Thursday, February 28, 2008

... A Little Perspective

I've been reading a book about the microcredit industry & social businesses by Nobel Prize Winner Muhammad Yunus, called Creating A World Without Poverty. Something I read in it the other day has been mulling around in my head.

Grameen Bank, a social business that Yunus founded, needed a way to measure its success in helping people rise out of poverty through microcredit. Rather than use a income benchmark (typically $2/day), they decided to go with a more practical ten-point system that described specific living conditions. Once a family had succeeded in clearing all 10 of these hurdles, then Grameen Bank considered them to have escaped from poverty. The ten points are:
  1. The member and her family live in a tin-roofed house or in a house worth at least $370. The family members sleep on cots or a bedstead rather than the floor.
  2. The member and her family drink pure water from tube-wells, boiled water, or arsenic-free water purified by the use of alum, purifying tablets, or pitcher filters.
  3. All of the member's children who are physically and mentally fit and above the age of six either attend of have finished primary school.
  4. The member's minimum weekly loan repayment installation is $3.
  5. All family members use a hygienic and sanitary latrine.
  6. All family members have sufficient clothing to meet daily needs, including winter clothes, blankets, and mosquito netting.
  7. The family has additional sources of income, such as a vegetable garden or fruit-bearing trees, to fall back on in times of need.
  8. The member maintains an average annual balance of $75 in her savings account.
  9. The member has the ability to feed her family three square meals a day throughout the year.
  10. All family members are conscious about their health, can take immediate action for proper treatment, and can pay medical expenses in the event of illness.

We live in a country where event the poorest often have TV. In Bangladesh the poor don't even have electricity. There is so much perspective to be gained by opening our eyes to the rest of the world.

Another interesting thing I've read over and over.... microloan industries have found that women are the key to raising families and communities out of poverty. They've found that when men earn extra money they spend it on themselves. When women earn the money, they spend it on their families -- housing, health of children, educating their children, etc. It is the women they loan the money too and the woman that are founding businesses and the women that are creating avenues to ending generational poverty.

Some microcredit organizations that I've been giving to over the years are Opportunity International and Kiva, though there are many more. (Thanks to Amy who gave me a gift certificate to Kiva as my Christmas Gift.) The idea of microcredit is something I get very excited about.... maybe I'll post on it another time. For now, I want to be grateful that I have poison-free water, heat, a dr. available to me, and a grocery store down the road.


wendy said...

Hey Michelle,

I haven't heard the term microcredit? or microloan?

What is that?

Michelle said...

Hey Wendy,

If you click on the blue term, it'll take you to a webpage that will explain better than I'm about to, but...

a microloan is basically a very small loan (usually around $100) to a person in poverty who has no collateral to get a traditional loan from a bank. They then use the $ to buy supplies to start a business and make a bit of money. Anything from selling food, to making baskets to buying cows, etc. It's been shown to be the beginning of helping a person to earn their way out of poverty. To earn an income.

For example, through Kiva I loaned $ to a girl my age in the Dominican Republic so she could start carrying meat in her grocery store. She repays the loan in small installments at very reasonable rates vs. in the past where their only option was traditional money lenders who charge super duper high interest rates, not allowing the worker to earn enough income to live.

Does that make sense. Super simplified, but I encourage you to research more. It's very exciting.

Sarah said...

Wow Michelle. I have never heard of this either but will certainly look into it.

Perspective is such an interesting and good thing. I recently heard that most poor people in this country not only have TV, but cable as well.

Thanks for sharing. I love when you write about this stuff.

Judy said...

Thanks for the post. It sure does make me even more grateful for all of the things I take for granted.

Jennifer said...

I think microloans are brillian. and it's true... providing women with ways to bring in income helps the whole family/community. I love eternal threads (the purse organization) they're providing women with work, sewing machines, etc. Many are going to school now and are able to start savings accounts as well as start their own businesses.

Thanks for giving some direction of organizations to give to. We are so blessed aren't we? I liked those ten points.... I'll be keeping them in mind.

I'm so thankful for medical attention... if not for that I'd probably have lost Samuel and the twins. So blessed.