Last weekend I attended the Opportunity International Governors’ Conference in San Francisco to discuss how small loans (somewhere around $100) are being used to transform communities. Microfinance has been an important arm of the global anti-poverty strategy, and Opportunity International is ONE organization providing financial aid to small businesses throughout Africa. This conference revealed specifics of microfinance, supporting ideas and the importance of ONE.
Early in the conference, I met three passionate women, Ruth Ann, Karen, and Amma (featured in the photo), who kindly took the time to discuss an important book with me. In the words of Opportunity International, the book One Hen is: inspired by the life story of Opportunity International’s Dr. Kwabena Darko, chairman of the Ghana board and member of the Opportunity International Board. One Hen tells the story of Kojo, a boy from Ghana who turns a small loan into a thriving farm and a livelihood for many. With this tiny loan, Kojo buys a hen. A year later, Kojo has built up a flock of 25 hens. With his earnings Kojo is able to return to school. Soon Kojo’s farm grows to become the largest in the region.” The book is being given as gifts and being read to children in schools and churches. Amma, Karen, and Ruth Ann carefully explained how ONE Hen is helping children grasp the importance of compassion and the benefits of microfinance. The hope is children will see how ONE person can make a difference through opportunity and entrepreneurship. After reading the story, children can then go online, play games, take a quiz, and read success stories to essentially gain a unique perspective of world’s outside their own.
Like many challenges facing the developing world, I learned providing loans was not as easy as I thought and not quite the same as loans we offer here in the United States. The biggest challenge is proving individual identity in most African countries, and in fact many countries around the world. Africa, a continent invested in rich culture, traditions, and potential, is often held from opportunities because of undocumented identity. A simple drivers license or passport are too expensive for many people to afford. However, through “Smart Cards,” Opportunity International has harnessed technology to keep files of photographs, thumbprints, and personal information of several people they call their clients. Now, Africans and others are gaining access to loans, savings accounts, and in some cases insurance while protecting their growing assets started with their small businesses. The loans are established through Trust Groups, a community of close friends and relatives who co-sign for each other’s loans as a group and therefore are essentially responsible for the repayment of the loan as a community. As the loan is repaid, the interest is used to finance other loans to start more businesses in communities. In addition to the loan, Opportunity International provides mandatory training to explain the basics of personal banking, savings and business investments. Profits and savings allow families to purchase food, clothes and provide jobs for their communities. Currently 98% of the loans are being repaid because of the trust groups.
Creatively, Opportunity International has tackled a second challenge, that of banking access, by establishing mobile banks across several countries with the hopes of allowing their clients to open savings accounts within a sixty minute walk of their home. Now, “dead money,” often stored under beds or in containers, can not only be housed and protected, but also used to create loans for others in the community. As an important service to their clients, Opportunity International trains loan officers to go door-to-door to both establish loans and collect payments weekly.
Identity Smart Cards, banks and small loans programs also create another avenue of protection for many hoping to secure their new ventures – Micro-Insurance. Through Smart Cards and documented assets, a growing number of people are able to gain access to health, property and life insurance. Micro-insurance can also serve to help people, once ineligible, obtain a small loan. In some cases people are not able to obtain a loan because they happen to live in an area burdened by poor weather conditions. In other cases, the small amount of money families have are wiped-out because of natural disasters or health issues. Health insurance gives investors the confidents to underwrite a small loan. So, a family once concerned about the weather effecting their crops, can use insurance to obtain a loan to purchase irrigation tools, and tolerant crop seed. Then, they can insure their property in the case of flood or drought allowing them to get loans in the future to expand their small business.
During the conference it became clearer to me why just one aspect of our campaign at ONE is so important. Often times health insurance is almost impossible to obtain for those with HIV and AIDS. ONE members are urging congress to set aside funds to help those inflicted with preventable diseases such as HIV/AIDS, TB and Malaria. Hopefully soon, groups like Opportunity International will become more confident to providing low-cost insurance to those who have access to life-stabilizing medications for illness which currently prevent health insurance coverage.
I am more energized now than ever to keep the conversation alive. I urge everyone to share these stories with your friends and family, learn more about our partners, and encourage everyone you know to make time to get involved. The more we do for the developing world today, the better a world we will sustain for generations to come.
-Roscoe Mapps, California Organizer