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HOW WE HELP MRS.
SOMKHIT AND HER NEIGHBORS OUT OF POVERTY
The Reverend
Richard Davis, Ann Hanus, Carol Doolittle and Phil Cogswell
Members of the
Microfinance Steering Committee
December 6, 2009
Introduction – The Reverend Richard Davis
Last year I wrote a sermon on poverty in our world. When you try
to conceive of the monumental scope of poverty in the world our imagination
falters – over one and half billion people live on less than $1.25 a day
(which the world bank defines as extreme poverty). So I
sought to give it a human face by speaking of the harsh lives of two women -
one in
Kenya
and the other in
Pakistan
- who suffer from extreme poverty and neglect. Considering the
hopelessness and despair that such poverty causes so many I quoted the poet
Yeats: “For the world is more full of weeping than you can
understand.”
Now
an occasional sermon that only paints a picture of the ills of the world and
offers no hope or no cure is just preaching the doctrine of perpetual
resignation. We don’t need that false doctrine. But what cure or
hope could I offer for such a vast social ill? Well, in that sermon,
delivered over a year ago, I called the congregation’s attention to the
Millennium Development Goals adopted by our nation and many others at the
United Nations. These goals pledge that our government will enter into a
partnership with others to form a new global partnership to drastically reduce
and eventually end world poverty. In light of this solemn pledge, I
urged you to contact your various federal representatives and urge them to
make fulfilling the Millennium Development Goals a priority - this is good.
Every morally informed citizen should know about the millennial development
goals and hold our elected representatives feet to the fire on our pledge to
(should we have some literature and petitions about this available after the
service?).
Yet
my conscience did not rest easy after this sermon. I felt that our
congregation was called – and I mean “called” in the sacred sense of
that word - to do more than call our senators and representatives. It
seemed to me that we, the members of this congregation, needed some direct and
palpable sense that we were playing a more direct and personal goal in
alleviating poverty in the world.
Now, in the realm of finances
economics no one ever said I was the sharpest tack on the bulletin board.
I do try to stay somewhat aware and informed, however, because as I once
heard the theologian John Cobb note: “economics is too important to be
left to the economists.” Too often, the economists forget about
economic justice. I had learned enough about forming micro-finance banks to
realize that this might well provide a vehicle that could help us move forward
on our mission to be helpful. Now ours is a shared ministry and I knew
that if we were going to pursue this idea I’d need to turn this over to
other members who had the expertise and aptitude that I lacked to get this
going. Such people stepped forward and I have been able to step back and
watch as they have taken the lead in an inspiring and compassionate endeavor.
And now I turn this service over to them.
What is Microfinance? – Ann Hanus
I want to thank Rick for inspiring us and strongly
supporting this project. He recognized that there are different
approaches to dealing with pervasive poverty and understood that microfinance
can be an important tool to lift families out of dire circumstances.
Mohammad Yunus, winner of the Nobel Peace Prize, first
realized the power of microfinance when, as research economist, he was shocked
to discover a woman in a Bangladeshi village borrowing less than a dollar from
the moneylender on the condition that the moneylender would have the exclusive
right to buy all she produced at the price he decided.
To Yunus, this was a way of recruiting slave labor.
When he made a list of the victims in this moneylending “business” in the
village next to his university, he found that forty-two people had borrowed
the total amount of $27 US dollars. A mere $27 dollars kept this village
enslaved in poverty. He also learned that traditional banks refused to
lend to the poor believing them untrustworthy.
The goal of microfinance – providing small loans to
poor people – is to break the cycle of poverty. By lending money
primarily to women and linking the loan requirements to actions that will lift
households out of poverty, microfinance can transform families and
communities.
