Tag Archives: microfinance

Fundacion Paraguaya, Social Enterprise and the Poverty Stoplight

Martin Burt, ED of Fundacion Paraguayan and Eduardo, director of Poverty Stoplight

Asuncion         Our first successful contacts in Asuncion were with the Fundacion Paraguaya.  After weeks of sending emails without answer and puzzling over our problems, Martin Burt, the Executive Director of the Fundacion immediately answered my email, and almost as quickly we were having a lengthy Skype call, and he was offering his help, including the support of his super-efficient assistant, Sarah Hopper.  It turned out that Burt had a PhD in international relations from Tulane University in New Orleans and in his words was a “wannabe Cajun.”  It’s a small world!

The Fundacion Paraguaya is a huge nonprofit though with a major footprint in Paraguay and operations in a number of countries in the world from the United Kingdom to the United States to Argentina and various countries in South America and Africa.  The bulk of its $20 million annual budget, according to one of their 500 staff members, is its $16 million microfinance operation in Paraguay.  They also have integrated their operations into the Paraguayan educational system with social entrepreneurship programs in all 7000 schools in the country.  They registered a charity in the United Kingdom which also specializes in such programs.

When the Organizers’ Forum delegation met in the Fundacion’s offices most of our time was spent discussing a unique and interesting tool they had developed called the Poverty Stoplight.  The Stoplight focuses on an effective and blunt survey method where families, usually accompanied by some representative of the Fundacion or one of their partners, assesses their own relationship to poverty across fifty indicators by choosing red, yellow or green on the stoplight for each question.  A green assessment is a positive indicator of no problem, no poverty in that area, essentially.  A yellow indicates progress in ameliorating the poverty indicator, and red is the signal for a significant poverty issue.  The indicators are obviously not just financial, but include family violence, dental health, access to clean water, personal hygiene and sanitation systems, decent housing, and social capital, like knowing neighbors.  The Stoplight is in use in upstate New York, Stockton, California, Newcastle, England, South Africa, and Nigeria among other countries through their work with their partners.

Burt described the tool as allowing the “poor to own their own poverty,” meaning that it was a bottom-up assessment tool rather than a top down determination.  He also argued that the tool led to action, though that was harder for the delegation to follow closely.  The Fundacion argues that 80,000 people have used the tool with the bulk coming from their credit representatives interviewing families of the borrowers in their microfinance operations.  With their microfinance clients they have determined the rate to “get out of poverty” is three times faster using the Stoplight.  In some ways it seems the Stoplight is as effective as the partner’s ability to intervene depending on where the red lights are indicated.  Though there was a claim that the Stoplight could trigger necessary collective action and organizing, the delegation generally had difficulty in connecting the dots to see how that might evolve from simple use of the diagnostic tool, but we were all intrigued by it.

Martin Burt, unlike Mateo Balmelli, didn’t start the conversation by asking if we knew who he was, but at one point he mentioned something about having been mayor.  Later we googled his resume to find that he had been Commerce Minister in one government, chief of staff to the President in another, and Mayor of Asuncion for a number of years before returning again to direct the Fundacion.  From the awards and prizes he and the Fundacion have won in the social entrepreneur development world, they have clearing focused a bright beam from Paraguay to the rest of the world.

Martin Burt, Myself, and Willie Cosme listen to questions from the Organizers’ Forum delegation

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Does Hillary Clinton Have a Real Plan for Income Inequality?

Victims of MFIs display their daily payment cards in Visakhapatnam, Andhra Pradesh. The Reserve Bank of India has appointed a sub-committee to look at governance issues. Photo: The Hindu/C.V. Subrahmanyam

Victims of MFIs display their daily payment cards in Visakhapatnam, Andhra Pradesh.  Photo: The Hindu/C.V. Subrahmanyam

Halifax    It’s time to start getting serious now that reality is sinking in and giving us a better look at a possible political future. There’s woe and rage about wage stagnation, the few future prospects of family-supporting jobs, deindustrialization, and millions stuck in grinding poverty while others have been allowed stupendous riches, and while fingers are pointing wildly, if Hillary Clinton is going to be the standard bearer for hope on any of these fronts, does she have a plan? Do we have any hope?

President Obama floated an interesting notion of wage insurance that would provide a cushion for a couple of years by making up a large part of the difference between a former job at higher pay and a new job at whatever was available in order to allow workers a transition and the ability to try to stay on their feet. This is not a guaranteed annual income proposal, which is what we need, but a shot in the right direction, even though it has no current or likely chance of passage. So far Hillary Clinton has danced around the $15 per hour minimum wage fight, arguing that, yes, a raise is needed, but, geez, not that much. She has also concretely argued for an increase in the earned income tax credit, but once again, you have to actually have a low-wage job for EITC to give a worker and her family much of a break. Once again, this doesn’t alleviate poverty.

For all of Clinton’s talk about women and children both domestically and in her recent past as Secretary of State and via the Clinton Foundation, it is still hard for me to believe she has been uncoupled from President Bill Clinton’s bargains with the devils on “ending welfare as we know it” that has put a hammerlock around the necks of many of America’s poorest families, while opening the door on tax breaks that have created an entire new class of the mega-rich. Her constant drumbeating for micro-lending and microfinance in her career is also very disconcerting, since at best microfinance is a job-buying subsistence program, not a poverty reduction scheme. Increasing debt is a guarantee for most families of an accelerated poverty trap, not an escape hatch. The support of microfinance institutions is widely understood now as simply smoothing the path for new markets under the existing financial models, not narrowing the inequality gap.

Thomas Frank in a devastating critique writing in Harper’s recently labeled much of Clinton’s work both in and out of government in the poverty reduction fight as largely a “virtue quest” rather than a serious fight against inequality or a struggle to break ground with workable policy prescriptions. He correctly pulls down the false flag of microfinance, but also gets too close to comfort on what may be the real problem of Clinton’s coziness with elites which is an embrace of what Michael Lewis years ago called “access capitalism.” Access capitalism is a world of head-nodding approval from policy makers, celebrities, philanthropists, foundations, corporate heads, former government officials, and others, which secures the common consensus, through its special access to the cronyism that both provides the infrastructure and the launching pad for “professional liberals” and same-old-story-business-as-usual capitalism and its implicit acceptance of intractable poverty and dream shattering inequality.

If that’s where she has been living, what does it take for Bernie Sanders, young activists, and the progressive forces to push her towards real programs, both domestically and internationally, before the dumbing down of the campaign and the inevitable compromises of government pull us farther away from winning change?

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