The Lewis Ledger
By Jonathan C. Lewis
Founder, MicroCredit Enterprises
In 2003, I visited my first microfinance program. In a desolate Bolivian mountain valley, I saw a mother proudly, if somewhat hesitantly, stand up before her village to talk about her microloan, her changed life and, for the first time, adequately feeding her children. I don’t recall the financial details.
In her jaunty bowler hat and with kids hanging on her long, full, dirty skirt, she radiated dignity and self-reliance. I didn’t speak her language, but she convincingly communicated her strength and determination to me.
Thanks to her, I am still supporting microfinance today.
“Your Wings Droop”Global poverty exists, in large part, because people are opportunity-deprived. People everywhere — and especially the poor — are willing to work hard and make sacrifices to better themselves, and they have the industry and the intelligence to do so. Across the globe parents want the best for their children.
In a single, elegantly sad phrase, the 20th Century author Simone de Beauvoir captured the despair and defeatism caused by economic and social discrimination. She wrote, “Your wings droop”.
At its best, microfinance recognizes and supports the whole woman by combining microfinance with health and human services, education, women’s empowerment, financial literacy training and more. Leveraging the grit and resolve of a mother’s desire to feed her children, microloans create soaring lift under a woman’s wings.
Malawi, Malaysia and MississippiAt public events, I am often asked, “Why don’t you bring microfinance to the United States?” In a tone implying that my patriotism may be feeble or on hold, the speaker asserts, “After all, there are lots of poor people in this country, and shouldn’t charity begin at home?”
From the Birmingham City Jail, Martin Luther King lamented, “Shallow understanding from people of goodwill is more frustrating than absolute misunderstanding from people of ill will.” Yes, there are poor Americans, but it is a shallow understanding indeed to ignore the excruciating level of poverty for people struggling, and dying, on less than $1.00 a day in remote parts of the world.
A crying, hungry child in Malawi or Malaysia should matter as much to us as a crying, hungry child in Mississippi. The accident of birthplace should not determine one’s birthright to a healthy, productive life. Whatever your religious or philosophical bearings, there is no creed or faith which makes a pencil mark on a map more important than a child’s right to life.
A Practical Prescription
From my experience, good hearted people want to end global poverty, but they want to do so effectively and potently, to be certain that their time and money is utilized well. Unaware that some programs or social investments have high administrative overhead, lack of basic sustainability or are insensitive to local conditions and needs, they assume that what should work, actually does, based on little more than a happy anecdote.
One of the compelling appeals of microfinance as an anti-poverty tool is that it creates profitable businesses for the poor, builds sustainable local micro-banking organizations and can even pay Western benefactors a modest financial return. Of course, not everything worth doing can be converted into a profit center, but microfinance as a sustainable, or even partially sustainable, platform is unquestionably effective.
Microfinance is neither a panacea nor a cure-all. But it works. And, maybe most important of all, it is a way for every one of us to fulfill our natural desire to make a potent and permanent difference.
Benefactor Beware
You owe it to yourself to ask tough questions of the microfinance programs that you support. Without information, the gap between wanting to do good and wanting to do it well is necessarily large.
Not all microfinance programs are the same. The common microfinance website or fundraising brochure with a smiling “developing country” woman hard at work or standing beside her rustic retail establishment conceals a range of microfinance social and financial objectives. While poor entrepreneurs almost always improve their lives thanks to microloans, frequently microfinance programs pursue distinct social missions.
What level of poverty is targeted? What percentage of women is served? Is lending to poor borrowers in rural areas a focus? Are anti-poverty social services and education, such as health services and products, financial literacy, business training, women’s empowerment classes, etc., offered?
Economic justice depends upon community-wide justice. As Burmese freedom fighter and Prime Minister-elect Aung San Suu Kyi notes, “It is not enough merely to provide the poor with material assistance. They have to be sufficiently empowered to change their perception of themselves as helpless and ineffectual in an uncaring world.” Ignoring women’s education and empowerment cannot be allowed and in the end cannot work.