We give money to a nonprofit organization that is able
to lend the money to people – usually women – that helps them increase
their income. The organization also provides support and assistance in
marketing and organizing. The women form groups that offer mutual
support too. Over time, the women repay their loans to the local
organization, which can then be lent again for more projects or to a different
group of women. In our case, the local organization in
Laos
is
Participatory
Development
Training
Center
, also known as PADETC. This group
has a direct connection to Carol Doolittle, a member of our congregation who
has worked with them personally. This is the first loan we have made.
With the support of the Congregation, we hope to increase the number of
loans to
Laos
and possible other poor countries.
Microfinance is NOT about earning a profit for the
donor. Unfortunately, we have recently seen some for-profit entities
taking advantage of the microfinance movement to generate profits similar to
payday loans. This is NOT what we are doing.
We are offering credit to poor individuals who do not have access to
traditional banking institutions as a way to create self-employment for income
generating activities as opposed to consumption.
Microfinance loans are given generally to groups of women who must agree
to conditions such as:
·
Repairing their homes
·
Improving their water supply
·
Growing vegetables
·
Educating their children
Microfinance supplements but
does not replace international aid such as providing health care, education,
and infrastructure. Microfinance can break the cycle of poverty by
providing capital and the resources to raise household incomes. In so
doing, it can empower women, remove the barriers to breaking out of poverty,
and improve lives on a long-term, sustainable basis.
Microcredit in
Laos
-- Carol Doolittle
So how can you and I help specific women and their families to break the
cycle of poverty? Well, we are already
helping thirteen poor women in
PhoneSong
Village
in
Laos
. Mrs. Somkhit and her neighbors Phaivan, Sakone, Thongpet, and nine other
women have received training from PADETC and small loans from our congregation
to help them build a more business-like foundation under their bamboo weaving
and sales. In the next few minutes I’ll focus on three questions:
1. Who is Mrs. Somkhit?
2. Why are Mrs. Somkhit and her neighbors poor?
3. How can small loans from funds provided by us help
Mrs. Somkhit and her neighbors out of poverty?
But first I’d like to tell you a little about PADETC, our partner
organization in
Laos
, and its founder, Sombath. PADETC is the intermediary between our microcredit
program here at UUCS and the micro-entrepreneurs who receive our funds in
Laos
. Its microcredit program grew out of its own development work and from the
work of Mohammed Yunus as PADETC development workers witnessed the struggles
of small businesspeople with little access to capital. Along with small loans,
PADETC also provides training in business skills, improved production methods,
marketing, and connections with buyers and retail outlets operating on “fair
trade” principles.
I’ve known Sombath Somphone, the founder and director of PADETC, since 1985
when I was working in
Laos
. He founded PADETC in 1996 after a decade of training Lao farmers to develop
sustainable and integrated farming systems. In 2005 he received the
prestigious Magsaysay Award in community leadership – sort of an Asian Nobel
Peace Prize.
Now, back to the three questions: First, Who is Mrs. Somkhit?
Mrs. Somkhit and her neighbors live in the rural
village
of
Ban Phone Song
about 50 miles north of
Vientiane
, the capital city of
Laos
.
PhoneSong
Village
is like hundreds of other villages on the Vientiane Plain with clusters of
neat wooden houses built on stilts and shaded by fruit trees.
Beyond the houses are the village rice paddies, occasionally broken by
clumps of bamboo and wooded brushland. The village head says, “We produce
enough rice to eat, but we do not have much extra to sell.”
Second, Why are they poor - Mrs. Somkhit, her neighbors, and other women
like her?
The Lao People’s Democratic Republic is one of the poorest countries
in
Asia
. The average per person income is less than $2 per day, which puts it below
the official United Nations poverty line. About 2/3 of the population still
lives in rural villages growing rice, raising animals, and gathering forest
products to provide for their own subsistence.
During the 20th Century, the people of
Laos
suffered from two major wars. The more recent of these two wars was the
American War (the one that we call
The Vietnam War). Many Lao were injured or killed, many homes and villages
were destroyed, and about half of the entire population was displaced. Village
life and the village economy were thoroughly disrupted. The communist
government began to stabilize the country in 1975, but was not focused on
economic development. After the dissolution of the Soviet Union, the
government was forced to open economically to
Thailand
and the West. By the early 1990s, people cautiously began to buy, sell, and
open private businesses.
