Group to offer loans in Cuba

Posted on Tue, Sep. 12, 2006

SMALL BUSINESS
Group to offer loans in Cuba
A Cuban exile group wants to start a loan program to support small
businesses on the island.
BY LAURA WIDES-MUNOZ
Associated Press

Several Cuban-American business leaders are seeking to boost the Cuban
entrepreneurial spirit with small-business startup loans they believe
could help stimulate the island's economy, but the plan first has to
overcome restrictions enforced by the U.S. and Cuban governments.

The idea is to give microloans to people who want to start businesses
such as selling food in the street. But the plan is a long shot, said
Miami businessman Carlos Saladrigas, co-chairman of The Cuba Study
Group, a nonpartisan Washington-based organization that has pledged $10
million in seed money and plans to announce the program today.

The Cuban government prohibits most private enterprise, while U.S. law
sets strict limits on sending money to the communist nation. Officials
with the U.S. State and Treasury departments had no immediate comment on
the proposal.

And despite Cuban President Fidel Castro's recent hand-off of power to
his brother, Raúl, there is little sign of any major changes in Cuba's
economic policies.

''But we believe we have to take risks and seize opportunities, and we
believe change is under way in Cuba,'' Saladrigas said. ``Raúl Castro is
not a spring chicken, and collective leadership always harbors the seeds
of reform.''

Similar microloan programs have become popular throughout Latin America,
in parts of Asia and even in some areas of the United States. The loans
would also be accompanied by training to Cuban entrepreneurs.

The Mexican bank Compartamos, which has offered microloans of less than
$1,000 for more than 15 years, has agreed to work with the group if it
gets permission.

''We realized it had a lot of sense, because in Cuba there are a lot of
people with a lot of knowledge and education who don't have access to
economic development,'' said Javier Fernandez Cueto, Compartamos'
planning director.

Saladrigas said his group did not want to see Cuba repeat the mistakes
made in Latin America and violence-torn Iraq, where the focus was on
large-scale reforms and too little emphasis was placed on economic
development at the grass-roots level.

''Democracies are not phoenix birds, they don't just rise out of the
ashes of collapsing societies,'' he said. ``This is a way to begin at
the bottom of society and empower the individual and help them become a
stockholder in the new society.''

http://www.miami.com/mld/miamiherald/business/15495360.htm