Reaching Out to the Bottom 

Sam Daley-Harris* 

Recently I was asked to participate on a panel entitled "The Future of Foreign Aid?"

As the founder of RESULTS Educational Fund, the non-governmental organization which convened the recent Microcredit Summit, I come to the question of foreign aid with some pretty strong biases, and they reside mostly in the area of reaching the poorest- the 1.3 billion inhabitants of this planet who live on less than a $1 a day.

Seven years ago I was moderating a conference call and our guest speaker was Peter Adamson, who had produced the State of the World’s Children reports for Jim Grant and UNICEF. We asked Peter which of the goals of the World Summit for Children was least likely to be reached. Child mortality? Access to clean water and safe sanitation? His answer,"Its none of those. What will be hardest to reach will be the bottom 20 percent."

My bias and that of my organization is for the poorest, the hardest to reach.

That is one of the reasons the recent Microcredit Summit was so unique. The goal of the Microcredit Summit is to reach 100 million of the world's poorest families - especially women - with credit for self-employmemt, and other financial and business services by the year 2005. The Summit's definition of the poorest: the bottom half of those living below poverty.

More than 2,900 people from 137 countries gathered in Washington in February for the Summit. Such diverse participants as U.S First Lady Hillary Rodham Clinton and World Bank President James Wolfensohn stood in partnership with Alice Semosa, a self-employed clothing vendor from South Africa and Hortensia Contreras, a microentrepreneur and mother of five from El Salvador.

Microcredit is not a panacea, but a powerful anti - poverty tool. It has made the transition from theory to practice in thousands of programs already reaching millions of families worldwide.

Ela Bhatt, General Secretary of the Self  -  Employed Women's Association (SEWA) in India, tells the story of SEWA ‘s first borrower.

In 1975 when the bank was not taking many risks, a vegetable vendor came who was under such economic pressure that she was absolutety desperate.

Her husband was an unemployed textile worker, and he would somehow roam about and fill his belly each day, but it was a very difficult situation for her and her children. The bank decided to extend her a loan of Rs.50 (US$1.50) and someone went with her to buy green masalas like coriander, mint, ginger, garlic, and chilies. That day SEWA cared for her childern, who where sick and hungry. She earned Rs.6 (US$0.18) profit selling the masalas that day, and she took home food that night. She continued building her business day by day, and the next week she repaid Rs.51. It was hardly any risk for the bank and it literally meant life or death for that woman. After that we started extending those Rs.50 loans to many women."

That was more than 20 years ago. Today SEWA reaches over 50,000 women. Giving the world’s poorest people access to credit has been hailed by UNDP Administrator Gus Speth as "one of the most powerful development assistance tools we have." The microcredit approach has also captivated the attention of international financial institutions from the World Bank to Citicorp.

Several years ago, Grameen Bank founder Muhammad Yunus was interviewed by Judy Mann of The Washington Post, and he told a story which outlines the deeper transformation these programs can engender. Yunus described the 350,000 housing loans Grameen has made ¾ loans of $300, which are repaid over a ten year period. The houses (125 square feet each ) consist of four cement pillars so the houses won’t wash away in the monsoon, a tin roof so it won’t rain in any more, and a sanitary latrine.

To qualify for a housing loan, the borrower has to have successfully repaid three one year, self-employment loans. Furthermore, her husband must sign over to her the title to the land on which the house would stand, a "radical" concept in any country, but especially so in Bangladesh’s Moslem culture.

Mann asked Yunus if the bank offered marriagecounseling. "Yes." Yunus answered, "but it’s informal." And then he related a conversation with the husband of a Grameen borrower.

"Are you happy with Grameen Bank? "Yunus asked the husband."
"Yes, I am," the husband replied.
"My wife’s gotten her loan and she’s working very hard."

"How about the two of you," Yunus continued ,"are you happy?"

"Yes," the husband replied, "My wife used to complain that we didn’t have enough food, but now we have enough."

Then there was a long silence. After a while, the husband turned to Yunus and said, "There is one thing, however. I used to enjoy beating my wife, but the last time I beat her I made a pact with myself that I would never do it again because the other women in her borrowing group came to me and they argued with me." When I beat my wife before," the man continued, "no one said anything; no one cared. This is no longer true with the women in her borrowing group."

This kind of empowerment reaches the deepest levels of community building. It links women who have been ostracized, even from their own families.

What can committed citizens do to help make the goal of the Microcredit Summit a reality? The first is to stay informed through our newsletter. We are committed to fostering a network of people who will work to ensure that the poorest people on the planet are able to climb out of poverty with dignity. Institutions have a vital role to play aiso. Enlist your institution - your company, your church, your elected officials, your servics club- to, join one of the 15 Summit Councils. You can assist your institution in developing, announcing and implementing an Institutional Action Plan for contributing to the fulfillment of the Summit’s goal.

The Microcredit Summit Fullfillment Campaign is in need of leaders- ordinary people who are commited to extraordinary changes. Are you such a person? Why.
 

To get involed with the Microcredit Summit Fulfillment Campaign, contact: Microcredit Summit Campaign c/o RESULTS Educational Fund 236 Massachusetts Ave, NE Suite 300, Washington, D.C 20002 Tel: (202) 546-1900; fax (202) 546-3228 E-mail: microcredit@igc.apc.org Web:http://www.microcreditsummit.org

 

  * Director of the Microcredit Summit Campaign of the RESULTS