Last week, I had the opportunity to talk with Peter Greer, president of Hope International, about microfinance, the challenge of getting the faith community involved and how a helicopter ride led to chapter three of his new book.
Give us a quick description of Hope International.
We’re a Christian microfinance organization operating in some of the most challenging environments in the world. More broadly, we are attempting to inform and engage the Christian community in microfinance.
So what is microfinance? Many think it’s complicated to understand.
At its core, it’s banking and other financial services for people who have no access to these services. If someone wants to start a business, we help them develop their business plan, give them a small loan to launch their idea and offer up a place to save their money. And since these entrepreneurs often lack collateral necessary to secure a loan, they collateralize what they do have—their relationships. They ask their friends and neighbors to cross-guarantee the loans. They put their reputation on the line.
So let’s say a man wants to start raising chickens in his village. He gathers a small group of other entrepreneurs in his community. He has to sell his business plan to his community before he can get a loan. They know if his expenses are accurate, if he is a man of integrity, and if his projected profit is feasible. The group then provides feedback—you’re charging too much for eggs, you can get feed for much cheaper than that. With this model, over the past five years we’ve had a 98% repayment rate. It’s remarkable.
But why microfinance? Why is this so important?
So much of our desire to help often just touches on the surface issues. Someone doesn’t have food, so we want to provide food. Someone doesn’t have a house, so we want to give them a house. But microfinance focuses on the long-term. We help people build their own houses, address their own needs. As the saying goes, give a man a fish, he eats for a day. But we want to help them start a fishing business. Then they’re going to eat for a lifetime.
How does faith play a role in your work?
We offer our services to all entrepreneurs without any form of discrimination. We work with people based on their need, not their creed. Whether you’re Muslim, Hindu, Christian—there’s no difference in the services you receive. But that’s not to say our faith isn’t important to HOPE – it affects everything we do. From the way we serve our clients to the biblically-based business curriculum to our definition of “success,” we seek to have a financial, social and spiritual impact.
Unfortunately, the church isn’t engaged yet in this transforming model of ministry. We actually just did a survey with Barna Research and found that 59% of American pastors have never heard the term microfinance before. That’s unbelievable. This is a huge community that hasn’t gotten engaged. So we’re looking at how we can wake up the US faith community and let them know that microfinance is effective—and it does fit with the mandate of the church.
Why don’t you think the faith community is more engaged on this issue?
I think there’s a lack of awareness about the issue. And change is always difficult. They already have models that they know and are comfortable with.
There’s also misunderstanding about the practice. Loans to start a small business? Why would we ask the poor to repay a loan?
I also don’t think the church has fully understood some of the negative long-term impacts of handouts. If people we’re serving around the world start to believe the only way to get ahead is to rely on the generosity of others, then we have failed these individuals. We have to help them realize that they have gifts and abilities. We partner with individuals in poverty and help them become all that God created them to be. Phil Smith and I wrote our book to help awaken the church to microfinance (The Poor Will Be Glad: Joining the Revolution to Lift the World Out of Poverty.)
Tell me more about the book. Where did the idea come from?
It started when I was in northern Afghanistan. I saw the issue of dependency everywhere—and while much of the service provided by foreigners started with good intentions, it didn’t guarantee good results. But it’s not enough to just identify the problem, you have to offer solutions. And I think employment is a better way of helping. So I started writing my thoughts on business cards during a helicopter ride back to Kabul. Those business cards turned into much of Chapter 3.
How did you first get interested in microfinance?
I was studying overseas in Russia. I had lunch with someone who was doing microfinance—and I realized this was a perfect fit. It mixed my love for business with my love of service.
I believe microfinance works. Anyone who’s traveled to the developing work has likely been bombarded by people asking for a hand out. You don’t get this type of treatment when you visit people who have received microfinance loans to grow small businesses. Just recently I was in the Dominican Republic and was welcomed into the home of a man named Jose. Rather than asking us for anything, he served us, gave us something to eat and drink. And you noticed a difference in his face—he had pride in his business and in what he had accomplished.
Or there’s Mama Flores in Kinshasa, Congo. She opened up a hair salon with the help of a microfinance loan and she’s now giving back to her community in big ways. At one point she received local charity, now she’s a local woman of generosity, employs 15 people and trains widows and orphans in her trade. You don’t get these results from traditional charity and handouts. Microfinance empowers, changes the relational dynamics and increases dignity. Meeting people like Jose and Mama Flores is my motivation and my reward.
What’s a typical day like at Hope International?
There seems to be a new challenge every day. First there’s security—how do we protect our staff and their families in places like Afghanistan and India. That’s what I’m checking my Blackberry for first thing every morning. Then there’s the question of how to we do our work with excellence. Let’s look at the payment procedures and audits and make sure they’re really working well. And how do we tell the story of what we do, and invite people to come along with us.
What are some ways that people can learn more—and get involved to help?
Our website is a great place to start. You can take the “Never Ending Hope” challenge, watch videos, find out about upcoming events or trips to see microfinance firsthand. The last section of The Poor Will Be Glad is devoted to practical suggestions of how you or your church could get involved.