Newsletter - October, 2007

The Least of These My Brethren

October, 2007

Assuredly, I say to you, inasmuch as you did it to one of the least of these My brethren, you did it to Me." Matt. 25:40

Published by the Society of the Good Shepherd, P. O. Box 122, Amberson, PA 17210

Why Microloans?
“The poor stay poor not because they are lazy, but because they have no access to capital.” Milton Friedman (Nobel Prize winner in economic science) Jesus cares about the poor. In fact, He cares so much that He said our own eternal destiny is affected by how we care for the poor and needy. Jesus said, “Then the King will say to those on His right hand, ‘Come, you blessed of My Father, inherit the kingdom prepared for you from the foundation of the world: for I was hungry and you gave Me food; I was thirsty and you gave Me drink; I was a stranger and you took Me in; I was naked and you clothed Me; I was sick and you visited Me; I was in prison and you came to Me” (Matt. 25:34-36).

A microloan helped the Fanconi family start a bakery

Unfortunately, a “top-down” mentality has long characterized various programs to help the poor in other nations. In the top-down approach, “experts” in prosperous countries like the United States decide what is best for the poor in other nations. These experts may be government officials, college professors, or the heads of charitable organizations. They draw up plans to help the poor in developing countries, and then try to impose these solutions on the poor—whether or not it fits their culture.

However, the record has shown that such top-down imposed solutions either don’t work or are very inefficient. Simply throwing more money at the poverty problem is not the solution. John M. Perkins, a Christian who has devoted much of his life to the poor, writes: “Acts of charity can be dangerous because givers can feel good about actions that actually accomplish very little, or even create dependency” (John M. Perkins, Beyond Charity).

A lean-to and used tools becomes a tire repair shop

In contrast, the bottom-up approach believes that the best solutions are those that are home-grown. This approach says that the people in developing countries are in the best position to know what works best in their own culture. And the feedback they are giving to governments and charitable organizations is that the most effective and efficient way of helping the poor is through microloans. Microloans are small business loans in the range of $200.00 to $2000.00. In the United States, loans of that size would be of little help to most businesses. But in developing countries, such loans can have a dramatic effect in helping a family climb out of poverty.

Of course, the income derived from microbusinesses is not very large. However, the cost of living for the men and women who run them is not very large, either. Nor is the cost of setting up business. A rustic lean-to made of rough wood, coupled with a few used pneumatic tools, becomes a profitable tire repair shop in Honduras and other developing countries. A few beehives, some homemade equipment, and a collection of recycled bottles and jars becomes a honey factory. A living room and a small inventory of milk, bottled water, soft drinks, and snacks becomes the neighborhood convenience store.

Roadside Honey Outlet

“Microcredit enables people to become givers, not takers. Microcredit should not be seen as charity but rather as the opportunity poor people need to build a decent life. Through microcredit, donors can shed the old hand-out mentality and become true partners in progress with the people of the developing world” (A Billion Bootstraps, p. 45). That is one of the keys to the effectiveness of microloans. It enables hard working persons to lift themselves out of poverty by working together with donors in the United States and other countries.

Another advantage of microloans is that the money donated is recycled. It first helps one family to sustain themselves economically. Then, when they repay their loan, the same money is used to help another family. One charitable organization reports, “We have found no other humanitarian work that delivers more in terms of changed lives for lower cost than microcredit.” To be sure, a microloan is not recycled indefinitely. Defaults, local inflation, and costs of running a microloan program eventually consume the original loan money. But many organizations are finding that the money is recycled about twenty times before being used up.

In our program in Honduras, we primarily make loans to Christians who are putting the kingdom of God first in their lives. In this manner, our donors not only help these pastors and other Christian workers financially by augmenting their “tent-making” small businesses, but they also help bring the gospel to hundreds of others through the ministry of the persons they help. It’s all about working together in the kingdom of God. DB
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