By Doug Priest
“I am married and have four children. I received a loan of $400 to start a business making jewelry and shoes. With the money, I purchased a sewing machine, the raw materials needed, and paid the rent for my business house. I have since been able to employ part-time workers.”
“”Moses, a slum dweller
In Matthew”s account of the anointing of Jesus by Mary of Bethany, he quoted Jesus as saying, “The poor you will always have with you, but you will not always have me” (Matthew 26:11).
Mark, who also wrote about this event in his Gospel, noted that Jesus said, “The poor you will always have with you, and you can help them any time you want. But you will not always have me” (Mark 14:7).
Since Jesus was fond of quoting from the Old Testament, it is likely he was referring to Deuteronomy 15:11: “There will always be poor people in the land. Therefore I command you to be openhanded toward your fellow Israelites who are poor and needy in your land.”
How do we reconcile these parallel, but different, Bible passages? Shall we throw up our hands in despair, keeping our possessions to ourselves, and interpret the verses to mean, Since we will always have the poor with us, what is the use of helping them? The problem is too big. It won”t go away. Or, should our understanding of the texts be, Since we will always have the poor with us, let”s take the opportunity and be openhanded with them.
One thing is certain. Global poverty is a problem that Christians should not ignore. Today 1 billion people live on less than $1 a day, and 2.4 billion people””40 percent of the world”s population””live on less than $2 a day.1 As followers of Christ, we want to help our poor neighbors discover their God-given potential, rise out of poverty, and be able to meet their needs and contribute to their communities.
How can we help the poor rise above their poverty without demeaning them or creating dependency?
The Beginnings uf a Worldwide MovementÂ
Thirty-five years ago Muhammad Yunus, an economics professor in Bangladesh, saw that the poor people in his community could not get the capital needed to take steps toward self-sufficiency. He approached the established banks, only to be told the poor were a bad risk, and making small loans was too much work for too little profit. The professor learned the poor had to resort to borrowing money from those who charged exorbitant interest rates.
He decided to personally lend money to the poor. He believed their ingenuity would allow them to establish small businesses that could make enough profit to repay the loans, and that in time they could move out of poverty. His experiment, called microcredit or microfinance, started a worldwide movement for which, in 2006, he was awarded the Nobel Peace Prize.2 Today, some 200 million poor people have received loans, and the repayment rate for these loans is an astonishing 95 percent.
Microfinance has become a vehicle for the poor to save, become insured, and borrow money.3 Potential entrepreneurs are recruited and formed into groups that meet weekly. The microfinance institution provides a loan officer for each group. The group undergoes training in simple business methods. Together they discuss business plans and the appropriate amount to borrow to establish or enlarge the business. Many of these businesses are operated in the informal sector of the economy, and thus have no taxes or fees.
The members are required to begin saving before applying for a loan. Interest is charged on the loan, but at a much lower rate than can be found via other methods. During the weekly meetings, each member repays a portion of the loan and also brings an amount to be saved. The loan officer provides documentation and banks the money. If a group member defaults on the loan, it is the group”s responsibility to repay it, providing instant accountability.
Once the loan has been repaid, the borrower can apply for a second loan. Research has shown that after four or five loan cycles, the borrowers” businesses are established to the point that further loans are not needed. They can then apply to formal banks for larger loans on their own, and no longer need to be a member of the weekly accountability groups.
Anne, a former slum dweller from Nairobi, Kenya, shared her story:
My three children and I lived in an abandoned shanty with no water, no electricity, no possessions, and no means of support except begging. After the police caught two of my children begging, a friend referred me to the Missions of Hope School. In addition to enrolling my children in school, I received a $15 loan to start a soap-selling business. Since then, I have expanded my product line to tea leaves and salt for area restaurants, and now my children and I live in a stone room. I have also become the prayer leader in my church.
Tangible Benefits
Around the world, three-quarters of those who receive loans are women, and they have proven to be a better risk for loan repayment than men.4 “When girls and women earn income, they reinvest 90 percent of it in their families. They buy books, medicine, bed nets. For men, the figure is more like 30-40 percent.”5
As women establish their own businesses and become breadwinners, they do not need to resort to other methods for making money””prostitution or brewing alcohol””common among those without resources or power. For women, microfinance addresses poverty and unemployment, the two root causes in the slums of the spread of HIV/AIDS, a horrible disease that leads to even more poverty.
