Local Group Provides Microloans To Impoverished Women
Local San Diego women are providing little loans that add up to big change in impoverished countries. WomensTrust and Women’s Empowerment International have provided microloans ranging from $55 to $5000 to help women in poorer countries start their own businesses.
They have helped women in Ghana, Honduras, Mexico and refugees in San Diego. Their goal is to help these women start sustainable businesses and begin to work their way out of poverty.
Women who have struggled to make $2 a day are using these loans, along with their skills, to start businesses from baking to quilting. We will talk to Dana Dakin, who is the founder of WomensTrust, and to Winifred Cox, co-founder of Women’s Empowerment International. We will talk about the impact that their partnership has made and the lives they have changed.
Dana Dakin, Founder of WomensTrust, a microfinance program for impoverished women in Ghana
Winifred Cox, Co-Founder and Co-President of Women's Empowerment International
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CAVANAUGH: This is KPBS Midday Edition. I'm Maureen Cavanaugh. The concept of giving very small loans to women in the developing world has transformed some impoverished communities. Groups of women have started profit making companies with loans as small as 50 dollars. The microloan group, women's empowerment international, held its annual conference in San Diego over the weekend to assess the progress and the recent troubles in the microfinance industry. I'd like to welcome Winifred Cox, cofounder and copresident of women's empowerment international. And good afternoon, thanks for coming in.
COX: Thank you, Maureen.
CAVANAUGH: Dana Dacon is also with us, she is founder of women's trust, a microfinance program for impoverished women in Ghana. Good afternoon, Dana.
DACON: Hi, there.
CAVANAUGH: Now, if any of our listeners has experience in microloans or questions about it, give us a call at 1-888-895-5727. Let me start with you, win Fred, may I call you win?
COX: Yes, please.
CAVANAUGH: Okay. Explain a little bit about how these microloans work. In other words, how do groups or individuals who need these loans connect with an organization like yours?
COX: They -- most of the world has a germane model of microloan where a bank for the poor goes out into rural areas, finds impoverished women, offers them the chance to get a small loan, and we're talking 25 dollars, maybe a hundred and 50 for a start up loan, but usually under a hundred dollars. They form a group of usually six to eight women, and the money goes to the whole group. The group chooses who gets to be in their group. Then the women receive the loans, they decide what business they want to create, they create it, they pay back the loans, usually about every two weeks, a little piece of it. They usually have six months to pay it back. And all of the women in the group guarantee each other's loans. Worldwide, they have universally about a 96 to 98 percent repayment rate.
CAVANAUGH: Wow, Dana, what kinds of accidents are started with these loans?
DACON: We are in a town outside of Accra in Ghana, it's a 20-thousand person town. The women there are all in the informal economy, so they are hair dressers, they sell baked goods. They make clothes, they do hair dressing, it's a local services that they provide for the local economy.
CAVANAUGH: And another -- other areas of the world, Win, what kinds of businesses? What kind of a business can you start with 25 dollars or 50 dollars?
COX: It's amazing. In most countries you can start a wonderful business with each 25 dollars. Wee supported programs in five different country, and for example in honest as, a woman can buy about four or five chick ebbs and get a thriving chicken business. In Mexico, goats, cows, making empenadas, making clothing, a lot of sewing businesses. Our program in Africa, a lot of the women were doing farming, pretty much subsistence farming, that was in Benin. And in San Diego, in fact, it's kind of a different model. But we have poor and refugee women creating small businesses here in San Diego.
CAVANAUGH: That's really exciting. So we're doing it right here in our own city.
CAVANAUGH: Why -- remind us if you would, Dana, why are women the primary recipients of these microloans?
DACON: First of all, they're a very good risk. Women take the money seriously, they have a cookie jar mentality, they save their money, they harbor it, and they put it right back into keeping their children in school, and keeping healthy. So they are -- they're very cautious and disciplined. And they in many cases they've always been working since they were young. So they know how to manage cash. And they want more money going forward, so they think strategically. These women are smart. They may have only gone to school through the sixth grade, but they have learned at the side of their mother, and they take the money seriously, and the repayment is remarkable.
CAVANAUGH: And is it true also, Win, that women are perhaps less likely to be given a loan by any other kind of conventional loan agency?
COX: Yes, all of our organizations are reaching the poorest of the poor. These people have no way of getting a repayable loan at a reasonable rate. So they really are the poorest of the poor.
CAVANAUGH: How do men respond to this? I'm just wondering. Let me ask you, Dana. How do the men in the small city or the village respond to the fact that the women now have the money, and they're starting a business, and they're about to be making some money?
DACON: So we've been in Pokuase, Ghana, for eight years, and about the second year, I said I wonder what the men are thinking. And by then, I know some of the men and the husbands, and I go to them, and I say, what do you think? Is this okay with you? And they say, are you kidding? This takes the pressure off. And the amazing long-term impact is that we talk to the nurse, and the local nurse, we asked, what is the level of domestic violence? And she said wife beating is down. And we said is there -- can you attribute that to anything? The loan program. It takes the pressure off. It puts the women in charge of their own day to day management. They do not have to go and just beg for money from their husbands or their family. And they get control of their lives, and the empowerment that you watch over this time of continuing to come back is impressive. The men love it.
