Tag Archives: savings

Cinderella Man on the Brink

I fought off tears for the entire 144 minutes of Cinderella Man. My emotions churned as I watched Jim Braddock fight for his family’s survival. Before the 1929 crash, Braddock was a superstar heavyweight boxer. But, injuries and the Great Depression knocked him to the mat. He stumbled from stardom and lost his place on the professional circuit. At home, his career crash meant he could no longer provide for his wife and kids. Star-turned-beggar, Braddock worked on the grueling docks for mere pennies to keep his home’s heat on.

On the brink of collapse, Braddock intercepted a whisper of hope. With the pantry sparse and the coffers empty, he caught a shot to reclaim his dignity: His agent secured him a fight. It wasn’t the main stage, but a chance to dance was better than no chance at all. His kids’ hungry bellies trumped any indignity he felt about back-stepping to the minor leagues.

I fight and I put a little more distance between my kids and the street,” Braddock said. He grew tired of hoping-and-praying. He knew the purse in this minor league fight would create a buffer for his family. The relatively meager payday would move them a step back from the cliff. Not a mile from the cliff, but far enough to avoid disaster.

Several weeks ago while in India, I walked through the types of neighborhoods I only knew from documentaries. Weaving through tight corridors with corrugated tin homes creeping onto the footpath, I came to terms with my own prosperity. The last shantytown we visited was the saddest place I’ve been. There, I sat with members of this community who explained the plight of their town—poor health, drugs, violence, porous homes, bad schools, lepers—their list went on and on. Because of their disheartened lot, they named their squatter village Helpless. They could have chosen anything, but they selected a name that voiced their pain.

Anjali

For the group we visited in Helpless, however, cautious optimism broke through the clouds. “Before, I would spend every penny I had,” Anjali shared. “Now, I have two hundred rupees [$4] saved.” It wasn’t much, but this savings account, like Braddock’s modest winnings, put a little distance between her kids and the street. Now, when Anjali’s kids caught the flu or when she found the rice bin barren, a safety net broke the fall.

In these communities, survival teeters in delicate balance. When the storms of life hit, they cause more than minor setbacks. Four dollars in a safe place means the difference between disaster and desperation. A subtle, yet remarkably substantial, difference.

As I watched Cinderella Man after my return from India, the scenes of Hoovervilles reminded me of Helpless. It wasn’t hard to reconcile these two images—both places stifled by suffocating despair. In the midst of the chaos in Hoovervilles and Helpless, however, unrelenting hope emerged. Braddock and Anjali refused to admit defeat and fought their way back from the cliff. That first step away from disaster is the most important. For Braddock, this step came with a fist pump in the boxing ring.  And for Anjali, that step took the form of two hundred rupees in a savings account with her neighbors.

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As we close 2011, two invitations:

  1. Watch Cinderella Man. There is no denying it: Life is tough for many Americans today. However, we can easily lose sight of how good we really have it. Watching this film reminded me just how incredibly challenging life was for breadwinners in the 1930s and it affirmed just how very much we are blessed.
  2. Give to HOPE. If you resonated with this year’s Monthly Musings; would you bring HOPE to families like Anjali’s? A little distance between these families and the streets makes all the difference.

Microfinance: The World’s Best! …no Worst! Idea

Close to five years ago, I charged into employment with HOPE International, riding the surge of the microfinance movement. At that time, the only press you could find on microfinance lauded the concept. The idea of helping poor people borrow and save money was not just pitched as a good idea. It was the world’s best idea.

Because the concept was so potent, so preeminently powerful, some industry leaders claimed it would single-handedly put poverty in a museum. Every major news source in the country (NYTThe EconomistNewsweekCNN, etc.) featured a steady stream of microfinance stories, all with the same message: We have discovered poverty’s cure-all—our silver bullet. There was literary and conversational “dancing in the streets” as we celebrated the discovery of the one-stop solution which would solve our world’s problems. The clear verdict: Microfinance eradicates poverty.

During early 2007, however, the news soured. The dancing turned to questioning as those bold proclamations were challenged. Research findings painted a less than glamorous picture of the impact of microfinance. Journalists (from these same publications) discovered microfinance clients who had taken out loans from one institution to pay off loans at another. Last month, it was revealed that some lenders’ high-pressure loan delinquency practices actually drove over 50 Indian microfinance clients to commit suicide, sparking agrowing unrest in the Indian microfinance sector. The clear verdict: Microfinance perpetuates poverty.

Here is my question: Why are we so desperate to label microfinance as either a panacea or pandemic? Might the reality be that microfinance is neither? When the Toyota acceleration debacle hit mainstream or NWA Flight 255 crashed, nobody suggested that the automobile, airplane, or transportation system in general were detrimental to our society. Similarly, when Waiting for Superman hit theaters this month, highlighting the sad reality that many of our nation’s public schools are failing our country’s youth, even the biggest of educational critics do not suggest that all schools be shut down.

On the flipside, we share a belief that for every pastor scandal or denominational split, there are many more positive examples of churches truly making a positive impact on our world. The reality is that no single idea, concept, industry or poverty alleviation strategy is perfect or devoid of abuse and corruption.  We all know hospitals, airlines, car manufacturers, schools and churches which are successful – and probably a few which have failed.

Microfinance is not a new idea – we all benefit from the core concept every day. Savings accounts, business training, loans, and insurance products are tools we all use every day. I am personally grateful for Graystone Bank and Wells Fargo, both of which have provided an immeasurably positive benefit to my life. I also know countless successful entrepreneurs across the globe whose businesses were fueled by mentoring, biblically-based business training and access to capital.

It is just as wrong to talk about microfinance eradicating poverty as it is to lump payday loan shops, ruthless money lenders and usurious banks with sound, values-driven, client-focused microfinance initiatives. Not all microfinance is created equal! Sadly, a nuanced and balanced perspective does not make headlines, but my encouragement is to critique every extreme story, on both sides, in the court of commonsense and sound judgment.

Please let me know if you have questions about any of the recent articles or news stories on microfinance. I’d love to dialogue with you!