Luminaries

Birthplace: Chittagong, Bengal, India
Education: B.A. and M.A. in Economics at Dhaka University
                  Ph.D. from Vanderbilt University

"A Field Trip to Change Lives" In 1974, Professor Muhammad Yunus, a Bangladeshi economist from Chittagong University, led his students on a field trip to a poor village. They interviewed a woman who made bamboo stools, and learnt that she had to borrow the equivalent of 15p to buy raw bamboo for each stool made. After repaying the middleman, sometimes at rates as high as 10% a week, she was left with a penny profit margin. Had she been able to borrow at more advantageous rates, she would have been able to amass an economic cushion and raise herself above subsistence level. Realizing that there must be something terribly wrong with the economics he was teaching, Yunus took matters into his own hands, and from his own pocket lent the equivalent of £ 17 to 42 basket-weavers. He found that it was possible with this tiny amount not only to help them survive, but also to create the spark of personal initiative and enterprise necessary to pull themselves out of poverty. Against the advice of banks and government, Yunus carried on giving out 'micro-loans', and in 1983 formed the Grameen Bank, meaning 'village bank' founded on principles of trust and solidarity. In Bangladesh today, Grameen has 1,084 branches, with 12,500 staff serving 2.1 million borrowers in 37,000 villages. On any working day Grameen collects an average of $1.5 million in weekly installments. Of the borrowers, 94% are women and over 98% of the loans are paid back, a recovery rate higher than any other banking system. Grameen methods are applied in projects in 58 countries, including the US, Canada, France, The Netherlands, and Norway.

What are the positive dimensions of Small Fortunes that you liked?
"It is an amazing work of superb photography, directing, editing and all other technical excellence. Congratulations to you and to your team."

What debatable points did you see in Small Fortunes?
"The film mentions that microcredit started first in Brazil, then in Bangladesh. This is a controversial issue. There is nothing in the film about how it happened in Brazil-why, who did it, what was the methodology that was applied, or for whom it was intended. The narrator says this as if it is established history. It is not."

Do you feel some facts are missing in Small Fortunes?
"Yes. The film lists countries where microcredit has expanded over the years. But it does not mention that Bangladesh has the highest number of microcredit clients (15 million) in one country, as well as that it reaches out to the highest percentage (nearly 90 percent) of the nation's population under the poverty line. It does not mention that Grameen Bank alone has more clients (5 million) than the total clients in all of South America or Africa. Also, I am surprised that the film states that global microcredit outreach is very small so far because it is actually very substantial. The number of microcredit clients in the world totals some 100 million people. The film could have let viewers know that most of these 100 million are in Asia. While Asia is booming, microcredit is still behind in Latin America and Africa."

What more could have been added about Grameen that would better inform viewers?
"Several things:

1. It could have mentioned that in Bangladesh the entire microcredit sector is financed either by the loans from PKSF, or, in the case of Grameen Bank, entirely financed with the depositors' money. Microcredit programs are not based on grant money in Bangladesh. The same can happen anywhere in the world."
2. The film missed the opportunity to mention the following: Grameen Bank not only serves five million borrowers, it is owned by the borrowers; elected representatives of the borrowers make up the board; it runs with its own money (from deposits); nearly 70 percent of the deposits come from the borrowers; it has given out over $5 billion through the years; it lends nearly $3 million a day (or half-a-billion dollars a year) in small loans; it makes a profit; it does not have a group guarantee, joint liability, or any legal instruments. Also, there are exciting new products like our pension fund, loans to beggars, student loans, housing loans, loan insurance, health insurance, etc."

Do you have any criticisms about the Small Fortunes description of other MFIs?
"Yes. The film mentions that ACCION has given $5 billion in loans to 3 million borrowers over the past years. This information is out of place. The film does communicate that ACCION is not a grass-roots organization; that it does not lend money directly to borrowers. It is a funding organization and technical-assistance provider. Its parallel would be PKSF, UNITUS, Grameen Trust, Grameen Foundation USA, World Bank, or the Inter American Bank. The film does not say how much money these organizations have given to how many borrowers. If the film was looking for an outstanding funding organization which helps MFIs to reach record number of clients, PKSF in Bangladesh would have been the best example. Imagine what the total number of borrowers would be if you added up all the borrowers of all the Grameen affiliates around the world!"