CAVANAUGH: Now, Win, I mentioned that there was just this annual conference for women's empowerment international that concluded, I think it was just yesterday.
COX: Yes, it was.
CAVANAUGH: And I wondered if one of the topics might have been some of the problems that have erupted this year. They've come into a sharp focus in the headlines about microloans in some areas of the world. I think some poor women in India and elsewhere seem to have gotten into extreme debt by the use of multiple loans, taking out a number of these small loans. What went wrong in those instances?
COX: That is exactly true. They had too many loans available to them, they were desperately poor, they would go to multiple agencies and get the loans and they just became over indebted. And it's one of the things you have to be sure that when you're funding microloans, you're in an area that's totally under served, that there are not multiple agencies providing loans. And that these are women who in fact are going to repay their loans back. That's one of the things, the credibility of our organization is based on doing due diligence about who we partner with, and also checking the books. Because we have a wonderful ability to tell our donors that if they want every penny of their donation to go for a loan, it will. We take no over head off of it, nor does the bank for the poor. Such as Dana's organization. But we have to make sure that that's happening. And so we do, and we're there on the ground with the banks for the poor, meeting with the women, and we also do a lot of sort of titration of them ahead of time.
CAVANAUGH: And Dana?
DACON: We believe in being bottom up. It's called bottom up in international development circles. What that means is our programs are run by local people. They are not run by agents who come into town for two hours a week and don't know the women. We know the women. We counsel the women. We get to know their programs. We work with them. And the problem of becoming over indebted is avoided because we're partnering with the women. Just as women's empowerment international partners with us. We then are -- our role is to be on the ground, make a local staff empowered to give out this money, train them, they teach us too, and work with the women in partnership.
CAVANAUGH: I'm wondering, do you think therefore that the problems that have surfaced have come from lack of over sight? That people have just not kept up with who is going into these certain villages and certain small cities to sign up people?
DACON: I think that organizations such as ours, it's our responsibility to make sure that when we go into an area, it is the right area to go in, and wee desperately needed there, and that this will be the only source for people who start to build their lives and get out of poverty.
CAVANAUGH: I'm just wondering, is this a setback for the whole concept of micro financing?
DACON: I think so. I think so if you aren't sophisticated because we rely totally on organizations like women's empowerment, and they rely on individuals, and individuals already are challenged by giving money beyond our borders. And so they hear this news, and then they say, well, it doesn't work to give any kind of contributions beyond people I know. And the wonderful thing about what our partnership, women's empowerment, and women's trust, is that it's personal. We actually -- the loans are personal. And it keeps that. And we're hoping that more and more people will come on board and realize that they can have tremendous impact beyond our country, and really create stability in the world.
CAVANAUGH: Well, then, Dana, the flip side of that must be the stories that you have of how these new loans have actually turned around and changed communities in the developing world. Do you have a story that you could share with us?
COX: Great story. I'll give the example of Sarah, who's a baker. She's lived in the community, her family has lived there for generations. She had a growing concern, in many ways a small business she trained at her mother's side in baking. And she with a loan was able to buy a larger oven, and then she hired three new employees and paid them rather than just give them food, she paid them. And she trained them. And she took them, brought them to our office and helped them get a loan to start their business. So it's a very positive cycle for the town.
MAUREEN CAVANAUGH: And not just for that one person that you initially give money to. What you're saying to me is that this is something that reverberates been the community.
DACON: And the community observes this, observes us coming back and being committed long-term to the community, and we also have scholarships for girls is other very important healthy living interventions. And so they trust us. Women's trust. It's women to women. And it's built on trust.
CAVANAUGH: Win, I wonder in the short time we have remaining if you could tell us a little bit specifically about the programs that help women here in San Diego. I know that you're an international organization, but I think perhaps people might be surprised to hear that, indeed, among the refugee community here in San Diego, you're giving out microloans.
COX: Yes, well, it's not exactly a microloan program. It is loans and grants. But our project in San Diego is a business incubator, in which refugee women and other poor women can come in with a business idea and for free from start to finish, they will end up with a functioning business. Or they will strengthen a business they already have. And it's because these are the people who are the invisible poor of San Diego. They're the ones that are falling through the financial safety net we've set up. Many of them are all on financial assistance. And it's to help them work their way out of that. So we have over a hundred businesses that have either been started or strengthened through our partnership with the international rescue committee. And it's called the start center, it's headquartered in City Heights. A lot of the clients are from City Heights, but many are also from El Cajon.
CAVANAUGH: I'm wondering, how is San Diego responding to the microloan cause? And I have to actual, we only have a short period of time.
COX: Well, I can just speak for our organization, I have to tell you, we started with 35, and we now have over seven hundred members and donors, men and women. We've raised over half a million dollars, and we've just funded about 70 thousand loans. So San Diegans are responding beautifully. We can't congratulate them enough for the way they have stood together to help women help themselves.
CAVANAUGH: I have been speaking with win Fred Cox, cofounder and copresident of women's empowerment international, and Dana Dacon, founder of women's trust. Thank you both.
DACON: Thank you.
COX: Thank you Maureen.