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Fourth Quarter, 2005
Economic development - breaking down the barriers
Dignity and liberation

Summary:
HOW DO YOU VIEW THE POOR? Are they a liability to be removed? A problem to be fixed? Or are they intrinsically valuable? And a vast untapped resource? How you view the poor affects your choice of solutions to poverty. Liberation and dignity for the world's poor lie at the heart of microfinance.

HOW DO YOU VIEW THE POOR? Are they a liability to be removed? A problem to be fixed? Or are they intrinsically valuable? And a vast untapped resource who, given the right tools, could make an incredible contribution to the world's economy?

One of the grave misconceptions held about poor people is that they are less able to work productively, and therefore less valuable. From the Biblical perspective, however, this idea is an outrage. The Bible is full of references to all people being equal in the eyes of the Lord. But God also recognises that we live in a sinful world where resources are not shared equally. He gives us over 2,000 references in the Bible, instructing us to look after people who are in need – “the fatherless and the widow” – perhaps none more emphatically than Proverbs 14:31: “He who oppresses the poor shows contempt for their Maker, but whoever is kind to the needy honours God.”

Getting back to my opening question, how you view the poor affects your choice of solutions to poverty. If you are of the opinion that the poor are a liability, then you could take the extreme measure evidenced by some governments or police forces and simply try to remove the problem. Or you could throw a lot of money at the issue in the vain hope that it will just go away. On the other hand, you could view the millions of poor around the world in a positive light. As people with dignity. People to invest in.

Like any good investment, the poor have the capacity to reap a great return. U2's lead singer, Bono, was quoted as saying in a recent interview: “You know that mantra, 'Give a man a fish, he'll eat for a day.Teach a man to fish and he'll eat for a lifetime'? Maybe the mantra should be: 'Give a man a fish, he'll eat for a day. Give a woman microcredit, and she, her husband, her children and her extended family will eat for a lifetime.”(New York Times Magazine, September 2005)

He added: “It's cash and dignity, side by side.” Here, Bono has captured in one short statement the essence of microfinance. It replaces fear with hope. Fear from no financial security is replaced with hope in the form of micro-savings and micro-insurance.

All people need dignity and hope. This is where microfinance providers come in for the poor. Organisations such as Grameen, Unitus and Opportunity International provide poor people with tools and skills that enable them to pull themselves out of poverty – out of a mere existence into an actual life. This method of poverty alleviation is a far more dignified process than supplying ongoing aid through grants. It treats the poor just like everybody else. If you're like me, you find it really hard to ask for help. I would much rather someone give me the tools I need to solve the problem myself, than have them step in and try to solve the problem for me.

What microfinance does is provide the poor with access to the financial services that most people in developed countries take for granted. The ability to get a loan, the opportunity to save money, insurance products, business training – these are all services that are so readily available we barely give them a moment's thought, but they're the fundamentals to our economies. Microfinance attempts to make them fundamental to developing economies as well.

At Opportunity Australia, our motivation is Jesus Christ's call to serve the poor. We recognise that for Christians, serving the poor is not an option, it's a requirement. “I (the Lord) command you, saying, you shall open your hand wide unto your brother, to your poor, and to your needy” (Deuteronomy 15:11).We serve the poor not only to provide the basics (health care, clean water, food, and so on), but through microfinance to help them achieve their potential. In Jesus' words: “Give to the one who asks you, and do not turn away from one who wants to borrow from you.” (Matthew 5:42)

In some countries women do not receive the same opportunities men do. In fact, they are actively oppressed. In Malawi, one of the countries where Opportunity works, women have traditionally had their money taken from them, to be controlled by their husbands or other male relatives. Opportunity is combating this by introducing savings accounts that can be accessed only with the account holder's fingerprints. Rather than let something like illiteracy get in the way of Malawian women's desire to save money, Opportunity has introduced technology to remove the problem altogether. Now many women of Malawi can save their own money securely. Financial security is a first step towards liberation for them.

As well as being about individuals' potential, microcredit is about family. Some 87% of all loans are given to women because they handle credit better; they invest their profits back into their families and businesses – despite being oppressed (women make up 60% of the world's population, earn 10% of its income and own just 1% of the world's wealth). And it's about community.The majority of microloans are disbursed on a group basis – Opportunity implements this method through our “Trust Bank” programme, with between 15 and 30 clients co-guaranteeing each other's loans, helping build accountability and a sense of communal benefit.

Micro-enterprise development is not a hand-out. Most of our clients don't want a hand-out; they want empowerment for their ideas and abilities, and the opportunity to participate in their communities.Yet things that many of us take for granted – the ability to apply for a loan, access to banking facilities and business advice – are what millions of people in under-developed countries around the world are crying out for. Both Old and New Testaments make frequent mention of economic activity or work as being a key aspect of human life. If successfully implemented, not only does micro-enterprise development give people the opportunity to put their business ideas into motion, it builds a sense of dignity and communal responsibility.

Microfinance works. I've seen individuals transformed, families saved and communities turned into areas of hope rather than despair. The non-economic benefits of microfinance complement the economic benefits. Liberation and dignity for the world's poor lie at the heart of microfinance and the organisations that offer it.

-- Mr Paul Peters is Chief Executive Officer of Opportunity International, Australia.

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