The impact of microfinancing – an excellent example

Saima Muhammad in Pakistan - her life changed due to microfinancing

Saim a Muhammad in Pakistan - her life changed due to microfinancing

I might not always agree to what Nicholas Kristof writes, but in his New York Times article “The Women’s Crusade”, he hit the right spot.

One particular part caught my eye: the story of Saima Muhammad, a woman in Pakistan. How microfinancing changed her life. It did not only boost the income of her family, but at the same time, it thoroughly changed her social position and her relationship.

Here is an extract from the article:

One place to observe this alchemy of gender is in the muddy back alleys of Pakistan. In a slum outside the grand old city of Lahore, a woman named Saima Muhammad used to dissolve into tears every evening. A round-faced woman with thick black hair tucked into a head scarf, Saima had barely a rupee, and her deadbeat husband was unemployed and not particularly employable. He was frustrated and angry, and he coped by beating Saima each afternoon. Their house was falling apart, and Saima had to send her young daughter to live with an aunt, because there wasn’t enough food to go around.

“My sister-in-law made fun of me, saying, ‘You can’t even feed your children,’ ” recalled Saima when Nick met her two years ago on a trip to Pakistan. “My husband beat me up. My brother-in-law beat me up. I had an awful life.” Saima’s husband accumulated a debt of more than $3,000, and it seemed that these loans would hang over the family for generations. Then when Saima’s second child was born and turned out to be a girl as well, her mother-in-law, a harsh, blunt woman named Sharifa Bibi, raised the stakes.

“She’s not going to have a son,” Sharifa told Saima’s husband, in front of her. “So you should marry again. Take a second wife.” Saima was shattered and ran off sobbing. Another wife would leave even less money to feed and educate the children. And Saima herself would be marginalized in the household, cast off like an old sock. For days Saima walked around in a daze, her eyes red; the slightest incident would send her collapsing into hysterical tears.

It was at that point that Saima signed up with the Kashf Foundation, a Pakistani microfinance organization that lends tiny amounts of money to poor women to start businesses. Kashf is typical of microfinance institutions, in that it lends almost exclusively to women, in groups of 25. The women guarantee one another’s debts and meet every two weeks to make payments and discuss a social issue, like family planning or schooling for girls. A Pakistani woman is often forbidden to leave the house without her husband’s permission, but husbands tolerate these meetings because the women return with cash and investment ideas.

Saima took out a $65 loan and used the money to buy beads and cloth, which she transformed into beautiful embroidery that she then sold to merchants in the markets of Lahore. She used the profit to buy more beads and cloth, and soon she had an embroidery business and was earning a solid income — the only one in her household to do so. Saima took her elder daughter back from the aunt and began paying off her husband’s debt.

When merchants requested more embroidery than Saima could produce, she paid neighbors to assist her. Eventually 30 families were working for her, and she put her husband to work as well — “under my direction,” she explained with a twinkle in her eye. Saima became the tycoon of the neighborhood, and she was able to pay off her husband’s entire debt, keep her daughters in school, renovate the house, connect running water and buy a television.

“Now everyone comes to me to borrow money, the same ones who used to criticize me,” Saima said, beaming in satisfaction. “And the children of those who used to criticize me now come to my house to watch TV.”

Can you now understand why I stressed the importance of empowering women when outlining our project?

New loans,… and we raised past $13,000 !

Mary in Ghana

Mary in Ghana

Mary is a 36-year-old married mother of four children. Her two sons and two daughters are still in school. Mary lives with her husband in a rented apartment in Dunkwa in the Central region of Ghana.

She trades in tubers of yam. She buys her goods from nearby towns and sells them on a table top at the market square in her community. She has been in business for over 15 years.

She requested a loan of $550 to buy goods in bulk so she could to expand her business.

Through our Kiva lending team, we were able to allocate her a loan of US$50. She was part of a series of loans we allocated this evening, which also included:

These loans were financed through a repayment of previous loans.

The other members of our Kiva team have been equally active, resulting in a total loan value of $13,275, a jump of almost $1,000 in a week! Thank you all!

Last, but not least, let us welcome Jong Seung as our latest, and 23th team member. Marhaba! :-)

An update from Tasi Rasch in Samoa

Tasi Rasch in Samoa

Tasi Rasch in Samoa

We received an update from one of our loans in the deep Pacific:

Tasi Rasch owns a cattle farm with about 10 cows. She sells her cows to villagers for falavelaves, Samoan feasts. On these occasions, Samoans butcher a cow to celebrate a wedding, throw a birthday party, or mourn a recent death. Large cows cost 1,000 tala (400 USD) and smaller cows cost around 500 tala (200 USD).

Tasi reckons she sells about one cow each month. In addition to her cattle farm, Tasi runs a small plantation with her husband. On their land they grow taro and bananas. Tasi’s loan from South Pacific Business Development (SPBD) was used to buy pesticides, fertilizers, machetes and nails for a new cow pen.

Each week Tasi sells her produce in Apia, the capital city. From their produce, Tasi and her husband earn around 200 tala each week. Tasi hopes to buy a car with her profit from her two businesses.

Update from Sabor and Faryada in Afghanistan

Sabor and Faryada in Kabul, Afghanistan

Sabor and Faryada in Kabul, Afghanistan

A few months ago, we gave a loan of US$50 to Sabor and Faryada Kapysa in Kabul, Afghanistan

Sabor wanted to take a loan for his general store so he could buy the necessary building materials to enlarge his shop.

Faryada wanted to take a loan for her brother’s business as baker who wanted to change his business with a bigger shop.

Sabor reported he bought the materials and finished the rebuilding while Faryada’s brother used the loan to more flour and fire wood for his bakery, increasing his business.

Related Posts with Thumbnails