Before my board meeting in Kenya, we visited a number of small-scale entrepreneurs supported by the Kenya Entrepreneurship Empowerment Foundation (KEEF), a microfinance institution funded in part by Grameen. One day we drove into the hills north and west of Kiambu, a small village north of Nairobi. Our first stop was a small hut where a woman had taken out a microfinance loan (about 10,000 Kenyan shillings or less than $150 U.S.) to buy a small wood-fired oven to bake small cakes that she sells to nearby schools and in local markets.
Our second visit was to a farm where a woman (almost all Grameen borrowers are women) had taken out a loan in order to purchase a cow. The cow was now producing more than six liters of milk twice a day. She sold most of it to a nearby milk co-op while keeping some for her family. The cow now also acts as collateral she uses to obtain necessities such as flour and cooking oil. We also visited two group meetings, where we observed more than 20 borrowers make their weekly loan and savings payments, listen to the progress of their fellow borrowers, and deal with any defaults or problem borrowers (which are rare).
Several things struck me about the visits.
Mohammed Yunis, the founder of Grameen, underscores the importance of providing loans rather than grants. There is the obvious advantage that a loan means the money is eventually returned and can be recycled to be reused for other borrowers. Sustainability for both the lender and the lendee are achieved. More important, it provides dignity to the borrower. I could sense the pride and responsibility among the borrowers. They took their loans and their businesses seriously. They were responsible to themselves and also responsible to their communities for successfully operating their businesses. I’m not sure all of the philanthropic grant programs we’re involved in institutionally and individually truly end up empowering and enabling the people we want to help.
Second, having a chance to actually speak with the woman who was able to buy a cow as a result of her microcredit loan was a very moving moment. I can better understand the trend by many organizations to make their giving sites as personal and tangible as possible—think of such organizations as Global Giving, Kiva, Heifer International, etc. This is both an opportunity for nonprofits to get specific about clarifying benefits, something many donors are expecting, but it will also be a challenge for many organizations that deal in general activities or intermediary roles.
The preceding is a guest post Bob Ottenhoff, Chief Executive of the Center for Disaster Philanthropy. With an entrepreneurial spirit, strong technology focus, and a quest to make an impact in the world, Bob has the ability to take an organization and lead it into strong performance, sustainability, and industry leadership.