There are pros and cons to every situation, every company, every concept. The trick is to run your cost-benefit analysis and figure out if the pros outweigh the cons, and if there's a way to ensure that fact.
Over the past week, studying the ASA model in depth, and gleaning information about Grameen and BRAC, I've begun to more clearly see the pros and cons to different microfinance models. They each have the same concept, but serve different purposes in the community. I have yet to decide which really is better. It might be an impossible analysis, comparing apples and oranges rather than different kinds of apples.
The ASA model has very specific benefits. They pride themselves on having a cost-effective and sustainable model. Since 2001 they have not relied on, or even accepted, any donation or grant money from outside foundations. The organization is completely self-reliant and self-sustainable. ASA is run primarily on a branch-level basis. Each branch has 3-5 loan officers that each have 18 groups with about 20 clients=1,800 clients per branch. Extreme decentralization of power and decision making allows most transactions and interactions to be run on a small level. The service charges cover all staff, office, and loan loss expenses for each branch. Within 12 months of creation, a new branch can be financially self-sufficient. Salary and expenses are paid, and new loans are given out, from service charges and installments each day. Excess funds are shuttled between branches and the Central offices, which runs entirely on interest funds from the branches. Because of this, ASA can grow exponentially without waiting on donations from outside sources.
ASA provides mandatory savings and life insurance resources, urging clients toward self-reliance. Each week they must pay a small amount of money into their savings account, which they can access at any time, and their security fund, which is returned sixfold upon death, or with interest after a certain allotment of years
The consolidated structure of decentralized power in the ASA model allows for a quick and efficient decision making and managerial process. In order to take out a loan, only the loan officer and branch manager must approve. One page of paperwork makes the application process easy, especially for the majority of clients who are illiterate. Within one week of initial application, the client will receive her loan, enabling quick and efficient relief for people in need of fast relief. The extensive written manual, and the authority of the branch manager, allow problems to be solved on a daily basis, rather than submitting questions and dilemma to higher officials and waiting for a response. Frequent visits from district officers and a monthly branch report give important information regarding structural fallacies give presiding authorities current knowledge with which to implement new changes. Simplified and precise accounting methods allow loan officers and branch managers to keep books and manage accounts, eliminating the need of a professional accountant. Cost is kept at an impressive low with limited staff, expenditure ceilings, and decentralized management.
Overall, ASA has specialized in and focused primarily on microfinance. With such intense specialization in an industry riddled with companies who provide many services to their clients, it has the benefit of an extremely well developed and effective microfinance model. They believe in a very fluid and hands-off approach. Give the people money, and they will find a way to take care of themselves. Although impoverished, the clients are still responsible adults who can utilize all resources in the area, including assistance from other NGOs, to find the things they need. ASA is grateful to other NGOs providing education, housing, business development, etc, to needy people in the area. Meanwhile, ASA works solely in microfinance, perfecting their model and enabling themselves to reach the poor and give them financial assistance
Sunday, July 6, 2008
Wednesday, July 2, 2008
Empowerment
Progress, I am coming to notice, is very relative.
An interesting discussion today with the Deputy President reiterated this. Talking about women's empowerment and progress, he explained about the garment industry in third world countries.Businesses come in and establish factories with very poor working conditions and low wages who employ poor women. And, oddly enough, the factories make their lives better one hundred fold. It is progress, however small, from unemployment and poverty into working hours and some type of income. When people come in and see the conditions and ban imports from Bangladesh, or a similarly situated country, they threaten to throw thousands of women out. But at this point, they cannot go back to their village to just return to poverty. So they take to prostitution and begging on the streets, which is obviously a step down, even from bad factory working life.
Many women who receive the loans from microfinance institutions go straight to their homes and give the money to their husbands, because that is what is expected. Then the men go out and use the capital to improve their own businesses, and have the money for themselves to use at their own (hopefully wise and inclusive) discretion. When it comes time to pay the loan installment each week, the women must go back to their spouses and ask for the money again. And this does not seem like it really fosters into good, empowered, strong women. In the West, this woman would be considered to be in an abusive and tyrannized marital relationship. However, by being the provider of the money in any way gives the woman a bit more leverage in the family life. Now, she is seen as someone who not only cooks and cleans and takes care of children and comes to bed each night, but a person who contributes to the family's financial well-being.
What Mr. Ahmed was saying, therefore, is that people in the West and in developed countries cannot see the small and simple things that is happening to improve lives. Relatively to world culture, their advancement in the world is nothing. But in context with the rest of their lives, and their mothers' lives, we see this as a huge improvement. This is not to say that we shouldn't press for better conditions for everyone: to give women more empowerment and safer working conditions and better jobs, but we can do so at a gradual rate, and taking into consideration the context that they came from.
An interesting discussion today with the Deputy President reiterated this. Talking about women's empowerment and progress, he explained about the garment industry in third world countries.Businesses come in and establish factories with very poor working conditions and low wages who employ poor women. And, oddly enough, the factories make their lives better one hundred fold. It is progress, however small, from unemployment and poverty into working hours and some type of income. When people come in and see the conditions and ban imports from Bangladesh, or a similarly situated country, they threaten to throw thousands of women out. But at this point, they cannot go back to their village to just return to poverty. So they take to prostitution and begging on the streets, which is obviously a step down, even from bad factory working life.
