DOUBLE FACE ISLAM (how I learned to stop worrying about one-bad-story and love the nice stories)

Many things have a double face. Coins, politics and –especially- every thing too beautiful to be real. And cities like Dhaka, have a double face. In just two hours of traffic, you can switch from smelly slums around Kamalapur where the crockroachs are as big as your ince and rats kill cicks (M: ”Why do you keep a little cick insiede the dresser?” Old-woman:-Because, if I leave it free on the floor the rats will eat it-) to elegant rooftops around Gulshan where the alcohol flows as easly as cha* and the moonlight reflected on the pounds makea Dhaka a fake-Manhatthan.  Also my personal experience in Dhaka has a double face, switching every day from slums to rooftops: but I am lucky, I know how to keep the remembers about  the firsts, and forget the second ones.

But stronger than the last gap, there is the double face, a real face, of Shamalia (or something that sounds similar to this spelling). Shamailia is one of the Assistant Managers of the MicroCredit staff of HITAISHI, she is less than 30 years old, -like every Bangladeshi female- she has very long and very dark hair, -like half of Bangladeshi females- she is a bit overweight but –like most of Bangaldeshi females- she is really pretty. Usually her eyes show a smart lights, like something that she wants say to me but she cannot, because of the English – but we know, a couple of eyes are stronger than every Babel tower- thus, she has always communicated me more than cold financial figures.

 But today, no. Today, she was not around the office like every day when I come back from the slum. She seated herself in the darkness of the power-cut and only the natural light of the sun showed me the wrong side of the Islam.  The left eye was a mix of blue, violet and black, and –believe me- there were no reasonable interpretations to think about a downfall, a door or a car-crash. The sad-dew around her eye, a mixed result of tears and cream, told me the story. Maybe not, but why not, it was the hand of her husband, her father or her brother.  Okkey, it could be a Spoon River’s game, guessing stories that I could not know, but she was sad, upset and tumefied. I spent one hour more in the office, that after finding the left eye, become dark and dirty and guilty, because –fuck!- she works for one NGO that works to alleviate poverty, aids and domestic violence! Is there a future for defenceless people helped by people that -in turn- are the victim of the same things they are fighting against?! Anyway, I was powerless, I am a bangla-less boy, I could not help her, no words, no hugs. Thus, I took one of my chocolate coins for the slums-children,  I gave her, no words, no chocolates for the others. It was my way to be woman with her.

Anyway the slogan "dark side of the Islam" presents a mistake. Because I used Islam that –here- counts 90% of the population: ignorant, unknowing and illiterate population. The violence doesn’t come from the religion, Islam doesn’t make violence. Ignorance produces violence, Islam is only a great world that allows everyone to find a personal interpretation of the things. And when there is ignorance, this interpretation could become a wrong way to accept the Islam. In poor words, Islam is the fuel that you should use properly and do not mix with the fire of your ignorance.

I have the proof, making a regression with all the experience getting in touch with muslim people, a hundred micro-stories could live down the sad-dewy eye. Only one, just today, after finding the dark side of the Islam. There was this old man in the office, repaying a loan for a poultry-business, who was so surprised to listen my few-bangla-words (assalamalekkum, kamonachen, amarnam teo, amardesh itali) that started to touch me. I was on a chair, he came, he put his hands on my shoulders, he fixed my eyes with his dark and deep ones and –dipping his fingers into my hair- he started to sing a mantra (every two words, there was an “allah”). Only after I discovered that he blessed me, in the name of Allah. The same name that ten minutes before I had just cursed.  

ZAKI DOES NOT KNOW IT (because a butch aunt with a micro-loan can keep away a shark)

City Palli Dhalpur is a licenced slum 35-taka-far-by-rickshaw from Paltan, established in 1988 for homeless people, it has become the largest heroin distribution spot in Dhaka. But my impression was good, streets not so narrow, cement blocks houses, one sanitary for five households, one tube-well every ten. At the gate, there were five girls playing the popular game (in Italy, called "bell") which you draw on the asphalt with a piece of chalk six-seven-eight boxes, than -using a little stone- you have to jump up to the box where you threw the stone and come back. Four girls shared three little stones, and the last one was jumping up to a little piece of orange skin: this is my very first memory of Dhalpur. The second one: two black crows that eat a died rat just over a baby pink t-shirt spread out on a roof after washing. Third one: the micro-story of Zaki, but Zaki does not know it.

