02 December, 2008
Pros and Cons of Religion in Microfinance
By Tamsin Harriman
While many microfinance institutions (MFIs) are secular, there are also a significant number of religious MFIs, especially Christian and Catholic. Here in Thailand, Small Enterprise Development (SED) is Catholic and Step Ahead MED is Christian. Worldwide, Opportunity International is the largest Christian MFI, and World Relief, World Vision, and many of the MFIs in the Philippines (among many others) are also Christian. Other religious organizations are also getting involved in microfinance, such as the Jewish Vocational Service in America, and the Aga Khan Foundation, a Muslim organization, in Central Asia and East Africa.
According to the Christian Science Monitor, in its article "New Evangelism: Mini Loans", "These days, Christian and other religious organizations [...] around the world, are lending more than just a hand. Microloans - of as little as $100 - have become as much a part of their ministries as preaching the gospel." This is a good trend, because it indicates that religious organizations are increasingly engaging in microfinance, rather than charity. This shift greatly benefits the poor, because while charity usually has only a temporary effect, microfinance can help a person permanently rise out of poverty. In fact, says the Christian Science Monitor, "religious organizations are increasingly adopting the Talmudic sentiment that the noblest form of charity is helping others to dispense with it."
Some people are concerned that MFIs do not always treat their clients completely ethically (high interest rates, focus on profit rather than poverty reduction, etc). Since religious MFIs are acting upon their religious and moral convictions that it is their duty to help the poor, they are more likely to keep their focus on helping the poor out of poverty (and perhaps giving advice and other forms of assistance) than on making a profit. For example, in 2005, Catholic Relief Services (CRS) massively scaled back its microfinance program, and reorganized its efforts to focus on savings rather than credit, when it saw that its partner MFIs were becoming remote, impersonal, and overly reliant on high interest rates. CRS realized this program was not in line with their mission, as it was not truly helping the poor as much as it could.
One concern is that religious organizations could be using their microfinance programs as a means to convert the poor. In fact - though the article does not actually mention conversion or evangelism - the title of the Christian Science Monitor article quoted above indicates that some do view microfinance as a vehicle for evangelism. While it may be a subconscious belief, and not overtly acted upon, its existence causes some concern.
Most religious MFIs claim that this is not the case. World Relief claims that while it is a Christian organization, its "services are, however, open to non-Christians." In addition World Vision states, "World Vision serves all people, regardless of religion, race, ethnicity, or gender." However, on the same page, they say: "Wherever we work, our prayer is that our efforts will be used by God to heal and strengthen people’s relationships with Him and with one another." That is a wonderful vision, so long as the pursuit of that vision (especially that of strengthening people's relationships with God) does not lead them to try to convert their clients or not to serve those who do not believe in the same God or do not worship him in the same way.
Religious MFIs often work farther from cities and towns than other MFIs, because, since they are less concerned about making a profit, they are less concerned about the higher cost of such outreach. Therefore another benefit of religious organizations practicing microfinance is that more of the poorest people are able to access MFIs' services. However, religious MFIs often hold their meetings in churches or even use churches as a base for their operations. For example, World Relief say, "In community with the local Church, World Relief envisions the most vulnerable people transformed economically, socially, and spiritually." This focus around the church could easily discourage potential clients who are not of the same religion as the MFI, and thus reduce the number of people that they actually reach.
Religion can play, and has played, a very beneficial role in microfinance. Religious MFIs must, however, exercise the utmost caution to ensure they do not force their religion on clients (even if they have good intentions) or discourage potential clients without even realizing it. If they succeed in doing so, then religious MFIs can be instrumental in lifting the poorest out of poverty.
While many microfinance institutions (MFIs) are secular, there are also a significant number of religious MFIs, especially Christian and Catholic. Here in Thailand, Small Enterprise Development (SED) is Catholic and Step Ahead MED is Christian. Worldwide, Opportunity International is the largest Christian MFI, and World Relief, World Vision, and many of the MFIs in the Philippines (among many others) are also Christian. Other religious organizations are also getting involved in microfinance, such as the Jewish Vocational Service in America, and the Aga Khan Foundation, a Muslim organization, in Central Asia and East Africa.
According to the Christian Science Monitor, in its article "New Evangelism: Mini Loans", "These days, Christian and other religious organizations [...] around the world, are lending more than just a hand. Microloans - of as little as $100 - have become as much a part of their ministries as preaching the gospel." This is a good trend, because it indicates that religious organizations are increasingly engaging in microfinance, rather than charity. This shift greatly benefits the poor, because while charity usually has only a temporary effect, microfinance can help a person permanently rise out of poverty. In fact, says the Christian Science Monitor, "religious organizations are increasingly adopting the Talmudic sentiment that the noblest form of charity is helping others to dispense with it."
Some people are concerned that MFIs do not always treat their clients completely ethically (high interest rates, focus on profit rather than poverty reduction, etc). Since religious MFIs are acting upon their religious and moral convictions that it is their duty to help the poor, they are more likely to keep their focus on helping the poor out of poverty (and perhaps giving advice and other forms of assistance) than on making a profit. For example, in 2005, Catholic Relief Services (CRS) massively scaled back its microfinance program, and reorganized its efforts to focus on savings rather than credit, when it saw that its partner MFIs were becoming remote, impersonal, and overly reliant on high interest rates. CRS realized this program was not in line with their mission, as it was not truly helping the poor as much as it could.
One concern is that religious organizations could be using their microfinance programs as a means to convert the poor. In fact - though the article does not actually mention conversion or evangelism - the title of the Christian Science Monitor article quoted above indicates that some do view microfinance as a vehicle for evangelism. While it may be a subconscious belief, and not overtly acted upon, its existence causes some concern.
Most religious MFIs claim that this is not the case. World Relief claims that while it is a Christian organization, its "services are, however, open to non-Christians." In addition World Vision states, "World Vision serves all people, regardless of religion, race, ethnicity, or gender." However, on the same page, they say: "Wherever we work, our prayer is that our efforts will be used by God to heal and strengthen people’s relationships with Him and with one another." That is a wonderful vision, so long as the pursuit of that vision (especially that of strengthening people's relationships with God) does not lead them to try to convert their clients or not to serve those who do not believe in the same God or do not worship him in the same way.
Religious MFIs often work farther from cities and towns than other MFIs, because, since they are less concerned about making a profit, they are less concerned about the higher cost of such outreach. Therefore another benefit of religious organizations practicing microfinance is that more of the poorest people are able to access MFIs' services. However, religious MFIs often hold their meetings in churches or even use churches as a base for their operations. For example, World Relief say, "In community with the local Church, World Relief envisions the most vulnerable people transformed economically, socially, and spiritually." This focus around the church could easily discourage potential clients who are not of the same religion as the MFI, and thus reduce the number of people that they actually reach.
Religion can play, and has played, a very beneficial role in microfinance. Religious MFIs must, however, exercise the utmost caution to ensure they do not force their religion on clients (even if they have good intentions) or discourage potential clients without even realizing it. If they succeed in doing so, then religious MFIs can be instrumental in lifting the poorest out of poverty.
Post a Comment