Microloans to Thieves and Other Revolutionary Acts That Demand Championing
July 8, 2009 SVMN Speaker Event re-cap written by Sally Levy
Sam Daley-Harris, Founder of RESULTS and Director of the Microcredit Summit Campaign, challenged the audience with his topic ‘Microloans to Thieves and Other Revolutionary Acts that Demand Championing.’ He shared examples of how microloans have transformed lives and specifically highlighted the innovative work of Jamii Bora, a Kenyan microfinance institution (MFI) founded by Ingrid Munro. He also spoke about the recent achievements of the Microcredit Summit Campaign.
Daley-Harris commenced with a part of a video, Small Fortunes, which follows the life of Jorimon Khan, a Bangladeshi woman who was married at age 10 and had her first child at 15. Her family lived on less than $0.20/day until Grameen Bank came to her village. With trepidation she took out her first loan (600 taka or USD 10) in 1980 and bought a rice husker. After a year she had repaid her first loan, could feed her family three meals a day and took out subsequent loans, each one larger than the preceding loan. Today, 25 years later, she has built a safety net for herself and her family.
This personal story was followed by a recap of the June 2009 Latin America – Caribbean Regional Microcredit Summit where Daley-Harris opened the event with a discussion on ‘Breaking Rules in Microfinance.’ He summarized his speech from the Summit [*see an excerpt via the link below] and shared a story he had told about the work of Jamii Bora: how they have reached people who are not economically active, e.g. beggars, thieves and prostitutes. He spoke of how Jamii Bora had received funding to rebuild a market which had been destroyed and had ‘broken the rules’ by finding the leader and 200+ gang members who had caused the destruction. Jamii Bora staff engaged the gang leader and his followers to guard construction materials at night and rebuild the market during the day, and eventually got them involved in microfinance.
To highlight the real face of poverty, Daley-Harris discussed a story from the book Race Against Time by Steven Lewis, concerning sibling-headed households. He then posed the question, ‘How do microfinance institutions [MFIs] deal with this kind of poverty?’ He again cited the work of Jamii Bora in addressing these issues and how they are breaking rules to better end poverty – for example, by loaning money to thieves who have gone on to build their own businesses and are helping others move away from a life of crime. Daley-Harris asked the crowd, ‘How is that for a return on investment?’ He suggested that investors would not be seeking this kind of return, but that the world needed these solutions. Following this he discussed other innovations Jamii Bora has made in microfinance. For one, all of its staff members are former members (clients) – including former beggars and thieves. The MFI has also created a health insurance program as it had found that the most common reason that borrowers did not repay was their having a family member in a hospital.
The current achievements of the Microcredit Summit Campaign were also a focus. Daley-Harris discussed how the goal of reaching 100 million of the world’s poorest families with credit by 2005 was reached only one year late in 2006. Then the Campaign launched Phase II with two new goals: 1) ensuring that 175 million of the world’s poorest families, especially women, receive microcredit, and 2) moving 100 million families above $1-a-day poverty by 2015.
Following a standing ovation, the event concluded with a lively and moving Q&A session. Daley-Harris again highlighted the need to overcome the preconceived notion that only the ‘economically active’ can become borrowers of MFIs. As banks already exclude so many customers, he proposed that MFIs should not do the same. Daley-Harris finished with a quote: ‘Be outrageous. It’s the only place that isn’t crowded! [Anon]’
RESULTS’s microfinance campaign and opportunities to get involved
Sam Daley-Harris at the Latin America — Caribbean Regional Microcredit Summit 2009
An op-ed by Sam Daley-Harris
When my wife and I slipped into our theater seats to watch Slumdog Millionaire, we braced ourselves for a journey into urban slums, a world inhabited by over one billion people globally.
But unlike the movie-goers in the theater that night who pinned their hopes for one chai wallah (tea seller) escaping the horrors of the slums of Mumbai, India, on the long-shot odds of his winning the Indian version of Who Wants to Be a Millionaire, we knew that right now there is a tool that has helped not just one movie character but more than 100 million of the world’s poorest people actually begin to escape the worst devastations of poverty.That opportunity is not a game show but microcredit—small loans to start or expand businesses like selling tortillas or cell phone time to your neighbors.And if there was an Oscar for assisting beggars, thieves, and prostitutes to find a dignified route out of the slums, I’d know where to look for the winner.
I wouldn’t look in the cool dark of a movie theater, but in the bright, hot sun of Nairobi where you can see the success of entrepreneurs in the urban slums, Jami Bora’s “slumdog entrepreneurs.”Jamii Bora, which means good families, is a Kenyan microfinance institution that has grown from lending money to 50 women beggars ten years ago to serving more than 200,000 members today.One of those entrepreneurs is Joyce Wairimu.Wairimu was one of the 50 women beggars who started Jamii Bora with founder Ingrid Munro in 1999.Munro calls Wairimu one of the fast climbers out of poverty.How fast? In ten years Wairimu has built six businesses and employs 62 people.
Another of the fast climbers is Wilson Maina.Before Jamii Bora, Maina was a thief, one of the most wanted criminals in Mathare Valley slum.Starting with a loan of $20, Maina has built four businesses and a new life for himself and his family.Along the way, he has convinced hundreds of youth to get out of crime.Now that’s a “lifeline” that really matters.
Munro didn’t stop at proving microcredit to help the poorest slum dwellers.She decided to build a town with decent housing and business space for her entrepreneurs.“Every poor person’s dream is to move out of the slums,” Munro says, “not patch up the slums.”On January 30th, that’s exactly what happened when the first 246 families moved out of the slums and into the newly created Kaputiei town with nearly 1,800 families to follow.For the same monthly mortgage they had paid for their one-room shacks, each family now lives in a home with two bedrooms, a bath, a kitchen and a living room.But this is ultra sub-prime lending that works because in order to qualify for a mortgage the residents have to have successfully repaid three micro-business loans.
Where does Munro’s capacity to innovate and defy conventional wisdom in the microfinance field come from?It started 20 years ago when she and her husband adopted three street children.It was in the fertile ground of Munro’s relationship with the mothers of her sons’ friends in the streets—women who were beggars— that her profound insights would grow.When Munro, a Swedish trained architect and urban planner, retired from the African Housing Fund in 1999, she thought she would also retire from the little group of 50 beggar women with whom she had been working.But when the women pled with her not leave them, Munro agreed to stay and insisted that they must lift themselves out of poverty.For Munro that meant the women had to start developing the discipline of saving on a regular basis.
She had them come every Saturday with about 50 cents in savings.When they deposited their 50 cents she would give each of them two scoops of corn and one scoop of beans for free.She admits now that for those first two months she was tricking them into saving with the lure of free corn and beans.After two months, the bags were empty, but the beggars continued to save and the free corn and beans never returned.
Another of Munro’s breakthroughs is that all Jamii Bora staff are former members, previously destitute themselves.
Winning the war against poverty won’t come from summoning the right “final answers” to a handful of trivia questions to strike it rich on a game show.Winning the war against global poverty will come when we realize that we have one of the answers—microcredit—and summon the political will to lift up those microcredit programs that have figured out how to reach the world’s most destitute people.This is a final answer we can stand behind.
Sam Daley-Harris is Founder of the Microcredit Summit Campaign which seeks to reach 175 million poorest families with microcreditwww.microcreditsummit.org and of RESULTS which seeks to create the political will to end poverty www.results.org.