What interest rate does Pajebal lend at to the cooperatives?
Pajebal currently lends to the cooperatives at 6%. This may be lowered depending upon how much money Pajebal is able to raise. However, the interest rate will never be raised beyond 6%. Pajebal’s interest spread is used to cover international wire costs, exchange rate risk, standard exchange rate differentials (the money that is lost due to the bank’s spread between selling and buying dollars), lawyer and accountant fees, other overhead costs such as online bank account fees and website server fee, and in the near future for the salaries of our Guatemala associates. We encourage donations to Pajebal so we can cover these costs without solely relying on the interest paid by the Guatemalan cooperatives, and thus lower their rate not too far down the road. Financing at 6% and under is considered very cheap in the Guatemalan cooperative-savings-and-loan industry, and this cheaper financing was the primary factor in CODICAP’s decision in late 2008 to reduce interest rates by 8% points to al