We don’t yet know the specific stories of the women of
PhoneSong
Village
: Mrs. Somkhit and her neighbors Phaivan, Sakone, Thongpet. But we can be sure
that they and their parents before them all have been affected by the poor and
rural nature of
Laos
, by wars, by communism, and by more recent economic openness.
Third, How can small loans from funds provided by us
help Mrs. Somkhit, her neighbors, and other Lao microentrepreneurs out of
poverty?
As with Mohammed Yunus’ Grameen Bank, the potential candidate for
microcredit must demonstrate to PADETC that she has some of the
characteristics necessary to carry out her proposed business idea:
·
a skill,
·
access to a necessary resource, and
·
some entrepreneurial experience or aptitude.
The bamboo weavers in Mrs. Somkhit’s
PhoneSong
Village
met all of these initial conditions. PhoneSong has a long tradition of bamboo
weaving, in part because the local bamboo is especially pliable. Mrs. Somkhit
and her neighbors and even the children all know how to weave bamboo. Village
men are expert at harvesting bamboo and splitting it into fine, pliable
strips.
Ten years ago villagers started to produce bamboo products for sale. A
visiting
Vientiane
businessman inspired them to improve by showing them photos of finer bamboo
products. The leading village bamboo weaver picks up the story, “[Then] a
few of us pooled together some cash and we went to
Vientiane
to buy samples like those shown in the photos.
We studied the samples and unravelled them to understand how they
should be woven. In the beginning, what we made did not turn out very well.”
“We tried stripping the bamboo thinner and finer and smoothing the edges
more, and sometimes we cut out fingers,” another woman adds. “But we kept
trying. We put aside money to buy samples of new designs so that we could
learn how to produce them,” a third woman reports.
After months and months of this, the hard work of the PhoneSong bamboo
weavers began to pay off. Their
bamboo products became more popular and they now have buyers not only from
Vientiane
, but even as far away as northern
Laos
and
Thailand
. As a result, bamboo weaving has
become the village’s major off-rice-season occupation for both men and women
alike and is the main source of cash for sending children to school and paying
for medical and other household expenses.
Two PADETC workers were impressed by the perseverance and determination
of the women and the improved bamboo products. But many women, they found, did
not include their own labor when calculating the true cost of the product.
Also, they do not have easy access to credit to expand their production.
Twenty-seven PhoneSong women decided to form themselves into groups and to
join PADETC’s network of handcrafts producers.
Since then, all 27 women have been trained in simple business planning,
book-keeping, designing, and marketing and have received micro-loans from
PADETC. The microloans of 13 PhoneSong women come from our contributions.
PADETC’s training and microloans from UUCS are quite recent, so we
don’t yet know how life in PhoneSong will improved. But I can
report on life improvements experienced by silk weavers benefiting from
on-going PADETC training, marketing and microcredit beginning two years ago.
Several of the land-poor, PADETC-affiliated silk weavers I visited last
March have been able to enlarge their houses or build new ones. (Their houses
are also their work spaces.) All of the weavers’ children are in school and
several children are continuing their education in
Vientiane
high schools and technical colleges.
In a nearby province, two textile weavers, Khampha and Sang, report that
their lives have definitely improved in the two years since they received
their first microloans and trainings from PADETC. Khampha’s earnings from
weaving have increased markedly. “Frankly,” her husband says, “most of
our household expenses such as medical fees, school fees, and fuel for the
motorbike, are from Khampha’s weaving. Khampha’s greatest wish now is to
see her youngest child through high school. Sang’s income from weaving has
also greatly increased. She is supporting her four children, ages 7-14, in
school now and hopes to be able to support all of them through high school so
they can find good jobs. These are some of the improvements we hope and expect
for “our” PhoneSong women
One final note: Lao people wear sashes like the ones we are weaving at
Buddhist and other ceremonial events. We are wearing them today to show our
connection to Lao people and to celebrate the hopes and successes of the
micro-entrepreneurs of
Laos
.
