The Lemonade Stand

Today, I visited a man who collects and buys recyclables, then sells them to a “boss,” who runs a similar business but on a larger scale. The only thing separating someone who picks through trash and a collector and buyer is capital, which a microfinance institution (MFI) can provide. During the interview, he admitted that despite their poverty, and despite not having children, his wife doesn’t work.

“Where I come from, women don’t work,” he said. “Well, I suppose it’s fine if a woman works, but then you wouldn’t marry her.”

The MFI staff member who was speaking with him was a woman. She hid a grin and glanced over in my direction, possibly because she knew something of my politics.

“Is that so,” she said, and we continued the conversation without missing a beat.

I felt conflicted about her impartial response. If she were working for a bank, then his attitude would be none of her business. But MFIs like the one I’m working with are not banks — they also have a social mission to help those in poverty. That means that an agreement between an MFI and a borrower covers more than just the money. In addition to whether the borrower will be able to pay back the loan successfully, this MFI also offers education and training sessions.

Groups that come together to raise livestock have to go through 4 mandatory training sessions before they can get their money. They devise their own membership rules for members, they are led through a solidarity chant (like a team huddle before a basketball game), they are given a speech by a veterinarian and the animal pen that they build is inspected for health and safety. Every group meeting starts with a prayer, led by the group leader. With both individual and group borrowers, loan officers take an interest in their businesses throughout the duration of the loan. They may drop by, unannounced, just to check up on things. With all this oversight, the line between what is and isn’t an MFI’s business is blurry.

The loan application process is thorough requires detailed information about their living conditions to ascertain their level of poverty – what kind of roof their house has, what level of education their kids have, what kind of food they’re able to put on the table. Many requirements are culturally specific — for example, 16 year olds can join in a group loan if they are already married, because marriage decreases the risk that they will run off to another village before the loan is paid back. To me, many of these lines of questioning are intrusive, but the borrowers I’ve spoken to don’t seem to take offense. I wonder if it is because they are more open about their lives, or because they don’t have a choice, since the MFI has all the power in these situations. After all, the MFI provides capital to an entrepreneur, without which his or her business might not exist.

From what I’ve seen, for the most part, MFIs try to wield this power judiciously, walking the fine line between providing education and training, and trying to convert others to their way of thinking. I’m working with a Christian MFI, but they fund people of all faiths. They make an effort to reach newcomers, originally from other parts of the country, whose values may differ from their own. They serve their Hindu neighbours who make and sell ornate crafts that are laid out as offerings every morning and evenings (to the chagrin of some Christian Kiva lenders in the United States, who have decried this as funding satan worship!).

It’s a difficult balance to strike, and sometimes despite the best of intentions, we don’t get it right. Yesterday, two loan officers met up with the leader of a group of women pig farmers on their way to the group meeting. She was riding a small motorcycle (about 115cc) that was styled like a “crotch rocket”, with plastic fairings and a forward leaning seat position. The loan officers, both men, were horrified.

“Why don’t you change your bike!” exclaimed one of them. “Get one that’s more suitable for a woman.”

The group leader shrugged and didn’t say anything. After the meeting had concluded, and she zoomed off on her bike, one loan officer turned to me and tsked, shaking his head and saying, “Like a man,” with a disgusted tone of voice. The woman, for the record, was unmistakably female, with waist-length hair, and a mother of several children.

Astounded by how little it took to transgress gender expectations, I told him that a motorcycle was a motorcycle and I didn’t see why a woman couldn’t ride any motorcycle that a man could. But I wasn’t changing his mind any more than the female loan officer had changed the mind of the recyclables collector who had his wife stay home despite struggling on just one income.

Most microloans worldwide are made to women, and microfinance has gained a good reputation for furthering women’s rights — generally, as their economic power improves, so does their social influence. But it is important to remember that microfinance is just a tool. It can be indifferent to gender equality, in the case of the collector of recyclables, who would have been given a loan regardless of his opinions on women in the workplace, and it can also perpetuate strict gender roles, to the point where a woman can be made to feel bad because her motorcycle is too “masculine” for her.

How much influence would you like to have over the people you lend money to? If it is appropriate to use education as a tool to change a borrower’s opinions on business, then how about on women in business? What if a small business owner refuses to hire women? Religion in business? If an MFI can insist on a short prayer before every meeting of pig farmers (and many do), then would it be any more or less appropriate to insist on what type of prayer and to which deity? Or should the prayer itself be replaced by something more secular? Given that MFIs serve a client and his or her community with their own distinct culture, beliefs and traditions, how do we decide where to draw these boundaries in a way that will serve borrowers and lenders well?

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