A microcredit program may not work among some of the most deprived persons, especially those in the cities, if the following conditions are present...
An inability to understand and follow through on the program as a result of malnutrition having affected a person’s intellect.
Total lack of community support because of the extreme misery surrounding a particular area.
Poverty so severe and needs so immediate, that the participant will be tempted to buy food for their children rather than use the loan money as intended.
Poverty so severe that people are unable to look past the present moment - people have been known to spend the loan money on a funeral or loan it to a starving neighbor where there is obviously no hope for repayment.
In conditions of such abject misery, a certain level of hope in the future has to develop before a microcredit project may be appropriate.
Nevertheless, despite these caveats, all over the world, and we have seen it happen in Haiti, many very poor people participate in these programs and then generously employ more destitute persons as their businesses grow. We have seen the move from stalls in market places to small stores to people looking for larger loans to start larger businesses.
The number one priority in most developing nations is that people develop the ability to feed themselves; to meet their basic human needs for nutrition, shelter, clothing and medical care. Microcredit loans create employment that can meet these needs and move people out of poverty.
Since it looks like there will be no return to protective tariffs on food imported into the third world, the only alternative is an influx of capital to build up local production and technology which can eventually compete with the low cost of certain, subsidized, imported items. Microcredit loans and educational and technological assistance, plus, of course, decent healthcare facilities are the best vehicles for strengthening local economies, especially when they have a personal and relational component which builds up trust between neighbors and enables and empowers people to hope in their own abilities and talents.
Printed in the Catholic Peace Voice, April, 1999, (Updated 2008, 2011)