TO OUR CREDIT : BOOTSTRAP BANKING AND THE WORLD
explores the human dimension of microcredit in four very different places:
TO OUR CREDIT, Bootstrap Banking and the World, takes us first to Bangladesh, where 120 million people live in an area the size of Wisconsin. More than half are impoverished.
We meet Mursheda Begum, abandoned along with her children by her husband. She made beautiful scarves and had no trouble selling them; yet she and her children would often go hungry. To buy raw materials, she was forced to borrow money from local moneylenders, who charged as much as ten percent a day -- enough to soak up all her profits.
It was for people like Mursheda that, almost twenty years ago, Muhammad Yunus created Grameen Bank. Grameen has now lent more than $2 billion to 2 million villagers, most of them women. The average loan is less than $100. A recent study tracked a group of ten-year Grameen members; over half had risen above the poverty level.
We come to appreciate how microcredit is different from most traditional development methods. The act of borrowing money rather than receiving a handout allows the borrower to retain control of her or his own development, without the loss of dignity and self-confidence.
The strategy of microcredit has spread to almost every country in the world. But nowhere is the opportunity so timely as in South Africa.
TO OUR CREDIT profiles women who, under apartheid, were prevented from owning businesses. Now, they borrow money from the Small Enterprise Foundation, or SEF, to make the most of new opportunities.
But we come to realize that life and business in rural South Africa is not easy. Unemployment is high, almost 40 percent. Men must still move to large cities in search of work, leaving women and children behind.
We meet Kate Makaku, who started selling snacks house-to-house when the money her husband sent from Johannesburg was not enough to feed the family. When she realized that most of her customers were children, she built a stand near a school. Today, her business supports the entire family.
We learn that microcredit is very much a woman's issue. Worldwide, four out of five microborrowers are women. Microlenders have discovered that women pay back the loans more dependably than men, and that the money they earn is much more likely to benefit the children.
The demand for microloans is growing rapidly. It is estimated that hundreds of millions of people worldwide could use them. In Bolivia alone, there are perhaps a million candidates for microcredit.
TO OUR CREDIT introduces us to BancoSol, microlender to almost 80 thousand Bolivians. BancoSol is a commercial bank with a social mission. Its founders believe that government and foundation money is too limited, and that only by tapping private capital can BancoSol meet the demand.
Only a few years old, BancoSol has achieved profitability. If it can continue to provide a return to its investors and, at the same time, serve the poor, it could provide a breakthrough in meeting worldwide demand.
We follow staff members as they work hard to win investors' confidence by bringing them face-to-face with customers. We meet Hilario Osco, who credits BancoSol's loans with helping him expand his doormaking business.
But perhaps the key to long term stability lies closer to home. We attend a raffle, as BancoSol's staff try to persuade borrowers to make savings deposits; only depositors are eligible for the prizes. BancoSol is trying to win its borrowers' trust; banks can fail and Bolivia has no depositors' insurance.
As microcredit's popularity grows, large donors, including the World Bank, are beginning to make more funds available. But in Ahmedabad, India, we meet an organization which remains leery of outside support: the Self-Employed Women's Organization, or SEWA.
SEWA is comprised of 150,000 women for whom self-employment means survival. Microcredit is an important tool in SEWA members' struggle for self-reliance. We meet Ramila and Moti Parmar, daughter and mother, who lost their livelihoods when Ahmedabad's textile industry collapsed. With loans from SEWA, they were able to build up their own spinning business.
But microcredit is certainly not the only tool. SEWA provides many services for its members, including insurance coverage, health clinics, and literacy training. Ramila Parmar now works full-time as a SEWA organizer, helping its members fight for personal rights such as decent working conditions, access to market space, and fair property laws.
As TO OUR CREDIT makes clear, microcredit is not a magic solution. But it embodies the qualities needed in any effective development strategy. It avoids charity. It preserves dignity. It provides resources directly to people who need them most.