue to be underserved by financial services. One of the key challenges facing the microfinance sector is how to “expand the frontiers” so that financial institutions can sustainably provide services to populations outside urban centres in the most remote rural areas. Forest communities often have limited access to financial services. The microfinance and development banking sectors are increasingly focusing on how to reach rural areas, but the focus is generally on agriculture. Little consideration has been given to reaching small-scale forest enterprises. Governments and international development agencies have mainly focused their attention to forest finance on creating appropriate incentives for forest conservation; they have been less concerned with the provision of adequate financial services for the business cycles of those making a living from the forest. Financial services principally include credit, savings, insurance, money transfers and leasing. These services allow people and enterprises to distribute their expenditures over time – so that what they can’t pay now with their current income, they can pay with past income (through savings or insurance), future income (through loans) or a combination of both (Rutherford, 2000). Smallscale financing, or microfinance, helps