Voices from the Field: Essma Ben Hamida

Pathways: financial inclusion to end extreme poverty | Find out what we heard from the industry in this year’s Listening Tour

We’ll be bringing you articles throughout April that reflect the results of this year’s Listening Tour Photo credit: by Geoff (originally posted to Flickr as Pilgrim’s path) [CC BY 2.0], via Wikimedia Commons

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In preparation for our 18th Microcredit Summit, the Campaign conducted a Listening Tour from December 2014 through February 2015. The Listening Tour served two purposes. First, it was our hope to find out how our audience (you) felt about on the World Bank’s goal of eradicating poverty by 2030, and equally important, we wished to consult you in identifying the topics that were at the top of everyone’s mind.

April is the Month of MicrofinanceLearn more

April is the Month of Microfinance
Learn more

The Listening Tour is our time to listen — and your time to speak — on the issues that the microfinance and financial inclusion sector face. We collected your feedback through an online survey and organized conversations with 27 leaders in the microfinance and financial inclusion sector. We heard from them on how financial inclusion can contribute to the goal of ending extreme poverty by 2030 and the role of microfinance in the post-2015 agenda. The results of this consultation will be reflected in the 2015 State of the Campaign Report, the 18th Microcredit Summit, and Campaign Commitments.

Below is a short excerpt from our conversation with Essma Ben Hamida, executive director of Enda Inter-Arabe in Tunisia.

Q: What do you think will be needed to achieve the goal of global financial inclusion by 2020 and how can this contribute to the goal of eradicating extreme poverty by 2030?

Essma Ben Hamida

Essma Ben Hamida is executive director of Enda Inter-Arabe in Tunisia

I’m not very optimistic, given the current situation. Banks and MFIs are having a crisis of liquidity especially during this last financial crisis. There is a lot of money in the MENA region, but our outreach numbers are low compared to other regions. Also, with just 1% of the population projected to own 50% of global wealth by end-2015[1], it is hard to see how the poorest can hope for financial inclusion. If it were possible, it would make an important contribution since without access to any financial resources, it is impossible even to work your way out of poverty. Those 1%, frankly, could not care less.

Q: In relation to our host region, what are the challenges and opportunities facing Africa & the Middle East in regards to microfinance and financial inclusion?

In Tunisia, we had a fairly successful democratic transition, much better than some of the other countries in the region, though we were still impacted by the situation in Libya. Banks didn’t have money because wealthy people were hiding money somewhere else, but now it seems we are getting back to normal. Enda is working more now after the revolution and our portfolio is again looking healthy. From time to time, we have to close a branch for a day or two, but I believe that the crisis has demonstrated the need for microfinance. [The revolution] has caused a lot more people to start a small business and the need for microfinance has grown strongly.

The MENA region is undergoing a democratic transition, and we need to make sure women and youth are included among the beneficiaries. They helped create that movement and we must listen to their frustrations and needs and find solutions. This can be achieved partly through creating and strengthening micro-enterprises thanks to micro-finance services.

Women empowerment is very important for the Arab region. Besides loan disbursement [to women], Enda does a lot of training, discussions, partnerships with NGOs, support for marketing, and computer literacy training as well as exposing them to different models and ideas. It’s important to talk about how we can empower [women] through financial literacy and overall citizenship education. For youth, we have to invest in their start-ups and assist with non-financial services such as training, coaching, developing business plans, exchange visits, and a lot more.

Q: What are key themes to consider or important debate topics we need to address in the microfinance & financial inclusion sector in the coming year?

Technology can help in many ways. For instance, mobile banking can save time and money for clients and reduce costs for MFIs. Using tablets and relevant apps can hugely improve loan officers’ performance. We see technological advances in financial products and services, and as a region, we want to know how to use them. They seem to be working well in some places in Africa (M-PESA), but what other experiences are working in our region? But governments, especially central banks, must encourage this rather than setting up barriers to technologies that have been working in other countries for several years already.

I also would add crowdfunding as an alternative source of funding for financial inclusion of the millions of micro-entrepreneurs in our region. It is still ignored and even rejected by central bankers in our countries. An exchange between central bankers and Kiva (USA), Babyloan (France), and other crowdfunding groups for microfinance would be very helpful for the industry in our region. Overall, we need to work to bring different models from around the world to learn from all the regions.

About Enda Inter-Arabe

Enda is the first and by far the largest microfinance institution in Tunisia. With a staff of close to 1,200 working out of 80 branches, Enda serves 250,000 active clients with a US$110 million loan portfolio and a global repayment rate which stood at 99% at end-2010 before the revolution in 2011. Today, it has declined to a still-respectable 96%, though quite a few clients are facing difficulties due to current economic problems in the country.

