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Microloans: a key to freedom


“I would go to the streets and steal from people, with my belly showing, pregnant,” says Rosario, an inmate at the San Joaquin Women’s Penitentiary in Santiago, Chile's capital city. “My job was stealing. It was enough to afford rent, electricity, water and other expenses. And at thirteen, I gave birth to my girl.”

Rosario was raised as an orphan. For her, her real family are relatives with whom she spent the weekends. Her happiest memories are of her childhood: those moments when they would take her to the park, the circus or for dinner. When they tried to adopt Rosario, her biological mother intervened and gained custody. There, she was abused by her mother’s partner. Soon after Rosario accused him and returned to the orphanage, but she did not stay for long. When she was eight years old, she ran away to live in the streets.

She started stealing to survive. To alleviate hunger and cold, Rosario began taking drugs. When she was twelve years old, Rosario was sexually abused by a man who stalked her.

A month later, she found out she was pregnant and kept stealing after giving birth to pay for her baby’s expenses.

She was arrested before her fourteenth birthday.

Rosario represents one of the more than 15,000 women currently held in the Chilean penitentiary system. Like her, many commit crimes due to an absence of economic opportunities. And like Rosario, many other have children from whom they will be separated as they become inmates. Rosario spent one year in jail for robbery, but her sentence didn’t end there. For most inmates, economic marginalization threatens their recently acquired freedom. While many will be reunited with their children, they will face severe difficulties to find a job or a legal source of income due to their low educational level and criminal records.

Many former inmates will commit crimes again. According to a study from the University of Chile and the Ministry of Women and Gender Equality, 38% of Chilean female inmates had been convicted of another crime after regaining their freedom in 2013. In Rosario’s case, she would spend half of her twenty-seven years of age in and out of prison, while her daughter was raised by her paternal grandmother.



In a survey, Chilean female inmates were asked what would help them the most after completing their sentences: 80% of them answered that a support to start their own business would be the best solution. These small ventures allow them to earn a living free from discrimination and close to their children, with enough flexibility to take care of their family.

In response to this, the Banco del Estado, along with the Ministry of Justice and the Chilean Gendarmerie began an alliance with the IDB to design an innovative and integral social reinsertion program. The project offers support to female inmates before and after they leave prison through three main components: training and financial support to build their own business, psychological and emotional support for them and their families for a year, and specialized entrepreneurship accompaniment.

The program has served 169 women, out of which 105 are expected to complete the whole cycle; that is, two thirds of them will be supported, out of prison and working to build their business by September 2019, when the program ends. In total, 300,000 dollars are being invested in psychosocial aid, motivational and work trainings, work management, seed funding for the businesses and self-employment initiatives, operational design and result evaluation. At the end of the 24 months of the program, its expansion to all the Chilean penitentiary system will be analyzed and assessed.

Slideshow: The Life of Inmates at Santiago's Female Detention Center


The rocky road to freedom

“Everyone wants less crime” says Rodrigo Pantoja, a psychologist specialized in the reinsertion of former inmates, who has also helped in the execution of this program. ‘When we have specialized programs that help reduce the criminal recidivism of the prison population, what we are doing is improving safety for every citizen.”

Chile has implemented numerous social and work reinsertion programs in the past years in order to reduce criminal relapse. However, according to an analysis conducted by IDB specialists—and in spite of the country’s best efforts— these programs are less effective than similar ones in other countries, since they do not cover all the inmate population and are not fully integrated with each other.

For example, Hoy es Mi Tiempo is a program that offers training to formerly incarcerated people in employable skills such as welding, computing, plumbing, cooking and construction. In its last review, the program showed that it had successfully taught 95% of its participants, but only 10% found and kept a job.


“I would go to the streets and steal from people, with my belly showing, pregnant,” says Rosario, an inmate at the San Joaquin Women’s Penitentiary in Santiago, Chile. “My job was stealing. It was enough to afford rent, electricity, water and other expenses. At thirteen I gave birth to my girl.”


A big part of the problem is that, even if former convicts are effectively trained in areas where there is a large labor demand, many employers are reluctant to hire them. They are afraid of them becoming violent, committing crimes against their businesses, consuming drugs or showing psychological and emotional instability. In some cases, their fears would be justified. For formerly incarcerated people, adapting to a job with routines and demands can represent a severe challenge that could trigger antisocial behaviors.

