A New Look at Need: Microfinance From Tanzania to New Orleans
by Rebecca Corey, KF16, New Orleans, USA
In 2009 when I told friends and family I was moving to Tanzania to study international development and to work for Kiva in the field of microfinance, or the furnishing of small loans to the working poor, we all had certain pre-formed ideas about how impactful and necessary my work was sure to be. We understood that in terms of GDP, literacy, infant mortality, and other common measures, Tanzania is a “developing” country, Third World, periphery. In another word: poor. As a recent college graduate, I had established ideas about poverty. It is there as opposed to here, it happens to the Other or them, not to me or mine, and so on. Therefore, a $200 loan for the purchase of a few goats to a thin, ebony-skinned woman with a brightly patterned cloth turbaned around her head made sense; it fit into my worldview, my idea of the face of poverty. The same held true for the fishmongers, the roadside bicycle repair men, and the juice vendors whose loans I helped process and post to the Kiva website. Oh yes, I knew there was poverty in the United States, but a part of me believed that for Americans, it was different. Better. Safer. More comfortable. And who in the U.S. didn’t have access to credit? I was sure that an entrepreneur with a solid business plan would find it relatively easy to acquire working capital.
But already, Kiva was challenging preconceived notions about poverty and microfinance. At training in San Francisco in 2009, I learned that the leaders of the young organization had decided to start funding loans in the United States. There was immediate backlash. A lending group was formed protesting the decision. Articles were written denouncing the move. But Kiva posted the first U.S. loans, and they were funded almost immediately.
One of the reasons I admire Kiva is that the organization has what I see as an unparalleled commitment to transparency, fairness, and reciprocity. Sometimes, I have come to believe, our attitudes about poverty are just as oppressive and unfair as poverty itself. We stick to a narrative that protects entrenched interests and ideas about the distance and difference between the haves and the have-nots. How fascinating, then, and wonderful, is the idea that a lender in Tanzania, or Colombia, or Thailand, or any “developing” country, could lend to a borrower in the United States, the so-called Leader of the Free World? How would this new direction change the relationship and the understanding between people and across boundaries? Could it break down those pre-conceived notions about need and privilege that sometimes prevent the recognition of our shared humanity? Could it draw attention to the injustice and inequality in our own back yards?
One of the first texts assigned to me by a professor at the Institute of Development Studies at the University of Dar-es-Salaam was “Development as Freedom,” by Amartya Sen. Sen’s Nobel-prize winning assertion was this: Development is not just about the speed of economic growth, Gross Domestic Product, or the military might of a nation. It is not even just about access to food, water, and shelter. It is about the freedoms that individuals in a society enjoy, defined by their economic, political, and human rights. So while the United States may enjoy a greater average wealth than every other nation, what about the plight of our poor? Do they have the opportunity to realize their full human potential and to pursue their dreams? Because if not, perhaps we are not quite so “developed” as we want to believe.
The backlash against Kiva for introducing U.S. loans never actually materialized. The Kiva lending community has voted with their feet (their dollars, rather), and consistently funded every U.S. based loan that has been posted, often within hours. Furthermore, the economic recession that began in 2008 has made people more aware of poverty here in our own neighborhoods and cities. As we analyze the state of our economy and the rate of unemployment, the buzz-words for politicians and financial experts remain “small business.” According to the Small Business Administration, more than 99% of businesses with payrolls in America are small businesses, and those small businesses historically employ more than half of all workers and create 80% of new jobs. So the “Buy Local” movement has arrived in its new form: Lend Local.
And Kiva is at the forefront of this new opportunity. Just a few months ago, Kiva (in partnership with Visa) launched a new program: Kiva City. Kiva City will leverage the influence and commitment of civic leaders, community organizations, and financial institutions like credit unions to extend microloans to small businesses all across America. Detroit was America’s first Kiva City, and New Orleans is the second, launching just a couple of months after Kiva Detroit. So here is where I come in. I arrived in the Crescent City about a month after the launch of Kiva New Orleans for my second fellowship with the Kiva Fellows Program, fresh from an arduous two-year recovery from the motorbike accident that ended my first fellowship in Dar-es-Salaam.
In my first two weeks I’ve found myself comparing Tanzania to New Orleans at several levels: in the office, among new friends, walking the streets. I am certainly in a modern, developed place with all the conveniences to which I’ve grown accustomed as an American. No cold bucket showers, no language barrier, no frequent power outages, no absurd technological slow-downs, no malaria, and no “local local lifestyle,” the term that I first learned in Tanzania to describe the frustrating aspects of survival in the developing world. The Kiva borrowers I’ve met make a great deal more money than their Tanzanian counterparts (though perhaps not, if we were to adjust for cost of living), and probably live more “comfortable” lives, but their stories are just as compelling and they seem just as deserving of the investment of Kiva Lenders for their commitment to providing jobs and boosting the economy in New Orleans, often struggling to re-open businesses they lost in Hurricane Katrina and have worked tirelessly to revive since then.
I recognize that some people may want me to come right out and say that these borrowers in New Orleans need business loans just as much as people in Tanzania. Some people may want me to say that they definitely don’t. The one thing I’m sure of is that the issue is much more complex than comparing income, or internet access, or appearances. Muhammad Yunus’s work with female agriculturalists in Bangladesh and the emphasis in development literature on microloans’ impact on women’s empowerment has created a singular profile in many people’s minds about the face of microfinance. I’m excited that the Kiva City program may change that stereotype and help people realize that microfinance is a tool with a great deal of power and potential, not just in developing countries but anywhere that entrepreneurs struggle to access credit because of the risk-averse nature of traditional financial institutions. And that anywhere might just be about everywhere, including here in the U.S.
Because of the generosity of the Kiva lending community, I don’t foresee any borrowers posted on the site going unfunded. But that may not always be the case. And if the supply of loans ever exceeds demand for funding them, the question of who needs a loan more will become crucial. Who would you lend to, if you had to choose between an African farmer and an American daycare owner, or a South American taxi driver versus a South East Asian fisherman? Why? I’m not yet sure of what conclusions I’ll draw here, how my opinions might change, what nuance I’ll discover about poverty in the richest country in the world. But I promise to report here, to the Kiva Community, the honest truth, however complex, contradictory, uncomfortable, or controversial it may be. This is what Kiva does– it pushes the envelope. I’m excited to be here, to see what this new territory holds.
Rebecca Corey was a Kiva Fellow in the 9th class with Tujijenge Tanzania, Ltd. in Dar-es-Salaam, Tanzania. Now, she’s back for round two, helping Kiva to launch Kiva New Orleans, the second Kiva City. To learn more about how to bring Kiva to your city, go here. To read about ASI Federal Credit Union, Kiva’s financial partner in New Orleans, go here. You can also follow Kiva New Orleans on facebook, join the Kiva New Orleans lending team, or make a loan to one of their wonderful clients.