Alright. So why do you believe in microfinance?
Well I believe in giving others the opportunity to do things for themselves. I believe that it is empowering not only in helping small business, but in helping the owners grow as active people. In this sense, loans are better than aid. They give the borrowers responsability and agency. It gives them the opportunity to prove to themselves that can do something in a way that free aid cannot. It’s more educational than giving them free classes on empowerment and business. As everyone knows experience is the best teacher.
How do you measure empowerment?
Okay, so maybe it does do some sort of good for the individual as a person, but really if it’s not helping them out of poverty as was said in the previous post, then how is it actually helping? Measurables?
Looking for measurables in microfinance is looking for something that’s hard to find in something that’s very disorganized (like a fifty needles in a bale of hay). How do you measure the self-worth that a person feels? I would argue that is improved by microfinance. How do you even measure poverty? I would argue that income is but a factor that goes into measuring poverty, and certainly not close to the whole story. Microfinance enables social mobility that comes from comunicating with microfinance institution (MFI) and other small business owners (if you have a group loan) also must be some sort factor that contributes to poverty. How can you measure this?
Sorry, data for this kind of stuff is hard to measure. If you want measureables, then maybe you won’t be terribly happy with microfinace. There are a couple of forms being develop to measure MFIs like FAPE: CERISE and PPI are two that Kiva is experimenting with right now to tell its users of how effective a particular MFI is. But these are quite experimental at the moment, and not proven measurement tools. You can also check the link to the left that says FAPE on MIX Market, which is a general assessment of MFIs.
Big Picture?
Again, little to no measurables here. But theoretically, the microfinance is helping individuals a little. And you ask these individuals (mostly women) what their hopes and dreams are and 95% of them say to have a better life for my child than I have for myself. So my children don’t have to do what I do. So they can be educated and get a job using their minds, instead of the struggles that I endure. MICROFINANCE IS FOR THE KIDS.
Okay, well maybe that’s not proven, but if the extra income that is earned from microfinance is spent towards the kids education (with loans given to women, this is generally true), or makes it so the kids can stay in school, then, IN THEORY, the kids of the future will be better off than their parents. Hence why FAPE gives over 90% of it’s loans to women entrepreneurs. Quite simply, they know what do with the money, invest it in their kids, in education, in the future.
There are no clear answers in microfinance. And it’s important to remember that, although centered around money, microfinance is not about the money. It’s about what happens as a result of the money. This has a strong parallel with life, which often not about money, is often what happens as a result of money.
Also this gets one thinking: Why do I do what I do? For my kids? For the future of others? For the money? For reasons that cannot and should not be measured?
Sorry this got a little angsty again. I hope to get a post up on XMAS about our christmas party in which I gave and received a gift, saw a play, and heard many songs about Jesús Christ
Me again, have you noticed any tension between the women – sugar mamas- and men -sugar recipients? If so, how do you give self-worth to the men as well and deal with these changing economic dynamics?