The Miracles of Barefoot Capitalism
The Miracles of Barefoot Capitalism
By Jim Klobuchar and Susan Cornell Wilkes
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“The Miracles of Barefoot Capitalism” is the story of a stunning and worldwide liberation movement of which few Americans are aware. It has no enemies. It cuts across all religions and political systems and today is lifting more than 100 million people out of the depths of poverty and into the sunlight of new lives.
The barefoot capitalists in the book written by Jim Klobuchar and Susan Cornell Wilkes are ambitious poor people who for the first time in their lives have access to money. The money takes the form of a small loan. It’s not a gift. The loan has to be repaid at interest. And in the 30 years that the movement has expanded throughout the world, the repayment rate on those loans is an astonishing 95 per cent, a figure that can only be envied by commercial banks in the western world. The movement is called microcredit, or microfinance, or microenterprise. None of those labels set off lightning bolts of recognition among Americans. This is true because they’re the words economists use and partly because most Americans—with good reason—often connect the words “corruption” and “rakeoffs” with money-for-the-poor schemes in the Third World.
There is virtually no corruption in microcredit. The money is tracked from start to finish. It comes from donor pools formed by grants and contributions from foundations, individuals and governmental agencies. Much of it flows through non-government agencies that raise the funds and pass them through to solidarity banking groups in Africa, Asia, South America and elsewhere in the world. Those groups are made up of small entrepreneurs, poor people who want to lift themselves out of oblivion. They can’t walk into a commercial bank and get a loan because they have no collateral. But as a member of that solidarity group they are connected with their own informal but reliable bank, maintained by an accredited partner of those non-profit funding agencies that raise the money. That means they can receive tiny loans of from $35 to $100, which they must repay within four to six months.
And they DO repay those loans. The jobs that are built or grown by those loans are humble ones—selling curry in a market in India, making pots and pans in Kenya, fattening a goat in Bolivia. But the transformation in the lives of the borrowers—90 per cent of whom are women—is remarkable. It brings them a sense of worth, a dignity they never experienced. It brings food and clothing to their children. And because much of microcredit is accompanied by schooling and training in social development, it can produce a scene like this in rural Nepal, one replicated a thousand times daily around the world:
A 50-year-old woman who makes scarves to sell in the market asks for a new loan to buy more material. It is approved by the solidarity group with which she borrows. She must sign when she makes her application. Until this day, she has had to press her inked thumb on the paper. It has been her lifetime signature. On this day she takes a pen, and slowly scrawls her name. It is the first time she has ever written it on a public record. She steps back to look at the paper and the labored loops she has drawn. She puts her face into her hands and weeps. She is crying because on this day she has an identity she never had. She can write her name. Her friends in the group gather around her and hug her; and they weep with her in her joy, in this very precious moment for a poor woman of the hills.
Jim Klobuchar has traveled the continents and experienced these scenes. So has his wife, Susan, who manages and advises family foundations and has been involved in microcredit work for many years. Their book brings to the reader the first-hand stories of the ambitious poor who have changed their lives forever, and some of the pioneers in microcredit who have made that happen. One of them is Muhammad Yunus, the founder of the Grameen Bank of Bangladesh that became the universal model for microcredit. His creed has inspired the movement for three decades: “Human beings we’re not born to live like animals. The poor aren’t poor because they’re dumb or lazy. They’re poor because they were born poor. They can be trusted like you can be trusted.”
It is a truth that has fostered thousands of microcredit groups and led to the empowerment of women in places where that phenomenon was considered impossible. Historically poor women couldn’t get a loan anywhere. Today, their group is their collateral in the developing world. It gives their children a chance where before they had none. It gives a life to the orphans of AIDS, by bringing more money into the homes of their foster parents. It’s an extraordinary story. In her preface to the book, Marilyn Carlson Nelson, the CEO of the Carlson Companies, observes, “if a social evangelist had to pick one tool with the goal of emancipating the poorest women on earth, the microcredit phenomenon wins without serious competition.”
This book explains how. It also explains why there is hope and a new world for millions of the poor when many of us have written them off as hopeless. And it describes the stake for America in the emancipation of poor people in lands that are potential breeding grounds for the kind of violence that cost us so dearly in 2001. Finally, it suggests how individual Americans who care, and want to make a positive difference in a world of turmoil, can get involved.