Banking on people
A UMaine senior interns in Bangladesh to learn how microfinance helps the rural poor
Last summer, in a country where nearly half the population of 135 million lives in poverty, Rachel Hathaway solidified her commitment to a career devoted to human rights advocacy.
She plans to do it using microfinance.
“When the five senses are engaged and you see children forced to beg in the streets, when you see women who are desperate to work but are told by their husbands and society they aren’t capable, when these women watch their children starve, you realize the injustice,” says Hathaway, a University of Maine senior who spent 10 weeks in Bangladesh last summer as an intern with Grameen Bank. “The challenges of this country can’t be understood from a big business perspective or textbooks. We also can’t sweep them under the rug, which is too easy to do when you don’t have to look it in the face every day. That’s why I wish more people could go to these countries to see what’s happening.”
Hathaway went to Grameen Bank to learn from the experts in microfinance, a strategy designed to help the poor out of poverty, typically by providing microcredit or small loans to the rural poor in developing countries. She came away from the experience inspired by people’s stories of the difference such a financial strategy can make and determined to help replicate the model elsewhere in the Third World.
Next summer, she hopes to return to Bangladesh to continue her research, exploring other microfinance models, including the Progress Out of Poverty Index, a Grameen Foundation poverty assessment tool. She isn’t sure yet where she will work to replicate the Grameen model. She’s considering South Asia or Africa.
“In times of financial crisis and bad banks, it’s heartening to hear of bankers to the poor, the idea of a social agenda for people to work toward, that it’s not about greed but how to improve the lives we’re touching,” says Hathaway, a financial economics and business administration major who grew up in Millinocket, Maine. “I believe we all have this obligation to be community members locally and globally. I hope to turn it into my life’s work in human rights advocacy.”
Grameen Bank, which started in Jobra, Bangladesh, in 1976 and is now headquartered in Dhaka, is led by Muhammad Yunus, founder of the microcredit movement, whose many worldwide honors include the 2006 Nobel Peace Prize and a 2009 United States Presidential Medal of Freedom.
As of January 2010, Grameen has more than 8 million borrowers, 97 percent of whom are women, according to its Web site. With 2,563 branches, Grameen provides services to all of the 81,343 villages in Bangladesh.
“These are women who are hard working and have skills, but have no opportunity to make a life for themselves. They’re not poor because they’re lazy. They are stuck in a cycle of abject poverty,” says Hathaway. “Approximately 70 percent of women in rural Bangladesh are unable to read or write. When Grameen teaches women how to write their name as a mandatory part of the borrower initiation, it is a source of great pride.
“I see these women as beacons of hope.”
The key is in Grameen’s “trickle-up” economics, she says. “When given the means to reach productive capacity, families, communities and the whole economy benefit. And it can reach world scales. Microcredit offers a real hope of solving inequities where no hope previously existed.”
Hathaway was one of 107 students who came from around the world to learn from the pioneers in microfinance last summer. Her five-week basic training program included an extended village visit and a week with a newly established branch in Netrokona. Her internship with Grameen Trust involved field visits and assignments. She also consulted for four weeks on two projects in India.
As part of her internship, Hathaway traveled with a branch manager in an effort to better understand the challenging external environment — from political corruption and lack of modern conveniences like running water and electricity to extreme weather such as monsoon season that required visits by boat to borrowers in the villages.
She also was there when bank officials met with potential new borrowers seeking small loans — often 10,000 taka or roughly $150.
“They’re told of the benefits and trained in what it is to be a borrower, and how they could make it work,” Hathaway says. “That’s when you get to see the light come on in these women’s eyes.
“When these women, who have been told their whole lives that they are nothing, go before the branch manager for their first loan, they are so scared. They worry that they can’t do it, that they don’t know how to handle money.
“Despite questioning their (own) skills and capabilities, the women stand in front of the manager, state their names and their loan purposes — to buy a rickshaw, to cultivate a rice paddy. Starting loans are usually for a combination of livestock and cultivation. It’s an enormous step for these ladies — the first step to a productive life.”
The result, Hathaway says, is real change in people’s quality of life.
“Women are feeding their children and facing less violence because they’re seen not as burdens, but contributors to their families and to society. Their status has elevated. They are realizing a sense of purpose and empowerment. They’re starting to educate their children because they see the value in it and can afford it.”
Image Description: Student Focus
Image Description: Student Focus