How about the film's tone and objectivity about microcredit? Does Small Fortunes convey a sense of objectivity?
"Well, it made a big issue that microcredit sometimes creates indebtedness through microenterprise failure. It presented a client to illustrate the terrible situation she fell into. It talks about an individual case of business failure, and the sadness of it. But it didn't mention that microcredit programs have matured to handle individual failures very satisfactorily. They successfully handle even nationwide failures caused by national catastrophes. For instance, Bangladesh faces nationwide flood disasters routinely, destroying homes, capital assets, and savings of the clients of Grameen Bank and other microcredit institutions. Do the microcredit programs get wiped out because of that? Do the clients get into endless indebtedness and spend the rest of their lives slaving to pay off their debt? No, they don't. They cope and go on to recovery. The film does not mention a word about the fact that microcredit programs have developed methodologies to help poor families, whose livelihoods are destroyed by disasters, get on their feet, rebuild their lives, and get back to the same, or an even better economic position than before. Moreover, the client in Small Fortunes suffered from the "burden of indebtedness," not because of the failure of microcredit, but because of the failure of the specific program. This MFI program either operates without having the right methodology, or it has different objectives than what a good microcredit program should have. The film should balance the report by presenting one client, out of millions in Bangladesh, who is grateful to the microcredit program for helping her rebuild her life after the terrible disaster her family has suffered."

Any other final reactions or conclusions about Small Fortunes and the future of microcredit?
"Yes. The film could have mentioned that a solution expanding the outreach of microcredit is to establish wholesale funds in the countries where programs are located, to establish guarantee funds in rich countries that offer guarantees to local banks for lending money. The best solution, however, is to give microcredit programs a legal framework to convert themselves into "formal microcredit banks," so that they can take deposits and operate in the mainstream financial sectors of their countries.

But all in all, I appreciate the wonderful efforts of BYU Broadcasting and the Center for Economic Self-Reliance at the Marriott School in raising global awareness of the microcredit movement."

Education: BA and MA in history, a PhD in Economic Development

"Inspiration at 30,000 Feet" In 1984, John Hatch, a Fulbright-trained economist and international development expert, conceived a new method for delivering assistance to the poor. John had worked on international development projects throughout the world, and had grown increasingly frustrated with government programs' failure to involve the people they hoped to benefit. Credit programs, especially, failed to make use of the borrowers' knowledge of their neighbors and the local economy. Most programs were administered by outside experts, thereby removing a critical incentive for repayment. This management style resulted in weak programs and low morale among borrowers. John was in an airplane high above the Andes, en route to a consultant assignment in Bolivia, when inspiration struck. He grabbed in-flight cocktail napkins, scraps of paper, and a pen and began writing down ideas, equations and flow charts as fast as he could. By the time he landed in La Paz, he had the outline of a radically different approach to poverty alleviation: a financial services program that put the poor in charge. Believing that the poor lacked neither ambition nor skill, but simply resources, John developed a philosophy he has yet to abandon: "Give poor communities the opportunity, and then get out of the way!" This spirit created what became known as the village banking method. This approach gave the poor the opportunity to obtain loans without collateral-the poor's main obstacle to accessing credit-at interest rates they could afford. But perhaps most important, it gave them control: the power to collectively disburse, invest and collect loan capital as they saw fit.

Birthplace: La Paz, Bolivia
Education: M.A. in Literature at the University of Maryland

"Helping Women Empower Themselves"

Maria was born and raised in La Paz. At the age of twelve she moved to Washington, D.C. with her family when her father took a position with the Inter-American Development Bank. As a young adult she studied at the University of Maryland followed by a few years living back in Bolivia. Over time she became more and more interested in economics, especially as it involved the lives of women living in poverty.

When Maria thinks of how her past experiences have carved out her life's path, she explains with retrospection how she has arrived where she is today: "It's a calling that stems from childhood. As a young girl growing up in Bolivia, I witnessed firsthand the obstacles faced by poor people in my country. The impressions were lasting. At the heart of it all was a lack of economic opportunity, especially among women. One of my most vivid memories as a little girl in La Paz is of a woman who would come to our house to sell avocados. Now when I look back, she is precisely one of the microentrepreneurs that we help today."

Maria relates the following narrative to explain the path to her current position: "While I was studying literature at the University of Maryland, my older brother was studying economics. He became increasingly involved in politics, while I really wanted to bury myself in the protected cocoon of the humanities. Yet my roots in Bolivia called to me. I thought of the rampant poverty in my country of birth and ultimately abandoned my Ph.D. dissertation and turned to the study of political economics. I knew then I wanted to spend my time on something that mattered. Then the early work I did in Africa and Asia with training women increased my focus on empowering women economically, which would directly affect the welfare of their children and their standing in the community. I looked for a way to fulfill my passion and found ACCION International. I've been with ACCION nearly 20 years, and it has been a privilege."

