Microfinance, Savings and Credit Associations, microloans….what do these terms bring to mind? Maybe you assume this is a subject for MBA’s and banking executives? Would you ever connect these words with sending poor children to school? We had the privilege of traveling with Hope International to see their work in the Dominican Republic. Our goal was to get a clear understanding of how these concepts can literally transform lives from hopeless poverty to productivity, pride and spiritual salvation.
We were in the D.R. to witness a marvelous partnership between Esperanza, a Dominican non-profit, and U.S. based Hope International. We headed into a small village in the middle of hundreds of acres of sugar cane. The unpaved road seemed to go on forever.
Along the way we passed by little villages where the sugar cane workers live. We were told that large corporations own these fields and the shanties in which the workers live.
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The poverty in the region was typical of the D.R. but this place has a reason to be joyful. Once a week, an Esperanza loan officer makes the trip to this remote place for a meeting. This officer literally brings the bank to these people. We were privileged to observe one of these meetings. The loan group (“clients”) assembles in the one building in the village. The meeting opens with worship and Bible teaching. On this particular day, they were discussing the story of Abraham and Isaac.
Next, the business starts. At this point, clients are able to make loan withdrawals, make payments on their loans, check balances and discuss their account. Basically, whatever you do in the U.S. with your bank teller, they are doing here. Just before business started, the group realized that one of the members of this client group was missing. The policy is that all clients must be present to start the banking business. All of these clients have taken small loans of $30-50 to expand or develop private businesses of their own. If one member is missing, it is up to the group to either find her or cover her payment for that meeting. You can imagine how quickly the group went to work locating her. After about 30 minutes, a well-dressed older woman came rushing into the group. She looked distressed and explained that she had been at a funeral for a family member who had taken his own life. Even in her grief, she quickly went to work making her payment to avoid the group being held up longer. You can see how this accountability encourages responsibility and good stewardship. If one person defaults, the repayment responsibility falls on the shoulders of the entire group. This policy translates into a community holding each other responsible for making good financial and lifestyle choices. Mix in Christian education, prayer, and economic enterprise and you can see how this is transformational! The power of this approach is obvious in the 95% loan repayment rate that Hope typically sees among their clients.
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The clients I spoke with were eager to share their success stories. One woman in particular has a shoe business. Every week she goes in to town and purchases shoes to sell. As we spoke through a Hope employee translator she was asking how big her next loan could be. She was pointing to our American shoes and saying, “I want to buy higher quality shoes like yours to sell”. She is paying back her sixth Hope loan and is ready for more! These small loans have enabled people to accumulate savings (and keep their savings in a safe place) for the first time in their lives. Now, when a child is sick, they have the $10 for medicine, they can pay for school tuition and uniforms, and cover emergencies.
Before they had savings accounts, one household emergency meant financial disaster. Having $50 in the bank can be the difference between life and death in this community.
Over the years I have personally become weary of hand out programs that seem to have no end in sight, creating dependency among the poor and basically threatening local businesses. Hope International provides a productive and creative alternative to that type of short-term help to the poor. If you are looking for transformational work that enables people to lift themselves permanently out of devastating poverty, I truly believe this is the approach to do that.
Learn more at www.hopeinternational.org
