What if microfinance really does work?

By Suzy Marinkovich, KF8 Peru

As I sat this morning, drowning in over 50 borrower interviews I’d done that need to be typed and uploaded, I felt overwhelmed with bureaucracy. Our Kiva Coordinator then walked in to let me know we had five more community bank meetings – FIVE – meaning I had a ton more interviews to do. For a moment, I actually thought about turning her down so I could catch up on typing up the previous ones. Regardless, I picked up my scrappy notebook and pen and ran downstairs to meet with the first group of women.

As I interviewed, I laughed with them, listened closely to them, hugged them, told them I admired them, and made sure to hang on to every word. I was beside myself that I almost turned them down to do paperwork. I’d gotten so used to the importance of paperwork at my last job in the US, it had actually pained me to ignore it.

At lunch I walked (more like trekked) to my apartment and took a seat on my fluorescent green plastic chair, took a long stare at the wall and began to think about the phrase “ignorance is bliss.”

Let’s pretend that its converse is “education is cynicism.”

Criticism abounds for Kiva, and more noticeably, for microfinance in general. In fact, criticism pervades international development. When one thing goes wrong, one borrower gets deeper into poverty, suddenly microfinance is moot. If 99% of stories we hear are positive, we play extra close attention to that flaw. And suddenly, every attempt at tackling poverty is debunked or worse yet, accused of worsening the situation.

This is an enormous problem with the way we look at poverty.

We sit comfortably at cafes sipping lovely lattes, pondering life.

Myself included, we look at certain international crises and we debate over what the solution may be – then we conclude there is no solution. “Man… that’s a crappy situation. Let’s talk about something else now. So… the Chargers are totally going all the way this year..”

Then we move on with our night.

Thomas Pogge says it beautifully.

That we are naturally myopic and conformist enough to be easily reconciled to the hunger abroad may be fortunate for us, who can ‘recognize ourselves’, can lead worthwhile and fulfilling lives without much thought about the origins of our affluence. But it is quite unfortunate for the global poor, whose best hope may be our moral reflection.

Okay, moral reflectors and idea-debating post-graduates… I’m about to drop a bomb.

Microfinance is working wonderfully up here in the Andes!

…Nope, I have no amendments to that phrase.

Here are some of the stories I would have missed this morning if I had stuck to my paperwork:

I met a woman named Berta who was renting a small apartment, until she began taking out FINCA loans. Through the various loan cycles and many educational business classes, FINCA helped her build her first home. She recently built a second story to that home. And now, she is getting ready to rent out the first floor for additional income.

Maria never knew what savings was until FINCA explained it to her. Over the many loan cycles, she built a savings. When her husband fell critically ill last year, she had enough money to cover his hospital visits. He is alive and well today.

Felicitas, with a huge smile, raised her hands to her face and told me to look at them. She said she works until the hands fall asleep at night. She never gives up working hard and long hours, because FINCA believes in her. The other women in her communal bank carry eachother and give one another strength. Her loan has helped her to believe in herself.

Maribel had zero capital to her name. FINCA and the Kiva lenders trusted her and gave her a loan for a copy machine, which she used to open a copy shop. She can now afford to send her children to school. For the record, that is exactly how Kinko’s started. With one shop in Santa Barbara, California, that held one copy machine.

And my favorite, because I cynically never thought I’d actually hear this, Dolores said verbatim: “FINCA has allowed me to break out of the poverty my family was trapped in.”

Though I feel like I “should” close with something like “now, this isn’t the case everywhere…” – I’m not going to. Call me ignorant, but what we are doing here is working. We have no reason to apologize for it. In fact, you should be honored to be a part of it.

Click here to make a loan to a borrower at FINCA Peru.

Suzy Marinkovich is a Kiva Fellow at FINCA Peru in Ayacucho, the first of her three placements. She has a wholehearted passion for microfinance, social justice, and poverty alleviation. Suzy is most excited to listen to the incredible stories of Kiva borrowers in South America and let them know how much they continually inspire us all.

/>