Follow us by email

Friday, March 18, 2011

Japan and Overseas: Suffering as Common Denominator

Like everybody else, we are riveted by what is happening in Japan. It’s too much to imagine: the shock of losing so many lives—whole communities—to successive disasters and the specter of meltdown at the damaged Fukushima nuclear plant heightening the stress of recovery to what must be an unbearable level.

Our office in Japan, always busy with devoted volunteers, has been besieged by calls for advice and assistance. We are doing our best to be a part of a compassionate and coordinative network in and outside of the country. These activities take place on top of full time work on behalf of the poorest families in the world.

Our mandate is to assist the poorest of the poor. You could make the argument that the type of chronic poverty we are tackling with families in Asia, Africa, and Latin America, is an ongoing disaster. It’s one that unfolds so constantly that it fails to draw much, if any, attention to itself. We are charged to keep paying attention to—responding to—a disaster that doesn’t occupy much space in the public consciousness.

It’s totally inappropriate to compare the experience of suffering based on context. The fact that Japan has the third largest economy in the world makes not one iota of difference to the people of Sendai, many of whom lost friends and family members. Whether you lost a child in Ethiopia because you don’t have clean water to drink or because a tsunami swept her away, you are in exquisite pain.

So we don’t say that the Japanese people are somehow less deserving of compassion because their economy is wealthier and their infrastructure stronger to withstand these disastrous events. What we say is that suffering is universal, and where it occurs, we must extend compassion.

Wednesday, March 9, 2011

Microfinance—Not a Panacea, but still Pro-Poor

Nobel-prize winner Muhammad Yunus’s unceremonious oust (for his allegedly improper conduct or for more political reasons) from the Grameen Bank is the latest disturbance in the world of microfinance. For our part, we’ll definitely withhold judgment on Yunus’s character or the fairness of his dismissal from the institution he founded. There is a more interesting discussion to be had.

Many have commented that this scandal is just the latest reason to be disillusioned about microfinance. Microfinance is simply the practice of lending out small, low-interest loans to people who would be too poor to qualify for loans at a typical commercial bank, people who would otherwise be targeted by the loan sharks who would drive them into miserable debt. This was the simple, but effective, concept behind Yunus’s Grameen Bank, which claims to have helped over 10 million families to cross the poverty threshold (currently defined as living on less than $1.25 a day). In its early days, microfinance was hailed as a brilliant development in poverty eradication, a panacea to the problem of families across the world who simply could not seem to get ahead.

As with every ‘miracle cure’, there was inevitable backlash. The truth is, the practitioners of microfinance aren’t uniformly saintly. As microlending institutions became more common, they also became more commercialized, motivated by the profits they might earn if they became more aggressive in their lending and collection methods. Some families defaulted, and in some cases were driven to suicide by the debts they incurred.

Perhaps it goes without saying, but HOPE International Development Agency follows a non-profit model for lending small loans to the poor. We also maintain that loans are not always enough - access to credit needs to be accompanied by training and social support. $40 might be enough to help a Cambodian woman to start a business. But $40 plus a course in accounting plus a small group of friends to meet with about the challenges she faces would probably be enough to help her maintain a profitable, viable business.

So while the backlash carries on, we’ll be perfecting our approach to financing the ventures of poor women on the verge of changing the quality of their children’s lives for good. What is the lesson we take from the controversies associated with microcredit these days? A good idea could always become a great idea. We feel loans for the poor are good - but loans with support for the poor are far better.

Thursday, March 3, 2011

Cambodia: Development is in the Details

When we talk about ‘development’, we often slip into well-meaning but very vague language. We hear talk about ‘empowerment’ and ‘aid’ and ‘sustainability’. One pictures a kind of iridescent moral net thrown over the world’s various ills. It doesn’t exactly zero in on what we—you with us—are trying to accomplish.

There’s a simple way of looking at it. We’re trying to help people address the things—big things to them, little things to us perhaps—that keep messing them up, keep them from having any sense of control over their lives, or the ability to improve things for their children. That is about it. That focused sense of mission takes us in a lot of different directions, it’s true; for every 100 people, after all, you probably have about 100 different kinds of problems, 100 required solutions. But the aim is the same—helping the poor to gain control over their lives.

Our health fund in Cambodia is a good example of how this all works. Pech Van is a 57-year old widow who lives in Prey Omal, Cambodia, with her mother, her daughter, her son-in-law, and her four grandchildren. Pech’s mother is disabled, and needs frequent medical care, which has placed a huge burden on Pech and her family. In the past, when Pech’s mother or any of her grandchildren were sick (which was often), Pech often couldn’t buy medicine for them or bring them to the hospital in Pursat town. The problem wasn’t that she couldn’t afford the expense; Pech has a good home garden and a chicken raising business. The problem was that her family often got sick at times when she couldn’t sell crops or chickens, which meant that she had no money with which to pay the doctors or pharmacies. Pech didn’t want to have to borrow money from a moneylender, who would have charged extremely high interest rates, and couldn’t borrow from her neighbours.

In May 2008, Pech joined one of HOPE International Development Agency’s new village health funds. Every month, Pech started paying 25 cents into the fund, along with almost 100 other families in her village; HOPE added money to this fund as well. From these pooled funds, the village health fund gives no-interest loans to fund contributors to pay for healthcare expenses.

In January 2009, Pech borrowed $40 to treat her mother for typhoid. She was able to pay this back in April, as soon as she harvested her vegetable crop. In August 2009, Pech again borrowed money from the fund - this time, she borrowed $50 to bring her young grandson, who had dengue, to the hospital. And again, Pech was able to pay back the loan within a few months with money from her home garden and chicken raising business. Since then, Pech has again borrowed and repaid money, and plans to do so in the future. With the safety net of the village health fund, Pech, her family, and her neighbours feel more secure and happier. They know that if they get sick, they now have options.

Development is in the details. It takes spending time with people to understand the obstacles they face in their lives. Pech needed a fund to draw upon in bad times. Every family has a different story, and every time that story ends well, it’s a lot more gratifying to describe than any lofty plan to ‘develop’ the so-called ‘under-developed world’.