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All the Microfinance organizations in Honduras seem to follow the Grameen model for lending purposes. In this model an organization assigns a number of officers to a community to familiarize with the situations on ground and gather loan applications. Once the loan applications are reviewed they decide on potential borrowers (usually the limit is five people) and form a group of with all them as members. Then they give money to two members of the group (the loan could range from anything between $50 to $5000) and monitor repayments for a two year period. If the two borrowers return the money on time, they extend the loans to everybody else in the group. This creates a dynamic that encourage encourages borrowers to make payments on time.
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