The Soul of Microfinance

The following post is a guest contribution from Sam Daley-Harris, Director of the Center for Citizen Empowerment and Transformation and former Director of the Microcredit Summit Campaign. This post concludes April’s theme, the “Soul of Microfinance,” as well as the student-led coalition, Month of Microfinance.


“The only thing I know for sure is it’s not all about the money.”Earlier this month I spoke to a group of students from eight high schools in the state of New Jersey. The group is part of a club that educates high school students about economic, financial, and investment principles. They wanted me to demonstrate to the next generation of leaders in finance how finance, in this case microfinance, can positively impact the global community.As we waited for the last group of students to arrive, the organizers played a segment from a television show called Sharks. The show features a panel of five wealthy investors called “Sharks”  who consider presentations from entrepreneurs seeking funding for their business. Just before I spoke, one of the Sharks said to the entrepreneur who had just presented, “It’s all about the money.”

When it was my turn, I looked out at the students and said, “The only thing I know for sure is, it’s not all about the money.” This was my cue to launch into a version of the TEDx talk I delivered in 2010 titled, “Purpose, Poverty, Pitfalls and Redemption.” I described how committing my life to ending poverty has given purpose to my life and outlined the pitfalls I faced recently. Specifically I explained about the recent period in microfinance when, for far too many, microfinance became “all about the money,” when the wellbeing of the investors was more important than the wellbeing of the clients. It was also a period when there was little interest in initiatives like the Smart Campaign for Client Protection, the Social Performance Task Force, and the Seal of Excellence for Poverty Outreach and Transformation in Microfinance.  Thankfully, that period is clearly passing.

I told the students that when I began to see and commit to microfinance that could bring redemption, that could restore people’s honor and worth, I was returned to my original purpose and vision. To illustrate microfinance for redemption, I recounted a story told to me by Ingrid Munro now of Jamii Bora SACCO in Kenya.

After the post election violence in Kenya, Jamii Bora received funds to rebuild one of the markets that had been destroyed in the rioting. They decided they had to find the rioters who burned down the market and engage them in rebuilding it.

I don’t know of any microfinance organization in the world that, if given funds to rebuild a market destroyed in rioting, would say, “We have to find the rioters and engage them in rebuilding it.” And if they said it, I don’t think they could find them. And if they found them, I don’t think they could convince the rioters to help rebuild what they had destroyed.

But Jamii Bora’s staff are all former members of the program, people who were former slum-dwellers, some of them former beggars, prostitutes, and thieves, so they are close to the ground.

The leader of the gang that destroyed the market was known as “The General.” Jamii Bora staff talked with him about helping rebuild what they had destroyed. His initial reaction was to be angry at her staff because they didn’t realize how dangerous he was.

But they convinced the General and his gang to help rebuild the market. They paid the gang to guard the materials at night and paid them to help rebuild with others during the day.

After the market was rebuilt, Jamii Bora engaged the General and some of the gang in microfinance. The General created a business that uses sheet metal to build cases that children use to keep their things in when they go to simple boarding schools.

He came to Ingrid and told her that he hadn’t gone to his home village for 13 years because his mother was so ashamed of him. But he had just gone home and his mother cried for three days because she was so happy about how he had turned his life around.

There are many visions for microfinance, including this one:  using microfinance for redemption. The dictionary defines redemption as restoring one’s honor or worth, setting one free. That’s what the world’s poor need—redemption that restores their honor and worth and sets them free.

Sam Daley-Harris is founder of RESULTS and of the Microcredit Summit Campaign and launched the Center for Citizen Empowerment and Transformation in 2012. www.citizenempowermentandtransformation.org
sam [at] empoweringcitizens365 [dot] org