In addition to issuing traditional lines of credit, Enda has developed specialized products including education, housing and agriculture loans, and has recently introduced a special loan to encourage young people to launch into self-employment. Enda also provides business development services, including financial literacy classes, vocational training, marketing, and workplace guidance.

Prior to her career in microfinance, Essma worked as a journalist/reporter in Tunisia, New York, Rome, and Geneva and as a consultant for the United Nations. She has received distinguished awards and decorations. She was selected outstanding social entrepreneur for the MENA region in 2010 by the Schwab Foundation and the World Economic Forum.

Visit Enda Inter-Arabe’s website: http://www.endarabe.org.tn/

FOOTNOTE

[1] Oxfam International press release (1/19/2015), “Richest 1% will own more than all the rest by 2016.” Accessed 4/1/2015: https://www.oxfam.org/en/pressroom/pressreleases/2015-01-19/richest-1-will-own-more-all-rest-2016

Relevant resources

Soul of Finance Series: An interview with Essma Ben Hamida of enda inter-arabe

Essma Ben Hamida: “I think the Arab region will be saved by its women.”

Essma Ben Hamida and her husband, Michael Cracknell, are the founders of enda inter-arabe (http://www.endarabe.org.tn/). Enda is the first and largest microfinance institution in Tunisia. With a staff of close to 1,000 working in 65 branches, enda serves 210,000 active clients with a US$80 million loan portfolio and a global repayment rate which stood at 99% at end-2010 before the revolution in 2011. Today, it has declined to a still-respectable 96%, though quite a few clients are facing difficulties due to current economic problems in the country.

In addition to issuing traditional lines of credit, enda has developed specialized products including education, housing and agriculture loans, and has recently introduced a special loan to encourage young people to launch into self-employment. Enda also provides business development services, including financial literacy classes, vocational training, marketing, and workplace guidance. Prior to her career in microfinance, Essma worked as a journalist/reporter in Tunisia, New York, Rome, and Geneva and as a consultant for the United Nations. She has received distinguished awards and decorations. She was selected outstanding social entrepreneur for the MENA region in 2010 by the Schwab Foundation and the World Economic Forum.

Larry Reed:  The Arab Spring revolution started when a street vendor, Mohamed Bouazizi, set himself on fire to protest harassment by the government. What role do you think microfinance played in the Sidi Bouzid Revolution?

Essma Ben Hamida: Enda’s assistance in strengthening micro-enterprises all over the country since 1995 certainly made a small contribution in favour of the revolution. I think the uprising wasn’t violent in part because people gained dignity thanks to earning money through a microenterprise, often with support from microfinance. I was expecting poor people to march on rich neighborhoods and trash them. They didn’t do that; there was a sense of dignity among the poor. They were against the regime, against dictatorship, corruption, and absence of freedom, but they were not against rich people just because they were rich.

When the revolution started, in many cases, our clients protected their enda branch from potential looters. Kasserine is a city close to Sidi Bouzid where the revolution started. That was where the people suffered most. Many buildings downtown were sacked and burned by rioters except three. The building where enda has its branch was one of those three. We were protected by our clients. Poor people understood we are not the government. They recognized that we are there to support them.

LR: How do you see enda’s role changing now after the revolution?

EBH: There is an unprecedented economic crisis right now in the wake of our revolution and our neighbor Libya’s, compounded by the world economic downturn. In the MENA region, we will soon have 115 million young Arabs looking for jobs, and it is very unlikely that governments will be able to provide jobs for all of them. Microenterprise can provide a solution for some of them but microfinance needs innovation. We need to encourage start-ups (microfinance institutions generally only support existing businesses); young people with little or no experience need training and coaching, which is costly. Money alone is insufficient to ensure success of start-up businesses.

Enda provides a lot of these necessary non-financial services, and after we set up a microfinance company under Tunisia’s new microfinance law (hopefully within the next 18 months), the NGO’s main task will be to provide such services—things like financial education, technical training, marketing, improvement of product quality, and education in citizenship. This will also enable poor people to be empowered to play a positive role in the advancement of their communities. Whatever is good for Tunisia will be good for other countries in the region. I think microfinance has a crucial role to play in the future.

LR: What are the challenges that you are facing now at enda?

EBH: The microfinance company we are planning to set up will have investors seeking profits, so it is essential for us to maintain our social mission. We should not have investors who are seeking to maximize their returns at the expense of our clients. Maintaining the social mission will require careful selection of the investors and the board members. I shall do my best to ensure that the same style and mission remain after I leave enda.