Zaki is a 6 months baby: according to me, he is more than 6, but the mother -Shobana- told me that he was born just 6 months ago. Even about her age, she said -twentyfive-: our women try to reduce their age, here they do not remember or they do not know and they guess. Their micro-story is sad, Zaki does not anything, but Shobana -who knows- is not discouraged. They live in one of the little block (ten-twelve sqm), there is also Souban, 5 years old, and Morjena, the elder sister of Shobana. Morjena is single, and she plays the role of the "dad" in this sad-micro-story. She works for Dhaka City Corporation, a public company involved in several services from washing clothes to building constructions: she is a cleaning woman. Where is the dad? The Shobana's husband is the village, somewhere in the north, far from his family, far from Zaki, because he left Dhaka, he deserted his family, he abandoned Zaki. Without a job, with one more son, he decided to run away just after the Zaki's birth. Shobana was alone, with two sons, thus the elder sister come from their village to help her. Theoretically, Morjena's income (6000taka, 63euro) is enough to cover all the expenditure (4500food,200school,1000housing), but the real problem is a money lender (or better, a loan shark) who is still waiting 20000taka (213euro) back.

Money lenders are able to provide 20000taka in ten minutes(every MFI/NGO requires a previous period of savings and a week for the loan processing). The interest is 5% every month that you wait to pay back the capital, thus after receving 20000taka, you will pay 1000taka every month up to be able to pay the 20000taka.

For Shobana and Morjena the emergency was a serious disease of another sister who lives in the village. They received 20000taka in ten minutes, but in ten months they paid back only half of the amount plus more or less the same amount of interests (1000*10months=10000taka). How did they find the money? They joined in HITAISHI BANGLADESH, "my" NGO, they started to save 50taka per week, they got a loan of 10000taka and in 40 weeks -paying 280taka per week- they repaid the loan. In the maintime, they saved also up to 4800taka. Now, they asked a second loan: but there is no business, it is only another loan to feed the shark.

Anyway, there is the serious possibility for them to be able to repay the money-lender. The micro-credit is helping them, a micro-loan should not be used to pay the interest for another loan, but it could work. This micro-story (made sad by the coward husband) is the story of milions of poor. They are not able to face an emergency, and thousands of taka in ten minutes is a big temptation for a poor family that maybe needs fast cash for a disease or a business opportunity (buy property in the village). Actually, the microfinance system helps them only ex-post-facto, but more and more microfinance institutions are implementing savings programs to improve the poor's capacity to face an emergency, building a brighter future for them.

About Zaki and his family...I cannot guess the color of their future, but a dad is not necessary to grow up and become a man -and a dad better than the one that you had got-, Morjena looks like a man and I think she will work as hard as a man and the loan shark will swim faraway. The main thing is that, now, Zaki does not know it: he sleeps, eats and plays with my behavioral-finance-experiment balls. Because tomorrow Morjena will wash clotehs, the shark will be further away and I will buy two new balls.

MICROFINANCE: A PERSONAL VIEW (overestimated solutions for underestimated problems) - Part one

