INTRODUCTION THE INTERVIEW PROFILES
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OW: Why, in your opinion, do most aid programs make only a short-term difference?

S.C.: I think there are several reasons. One is the creation of large-scale programs where the results are expected to "trickle down" to the poor. I don't believe in trickle down. As one of our Filipino partners says, I believe in "bubble up." Target the very poorest people, get the resources into their hands, and the benefits will bubble up to the rest of society.

Another is that people, and especially women, have not been given a voice in their own development. We try to keep our programs as close to the clients as possible. They are involved in self-management of their loan funds, in setting policy for their Trust Banks, in developing their own independent group savings funds, in identifying and carrying out their own community projects, etc. Traditionally women have not been given a voice in the design of development programs, so the programs often don't meet their needs. I hope we are part of changing that.

Another phenomenon is that funders in the developed world are very sporadic in their funding interests. A country will be the darling of the moment due to some kind of international attention or strategic political interest, and that country will be loaded with resources, and inundated with expatriate staff who come to run development programs. Then the whims change, and the staff and the resources are suddenly gone, and the programs disappear.

That's part of why we believe strongly in equipping local leaders who have a vision for their communities. We help to build local institutions, with local leaders serving as volunteers on the Board of Directors, and talented local staff who are trained to run these programs. The Women's Opportunity Fund has invested heavily in training some dedicated local women who will be making a difference in their communities long after we are gone.

Finally, one of the beauties of microlending is that we create a revolving loan fund that continues to work in a given community for years. Unlike a development program where resources are invested and disappear, a microlending program can usually cover its costs by charging interest and loan fees, just as a bank would. That creates a sustainable program where the value of the loan fund is maintained and continues to provide a source of hope for the poor.

OW: Most banks would be envious of your repayment rate, wouldn't they?

S.C.: Right. It's an extraordinary repayment rate. One of our findings is that the poor are very bankable. In fact, the poor are more honorable in paying back their loans than those who are better off. Another finding is that the poor actually do more with a small amount of money than people who are wealthier. These are some of the myths about poverty that we have been exploding along the way.

OW: What are some of the other myths that you can think of?

S.C.: The primary one that we have in the United States is that the poor are lazy. In fact, if you go to any country where there is not a welfare system, where there is no safety net, you'll find that the poor are working often from dawn, till way past sundown because if they don't work that day, they don't eat. Another thought is that the poor are stupid. One of the things that you discover is that they have the most extraordinary survival skills and street savvy.

There was a feeling that Opportunity's programs were a success, that Opportunity had found a way to address poverty issues that provided a lasting solution and did not create dependency. This is important because so many programs give handouts and end up causing a need for those programs to be available on a continuous basis. This prevents the poor from being able to move forward on their own.

So everyone believed that this strategy was brilliant. It's simple and incredibly effective, but we felt that there was a group of the extremely poor who were not always being reached. And, because the extremely poor are most often women and their children, we wanted to explore ways to make the programs more inclusive of that particular population.

So the same philosophy was applied to women through the Women's Opportunity Fund, which was started by a group of about ten women in 1992. They raised $50,000 and they used the money to send me to El Salvador, where I was the first field director and actually created a group lending program.

This is a particularly important part of our strategy. The Women's Opportunity Fund never lends to an individual. We always lend to a peer lending group, which is sometimes called a "solidarity group." We call them "Trust Banks."

OW: Why call them "Trust Banks?"

S.C.: This is a term that was identified by our Latin American partners -- the word "bank" to indicate that it is a lending program, and the word "trust" to indicate that it is managed by the women themselves. The groups also provide an opportunity for women to become united in addressing personal, family and community issues.

The term "Trust Banks" in Spanish implies much more than it does in English. It's "Bancos de Confianza." The word "Confianza" holds all of these nuances that include self-confidence, trustworthiness, and trust in each other.

The women we serve don't have any kind of collateral. So in order to create some kind of repayment security and in order to teach them how to be good, successful loan recipients, the best strategy we have found is to form these lending groups. The groups enable them to learn together how to use and repay a loan. And it also provides a peer guarantee, or solidarity guarantee, and that's one reason our loan repayment rate is so high.

There are weekly loan repayment meetings. The amount might be as small as $50 with a loan term as short as four months and the repayments are weekly. This is because in an unstable society that operates very short-term, as most poor displaced societies do, it's much better for the women to think in terms of smaller loan repayments that happen on a weekly basis.

But the magical thing is that when these women come together and the President of the Trust starts the meeting, and the Treasurer collects the funds, and everyone is participating in the management of these funds, all of a sudden you have an opportunity to deal with the other issues that are going on in these women's lives.

When I go out into the field and talk to the women, they tell me what differences these loans have made to their lives. The first thing they say is, "I have more money now. My income has increased." But immediately after that they say things like, "I never knew anyone in my community before. Now for the first time I feel at home here." They say, "I have a little space of rest and respite in my life that I never had before. I have people who love me and people whom I love." They say, "We take care of each other in my group." And there are women who have even been able to address very personal problems such as domestic violence. Through the support of their lending groups they've been able to resolve that situation.

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