Is lowering interest rates for poor borrowers a priority goal? Some microfinance programs are undisturbed by the excessive interest rates for microloans to impoverished women because they believe that market competition will automatically “correct” for microfinance price gouging. Putting aside the bogus assumption that empowered and informed consumers are the norm in the desperate areas in which the illiterate poor reside, there is something vulgar about charging the impoverished a penny more than is necessary to achieve operational self-sufficiency.
MicroCredit Enterprises, for example, is firmly committed to backing overseas microfinance programs that increase the number of poor clients served, operate comprehensive social service programs, such as women’s empowerment, health education or business training, and are not charging predatory interest rates to impoverished client-borrowers. As a nonprofit, we measure our profits by the reduction in poverty.
Doing Good by Doing Well
Because international aid agencies, governments, foundations and donors do not have unlimited funds and because microfinance competes for scarce global resources with other worthy causes (clean water, healthcare, education, peace and reconciliation, etc.), the microfinance intelligentsia has convinced itself that private capital markets can be a steady cornucopia of cash. In a virtuous circle, social investors invest, microfinance pays profits and poverty is whisked away. Doing good by doing well.
Undeniably, open capital markets can be powerful engines for economic development, creating jobs and opportunity. Recalling 5,000 years of human history with its economic slavery, gulags, feudal serfs, indentured servants, sweatshops, exploited industrial workers, debt bondage, children’s labor and 3 billion people today still living on $2.00 per day, we all appreciate that free markets allocate capital efficiently, albeit not fairly.
No abstract economic theory and no market, whether functioning or failing, can change the reality that we each, alone and singularly, are blessed and burdened with a moral compass. Within every free market you and I are free to make ethical choices. “…of all the differences between man and the lower animals, the moral sense or conscience is by far the most important,” wrote Charles Darwin. “It is the most noble of all the attributes of man.” He added, “A man who possessed no trace of such instincts would be an unnatural monster.”
Paradoxically for an anti-poverty movement built on capitalism, a whiff of microfinance Marxism hovers in the air. As Marx viewed the human condition solely in terms of economic class, some fans of microfinance are exclusively attracted to its economic opportunities, its self-help entrepreneurism. The unintended consequence is that impoverished women are monetized as microfinance fulfills its mission by making women more profitable chattel (or, in the parlance, creating self-help business opportunities). The idiocy often begins by defining microfinance as providing access to financial services, instead of providing fair access to fair financial services.
A Sense of ShameNo one has ever told me that they want to live in a world in which one billion people, a sixth of humanity, is cast aside. 4th Century B.C. Chinese philosopher Mencius wrote, “…no man is without a sense of compassion, or a sense of shame.”
For many people, global poverty is just too daunting, discouraging and depressing. Even with global market forces at full strength, the democratization of governments, the growth of microfinance to reach millions and hoped-for economic opportunity for all, poverty will still plague the planet. One does not have to be a pessimist to believe that the poor will always be with us.
But the sorrowful reality of intractable poverty only means that what you do matters. It matters to families living in poverty. It matters to you. And, it matters because of what it says about you. As has been famously observed, “Life is not a dress rehearsal.”
Today, 18,000 children will die from malnourishment. Among the children who will die today might be another Gandhi or Galileo, a Shakespeare or a Socrates, a Jefferson, Beethoven, Churchill, Mandela…
Ending savage poverty is the right thing to do. It is also the smart thing to do.
Be the Hands and Feet of Justice
In 2008, I attended my son Aaron’s graduation from Columbia University. The Commencement Day Invocation by Chaplain Jewelnew Davis moved me (excerpted for brevity):
“Your education must be cherished as a sacred trust. You will have the opportunity to influence some of the most critical, international, environmental, business, legal, journalistic, scientific, engineering, medical, dental, public health and public policy issues of this century.
Family and friends, strangers and neighbors, communities and nations will count on your leadership, your compassion and your humility to speak up for the sick, the thirsty and hungry, to speak up for the poor, to speak up for those who have lost their dreams and seek new hope.
Be a maker of peace, a steward of mercy, a voice of reason and be the hands and feet of justice.”
If you keep your food in a refrigerator, and your clothes in a closet, and if you have a roof over your head and a bed to sleep in, you are richer than 75% of the world’s population. Invest in a future. Recovering a person’s humanity is priceless.
I don’t know what else could be more worth doing than helping a mother feed her child.
