During the 1975 UN Women’s Conference a remarkable concept was born, the concept of a women’s Bank, dedicated to empower women through small microloans that would benefit the whole family. Five women from five continents realised that to defeat poverty women had to be empowered to run their own business within the community in which they live. The businesses would be small in concept but would make a collective difference to the whole village or community, because they would have more services and facilities. Not only that the theory behind empowering women was the fact they women would work harder for their children and also educate their children and the long term effects could be more worthwhile than giving men the money.
Women’s World Banking (WWB) was officially launched as a non profit in 1976, and it helped to provide in some cases the first mobile phone to a village, thereby improving communications and creating a viable business for very little money. Other ideas were a sewing machine to allow a seamstress to work. None of the women had any training to run a business but they had the grit and determination to improve their lives. A seamstress could have a business without the sewing machine, but her production would be limited. Once she has a sewing machine the possibilities were wider, she could increase her out output, and pay back the microloan, but she could also loan out her machine for a small fee when she was not using it. She could also save for a second sewing machine. None of these possibilities were even remotely possible without the services of the WWB dedicated to funding women’s business in many cases for less than a hundred US Dollars. An example of the power of microloans is Joyce a Kenyan villager. Her community lacked a fully stocked hardware store and her neighbours were forced to travel to neighbouring areas for their supplies. Although Joyce had a small stall selling nuts and bolts she did not have the capital to expand and provide a full range of hardware. That meant that people did not buy from her because they still had to travel for half of their hardware needs. With the help of a loan of seventy dollars, Joyce was able to expand and buy a full range of the goods needed in the village. Immediately she made the villagers more productive, because they saved both time and money travelling out of the village. In time her business grew which allowed her to repay her microloan and then expand. In the course of her expansion she funded her sister’s doctorate thereby adding an educated person to the community. Eventually she employed twenty people in her village. All of this made possible because she had heard of the WWB global network through the Kenyan Women’s financial trust. The power of microeconomics is that for the price of a dinner out in the West the lives of a whole community are made better overnight. Prior to the concept of the WWB most aid projects concerned macro economics, they were large in concept such as a new dam, the idea that women could control their economic destines was a new concept. Banks were not set up to deal with such small money and the credit risk of the women that the WWB lent to was such that they would never have been allowed to borrow that money from conventional sources. Their ambitions were not only out of reach, they were nonexistent; they did not have any ambition because they had no hope of realising them. Strangely once the WWB had been trading for a few years they realised that women in fact paid back a higher proportion of the loans than men. Women saw the power of the loans to benefit their whole family and were more committed than men to repaying the debt. That meant their credit risk was better and that allowed the concept to grow exponentially both in Asia, Africa and South America.
However the improvements were wider than that because women really were empowered, they saw the true potential, not only did they prosper and pay back their debt, but they saved and provided the means for others in their community to provide services that they had created the need for. Between 1950 and 1975 the World Bank and the IMF had made no real inroads into poverty. In fact it is debatable that, that was their priority. Within ten years the WWB had made a real difference to communities, raising their standard of living above the poverty line. As their loans were small they were not crippled with exorbitant interest rates for years and they were and are giving their children real hope of a better future. The increased prosperity also means better educational possibilities for their children which also mean better technological idea evolving from that education.
In short the WWB micro- economic policy is rather like throwing a pebble in a puddle, the ripples are outwards getting wider and stronger. The villagers improve their lives by their own efforts and they are not stigmatised by the concept of a charity program or a government grant that has conditions. They can make their own choices as to what will benefit their lives.
The funding for the WWB comes from traditional financial institutions and humanitarian organisations. Despite this they still need donations because the demand for their services is increasing. However because it is based on micro economics even small donations have an extremely powerful impact. Many American and European women businessmen send money to the WWB both from personal donations and tax free corporate grants. Still more women have never heard of the WWB and do not realise the power even a small donation could bestow. The WWB literally changes lives almost overnight, and the benefit is long term and grows.