The first exposure Maria had to microcredit came in the following way: "I was hired by a development research group in 1977 as part of a USAID project to figure out if in fact there were viable small (or micro) businesses in the developing world that could benefit from financing. This all took place before any of us really knew there was such a thing as microenterprise, but what we did determine is the vibrancy of the tiny businesses of the poor."

Other important defining moments from Maria's life explain why she has been successful. She says, "Coming from one of the poorest countries in Latin America made a deep and lasting impression on me. Particularly seeing the hard-working women in the markets, where I accompanied my mother for the weekly shopping, I wanted to do something that would eliminate their need to live hand to mouth, day after day.

Along with my dedication to the advancement of women comes my dedication to my family. Allocating my time between my husband and children and my professional responsibilities is an ongoing balancing act. Sometimes those decisions are not easy. In 1995, I was slated to sit on a panel with then First Lady Hillary Rodham Clinton at the U.N. World Conference on Women in Beijing. However, it fell on the first day of school for my children. Seeing my kids off to school is so important to me. I decided that I had to miss the conference, and though it was a loss for me and for ACCION, it's a decision that I would make again."

What do you like about Small Fortunes? What are some of the more positive aspects about it?
"I think Small Fortunes is just terrific! I am proud that ACCION and two affiliates of the ACCION Network were included - Compartamos in Mexico and Mibanco in Peru - as well as our licensee ACCION New York. The producers did a wonderful job of capturing the energy and optimism of microentrepreneurs around the world. With broad airing in the United States just as the UN Year of Microcredit draws to a close, Small Fortunes can play a powerful role in raising the issue of poverty as well as the promise of microfinance."

What concerns do you have about Small Fortunes-facts, tone, message?
"I do think that the focus on Grameen in Bangladesh perpetuates the current impression that microfinance is only really happening there, in Bangladesh, when in fact the field has evolved dramatically in the last ten years. A focus on other newer and more vibrant microfinance examples in other regions would have been very useful. For example, more focus on Compartamos in Mexico (the largest and currently regarded as the best microfinance institution in Latin America with over 400,000 borrowers) or others in Africa. In fact, the world's largest microfinance bank, Bank Rakyat in Indonesia, has over 3 million borrowers and 30 million savers! It should have been included in the cases. We want to be sure that audiences understand that microfinance is a global movement with exciting, successful institutions throughout the world. I would also have liked the script to define a bit more clearly the pioneering role of ACCION in the 1970s, some years before the first loans in Bangladesh. In addition, the plethora of commentators included in the piece, some of whom are not really relevant to the development of microfinance in the field, may confuse rather than inform viewers."

What's missing? If you could add some items, issues, debates, innovations, players, to Small Fortunes for everyone to know, what would those overlooked items be?
"I think that Latin America is under-represented in the mix of client stories. So I would have taken a more in-depth look at one of the leaders in Latin America, like Mibanco, which has its roots in Acción Comunitaria del Perú, an NGO founded way back in the late 1960s as part of the first ACCION International community development projects. The heavy reliance on Bangladesh and India perpetuates the perception that microcredit is "that interesting little thing that is happening in India or somewhere else around there." It does not credit the many excellent microfinance institutions elsewhere that are doing this important work. I would also have liked more coverage of how new technologies affects our ability to reach more and more people in harder to reach areas, and an examination of other aspects of microfinance - savings, remittances, etc. But that's surely another hour-long program!"

What do you wish was said about ACCION that would help viewers to understand what you do better?
"I think that ACCION's role as a product innovator and institution builder was not laid out as clearly as I would have liked. That said, I was grateful to be so generously included in Small Fortunes and especially happy to see ACCION New York included. It is so important for viewers to understand the role of microenterprise in the U.S. and other developed countries."

What would be a conclusion/overview perspective for Small Fortune's stories?
"The producers did a wonderful job of capturing the energy and optimism of microentrepreneurs around the world. They helped viewers understand what people in the developing world do to make ends meet. What they might have missed a bit is depicting the innate business savvy of poor microentrepreneurs. We see it everyday at ACCION. A man or woman with little more than a grade-school education invariably is quite clear on the required investment, market demand, and product upgrades he or she needs to move the business forward. I think it would have been very interesting to include more footage of the interaction points between microfinance institutions and their borrowers, most particularly in the field between loan officers and clients. That relationship, between loan officer and client, is a very vibrant one. Showing it in action may have helped viewers understand more clearly just how loans are applied for and granted. I believe the BYU team also did an excellent job overall with the facts, and they were a consummately professional group to work with. BYU Broadcasting has a lot of footage, interviews and time invested in this project, and I salute them for such a large undertaking."