Town and Gown Partnerships:  East St. Louis Model

New Orleans        ACORN partnered with Ken Reardon and his team from various universities that he mobilized for the recovery after Katrina to create the Peoples’ Plan for the Ninth Ward.  His students and volunteers surveyed every property and assessed the level of damage and whether or not it could be affordably repaired, finding that the vast majority could be, and giving us ammunition to argument for support and redevelopment of our communities.  At that time almost fifteen years ago, he was the head of the Urban and Regional Planning at Cornell University, one of the largest such schools in the country.  Now he is in a similar post at the University of Massachusetts at Boston.  Talking to him on Wade’s World reminded me once again that in some ways we owed a debt for such a gift to his previous experience in building town and gown partnerships that actually worked in East St. Louis of all places when he was starting out his academic career as a young professor at the University of Illinois Champaign-Urbana.

Partially, we were talking about Ken’s new book, Building Bridges:  Community and University Partnerships in East St. Louis.  I knew the book inside and out, having read it from front to back a number of times while editing it for publication at Social Policy Press, where it is now available, as well as from the excerpt in the current issue of Social PolicyStill, listening to him answer the softball questions I was tossing out in the interview, I was struck by the gratitude we owned the good people in the half-dozen communities in that broken and deindustrialized, largely minority city, forlornly peering across the Mississippi River from St. Louis, Missouri, an afterthought and stepchild of Illinois.

In the almost mythical origin tale of these hard-won successes in East St. Louis from affordable house, light rail, parks, and other farmers’ markets, Reardon positions the story on the backs of Ceola Davis, an outreach worker at a neighborhood center, and seven other women she assembled to convince the university to embark on what would be a several decades partnership.  Davis had already “been there, done that” with researchers, plan writers, hustlers, and thieves.  From the first meeting she laid out clear principles, that Ken can still recite, that dictated the terms and conditions of any project, and, and along with Ken and his students and the resources they were able to develop, ensured that it was marriage of equals that could bridge the divides of race, class, and the rest of it.  They were the following:

  • Local residents would determine the projects for the partnership’s work.

  • Local residents would be equal partners in all aspects of the planning.

  • The university would make a five-year minimum commitment to the partnership.

  • Resources and capacity would be developed for the community and money would be split 50-50.

  • A permanent organization to continue the work would be developed before the partnership would be terminated.

There were ups and downs, fans and foes of the projects, but the chance of any such partnership succeeding would be greatly improved by revisiting and committing to something along the lines of what Reardon still reverentially calls, the Ceola Accords.

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Predatory Face of Microlending Becoming Clearer

New Orleans        ACORN International has done several reports over the years stating our position clearly:  microfinance is not a poverty reduction program.  Doing so, we knew we were running way outside the herd of the prevailing donor-based and donor-funded consensus, but facts are facts.  Debt doesn’t reduce poverty.  Maybe you buy a job for a bit, but it’s the exceptions that bust out, not the rule.  Furthermore, our reports argued, the collection system is relentless, abusive, and unsustainable.  The interest rates are usurious.  The more you look and listen, the harder it is to believe microfinance and microlending is a solution for anything.

All of which made me read a piece in The Economist on the microloan crisis in Sri Lanka very closely.  The Organizers’ Forum was originally slated to visit the island this year, but the political situation deteriorated and the terrorism was intimidating.  When we go, we’ll dig deeper on this issue, but these reports are shocking even though we were already prepared for the worst.

Sri Lanka’s finance minister has “accused microfinance companies of ruining Sri Lanka’s financial sector and of creating a ‘sadistic situation’ in which loan officers, when unable to extract repayment, solicit sexual favors.”  Whoa, nelly, how did it get this bad?!?

Part of the answer is what I’ve already stated.  The principal of weekly or in some cases daily collections forces the cost up even if the amounts in the loans are tiny.  These are loans, so covering the repayment, risk, and overhead means that interest rates are atmospheric with effective rates up to 220%, and we’ve seen higher.

In Sri Lanka, like so many other lower-income countries, the microfinance industry is virtually unregulated.  The industry’s association has 66 members according to the Economist, but there are 5000 others that are escaping regulation.  In fact, without the finances or infrastructure to offset the end of the civil war and natural disasters, the government had encouraged women to take the loans to rebuilt and help get families on their feet.  One of the tenets of microfinance is that women are best with small sums of money.  There had been no limit to the number of loans or companies that were lending largely to women.  The bottom line, “In Sri Lanka, …[the loans] seem to be burying many, particularly women…” in poverty.

The government acted, kind of, after a decade and passed the Microfinance Act in 2016, but it only covered lenders that take deposits, so only three companies are currently registered under the act. The government in 2018 wrote off business loans of up to 100,000 rupees given to women in areas impacted by drought and capped interest rates at 35%.  Unfortunately, as the Economist writes, “But the relief applied only to each person’s biggest loan from a registered lender.  Enforcing the cap fell to borrowers, few of whom knew about, let alone understood, the rule.”

The vicious cycle of microfinance and of poverty itself constantly repeated:  the poor made poorer, forced to pretend that loans are the solution, and then left to their own devices to solve the mess, once again, by themselves.

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Please enjoy Interstate Love Song (Live at New Haven Veterans Memorial Coliseum New Haven CT 8/23/1994) from Purple (Super Deluxe Edition) by Stone Temple Pilots.

Thanks to KABF.

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