NZ Business Magazine
Words and Photograph by Chris van Ryn
A woman squats in the street. She is selling fish from a large dish beside her. Her only other piece of equipment is a set of rudimentary scales. This is her "small business", carried out in Varanasi, India.
Her image is one of many of people living in poverty that I have collected in my book Bodyography. During my travels around the world I have photographed many people who were destitute, hungry and helpless. There is, however, a way out for some. These are people lucky enough to come across microfinance, a positive financial model which is aimed at empowering people, in particular women, through business.
The recent global recession demonstrated the polarized opposite of this model: capitalism at its worst. Wall Street bankers created and exploited a system for the benefit of themselves. They used financial "contributions" to influence government policies with a view to deregulation. They were given a free hand to carry out morally bankrupt financial transactions.
In the process, the bankers rendered 30 million people unemployed, and, according to Nouriel Roubini, senior economist and professor of NYU Business School, pushed an estimated 50 million fellow human beings below the poverty line.
In a recent interview about the global recession, the French Minister of Finance, Christine Lagarde, said "The financial industry is a service industry. It should serve others before it serves itself".
But the opposite was true of Wall Street's self-serving financiers leading up to the recession.
Microfinance, in contrast, offers a financial service to the needy people of the world. It has its origins in assisting the very poor but has the potential to assist a much wider audience. It moves with the ebb and flow of people's lives, a model of capitalism which enables people to escape from endemic poverty.
Microfinance, as championed by Muhammad Yunus, founder of the Grameen Bank, lends small sums of money to individual women within selfmonitoring collectives for the purpose of creating and running small businesses. It has its origins in Bangladesh and has since spread across the globe, including offering financial services in America.
The Grameen Bank makes a profit but it is not a profit-driven enterprise. Rather than being politically or privately driven, Grameen as a financial institution sees itself as belonging to a new sector- the socially conscious driven private sector.
The Grameen Bank established an institution on a few hallmark principles:
- • It gave money to the poorest of the poor to assist in establishing small, self funding businesses.
- • It gave money predominantly to women, because it was practically demonstrated that women, being the caregivers of children, were more responsible than men.
- • It required very small, incremental loan repayments, such that the borrower could easily absorbthe repayment unlike conventional banks, which try to delay the repayment as long as they can and in the process make the loan grow bigger and bigger.
But microfinancing goes much further than this. It has some very important externalities. It demonstrates that there is a model of capitalism which can successfully perform a socially responsible role as well as generate a profit to enable business to be sustainable. And, perhaps most important of all, it contributes vitally to the critically important reduction of worldwidegender inequality.
Raj Patel in his recent book The Value of Nothing states "Beyond the physical violence of rape, beating or assault that one in three women will be subject to in her lifetime, hunger is a form of violence that affects women disproportionately".
It is now widely recognized that women are a linchpin in eliminating poverty. In 2001 the World Bank produced an influential study called Engendering development through gender equality in rights resources and voice, arguing that promoting gender equality is crucial to combat global poverty.
The United Nations Development Programme summed up recent research saying "Women's empowerment helps
raise economic productivity and reduce infant mortality. It contributed to improved health and nutrition. It increases the chances of education for the next generation".
In commenting on the typical first time borrower, Muhammad Yunus in his book Banker to the Poor said:
"When she finally receives the twenty five dollars she is trembling. The money burns her fingers. Tears roll down her face. She has never seen so much money. All her life she has been told that she is no good, that she brings only misery to her family, and that they cannot afford to pay her dowry. Many times she hears her mother or her father tell her she should have been killed at birth, aborted or starved. To her family she has been nothing but another mouth to feed, another dowry to pay".
Now, through microfinancing, she has a chance - not just for survival but to be accepted as equal.
Websites to visit:
Pioneered microfinance in Bangladesh and has diversified into an array of development programmes.
Supports women in Latin America through microfinance and business training.
A union for poor, self employed women in India. It accepts volunteers.
Supports micrxofinance institutions around the world that assist women.
Operates like a venture capital fund for women's groups in poor countries.
Grameen Bank contact in the US.