Sarah Doe, her husband dead in Liberia's civil war, fled to Ivory Coast in 1990 with nine children, some cooking utensils and no savings. Her main economic activity had been baking doughnuts, and she began on a small scale once she resettled into her brother-in-law's house.
In August 1998, she joined 14 others to start a savings and loan club. She obtained a $16 loan from the club and purchased flour to increase her production. The club saved enough to receive a matching loan from the International Rescue Committee, and Doe has had three additional loans to continue expanding her business. Four of her now-10 children are enrolled in school. She is renting a house while she has another built in Liberia.
She is one of millions of success stories to come out of the micro-credit movement that began in the mid-'70s in some of the poorest parts of the world. The best known of these efforts is the Grameen Bank in Bangladesh that began informally in 1976. Muhammad Yunus, a teacher at a university near a rural village, made a $27 loan out of his own pocket to 42 villagers so they could buy a round of raw materials for their crafts. That spared them from having to borrow from a traveling trader who insisted that they sell their crafts back to him. One woman, who made bamboo stools, made only 2 cents a day. With the loan, she was able to sell to the highest bidder and her income increased to $1.25 a day.
The Grameen Bank, established formally in 1983, has lent money to 2.4 million of the poorest people in Bangladesh, most of them women, to help them set up small businesses. Yunus, who received his PhD in economics from Vanderbilt University, did the opposite of what banks were doing. If banks lent to men, he lent to women. If they demanded collateral, he did not. His bank was illiterate-friendly. The small loans were usually structured around groups of five women who were unrelated. They took a seven-hour course on how the bank works, learned to sign their names, and took an oral test to qualify for loans. The two poorest of the five got the first loans. If they repayed small amounts over six weeks, the next two got loans, and if they repayed, the fifth participant got her loan.
The success of the Grameen Bank and similar micro-credit efforts in India and Latin America eventually captured the attention of such people as President Clinton, who has made it a centerpiece of his strategy to lift people out of poverty. In February of 1997, 2,900 people from 137 countries gathered in Washington for the first Microcredit Summit, and they launched a campaign with the remarkably ambitious goal of providing credit for self-employment and other financial services to 100 million of the world's poorest families by 2005.
"We have these global summits, and the enthusiasm is always there at the end," says Sam Daley-Harris, director of the Microcredit Summit Campaign. "But then it's follow-up time."
On Sept. 3, the fourth anniversary of the U.N. Conference on Women in Beijing, the campaign delivered encouraging follow-up numbers. In 1998, 622 programs were reporting on their progress to the campaign. As of Aug. 1, 925 programs reported that they reach a total of 12.6 million of the poorest men and women, a 50 percent increase from the 8.1 million they reached in 1997. The 34 largest programs have expanded to reach an additional 1.1 million women over the past two years. The total poor being reached by micro-creditors rose from about 14.8 million in 1998 to more than 22 million this year.
There are pitfalls that micro-creditors have learned about as they have gotten more sophisticated. At a 1998 campaign conference, Helen Todd, editor of CASHPOR, a network of Grameen Bank replications, told of going to the home of a woman in Nepal who had borrowed to develop her grocery business. "As soon as I started asking questions about the grocery business, the husband made all the answers," Todd said.
Todd followed the woman into the house, and she started crying. It turns out that not only had the husband taken over the business, he had also taken a second wife. Todd is convinced the most successful borrowers were "those husbands and wives working in partnership."
At the same conference, Muhammad Yunus explained how Grameen's housing loan policies protect women from the kinds of abuses Todd described and helps buttress their independence. To be eligible, a woman has to have successfully repaid three one-year business loans. A housing loan is $300, but before she can get the loan, she has to tell her husband that the only way she can get it is for him to give her title to the land.
"This is quite a shocking thing for the husband to hear," Yunus said. "But the need for housing is so much, they come around."
The bank has given more than 500,000 housing loans, and in every case the woman is the borrower and the owner of the land and the house. Divorce, he said, is common practice, particularly among the poor. "All you need to say is, `I divorce you' three times, and it's done." But once the family is in the house, "the husband, even in his utmost anger, doesn't utter that sentence, because he realizes that after saying that, it is he who has to go out of the house."
The micro-credit movement empowers the world's poorest women within their families and within their communities. The Grameen Bank has encouraged its borrowers to vote since 1991, and they now are running for and winning local elections themselves.
Daley-Harris says an average of five family members benefit from micro-loans. More children are going to school, for example. Should the campaign reach its goal of 100 million borrowers by 2005, a half-billion of the world's poor may be helped through access to financial services. Those very early helping hands in the micro-credit movement have come a very long way.