Final Remarks -- Phil Cogswell
First, in the interest of full disclosure, I need to elaborate on
Carol’s mention of why we are wearing the Laotian sashes today.
She mentioned respect for their culture and this being a religious
occasion. Another reason I’m
wearing a sash is that the suggested alternative was a sarong
– the traditional kilt-like wrap-around garment.
I grabbed the sash option like someone falling out of a tree grabs a
branch.
My role in this presentation is to share some thoughts on why this
project appealed to me as something worth my effort and why I believe it is a
good fit and appropriate undertaking for our congregation.
While I’m not sure I’m the best person to do this, there is one
thing I’m quite sure about. That
is that we in this congregation want to do as much as we can for those less
fortunate that we are. It’s
inherent in our principles, and we act on it.
But considering the variety and number of worthy requests for our
charitable dollars, why add this project to the list?
Its appeal to me comes from three separate concepts that come together
to make a strong rationale for support. The
first concept relates to providing direct help to specific individuals.
Obviously, many charities need to pay staffs and office expenses, but
there’s a special gratification in knowing your gift or time is going to
straight to someone who will benefit from it.
Our congregation already does that in several ways:
Interfaith hospitality network, the soup kitchen activity, and
contributions to the food bank, which passes the groceries on to families in
need.
The second concept relates to an international outreach – to help
disadvantaged of people outside of
our own area or country. Our
principles contemplate the whole world as our responsibility.
For those of us fortunate enough to have visited the third world –
Guatemala, Costa Rica and Thailand in Kay’s and my case – it is striking
what a large gap exists between the standard of living for so many people
there and that of Americans of even modest lifestyles.
It is also striking what a big difference a small expenditure of effort
or money – done the right way – can make in improving their living
conditions or economic prospects. I
saw that when my daughter was in the Peace Corps in
Guatemala
’s hill country. When she and
her husband to be returned home, they brought 30 handcrafted backpacks –
combinations of leather and fabric, as gifts and hopefully to sell.
They eventually covered their cost, but the underlying impact was that
their order, worth maybe five hundred dollars, gave the craftsman the up-front
money to expand his workspace, higher an assistant and thus improve his
productivity.
The
third concept relates to confidence in the intermediary – confidence that a
contribution will be used appropriately and wisely, not siphoned off for the
benefit of the organizers. As
many consumer alerts have noted, some charities put much more of a
contribution to beneficial use than others do – and some worthy appearing
solicitations are outfight frauds, or at least so top heavy with
administrative costs that contributions are mostly wasted.
So as you try to move from local efforts you can see and volunteer for
yourself to more global ones, how do you know which cause is a valid target
for your contribution? In the case
of PADETC, we have, through Carol’s fortuitous experience in
Laos
, personal knowledge of this organization’s trustworthiness and judgment in
allocating our contribution appropriately.
What I especially like is that this was not a group that was formed to
ask for our money – rather it was an existing social service organization
that we found and want to help.
In my view, these concepts blend
together to form a strong rationale for our choice to help Mrs. Somkhit and
her neighbors in
Laos
. It extends our direct effort to
the global community via an organization that we can have confidence in.
It makes a difference – hopefully a long-term, life-enhancing one to
actual, definable people. So
that’s my thinking and, of course, we on the microfinance committee hope the
project will appeal to you and receive your support, too, now and in the
future.
Now I have the pleasure of introducing the other members of the
microfinance committee. We are wearing the Laotian sashes today and please
feel free to ask questions during the coffee hour and also to come to our
table. In addition to Ann and
Carol and myself, other committee members are Loraine Stewart, George Struble,
David Boaz, and Rick Davis.
Thank you for your attention and consideration.
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