Many microfinance programs are established for social reasons””to help poor people better cope with their poverty, and eventually to rise out of it. Other microfinance programs are started as a way to make money, such as a traditional bank. There can be a tension between these approaches, one primarily designed as altruistic to meet client-demands, and the other focusing primarily on investor-demands to obtain profit.
Christ followers are implementing microfinance programs in the poorest and most needed places in our world. These microfinance programs include biblical teaching about money, promote Christian values, and include prayer in the weekly meetings. These efforts often depend upon donations to provide the amount of cash needed to get the program going. Donors like knowing that once they contribute their funds, the money will be used over and over and over again, since the payback rate is so high.
Phil Smith and Eric Thurman comment on some of the tangible benefits of microcredit in their book, A Billion Bootstraps.
The true benefits are dignity and self-esteem, along with respect for family and community. Microcredit enables people to become givers, not takers. Microcredit should not be seen as charity but rather as the opportunity poor people need to build a decent life. Through microcredit, donors can shed the old hand-out mentality and become true partners in progress with the people of the developing world.6
Microfinance is but one tool in helping people who live in poverty. When microfinance is combined in a holistic program with evangelism and spiritual development, health and nutrition training, and children”s education, heartening results have been achieved.
Through microfinance, men and women feel empowered to have control over their own economic state and future, which leads to an improved standard of living and subsequent behavior changes. People come to Christ and are discipled through the training and accountability groups. As they work and earn a living, they begin to give to their churches. Communities are transformed, and Christ is glorified.
Elese established a tailoring business and now provides employment to others.
Yes, we will always have poor people with us. Will we be generous and openhanded?
“I am married with three children. I received a loan of $106 to support my charcoal selling business, which I repaid. Next, I received a loan for $333 to start a tailoring business that employs two other women. I also saved $105 while growing my businesses. I dream of buying a plot for my family to live on and to grow my business. I want to employ 15 women to provide them with a way to earn a living.”Â
“”Elese, a slum dweller
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1Found at http://earthtrends.wri.org/updates/node/6.
2Muhammad Yunus, Banker to the Poor (New York: Public Affairs, 2003).
3For more information about microfinance, see LeRoy Lawson”s book reviews in this issue.
4Larry R. Reed, State of the Microcredit Summit Campaign Report 2011 (Washington, DC: Microcredit Summit Campaign).
5Nancy Gibbs. “The Best Investment,” Time, 14 February 2011, 64.
6Phil Smith and Eric Thurman, A Billion Bootstraps: Microcredit, Barefoot Banking, and the Business Solution for Ending Poverty (New York: McGraw-Hill, 2007), 44.
Doug Priest, a CHRISTIAN STANDARD contributing editor, is executive director of CMF International, Indianapolis, Indiana.
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Can I Go Online and Provide a Loan?
Along with the BigDent website highlighted in this issue (BigDent.org), Opportunity International (www.opportunity.org) is a Christian organization involved in microfinance. Opportunity International provides microfinance loans, savings, insurance, and training to more than 2 million people working their way out of poverty in the developing world.
One of the largest microfinance programs is online at www.kiva.org.
Kiva.org receives donations that are then funneled to banks and organizations that make small loans to individuals. Some of the organizations kiva.org partners with are Christian organizations, such as World Vision, though many are not. Kiva.org“s mission is to connect people through lending to alleviate poverty.
“”DP
I agree with and trump such organizations who are helping people in real poverty to make their way out through the loans and services provided. I would consider making ‘loans,’ and genuinely expecting nothing in return.
However, I feel burdened to help in areas all over the world, where not only is poverty incomprehensible and utterly unbelievable, but where the Gospel will also be presented with the same fervor as the services given.
I have trouble personally with the emphasis on poverty alone. My question would be, “What does it profit a man, if he come out of poverty and live a better life–and yet not be also saved from spiritual poverty and eternal death?” Should not global spiritual poverty be as much a deep concern as physical poverty?
Again, I am deeply moved by poverty, but I am as deeply moved by the spiritual salvation of those helped out of poverty.
All that to say, I want to know Who is really ministering to BOTH, as Jesus did when He fed the 5,000. I give generously, but thoughtfully, prayerfully and wisely.