TIAW is committed to improving the economic security
women around the world.
A woman's most basic needs and desires are simple. She
needs a safe, dry place to sleep. She needs enough to eat. She needs shoes and
clothes to wear. She wants her children to have their needs met, and she puts their
needs above her own. She wants to make a better life for her family -- regular
meals, education for the children, some medicine when they are sick. Women are strong and
incredibly resilient, but for those women in developing countries, extreme
poverty -- living on less than $1 per day -- crushes the ability to achieve
even these simple goals. So the last basic need is the need to find a way up. A
woman needs to be able to earn enough to better her life and secure her
To inch their way out of poverty, women work. They buy
chickens or goats and sell the eggs and milk. They set up roadside stands and
market stalls to sell homemade food, produce or convenience items. They do
dressmaking, tailoring and embroidery. They make artisanal products like
baskets and jewelry to sell for export. They buy cell phones and small
generators and rent them to their neighbors by the minute or the hour. You name
it. The list of women's businesses is endless, because women's creativity is
boundless. The entrepreneurial spirit can be as strong in a poor and uneducated
woman as it is in the captains of industry. Only her command of resources is
Here's the catch. Women's small, home-based businesses
have the same capital needs as big corporations, but on a much smaller scale.
The women we are talking about -- women who cannot afford to eat more than one
meal a day, and sometimes not even that -- these same businesswomen must finance
inventory and supplies, pay for space and utilities, and cover any cost of
travel and advertising, just like a larger more traditional business. Yet they
have almost no access to conventional financial services. If their families
cannot help them, most are forced to rely on predatory moneylenders or do
without financing altogether. Micro credit is the alternative.
Micro credit refers to very small business loans, offered to very poor and
uneducated borrowers who have no collateral. With micro credit
there is usually no brick and mortar bank. The lender brings the loan funds and the papers to
the borrowers, not the other way around. Several women who live in the same general
area all agree to take out small business loans at the same time. The women select
a president and a treasurer, and they meet regularly to make their loan payments.
These meetings also offer mutual support, problem solving opportunities and social
interaction. When all the loans have been repaid, those women who want to can borrow again.
This borrowing circle is what we refer to as a village bank. The loans bear interest
at a market-based commercial rate. However, the loan terms are fair, and depending on
the micro lender, the borrowers receive other services (savings opportunities,
business education and support, insurance, etc.). Most importantly, the
borrowers are treated with respect and not subject to the extortionate terms
and violent collection tactics of "loan shark" moneylenders.
World wide, micro loans have a repayment rate of 95 to
98%. Notwithstanding this incredible record of responsibility, it should be
obvious that micro lending has higher processing and administrative costs
relative to the return from interest paid. Governments and social investment
funds provide sources of financing, but the need for loan capital far exceeds
capacity. Larger lenders such as Grameen Bank and Pro Mujer are able to garner
sufficient loan capital, but the many smaller and independent micro lenders are
still at least somewhat reliant on donated funds with which to make loans. Many
of these micro lenders have the ability to become self-sustaining in the long
run, but need and deserve support until that happens. This is where the TIAW Micro
comes into the picture.
You've heard the expression, "Think globally -- act
locally." TIAW Micro does exactly that. We actively engage our TIAW member associations
and our individual members in supporting the micro finance industry and in raising
loan capital to donate to micro lenders that meet our standards of financial integrity
and stability, respect for borrowers and the eventual ability to become self-sustaining. TIAW
Micro aggregates donations received and uses the leverage gained from making a larger
donation insure that all loan repayments are recycled into future loans, not into
management or other activities, and that the lender will send a report with photos and
information about the borrowers that we can share with the TIAW women donors. From time
to time, TIAW also offers donors the opportunity to take a trip to participate in
a bank launch and meet the women who are benefiting from their commitment and generosity.
TIAW Micro is a far-sighted far-reaching program to help
very poor women in the non-industrialized world. Many benefits are achieved
when women become active participants in their family and community
economies. Some of these benefits are seen in higher status and self esteem, and
will have implications for the next generation, as well as the borrowers
themselves. TIAW is not naive enough to believe that women gaining economic security
will solve all the world's problems immediately. However, micro credit helps women
and the world take a step along that path. It is a step that we support with
pride, with passion and with joy!