WHATEVER HAPPENED TO . . . TONY STONE, '88

Giving Credit Where It's Due

NATIVE HONDURAN Tony Stone once quit a Latin American students’ club at Stanford because “the members were too focused on politics, and particularly communism.” Today he’s back home, running a project well-rooted in capitalism.

Stone is the co-founder and director of the Adelante Foundation, which tries to reduce poverty in rural Honduras by lending money to entrepreneurial villagers. A former water polo player who worked as an aerospace engineer for 10 years after graduation, Stone now lives in the Caribbean port town of La Ceiba. His wife, Kim Walsh Stone, ’91, JD ’96, is a former prosecutor for San Mateo County who does volunteer fund raising for the foundation.

Adelante’s loans go to “the poorest of the poor,” Stone says—primarily women struggling to operate tiny businesses of their own. Some have retail operations, using their loans to travel to a city and make bulk purchases for resale in the village. Others have service businesses, like washing clothes or sewing, or manufacturing businesses, like selling tortillas or making brooms. “Their biggest hurdle is access to affordable financial services,” says Stone. Local moneylenders charge as much as 10 percent interest per week, he explains.

Unlike the collateral-based loans typically offered by banks to wealthier clients, Adelante’s loans are “character-based” or “solidarity-group-based”—insured, in other words, through social pressure. These short-term loans go to groups of five women in a village. If one cannot make her weekly payment, the others must pay her share—which means the group members pick each other carefully. Adelante also helps its borrowers learn business skills. The foundation has maintained a 100 percent repayment rate since its launch in 1999, Stone says.

The same “microcredit” model has boosted small businesses in many third-world countries. However, Stone says Adelante is the only such lender in Central America to work exclusively in villages of 500 to 5,000 people. “We focus on rural areas because the rural poor have the worst land and the fewest economic opportunities,” he explains.

Why target women? It’s a delicate question, but Stone says the experiences of microlenders elsewhere suggest that women repay their loans more faithfully and spend more of their earnings on their children. “By assisting women and their businesses,” he says, “we hope the children of our borrowers will have better nutrition and a chance to go to school.”

—Mikel Jollett, ’96