“If you are in a house and want to see what is happening outside, look through the window and not through the mirror”
— Dr Timothy Thahane, Minister of Finance
IN THE last three years that I have attended the Nedbank/Lesotho Revenue Authority (LRA) Budget analysis dinners, I have noticed a golden thread that weaves through Minister of Finance Dr Timothy Thahane’s comments.
It strings together issues of proactive engagement, open dialogue and most importantly innovation and initiative.
This is directed to the private sector which, in the absence of a bureaucracy, is more suited to act in such a manner.
I am all for this approach and instead of a line by line analysis of the budget allocations and their possible implications, today I will “look through the window” and focus on women’s
access to credit in light of the recently launched Partial Credit Guarantee Scheme.
When talking about economic development, Nobel Prize laureate Muhammad Yunus uses the analogy of a train.
Contrary to popular thought, the development of a country is not one long train whereby fuelling the front engine sees all the carriages moving along at a steady pace.
He argues that every country is made up of different economic layers; the carriages, each with its own engine and it’s the combined power of all the engines which results in development.
Capacitating some of the engines leaves out parts of the population, thereby reducing the combined power of the economy.
In his autobiography, Banker to the Poor, Yunus states a widely known fact that “Women experience hunger and poverty in much more intense ways than men.
“If one of the family members has to starve, it is an unwritten law that it is the mother”.
Although women do share some common issues that can be addressed through legal instruments such as the Legal Capacity of Married Persons Act of 2006, because of their economic situations they belong to different carriages, so to speak.
For example, poor women in the rural areas may not necessarily want to farm.
According to Yunus, “farming” doesn’t encompass what they do the whole day and it doesn’t take into account their full potential.
They may have other ideas which need only a little bit of funding to get off the ground such as selling airtime, hair extensions or tailoring.
However, women in this economic grouping are not the target beneficiaries of schemes such as the Partial Credit Guarantee Scheme and other initiatives to ease access to finance.
This is where micro-credit comes in and Yunus’ award winning Grameen Bank (www.grameen-info.org) proved that the poor, particularly poor women are bankable and they pay back with interest too.
It took many years for the bank to refine the business model and replication has been taking place all over the world.
The Grameen Trust (www.grameentrust.org) trains would be replicators under its International Dialogue Programme and also funds approved start-ups and this is something interested local persons can actually pursue.
Lending takes women out of the welfare situation which is designed to address their practical gender needs only, which according to the non-governmental organisation, GTZ, is still the most popular method of intervention as it is least challenging and women remain passive beneficiaries.
Asked how they came up with their no contract letter and no collateral business model, Yunus replied that they studied how a conventional bank operates and they turned everything upside down. Furthermore loan amounts are so small and repayments even smaller (they are done weekly) many clients don’t even feel the pinch.
And it doesn’t end there, the Grameen empire now has a mixture of companies for profit and non-profit in internet services, national cellular telephone services with a non-profit dedicated to the rural areas, fisheries, a knitwear factory and a merchant bank.
One that deserves special mention is the company which coordinates the production, marketing and export of fabrics, hand-woven by women who previously did not have access to markets, a topic I will explore another day.
“If the goals of economic development include improved standards of living, removal of poverty, access to dignified employment, and reduction in inequality, then it is quite natural to start with women.”
— Muhammad Yunus