Micro-Credit’s Dirty Little Secret

4 March 2012 at 07:55 10 comments

Ryan Cummings | KF 17 | Liberia

Cynthia and Maroline with their Bangladeshi host

All too often, when people talk about the positive impact of micro-credit, they focus exclusively on borrowers. While they are obviously a significant beneficiary of micro-credit, I have a dirty little secret for you: many other people benefit from micro-credit too.

There is an entirely different group of people who are having their lives changed for the better by the micro-credit movement. Who am I talking about? Let me introduce to you Cynthia and Maroline, two Liberians working for microfinance institution BRAC in northern Monrovia, Liberia.  BRAC employs more than 300 staff members. In fact, BRAC is one of the fastest growing companies in Liberia – and it’s in the top 15 largest employers.

Cynthia and Maroline are employed at the Caldwell BRAC branch and the Nimba BRAC branch, respectively. BRAC’s micro-credit operations have impacted their lives in several ways.  First, they are gainfully and meaningfully employed in a country that has an 85% unemployment rate. With a salary 18 times higher than the gross national income per capita, these woman help provide a high quality of life for their families.

How do they spend their money?  Buying permanent housing, medical care, nutritious food for the table, and education for their children. These expenditures have strong ripple effects in their local economies too.  On top of that, as breadwinners, these women set a standard of gender equality in their homes for their children to see and value.

Second, BRAC provides invaluable leadership training. Liberia is decimated by war, leaving no formal management resources for businesspeople. BRAC has introduced  professional management structures, systems, and training to its operations in Liberia.

Cynthia and Maroline have worked at BRAC for several years, and have made their way up the ladder to take on managerial roles. Throughout this process, BRAC has provided them with training, support, systems, and opportunities to strengthen leadership in the workplace.

Lastly, BRAC offers its employees the opportunity to travel and receive additional training abroad. Cynthia and Maroline have just returned from a global micro-credit training summit in Bangladesh. To be able to travel internationally is a rare and invaluable opportunity.

Cynthia and Maroline at the Global Learning Meeting in Bangladesh

While they were nervous about their first ever airplane ride, they relished the chance to meet colleagues from around the world, and brought back many new ideas to help build the micro-credit industry in Liberia.

So although lending money to borrowers is the impetus for Kiva’s work, it shouldn’t be a secret that, in fact, micro-credit institutions have a much broader impact than just the clients they serve!

Ryan Cummings is a Kiva Fellow working closely with BRAC in Monrovia, Liberia.

Entry filed under: Africa, BRAC Liberia, KF17 (Kiva Fellows 17th Class), Liberia. Tags: , , , , , , , , , , , .

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  • 1. Karen Buxton  |  5 April 2012 at 16:13

    Very true! Great post Ryan! 🙂

  • 2. salam  |  1 April 2012 at 08:21

    Thanks Ryan.

  • 3. Khaled  |  31 March 2012 at 07:55

    Hi Rayn
    Thank you very much for this interesting article. People should know, what BRAC is doing in Liberia and how the Liberians are benefiting

  • 4. alexkiva  |  12 March 2012 at 19:36

    Good stuff Ryan. I was actually thinking about this side of the equation myself while working in Medellin. The staff at the MFI was just so motivated and happy, and so much objectively better off than the average Colombian. I think microfinance has more of these positive externalities than we probably realize.

  • 5. hsullivan3  |  8 March 2012 at 01:34

    Great to bring attention to the employment obstacles in Liberia and countries like it, Ryan. As you have suggested in your postings elsewhere, self-employment is not always a viable solution and it’s wonderful to hear about BRAC’s contributions to the formal economy.

  • 6. Nessa E. French  |  6 March 2012 at 06:42

    Awesome post, Ryan. So cool to hear how one organization is having such a major impact on the entire country!

  • […] Micro-Credit’s Dirty Little Secret Ryan Cummings | KF17 | Liberia Ryan shocks the Kiva Stories from the Field readership by revealing that microfinance institutions don’t just help their clients – they can also change their staff members’ lives for the better. […]

  • 8. adamcohnkivafellow  |  5 March 2012 at 08:46

    Excellent article! Another point which many people don’t realize: many MFIs are created and sustained using donor funds. The interest the bank collects on Kiva loans helps pay for things like Cynthia and Maroline’s salaries. In the long term, MFIs hope to become self-sustaining, not reliant on donor funding. As such, Kiva loans benefit the borrowers, the MFI staff, and the MFI as a business as well!

  • 9. Philip  |  4 March 2012 at 23:24

    I agree, this is an excellent post. Definitely something I had never considered before. Also, 85% unemployment rate???

  • 10. Jon  |  4 March 2012 at 22:53

    Hey Ryan,
    Great post! It’s interesting to hear more about this war torn country and how BRAC’s work has spillover effects far greater then it may seem. I look forward to hearing more about your time there and the different things you are learning about how Microfinance works there.

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