I was in Abu Dhabi at the MicroCredit Summit for four days - 14-17 March. I was honored to have been invited to the Leadership Council for the campaign - more on this later.
I have steered my own efforts away from micro-credit to community-based, savings-led groups. But it's good to recognize some of the positive impact of the microcredit movement, things that might be forgotten:
- Microcredit showed the importance in people's lives of getting together lump sums when they need them - poor people are less concerned about whether they come from saving or credit - they just need the money to feed their kids or fix the roof.
- Microcredit institutions set the bar high for efficiency and outreach. When I first visited the Grameen Bank in 1987, I was leaving an institution that had made 700 loans in four years. Grameen had two million clients at the time. They taught us to think big.
- Finally, microcredit showed us a lesson that we are still learning - that local institutions can be wonderfully effective. They appreciate their international partners, but don't need or want or benefit from international control. Find the right leaders, and empower them, and then step out of the way.
Mohammed Yunus spoke to the opening plenary. He said he was committed to "three zeros":
- Zero poverty. Which he completely believes is possible. And for him, an element of eliminating poverty is what can be called right livelihood: he wants people to play the principal role in bettering their lives. "Welfare doesn't eliminate poverty - it only hides it".
- Zero unemployment. This goes hand in hand with eliminating poverty. He has remarkable disdain for people simply looking for jobs. He is such a social entrepreneur himself, that he assumes that path is good for everyone. He may be right, but perhaps he doesn't recognize how rare people like him are.
- Zero net carbon emissions. First mention of carbon or climate change at the conference so far, despite the fact that climate change can eat up all the gains of the good works of the people present.
Professor Yunus was particularly brilliant, I thought. He keeps promoting his idea of social enterprises, business which, he say, make enough profit to stay in business, but do not return profit to the owners, and exist to make a difference in the world. During one presentation, a moderator kept pressuring him: "But Dr. Yunus, don't you think businesses need to make money for the owners? Isn't that their purpose?" Yunus kept staying on course: "I'm just giving you my definition of a social enterprise. You can be a profit maximizer if you like, or anyone can. It's just a definition." But, he added, "Of course, my personal preference is that all businesses be social enterprises!"
I enjoyed moderating a panel discussion on savings-led community-managed microfinance - the panel consisted of Hugh Allen, of VSL Associates; Mark Staehli of Aga Khan Foundation; and Frances Frasier of Positive Planet. The presentations were lucid, and the questions from the floor were spot on:
- Shouldn't we be including Self-Help Groups from India? millions of them really are savings groups - they only save.
- What do you think of forming groups of Syrians and Jordanians? (I said, Nelson Mandela said, 'Start a project with your enemy then he becomes your partner.")
- What value do SGs add, compared to existing structures like ROSCAs and Stokvelds?
All good questions that led to interesting discussions.
I am part of a group working to create an action team that will advise the MicroCredit Summit Campaign. Community led microfinance is one of the areas of concentration of the MicroCredit Summit and in our first discussions, we looked at:
- Advocacy areas (such as getting the World Bank to afford more credibility to SGs, Helping to expand the participation of SGs in social protection programs by highlighting what’s already happening);
- Publicizing efforts to reach the ultra poor with SGs;
- Research to find the sweet spot in interactions between the formal and the informal.
This is ongoing work, and so this blog will end here - to be continued eventually.