Ten Things to know before to read this post
1- Finding “Microcredit”, “Grameen Bank” and "Muhammad Yunus” on Wikipedia
2- “One day our grandchildren will go to museums to see what poverty was like” M.Yunus, 1996
3- Grameen methodology: 5 poor women join in a group, each of them presents a proposal to obtain a loan (business/i=20%, housing/i=8%, education/i=15%, beggars/i=0%) and attends a training program about rules and advices. If the borrower gets the loan, she will start with a basic loan, little weekly repayments, little weekly compulsory savings. Now, if the borrower is able to repay and save the first weeks of the program, she will obtain other money till reaching gradually the final amount of the loan. The 5 members receive the loan individually, but they attend the weekly center meeting as a group. The low amounts and the social responsibility’s method work as commitments for the borrowers to re-pay and save, every week;
4- Grameen offers also other voluntary savings devices and a pension scheme (GPS), but only if you are a member of a loan-group. Thus, you can save but only if you borrow;
5- “Not all the poor are budding entrepreneurs” Johonson and Kidder, 1999;
6- For the poor –and their financial culture- borrowing is easier than saving;
7- YOU CANNOT SAVE ALONE: ROSCA’s is one of the most popular informal mechanism of savings. Imagine 10 women in a village, and everyone wants to buy the same good, a basic cooking stove. The cost for a cooking stove is 1000 BDT, too much for the monthly saving of each. Month 1 – every member saves 100 BDT and with the total pot one of the member could buy the stove. Month 2 – every member saves other 100 BDT and the second one buys the stove. Month 10 – finally, also the 10th member can buy the pot. After 10 month, 10 women -that couldn’t save 1000 BDT for a cooking stove- have bought the good: 9 of them have received a benefit buying the good in advance (the first one, 9 months in advance; the second one, 8 month in advance; etc…) and only the last woman has not received a benefit from the ROSCA’s membership (but the next time, she could become the first member to receive the money and buy the good with an advance of 9 months);
8- Weakness of informal savings clubs (ex: ROSCA): 1/lack of safety (there is no safe place to keep the money), 2/hard to replicate the model in urban area (lack of social responsibility), 3/a formal savings device could offer the chance to invest in a business opportunity or to face an emergency (withdrawing money from the saving account);
9- SafeSAVE, a cooperative working in the slums of Dhaka collects daily saving with a sixty-four staff members. Every day, customers are visited in their house or business, without the “logic of social responsibility”: they are saving and building assets for the future, for future business opportunities, for future emergency.
10- Anyway, the Grameen Family is bigger than one bank that works for the poor. Not only money, but a solid system of sister-companies get involved in health services, environmental projects, green energy, food and water and social business.

Beyond Grameen
I have no doubts to say: Yunus is one of the most important innovators of the last century, he deliberately did the opposite of what a conventional bank would do. And it worked, and it is still working. Okkey, 1/ it is not completely clear “how”; 2/ we cannot yet evaluate the real impact of microcredit; and 3/ we are really far from getting tickets for the museum “Once Upon a Time the Poverty”, dreamed by Yunus: but, despite that, microcredit works. Because when you try the magic green of rural village, when you seat in front of twenty-three-colored-saari-women, when you speak with them, when you visit their house, when you drink the tea that they made for you, when you note that tube-well, sanitary and electricity have arrived in their house only after Grameen Bank, when you reject the lunch that they offered you, when you play marbles with their sons, when you smile with them…you cannot misunderstand that something in their eyes has really changed. And if it is true that the eyes are the mirror of soul, the eyes of a micro-borrowers show the evidence that microcredit works.

In the same breath, I have no doubts that the phenomenon of microcredit is overestimated. Not only in Bangladesh, but everywhere. I am sure that this overconfidence is naturally inside every utopia, thus the idea to help the poor with a bank –that usually it’s only for the rich- makes the dreamers enthusiastic, too much enthusiastic. I think that the microcredit programs lack of a Plan-B. For more than 30-years, a lot of NGO’s and Microfinance Institutions have provided loans to borrowers that would like to change their destiny starting or improving a business. These institutions have always offered more than a simple loan: financial assistance, training programs, collateral projects about health-education-women empowerment opportunely created for the borrowers. But, it's not enough, they are still forgetting the hidden side of Microfinance: saving!

Borrowing VS Saving
Borrowing is the only way to start the escape from the poverty, if you lack of everything: food, job, house, health. For this reason Prof. Yunus, and other after him, started to lend micro-amount of money -asking an interest, because the charity has not ever worked and the poor need to build an own financial culture. Borrowing money is the first step, could be the second one, …but should not be the third one. This way could make the borrower a microcredit’s addicted (Debts Spiral).

But, incredibly, a lot of poor don’t need money and they don’t ask loan. They live with 2$ -or less- per day and they can save, or better, they need to save but they lack of devices to save. Portofolio of the Poor reported stories of poor like Himid and Khadeja: a couple that -though living in a Dhaka slum with an average earning of $70 per month- generates a total turnover of $965, larger than their annual income of $840. So each dollar of income earned is subjected to $1.14 of intermediation – of being pushed and pulled through financial instruments of one sort or another. The Himid and Khadeja story is the same story of other millions of poor and expresses a need for savings to sustain their financial structure, made of smoothing consumption, loans payment, insurances.

Borrowing is extremely easier than saving, because the self-control that you need to put money into a voluntary savings account –reducing your consumption- is weaker than the one that pushes you to pay every week an instalment because all the other members pay the instalments.

But, borrowing is extremely more dangerous than saving. […to be continued]