Founder, MicroCredit Enterprises
In 2003, I visited my first microfinance program. In a desolate Bolivian mountain valley, I saw a mother proudly, if somewhat hesitantly, stand up before her village to talk about her microloan, her changed life and, for the first time, adequately feeding her children. I don’t recall the financial details.
In her jaunty bowler hat and with kids hanging on her long, full, dirty skirt, she radiated dignity and self-reliance. I didn’t speak her language, but she convincingly communicated her strength and determination to me.
Thanks to her, I am still supporting microfinance today.
“Your Wings Droop”Global poverty exists, in large part, because people are opportunity-deprived. People everywhere — and especially the poor — are willing to work hard and make sacrifices to better themselves, and they have the industry and the intelligence to do so. Across the globe parents want the best for their children.
In a single, elegantly sad phrase, the 20th Century author Simone de Beauvoir captured the despair and defeatism caused by economic and social discrimination. She wrote, “Your wings droop”.
At its best, microfinance recognizes and supports the whole woman by combining microfinance with health and human services, education, women’s empowerment, financial literacy training and more. Leveraging the grit and resolve of a mother’s desire to feed her children, microloans create soaring lift under a woman’s wings.
Malawi, Malaysia and MississippiAt public events, I am often asked, “Why don’t you bring microfinance to the United States?” In a tone implying that my patriotism may be feeble or on hold, the speaker asserts, “After all, there are lots of poor people in this country, and shouldn’t charity begin at home?”
From the Birmingham City Jail, Martin Luther King lamented, “Shallow understanding from people of goodwill is more frustrating than absolute misunderstanding from people of ill will.” Yes, there are poor Americans, but it is a shallow understanding indeed to ignore the excruciating level of poverty for people struggling, and dying, on less than $1.00 a day in remote parts of the world.
A crying, hungry child in Malawi or Malaysia should matter as much to us as a crying, hungry child in Mississippi. The accident of birthplace should not determine one’s birthright to a healthy, productive life. Whatever your religious or philosophical bearings, there is no creed or faith which makes a pencil mark on a map more important than a child’s right to life.
A Practical Prescription
From my experience, good hearted people want to end global poverty, but they want to do so effectively and potently, to be certain that their time and money is utilized well. Unaware that some programs or social investments have high administrative overhead, lack of basic sustainability or are insensitive to local conditions and needs, they assume that what should work, actually does, based on little more than a happy anecdote.
One of the compelling appeals of microfinance as an anti-poverty tool is that it creates profitable businesses for the poor, builds sustainable local micro-banking organizations and can even pay Western benefactors a modest financial return. Of course, not everything worth doing can be converted into a profit center, but microfinance as a sustainable, or even partially sustainable, platform is unquestionably effective.
Microfinance is neither a panacea nor a cure-all. But it works. And, maybe most important of all, it is a way for every one of us to fulfill our natural desire to make a potent and permanent difference.
Benefactor Beware
You owe it to yourself to ask tough questions of the microfinance programs that you support. Without information, the gap between wanting to do good and wanting to do it well is necessarily large.
Not all microfinance programs are the same. The common microfinance website or fundraising brochure with a smiling “developing country” woman hard at work or standing beside her rustic retail establishment conceals a range of microfinance social and financial objectives. While poor entrepreneurs almost always improve their lives thanks to microloans, frequently microfinance programs pursue distinct social missions.
What level of poverty is targeted? What percentage of women is served? Is lending to poor borrowers in rural areas a focus? Are anti-poverty social services and education, such as health services and products, financial literacy, business training, women’s empowerment classes, etc., offered?
Economic justice depends upon community-wide justice. As Burmese freedom fighter and Prime Minister-elect Aung San Suu Kyi notes, “It is not enough merely to provide the poor with material assistance. They have to be sufficiently empowered to change their perception of themselves as helpless and ineffectual in an uncaring world.” Ignoring women’s education and empowerment cannot be allowed and in the end cannot work.
