Nairobi The cultural shift of time zones and airports between New Orleans and Nairobi might only add up to 8 hours forward and cooler, drier temperatures but going from True Grit on the United Airlines screens to all of the news now from Al Jazeera is a big change worth noting. Plane loads of lawyers negotiating development deals in Africa, missionaries en route to Kenya or on summer break to Liberia, and regular people trying to get home make globalism both real and more ambiguous.
Catching up on back magazines, I read an article in The New Yorker with interest about a clinic and its experiments with “total care” in the Bayview/Hunter’s Point area of south San Francisco and its primary doctor, a young practitioner named Nadine Burke. Using the results of an extensive study done by Kaiser Health in California on Adverse Childhood Experiences over a number of years, an ACE score had been developed from that work and the clinic that was frighteningly predictive of bad health outcomes in the future based on the perils of childhood. I read this article with mixed feelings, both excited that doctors were finding some responses and struggling with the health crises in poor communities and depressed that it was so likely that so little would be done in most parts of the country – and the world – given the imbalance of resources.
In this one island in the story, Burke’s work and energy has captured support and funding for a model program that will combine good health care with good social support. With time and a fair trial, how can the results be anything but positive? Any organizer who has ever worked in low income communities could tell endless stories of the health issues of member after member, leader after leader with hypertension, diabetes, and asthma as common as colds. I listened to an argument among organizers only last week about whether or not to serve cake at a celebration since so few of the members should really have a piece given the diabetes epidemic in the community. Despite how obvious the issues, without political power what would it now take to have “health equity” independent of the questions of sustainability?
Preparing to meet with ACORN Kenya organizers working in Korogocho, the oldest of the Nairobi mega-slums, it is hard not to extrapolate the ACE scores from poor communities in developed countries to the slums of developing countries where every day is a question of survival, which no doubt translates as stress on steroids. We have so far to go to achieve equity and justice.
Microfinance has many positives, but should never be confused or misnamed as a “poverty reduction” strategy. There is simply no way to reduce poverty through debt. Microfinance or microcredit or micro-lending or whatever the name has a value for the poor as a way to access minimal credit to create or improve livelihoods, but such livelihoods, usually in the informal sector are marginal and fraught with the same risks common to all informal work and small business for that matter. ACORN International’s experience around the world is also very clear that there should never be any confusion about whether or not many of these loans are charitable because in fact they are often simply predatory.
I say all of this to put in some context a confusing article in today’s Times entitled “Microcredit is Imperiled in India by Defaults” by Lydia Polgreen and Vikas Bajaj. The handwringing in the article painted the problem as a “subprime” crises because 80% of the money being lent in India comes from the state banks and in Andhra Pradesh the article says, “…almost all borrowers have stopped repaying their loans, egged on by politicians who accuse the industry of earning outsize profits on the backs of the poor.”
Indian politicians have deservedly earned a lot of skepticism and abuse for their probity and fairness, but in this case there’s a lot more to the story, and the politicians are right about this, as even some of the industry officials partially concede.
Here’s the real story in India in a nutshell. The microfinance industry is no longer your older brother’s microfinance industry of even a decade ago with small non-profits and NGO’s and do-gooders.
Fueled by private bank money, many private finance operations have swooped into this lucrative market for lending to poor families and poor workers. Microfinance is a major player in South Asia in India and Bangladesh particularly. Andhra Pradesh is leading the accountability parade because the penetration of microfinance in the lending market in that state now accounts for about 12.5% of the loans outstanding. Karnataka, where Bangalore is located is next with over 9%, Tamil Nadu, where Chennai (Madras) is the largest city has almost 5%, as does West Bengal, home of Kolkata (Calcutta).