Many women who receive the loans from microfinance institutions go straight to their homes and give the money to their husbands, because that is what is expected. Then the men go out and use the capital to improve their own businesses, and have the money for themselves to use at their own (hopefully wise and inclusive) discretion. When it comes time to pay the loan installment each week, the women must go back to their spouses and ask for the money again. And this does not seem like it really fosters into good, empowered, strong women. In the West, this woman would be considered to be in an abusive and tyrannized marital relationship. However, by being the provider of the money in any way gives the woman a bit more leverage in the family life. Now, she is seen as someone who not only cooks and cleans and takes care of children and comes to bed each night, but a person who contributes to the family's financial well-being.
What Mr. Ahmed was saying, therefore, is that people in the West and in developed countries cannot see the small and simple things that is happening to improve lives. Relatively to world culture, their advancement in the world is nothing. But in context with the rest of their lives, and their mothers' lives, we see this as a huge improvement. This is not to say that we shouldn't press for better conditions for everyone: to give women more empowerment and safer working conditions and better jobs, but we can do so at a gradual rate, and taking into consideration the context that they came from.
Tuesday, July 1, 2008
for fathers
There once was a poor young man who lived in a small village outside Dhaka, Bangladesh. Every day he would travel into the city to attend school. His father gave him 10 taka each day to pay for his transportation and lunch. He would hop on a truck into the city for 3 taka each way, and eat lightly and spend 3 taka on his lunch. This left him with 1 taka remaining. 1 taka every day for whatever he chose: more food, saving for a new shirt, giving back to his father. But instead he opened a bank account and deposited 1 extra taka a day for his daughter. "If I should be so fortunate as to have a female child," he would say to himself, "this money will be for her education." Every extra bit he had, the man would save for her. Nobody would spend this money except for his future daughter.
For years and years he saved: extra money from work, from loans, from grants, everything. He sacrificed much potential comfort in case he was fortunate enough to someday have a female child. The man saw the type of life that women had in his country and culture, and saw potential for change. He wanted to see an end to women being treated as fourth- or fifth-class citizens. He hoped for a society where women could be equal with men: could go to the marketplace alone and get an education and choose for themselves the lives they wanted. Above that increased right in his country, he wanted a female child to make into a good, educated, international citizen. One who had responsibility in the world. So he saved all the time. Never took money from her account, except to marry her mother, and even then he paid it back. With interest. And when his wife became pregnant, he at last really dared to hope for a female child.
And then, finally, one day she was born. And he was glad for the money he had been putting away. Their family taught her good things at home, and when she was old enough, the man and his wife searched for reputable schools for her. She was sent to an international boarding school in India. The man was able to pay her tuition and exam fees. And they taught her to have respect for herself and for women and to value education and try to be something big and important. Today the man's female child is about to write a book, graduate from school, hopefully get a scholarship to a good college, and move out and make her mark on the world. And the man is very proud of his female child.
We need more men like Sohel Mahmud Sagar. People who, even growing up in a male-dominated society with 4 brothers, still can see the importance of gender equality in the home, workplace, and world. He was willing to make a sacrifice for a daughter he hoped he would someday have, in a society where female children are seen as a burden, not a blessing. But he hoped for the opportunity to bring up one daughter and to add her to a future generation of empowered women. With vision like this, and sacrifice, and patience, and hope...these are the type of people we can count on to lead us into a more progressive and equal and prosperous future.
For years and years he saved: extra money from work, from loans, from grants, everything. He sacrificed much potential comfort in case he was fortunate enough to someday have a female child. The man saw the type of life that women had in his country and culture, and saw potential for change. He wanted to see an end to women being treated as fourth- or fifth-class citizens. He hoped for a society where women could be equal with men: could go to the marketplace alone and get an education and choose for themselves the lives they wanted. Above that increased right in his country, he wanted a female child to make into a good, educated, international citizen. One who had responsibility in the world. So he saved all the time. Never took money from her account, except to marry her mother, and even then he paid it back. With interest. And when his wife became pregnant, he at last really dared to hope for a female child.
And then, finally, one day she was born. And he was glad for the money he had been putting away. Their family taught her good things at home, and when she was old enough, the man and his wife searched for reputable schools for her. She was sent to an international boarding school in India. The man was able to pay her tuition and exam fees. And they taught her to have respect for herself and for women and to value education and try to be something big and important. Today the man's female child is about to write a book, graduate from school, hopefully get a scholarship to a good college, and move out and make her mark on the world. And the man is very proud of his female child.
We need more men like Sohel Mahmud Sagar. People who, even growing up in a male-dominated society with 4 brothers, still can see the importance of gender equality in the home, workplace, and world. He was willing to make a sacrifice for a daughter he hoped he would someday have, in a society where female children are seen as a burden, not a blessing. But he hoped for the opportunity to bring up one daughter and to add her to a future generation of empowered women. With vision like this, and sacrifice, and patience, and hope...these are the type of people we can count on to lead us into a more progressive and equal and prosperous future.
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