Is lowering interest rates for poor borrowers a priority goal? Some microfinance programs are undisturbed by the excessive interest rates for microloans to impoverished women because they believe that market competition will automatically “correct” for microfinance price gouging. Putting aside the bogus assumption that empowered and informed consumers are the norm in the desperate areas in which the illiterate poor reside, there is something vulgar about charging the impoverished a penny more than is necessary to achieve operational self-sufficiency.
MicroCredit Enterprises, for example, is firmly committed to backing overseas microfinance programs that increase the number of poor clients served, operate comprehensive social service programs, such as women’s empowerment, health education or business training, and are not charging predatory interest rates to impoverished client-borrowers. As a nonprofit, we measure our profits by the reduction in poverty.
Doing Good by Doing Well
Because international aid agencies, governments, foundations and donors do not have unlimited funds and because microfinance competes for scarce global resources with other worthy causes (clean water, healthcare, education, peace and reconciliation, etc.), the microfinance intelligentsia has convinced itself that private capital markets can be a steady cornucopia of cash. In a virtuous circle, social investors invest, microfinance pays profits and poverty is whisked away. Doing good by doing well.
Undeniably, open capital markets can be powerful engines for economic development, creating jobs and opportunity. Recalling 5,000 years of human history with its economic slavery, gulags, feudal serfs, indentured servants, sweatshops, exploited industrial workers, debt bondage, children’s labor and 3 billion people today still living on $2.00 per day, we all appreciate that free markets allocate capital efficiently, albeit not fairly.
No abstract economic theory and no market, whether functioning or failing, can change the reality that we each, alone and singularly, are blessed and burdened with a moral compass. Within every free market you and I are free to make ethical choices. “…of all the differences between man and the lower animals, the moral sense or conscience is by far the most important,” wrote Charles Darwin. “It is the most noble of all the attributes of man.” He added, “A man who possessed no trace of such instincts would be an unnatural monster.”
Paradoxically for an anti-poverty movement built on capitalism, a whiff of microfinance Marxism hovers in the air. As Marx viewed the human condition solely in terms of economic class, some fans of microfinance are exclusively attracted to its economic opportunities, its self-help entrepreneurism. The unintended consequence is that impoverished women are monetized as microfinance fulfills its mission by making women more profitable chattel (or, in the parlance, creating self-help business opportunities). The idiocy often begins by defining microfinance as providing access to financial services, instead of providing fair access to fair financial services.
A Sense of ShameNo one has ever told me that they want to live in a world in which one billion people, a sixth of humanity, is cast aside. 4th Century B.C. Chinese philosopher Mencius wrote, “…no man is without a sense of compassion, or a sense of shame.”
For many people, global poverty is just too daunting, discouraging and depressing. Even with global market forces at full strength, the democratization of governments, the growth of microfinance to reach millions and hoped-for economic opportunity for all, poverty will still plague the planet. One does not have to be a pessimist to believe that the poor will always be with us.
But the sorrowful reality of intractable poverty only means that what you do matters. It matters to families living in poverty. It matters to you. And, it matters because of what it says about you. As has been famously observed, “Life is not a dress rehearsal.”
Today, 18,000 children will die from malnourishment. Among the children who will die today might be another Gandhi or Galileo, a Shakespeare or a Socrates, a Jefferson, Beethoven, Churchill, Mandela…
Ending savage poverty is the right thing to do. It is also the smart thing to do.
Be the Hands and Feet of Justice
In 2008, I attended my son Aaron’s graduation from Columbia University. The Commencement Day Invocation by Chaplain Jewelnew Davis moved me (excerpted for brevity):
“Your education must be cherished as a sacred trust. You will have the opportunity to influence some of the most critical, international, environmental, business, legal, journalistic, scientific, engineering, medical, dental, public health and public policy issues of this century.
Family and friends, strangers and neighbors, communities and nations will count on your leadership, your compassion and your humility to speak up for the sick, the thirsty and hungry, to speak up for the poor, to speak up for those who have lost their dreams and seek new hope.
Be a maker of peace, a steward of mercy, a voice of reason and be the hands and feet of justice.”
If you keep your food in a refrigerator, and your clothes in a closet, and if you have a roof over your head and a bed to sleep in, you are richer than 75% of the world’s population. Invest in a future. Recovering a person’s humanity is priceless.
I don’t know what else could be more worth doing than helping a mother feed her child.