“Any process of change, even for people who are very well socially integrated, is difficult. Think about how hard it is for a professional to stop smoking,” says psychologist Rodrigo Pantoja. “It is going to be far more difficult for a person in a vulnerable situation, exposed to a severe psychosocial stress and suffering many hardships.”

That discrimination generates hardships to those who are in good standing to work. “I know that once I leave here, I will face rejection. To me it is something normal, it is not something that hurts me or that I give too much of a thought to. It is something I have always experienced,” says Rosario “On the contrary, what surprises me the most is when someone is nice to me, when they are human.”

An alternative for formerly incarcerated people is to offer assistance and training for them to start their own businesses once they leave prison. One of such programs is Emprender en Libertad, which helps Chilean female inmates with financial and entrepreneurship education and seed funding. To this day, the effectiveness of the program has not been evaluated. However, a qualitative revision of the program conducted by the University of Chile in 2013 found that it could benefit from improvements such as: increased psychosocial support, training the former inmates with socio-occupational skills,  increase their ties to businesses and follow up on the women after they are released from prison.


What is the most efficient mechanism to prevent former inmates from relapsing?
Job and educational training
Family reunification programs
Psychosocial support before and after leaving prison
Microloans to start a self-owned business


Another central component of the social reinsertion strategy is family reunification, primarily designed for imprisoned women. Since 2008, the Chilean Gendarmerie established penitentiary policies with a gender approach which include spaces and adequate conditions for prenatal and postnatal care, and for lactating women. Additionally, it started the Abriendo Caminos program where minors can visit their mother during their imprisonment and receive specialized care to mitigate the psychological, family and social effects caused by separation.

Rosario’s daughter was a beneficiary of a similar program, operated by the organization Fundación Mujer Levántate. “Something strange would happen to me when I saw my daughter. There were mothers who remained happy after seeing their children, I felt destroyed when I saw her because I could see the poor conditions she was living in,” Rosario says. “It motivated me to raise again. She was my motivation to get better and take advantage of the tools that are available to me.”


What is our program about?

In spite of the progress that has been accomplished on social reinsertion in Chile, the fragmentation of existing programs has hindered their potential impact. Currently, there are a handful of psychosocial, educational, work and family programs, but each one of them operates independently.

The innovation of the project developed by Banco del Estado, the Chilean Gendarmerie and the Inter-American Development Bank is to identify the successful components of the existing programs and unify them under a single operation, so that they effectively respond to the needs of incarcerated women before and after they leave prison.

Our program is composed of three elements: a psychosocial, socio-occupational and economic aid through entrepreneurship. In the words of Rodrigo Serrano, a citizen security specialist at the IDB, the conjunction of these elements can be very effective. “We know from scientific evidence that psychosocial assistance can be very important in the reduction of the recidivism rates. It could prevent up to 30-40% criminal relapse,” Serrano says. “When it operates together with an entrepreneurship program, there is a high chance it will improve its effectiveness so that it reaches, for example, a 50% reduction of the criminal relapse rate.”

The support offered by the program begins six months before women are released from prison. Through the work of the Abriendo Puertas Corporation, a non-profit organization, a general mental health examination is carried out and their interest in starting a business is evaluated. Based on that information, they are trained in basic finance and entrepreneurship, and given emotional and psychological support. The women who prefer to look for a job instead of starting a business of their own are offered job trainings.

After they leave prison, the support continues: women are given approximately 300 dollars of seed capital for the purchase of equipment and supplies, which is vital to many of them. "I have skills now. I know how to make bread, I know how to make cakes, I know how to make cocktails," Rosario says. "But I do not have supplies, I do not have the most basic thing like a knife, I do not have what is needed to start a business."

After the seed capital is delivered, training and psycho-emotional support continues with Abriendo Puertas. Upon discharge, this institution helps women with the purchase of supplies, the design of a business plan, and the application for a loan to Banco del Estado. The loans have a twelve months term with a preferential interest rate. In addition, for six months the women receive individual and family support through regular visits by the organization in their homes; this is to help them cope and adapt to the world outside of prison.

The program began operations in 2017 and, upon completion in 2019, its impact on the criminal relapse rate will be analyzed. A further analysis will determine what are the areas that need revision before expanding it throughout the penitentiary system.

But for Rosario, the program already represents a hope that she could gain sufficient economic stability so that neither she, nor her daughter, will see a prison cell again.

"I only see myself with my daughter," Rosario says. "I think of her future. And if I change mine, I'll be able to give her a better one."

Learn more about the situation of incarcerated women in Latin America here