Half the Sky

Microcredit: The Financial Revolution. Near Lahore, Pakistan, Saima Muhammad lived in misery, the authors write: her unemployed husband beat her daily, her daughter lived with an aunt because of the lack of food at Saima’s derelict home, and a cloud of debt hung over her. Her mother-in-law advised her husband to take another wife, which might wreck the family financially, and her sister-in-law mocked her for being unable to feed her child. At her life’s lowest point, she joined a women’s group affiliated with the Kashf Foundation, a microfinance organization. She borrowed $65 to buy beads and cloth, the authors write, and soon started an embroidery business, eventually expanding to employ thirty families, and started giving orders to her husband. The authors describe her, at their interview, as radiating confidence, wearing gold jewelry and showing off her remodeled home and new television. All the abuse Saima suffered earlier, including from her mother-in-law, seemed to have melted with the rise of her business. She also, the authors report, plans to send to her three daughters to high school.

Saima is an “unusually successful participant in the microcredit revolution sweeping the developing world,” Kristof and WuDunn write. They claim that microfinance has empowered and protected women far more than any law could. Like most microfinance programs, Kashf lends almost exclusively to groups of women, who guarantee one another’s debts and discuss topics like family planning and education. Men tolerate the breech of cultural rules that push women out of business, because it brings in money, the authors write. One woman reported that her husband stopped hitting her when she used the loan as leverage.

Kashf was founded by Roshaneh Zafar, a Pakistani woman who grew up in great privilege, which she redirected to empower the underrepresented in her country. First working for the World Bank, she says she worked with, “megamillion-dollar projects, but the money never got down to the villages.” She studied the work of another social entrepreneur and returned to Lahore to start Kashf (which means “miracle”), where she found that women were at first very resistant to taking loans. She teamed up with another Pakistani woman, Sadaffe Abid. The authors describe Roshaneh and Sadaffe as brilliant, but lacking at the time in knowledge about poverty. With time and persistence, they shaped their business model to include tracking loan repayments, checking creditworthiness, and even employing men in places where women branch heads just wouldn’t be accepted. The model depended largely on women inside the groups, who vetted their own members, since if anyone defaulted the whole group would be responsible for the loan.

Through Bill Drayton’s organization, Roshaneh became an Ashoka Fellow and networked with other social entrepreneurs. In addition to lending small loans, Kashf accepted deposits so that women could build savings, which may be more important than loans, the authors report. An in-house study showed that, “by the time the borrowers have taken their third loan, 34 percent have moved above the poverty line in Pakistan.”

The enormous success of Kashf and similar organizations hasn’t been universal, the authors stress. In Africa, microfinance has been less successful than in Asia—malaria and AIDS, dispersed populations, and other factors contribute to the disparity. Moreover, annual interest rates are a high 20-30 percent, making loans untenable for those who can’t profit from them, which can make microfinance borrowers even worse off, the authors write. Roshaneh acknowledges that, “microfinance isn’t a panacea,” and says that health and education—especially education—are vital.

Kristof and WuDunn write that women suffer more from poverty than men, hence microfinance’s focus on women. In famines, more girls die than boys, and the strain on crops that drought or flooding bring correlates with the murder of killing “witches”—elderly women who no longer contribute to productivity. But one of the biggest reasons for female-focused campaigns, the authors report, is the “impolitic secret of global poverty,” that men spend money less wisely than women. Men, who control most family incomes, are less likely to spend funds on education and starting a business. The authors report that the poorest families spend about ten times as much “on a combination of alcohol, prostitutes, candy, sugary drinks, and lavish feasts as they do on educating their children.” Girls would benefit most from a shift in priorities. The authors acknowledge that it may seem insensitive to criticize poor families for spending money on activities that bring pleasure to life, but defend their stance with the argument that a daughter’s education shouldn’t be a luxury when there is beer being drunk.

One solution, Kristof and WuDunn posit, is to put women in charge of more money, since women are more likely to invest wisely and improve their family’s health. In one South African study, children raised by grandmothers had healthier gains in height and weight than those raised by grandfathers. The authors argue that donor countries should “nudge poor countries to adjust their laws to give more economic power to women,” such as making widows, not brothers, the typical heirs to a man’s property. They admit that it may seem unorthodox to note the gendered nature of money spending. But, they stress that the belief is commonly held, even by the former president of Botswana, who told the authors that “Women do work better,” and are more likely to defer consumption in favor of investment.

The effect women have in their home may be extended to the government, the authors write. Female leadership has risen, and groups like Women’s Campaign International have had success in coaching women activists to enter political arenas. While the authors acknowledge that, despite popular belief to the contrary, little evidence suggests that women leaders are more empathetic or peacemaking than men. However, women leaders do attend more to the needs of women and children, and are less likely to be corrupt. Nonetheless, the authors report that both men and women judge women leaders more harshly, even when their performance is superior. Over time, though, women officials gain more respect. Further, evidence for the power of female participation is found in American history—when women won the right to vote, better public health followed, since women constituents cared about public health, and child mortality plummeted. The authors state that, contrary to naysayers’ argument that women who leave the home neglect their children, women’s political participation has in fact saved countless children’s lives.

A CARE Package for Goretti. Kristof and WuDunn introduce Goretti Nyabenda, a mother of six living in Burundi in a red adobe hut, where she was effectively trapped, since her husband Bernard was stingy with permission to leave the house. They grew cassava, beans, and other crops, but barely survived on the profits, the authors report. Further, Bernard’s evenings drinking banana beer cost 30 percent of the family’s disposable income, while Goretti couldn’t make a single spending decision. The authors write that, “Goretti’s interactions with Bernard consisted mostly of being beaten, interspersed with having sex.” When telling her story to the authors, sitting outside her hut, she frowns and describes her life as wretched and filled with anger.

Goretti’s mother-in-law told her about a local CARE association for women, and Goretti disobeyed Bernard by sneaking out one day to attend. CARE associations have about twenty women, so Goretti, seeing other women eager to join, started a new one and was elected president. One day all the women tilled Goretti’s fields together, as is typical of the CARE groups, to Bernard’s happy surprise. The authors write that, “each woman brings the equivalent of a dime to each meeting,” which permitted Goretti to borrow $2 and buy fertilizer—the first money she had ever handled. With the money from fertilized potatoes, she paid off her $2 loan and brewed banana beer, then borrowed more and bought a pregnant goat. Goretti’s financial success, and her ability to pay for Bernard’s malaria treatment, hushed up her husband, who she didn’t allow to drink her banana beer. At meetings, the authors report, women “trade tips on how to manipulate husbands,” as well as animal training and entrepreneurial tools. Further, women are taught to give birth in a hospital and register their babies, so they’ll be eligible for welfare. Simply put, CARE meetings reshape the women’s perceptions of what life as a woman can look like.

Goretti’s CARE group’s influence is so widespread, the authors report, that members are trying to eradicate the tradition of men finding second wives (mistresses) after bountiful coffee harvests, which depletes incomes and spreads AIDS. CARE women sometimes even fine men for attempting this. Now, the authors write, Bernard approaches Goretti for cash, and Goretti leaves the house without asking him. Kristof and WuDunn stress that the microfinance model isn’t perfect, and Goretti’s success could collapse. But so far, the success has been palpable, and her children have school supplies as well as a new model for womanhood. Meanwhile, Bernard, who was reluctant to be interviewed, admits that he prefers having a partner to having a servant, although he still seems to have reservations. Goretti tells the authors she used to keep silent, but, “now I know I have good ideas, and I tell people what I think.”