The NGO will continue as the main shareholder in the company, providing support services to the clients and promoting women’s empowerment. Being the main shareholder will greatly help in keeping the same ethics. It is not easy today in a world where the only “value” is money; it is easy to say the poor should not be exploited, but this is what is done in the world over in order to enhance profits. Microfinance has to remain different from this destructive philosophy.

LR: How has the revolution affected your operations?

EBH: The revolution began as a huge reason for hope for a better Tunisia. Unfortunately, the young people who lit the revolutionary flame have gained nothing from it. It has been confiscated by groups who were not even present during the revolution, especially fundamentalists. Even within enda, we are discovering that certain employees, in particular loan officers, are against women’s empowerment—which is one of our main objectives and the essence of microfinance. I am really worried about this. We are working with the Center of Arab Women for Training and Research (CAWTAR) to train our staff on women’s rights and citizenship. If the staff is not convinced about this, it will be even more difficult for us to empower rural women.

Some of the staff have set up a union. Maybe it is something natural because in the whole country everyone is striking and exercising their new-found ability to contest. Enda is a social enterprise. Our staff benefits go way beyond what the law requires. We should have liked the union to adopt a positive and constructive approach. Instead, they seem to be all the more confrontational as they have so little to claim. Some of our staff are concerned about the implications of creating a microfinance company, fearing they will be fired; many of them think that it is by contesting, instead of working better, that they will secure their future with enda.

LR: That sounds discouraging …

EBH: Sometimes when I am very down, I just listen to our clients and especially women. They give me back my energy. They make me happy because they show me how important our work is. They are so often happy and optimistic and determined to improve their families’ lives. For me, they are the pillars of Tunisian society. It is the women who will bring about real change.

LR: Your strong sense of values led you to start enda and guide its growth. Where did those values come from?

EBH: My values come from my Tunisian Muslim culture. Tunisian culture is a mix of Berber, Arab, Muslim, Ottoman with French influences. My generation had a rich education, based on great Arab, French and Tunisian thinkers. We had Al Moutanabbi, Ibn Khaldoun, Tahar Haddad, and Bourguiba as well as Voltaire, Montesquieu, and other European thinkers. It was a beautiful, balanced education based on strong values. We were the first Arab Muslim country that set up a gender balanced constitution. Tunisia developed a revolutionary family code since independence in 1956. This has helped me a lot. Those who today want to confine women to the home are apparently unaware of how much the Prophet did to improve the situation of women at the time and how much positive influence women had on his life and thinking.

My values also come from my family. I grew up in a family where my grandfather, father, and mother all taught me great values. My grandfather used to say, “If someone comes to your house asking for food, give him your dinner.” My grandfather was a lawyer, but we always lived with poor people. We were taught to respect people, whatever their religion.

My father was a man with good Muslim values. He was a micro-entrepreneur, with a small grocery. My mother was widowed at the age of 27 with 5 daughters. She had to work very hard, sewing, and weaving carpets. She was also a microentrepreneur in her home and she was, as were so many other women, exploited by middle men. She used to ask her father for money for the business or for the family. It is not easy for a woman to ask her husband or father for money, even when it is for the house-keeping.

Today I am so happy to have discovered micro-finance, this tool that gives poor people, especially women, a sense of dignity.

LR: What do you think the future holds for your country?

EBH: I was in a meeting with Lech Walesa and I asked him, “How long did it take you to move from a revolution to a country that embodied the values of the revolution?” He said it took us in Poland 20 years. I said to him “But you don’t have a problem like Muslim fundamentalism.” He said, “We have the Catholic Church. We have the same problem as Tunisia and it took us 20 years to become a free nation.” I hope it will take us less than that.

I tend to be very pessimistic, but around me there are young people who are optimistic. I know why I am pessimistic. I am getting old and don’t want to wait 5 or 10 years to see Tunisia again become a lovely place to live in as it used to be, a country where poor women are empowered and can take their destiny in their hands. I hope that we will get there in 2 or 3 years. I feel we are swimming against the tide …but still, even with the fundamentalists, I want us to keep empowering poor people and especially women with microfinance and support services.

I think the Arab region will be saved by its women.

This post is the first installment of the Soul of Finance Series in which Campaign Director Larry Reed will be interviewing leaders in microfinance and the wider financial community to ask them questions about how they deal with the challenges and temptations that come with managing money. To learn more, visit the Soul of Finance section of our blog.

Visit enda inter-arabe’s website: http://www.endarabe.org.tn/