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Not ''Business as Usual'', but ''Unusual Business"
Category: Microcredit | By VMC-2011, 18-Mar-2011 | Viewed 8076  Comments 0
Victoria, British Columbia, Canada
Microcredit Conference 2011 — A Microcredit "brain trust" came to Victoria
By Pieta VanDyke
Victoria Harbourside Rotary Club

While most residents of Victoria were enjoying a sunny spring afternoon, many of the world's experts on microcredit came to share, debate and present their knowledge in the area.  They were in attendance at the city's second Microcredit Conference, sponsored by Rotary District 5020 and the Rotarian Action Group on Microcredit.  The keynote speaker was Phil Smith of Tulsa Oklahoma,  Smith is a co-author of "A Billion Bootstraps", the seminal book on the subject.  In his introductory talk he talked about the "social collateral" model where a peer group guarantees the loans of its members. Each member has an interest in the well being of the group. He noted that it is a tool towards women's empowerment in the third world.  Ninety percent of micro loans are made to women — they are more motivated to succeed, as they have to feed their children.  They work harder than men, are less likely to die in war or to leave their families.  Smith addressed the criticisms that are sometimes directed at microcredit. Recently we have heard about "loan abuse" in India and that borrowers there do not know what they are getting in to.  What we are seeing in India, he said, are banks getting on to the microcredit bandwagon, charging high interest rates and using coercive repayment tactics.  Smith could not help noting that while microcredit abuse charges are being leveled at India, the US banking system has itself been guilty of issuing "abusive" home loans.  With regard to Bangladesh's removal of Mohammed Yunis from the Board of Directors of the Grameen Bank, Smith noted that this is simply a case of a government seeing the influence that microcredit is having, and wanting to have power over the poor for itself.

The speaker travelling the greatest distance was Gert Van Maanen, who came from the Netherlands.  Gert was on the Board of Directors of the ING Bank when he joined the Board of Oikocredit, one of the world's most prominent microfinance institutions. He told of his initial incredulity at learning about the "negative asset test" used to determine eligibility for a microcredit loan. The fewer assets a person has — the more likely they are to be eligible!  Van Maanen noted that there is a major movement among the poor to join this movement.  In 2007 there were 155 million microcredit clients, of whom 106 million met the criteria of being among the world's poorest. Since each of these people supports approx. 5 people, there are over 775 million people in the world who are supported by parents who are economically independent thanks to microcredit.  Van Maanen identified roles that conference attendees can play —         1. Choose who you want to ally with (i.e. a specific MFI, country, or donor body), 2. Advocate to friends, government, and CIDA to support and invest in microcredit, and 3. Convert other Rotarians to using this tool — especially Rotarians in the south. Another speaker who made the switch from the formal to the informal economic system was Damian von Stauffenberg, who made the move from the World Bank to found MicroRate — the world's first rating agency specializing in microfinance. Von Stauffenberg noted that while receiving charity diminishes the dignity of a person, microfinance enables individuals to create wealth.  It is a transaction between equals.  By repaying their money, participants become co-owners of a project. Other notable speakers included Julio Villalta, a Rotarian who is currently the finance Director for the Development Bank of Tegucigalpa, Honduras, and was the founding member and President, in 2000, of the Uniendo America Foundation, a Rotary Foundation for microcredit in Honduras.  Joyce Bontrager Lehman, of the Bill and Melinda Gates Foundation spoke of the need to develop opportunities for microsavings for the very poor.  The Rotary Foundation was represented by staff member Candace Embling, who outlined new funding and grant options being developed for use by Rotarians.  Representatives of World Vision, Opportunity International Canada and Oikocredit provided information tables and spoke in workshops. Youth attending the conference learned how they can participate in international aid projects, and a presentation was also made by Lisa Helps, the founder and Executive Director of the Victoria Community Microlending Society, about how microfinance can work in our community.

Speakers remarked on the energy in the room — noting that everyone in attendance was there because they wanted to help those most in need.  Conference organizers were gratified to hear Phil Smith state that he had learned things at the event.  He congratulated the organizers, saying that it was not Microcredit 101 or even Microcredit 201, but due to the high level of debate and discussion, the conference would qualify as Microcredit 301!
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