The circles of life

I´ve noticed that most of my blog is about my experiences and the cultural differences here. It´s high time I really let you know the thoughts rolling around in my head and the overall nature of life down here.

There are two main circles of life that I´m learning about here: poverty and microfinance. First, the circle of poverty (more often referred to as a trap). Its amazing the things we take for granted, and I´m not just talking materially. There is a huge lack of education here, not necessarily book smart, but life smarts. Unfortunately sickness and poverty thrive on and contribute to the lack of education. Here poverty is characterized by little education, lots of kids, petty jobs, small houses, few material posessions, frequent sickness, domestic violence, the works. And the problem is that they are all inter-related. You could talk about root causes for years here and never figure it out. You need money to get an education, you need an education to get a good job to get money. You need kids to help support the family, you need less kids to be able to provide a good education for them. You need medicine to keep from getting sick, you need to stay healthy to earn money to buy the medicine. Its a hard-knock life.

Second circle of life is microfinance, which is best described as a system of incentives and consequences. Esperanza International uses the solidarity microloan model in which a group of 5 people is given a small loan amount (usually ranging from $50 -$200) and are responsible for repaying the loan together. The groups are then put together into Banks of Hope for a total of up to 40 people. If the group cant repay their loan, the bank steps in to pay. They pay an interest rate of 4% each month, and make a payment every 14 days (2% every two weeks). The payment has 4 components: capital (paying off the loan), interest, insurance (in case of emergencies, like someone in the group dying -sadly, it happens), and savings. The savings component is broken into two parts: mandatory and voluntary. Each meeting or reunion every two weeks allows for the group to collect their money, give it to their loan officer, pray, refresh their commitment and hear a little lesson about a variety of topics including Hep B, papsmears, forgiveness, etc. The loans act primarily to protect the vulnerability of the associates. If you have more capital to buy more chicken, then you can sell more chicken, and you can make more money. That money allows you to not only provide for you family but also to stay afloat in times of trouble, such as having to take care of a sick child and missing a few days of work. Those normal struggles would generally have a devastating impact on their lives, but with the loan, they have a better chance of pulling through.

This second circle is meant to combat the first one. There are built-in incentives/consequences to repay your loan cause otherwise you have some unhappy neighbors on your hands who know where you live. Also, when you successfully repay a loan with good attendance, you are eligible for a even larger loan. Many people here are on their 5th or 6th loans already. The loans only stop when they fail to uphold their end of the bargain or when they get rich enough to qualify for a commercial bank loan. They learn to be in community with one another, to help each other, to save money (a rare concept here) and to be held responsible in their commitments. Microfinance is the best way, in my opinion, to serve the middle and upper poor. (Extreme poor just need flat out donations cause the situation is too desperate and the poverty trap is too suffocating).

However, the circle of poverty doesn´t always react in a predictable way to the circle of microfinance. While the incentives and consequences are there and should work, they don´t sometimes. The best way I can rationalize why is to think of children. When kids are taught at home to be respectful and polite, educating them at school is easy. But if that groundwork isn´t set, teaching becomes much more complicated because you are now trying to each too much all at once. Different poor people have different groundwork. And then, even the groundwork can fail them. Afterall, its not as if the rich, well-educated people are always responsible. People aren´t machines and can´t be predicted. That´s the fun and the frustration of it all.

It´s easy to rationalize it away, saying the poor are too lazy, too dumb, too set in their ways to get out of poverty. However, the many many success stories here prove otherwise. Working in microfinance requires patience, mercy and lots and lots of hope. You have to get your hands dirty, you have to actually build relationships with the poor. But when you do, great things can happen. It all hinges on your view of the poor. The first step is to recognize the dignity and value of every person. Afterall, how is it that I was born as me and not as one of these Haitian children? Different circumstances doesn´t mean different values. Every person was made with a purpose. The greatest gift you can give to a person is to help them find that purpose. Some people just have more barriers to get through. It´s really hard to be patient while trying to find the break in the negative circle of poverty that will catapult the person into the positive circle of microfinance. But well worth it.