Beyond Giving Hope – Religion’s Contribution to Financial Capability

John Gitau, CEO of Kenya Financial Education Centre, writes on the Center for Financial Inclusion blog about “the important contribution religion is making and its potential in advancing financial capability among the poor it so effortlessly reaches.” Larry Reed shared his own observations and some historical context for religion and financial inclusion in the comments. What do you think?

Thanks, John, for bringing up the role of religious movements in promoting financial capability. I recently returned from Mexico (since our Summit will be there September 3-5) and while I was there I learned that most of the savings and credit cooperatives (the SACCOs that you talk about) were started by Catholic priests and workers in rural areas. I did some research on this a while back and found that religions that promote the dignity of each person and the caring for people in poverty usually develop some sort of financial services for those in need. For example, in the Middle Ages the Franciscans developed Montes de Pietati (Funds of Piety) to lend to people whose financial emergencies had led to them becoming indentured servants. These Montes still exist throughout Europe and many other parts of the world. The earliest program of this type I can find are the Buddhist and Hindu temple loan systems from around 400 CE. Monks would turn all their worldly possessions over to the temple when they joined, and the temple leaders used these funds to provide loans to struggling small scale farmers in the surrounding areas. And, of course, the earliest version of the Smart Campaign and Client Protection comes from the Hebrew Scriptures, which do not allow usury or collection practices that would harm the livelihood of the borrower.
Yes indeed, Larry and thank you for your sharing your observations. It is these sort of financial services amplification through financial capability that we are lauding religion for. Otherwise, before, beyond giving hope, religion was seen as a system of mopping the little cash the poor had and channeling it to developments benefiting the rich such as good schools, hospitals, universities, residential and commercial real estate property. Now with the financial capability interventions religious organizations are promoting more aggressively, the poor will benefit materially and through appropriate tools and systems help themselves out of poverty.
You’re right, John. In fact, there is a cautionary tale in some of the examples I gave about how tools developed to assist people out of poverty become deployed to exploit them instead. In China, the Confucian revolution was in part a rebellion against the economic domination of the temples. The Montes developed by the Franciscans later became pawn shops. Whether religious or not, we humans have a hard time keeping the interests of the excluded and powerless above our own self interest.

Center for Financial Inclusion Blog

Posted by John Gitau, CEO, Kenya Financial Education Centre

I was once a seminarian. Had I followed that path successfully, I would most probably be a Catholic bishop today. I blame my wife for the failure, though she never admits it. She instead boasts of 27 years of successful marriage complete with two adults and a teenager as offspring. She says, in jest, that marriage is celibacy tweaked. I don’t like her bravado, especially when she recalls how she crafted the fall that felled me. Before you can throw a stone at her, know that we always unite against a common enemy.

During my seminary days and perhaps since time immemorial, religion was about preparing the soul for eternal life. It is a way of life, complete with doctrines, laws, dogmas, liturgies, beliefs, and ethos, all meant to cultivate spirituality. Most religions profess the existence of a deity and…

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