On Thursday we had a guest speaker in class, Mr. Steve Meeks. He’s a business man who has had a great deal of success in economic development since retiring from his tv network. He’s done a lot of work in Sierra Leone, and has been recognized by their government for the MFI he started there, and he spoke a great deal about animal multiplication programs he’d run in New Guinea. He has a very different take on microfinance and development work than most of the people we’ve spoken to and I think there are a lot of things we need to really reconsider after speaking with him. During class he emphasized the importance of distinguishing between a business model and a charity model and realizing which side your organization was on. After hearing our plans for La Ceiba he told us we were falling squarely on the charity side and would have difficulty running a charity like a business and being sustainable. I think he’s got a point, but I still disagree with some aspects of his analysis. He said that if you go into a community and bad things happen, you can’t blame yourself for those things because you’re still doing lots of other good, and the good outweighs the bad. I agree that sometimes bad things happen that are beyond your control, but I also consider it to be our responsibility to take those things into consideration and minimize their effects. I’d like to think  that we could find a happy medium. 

Something else he discussed that really made a lot of sense was the importance of “spinning your money”, meaning getting through loan cycles quickly and getting money into the hands of other entrepreneurs right away so that you’re getting a higher return on that money over the course of a year. He said that shorter loan terms help to increase the impact of the money and reduce the default issue. His organization has loans between 2 and 6 months… we were setting ours at 6 months… but maybe we need to reconsider that… and the interest rate needs to be set by the people in the program… The case he presented for that point was strong, and I think there was a great deal of validity to it. He also said that it’s really important to be hands on in a community because people need to have constant contact with the MFI in order to maintain a sense of ownership and obligation to the organization. Interestingly, his MFI has a lot of repeat loan recipients, but he aims for  a “6 and out” philosophy, meaning that after 6 loans they’re able to seek loans from traditional banks. Apparently, this is a complicated process, but they get the real loans at the end by guaranteeing the loans for the lendees at the formal bank. Mr. Meeks said that this was a really important aspect of that transition because it helped to deal with the lack of formal identification and it prevented the person from having to offer all their property as collateral then losing it. He cited an example where a country had dismantled its hacienda system to give people land, but those people lost it back to the same people who’d had it before anyway. 

 After class I spoke to Mr Meeks a bit more about some of our concerns with defaults, domestic violence and other issues. As to domestic violence, he admitted that it was a legitimate concern and expressed an awareness of violence that has resulted from mfis, but said that we needed to realize that it’s not our fault, it will be triggered one way or the other. He also said that only by being a sustainable presence that community leaders and the government can’t ignore can an mfi have a serious impact on familial issues. We need to be sustainable to have that kind of economic power. He also said that information can be presented through videos, literature or some kind of media outlet (a popular TV show in South Africa was a successful program of this sort). He also said that we have to remember that educating the women can only do so much. It’s not women who are choosing to be assaulted or beaten or disempowered in any way. It’s the men around them who are doing it, so it’s the men’s problem. They must be dealt with if the issue is going to be affected. He said that finding a way to give the husbands an incentive to embrace positive behaviors was the key. One program that he was proud of was a goat program. Children who had perfect attendance at school would receive a goat at the end of  the year. Because the goat was valuable to families in the community, parents pushed their kids to attend class even when it was harvest season or the child was a little sick. They would get the child vaccinated and the child would see the school nurse before illnesses became severe. By giving the family a reason to send the child to school, the program ensured that the child remained healthy and got an education. By hiring a local to raise the goats during the year, the program also gave someone a job that would support their family. This is the sort of incentive structure we need to create to deal with the issues we confront in Honduras… we’ll see much better results with positive reinforcement then we can get with punitive measures. You can only do so much to punish, but there are near limitless ways to reward. 

After talking with Mr. Meeks for awhile, I really think that we need to look at the way that we approach microfinance once more. I want to be holistic and responsible, and I want to remain client-driven… but I also think that we need to put sustainability first. You can’t have an impact if you don’t exist. 

There was a lot covered, and I may have missed some, but I’ll update if there’s anything else that comes to mind. I think he’s a very valuable resource and I’m so glad he shared his perspectives with us.