On Dec. 10 Muhammad Yunus will receive the Nobel Peace Prize for his work with the Grameen Bank in providing micro-loans to the working poor in Bangladesh. In a recent speech in Halifax, Yunus said he would be accepting the prize on behalf of the many others who are doing similar work around the world.
Two of those “many others” are Oak Parkers Larry Reed and Beth Houle.
Reed, CEO of Opportunity International, whose headquarters are in Oak Brook, lives with his wife Sandy on Taylor Street and has been with Opportunity since graduating from the Kennedy School at Harvard with a master’s degree in Public Policy in 1984.
Opportunity International’s website states that it “provides emerging entrepreneurs with access to small loans and training that will enable them to start or expand their own businesses.” The work Opportunity does in providing micro-finance to the poor is based on the assumption that “many of the world’s poorest people are a good credit risk” and that “rather than being merely victims, the world’s poor are the key to their own emergence from poverty.” Opportunity presently serves 810,000 clients in 28 countries, including Rwanda, Indonesia, Croatia and Nicaragua.
Reed makes it clear that Opportunity is not about giving charity. What they do is provide small loans of as little as $25, which clients pay back with interest in four to six months. Often that small infusion of capital is all that the working poor need to take off on their own small development program.
It’s become almost a mantra among many relief organizations: “Give people a fish and you feed them for a day. Teach people to fish and you feed them for a lifetime.” The problem is if poor people have no capital with which to buy fishing boats, all their knowledge of fishing and their ambition cannot lift them from abject poverty.
That’s the point where Opportunity International makes such a big impact, says Houle, senior vice president. She tells the story of Catherine Kamuli in Uganda. Opportunity got her started with a small loan to buy some chickens. Building on that small infusion of capital, Kamuli expanded her business to the point where she now has 500 chickens, employs most of her family in the business and has taken three AIDS orphans into her family.
Reed emphasizes that micro-loans often make an impact that goes beyond increased economic well being and affects the spiritual, social and even political aspects of people’s lives. He cited the example of a trust bank in Columbia which the participants named “A Gift of God.” A trust bank is a group of 20-30 clients, usually women, who co-guarantee each other’s loans. Reed says A Gift of God had gone through several loan cycles, and the women were feeling good about their progress, when the leader of the group mentioned meeting “the poorest woman in the community.” This woman, like the members of the trust bank, had fled to the city to escape the brutality and insecurity of the drug wars being waged in the countryside.
After much discussion, the women decided to use half of their $200 savings to help the woman. Being savvy entrepreneurs they got a doctor, the wealthiest man they knew, to match their amount and a lumber company to sell them boards at cost and give them scrap wood for nothing. Reed noted the joy he saw in their faces when they told him about the rudimentary shelter they had built for the woman and her two sons and how their lives had been transformed. The group no longer saw themselves as victims but as people with the potential to make a difference, not only in their own lives but in the lives of people in their community.
Christian in deed
Reed said the organization he directs is self-consciously Christian-in terms of its motivation for serving the poor more than propagating a belief system.
“Opportunity is a group of people motivated by Jesus’ call and Jesus’ example to serve the poor. That means we try to follow Jesus’ example in what we do. Jesus’ example is to care for all people in need. Jesus doesn’t give a test as to a person’s faith before helping them.”
Reed added that Muslims in Indonesia, for example, have no problem with him coming to them in Jesus’ name. For them, Reed said, the problem in the world is not Christianity but secularism. Having been in the business of providing micro-finance to the poor for 22 years, he is often asked to teach at conferences in which many of the participants are Muslim. “I find I connect with Muslims quite easily because they take their faith seriously and respect me for taking my faith seriously. They understand what we are talking about and are grateful that they can talk about [religion and faith as well as business].”
In an interview at Wheaton College, his alma mater, Reed outlined the four key values he has learned in his work:
1) Be committed to the poor: “When I see people who are just barely making it themselves finding a way to give and to care for others, I am motivated to do all I can to give and to care for others as well.”
2) Respect: “If we truly believe what it says in the Bible that the image of God is in every person, I need to show respect for that image of God that is there. I need to connect.”
3) Integrity: “It means doing the right thing whether or not anyone will notice.”
4) Be good stewards: “All we have comes from God, and we are ultimately responsible for what we do with it.”
Rewards vs. compensation
When asked if he regrets not working in the private corporate sector where he could make a lot more money, Reed laughed. “Those people don’t get the rewards I get,” he said. “All they get is money. I get to see people whose lives are changed. I really do believe that when we use our gifts to help others who couldn’t receive help in any other way, that we are in touch with the heart of God in a very deep way.”
Reed has also observed how the lives of successful business people have been transformed by getting involved with his organization. Some come on board and use their business knowledge as staff members at Opportunity. Some become donors and see their gifts multiplied as the organization uses their money to leverage loans from commercial banks. A dollar given to Opportunity International as a gift, Reed said, will result in $1.40 in loans to the working poor in just one year. He has also seen people make socially responsible investments in the Calvert Fund, for example, which earns an acceptable return for investors while using its capital for social purposes.
What is unique about what Reed and Muhammad Yunus and others in the micro-finance industry are doing and what puts them on the cutting edge in some ways is that they see business savvy and religious faith as compatible partners in the struggle to address poverty and hunger in the world. Reed believes poverty can be eliminated. He grounds that faith not on idealistic fantasies but on sound business principles. In fact, he points out that Adam Smith himself talked about capital being used on behalf of the poor in The Wealth of Nations. “The Gospel,” he added, “is practical.”
Even big business seems to be learning from the micro-finance community. At a recent conference, Reed heard high-powered business leaders beginning to say that if we don’t take care of the environment and provide jobs for the poor, we will be, in effect, killing ourselves, that we have to begin looking beyond next quarter’s profits. This goes beyond businesses having charitable giving programs, Reed said. What they are talking about is investing in a sustainable future. Even giants like CitiBank are pursuing partnerships with micro-lenders like Opportunity in acknowledgment that the whole micro-finance movement understands some important things about the long-term health of the global economy.
Life paths converge
Both Larry Reed and Beth Houle were led to their work at Opportunity International by life experiences which showed them how business and faith complement each other. Reed was raised by conservative missionaries who were good at fundraising. He became involved in global concerns while serving as the student body president at Wheaton College and later while doing graduate work at Harvard.
It was, however, becoming a parent that made him most sensitive to people in need. “I didn’t get the heart of it,” he said, “until I had children. The one I care about at any moment is the one who is hurting the most. If God is a parent, God wants me as his child to reach out to his millions of children who are hurting.”
Houle was raised by entrepreneurs who were socially-conscious Catholics. While studying and doing research in India through a program at the University of Dayton, she saw examples of how large corporations could have a positive impact on the poor. After earning an MBA from the Kellog School at Northwestern, which focused on non-profits, she joined Opportunity.
Houle, who happens to be married to Village President David Pope (and is expecting their second child in January), says that one of the reasons her family resides in Oak Park is that the village’s culture is compatible with their values. On the other hand, she noted, so many people could be doing so much more. To support her contention, she quoted an Opportunity board member from River Forest who said, “You know, we can so easily spend $250,000 on rehabbing our homes but find it so hard to write a check for $5,000.”
Likewise, Reed said the total annual income of Christians around the world amounts to $15 trillion, and it would require only $280 billion to give a micro-loan to everyone who needs one. That comes out to less than 2 percent of one year’s income.
Poverty and hunger, says Reed, can be eliminated.