Relieving Poverty Through Micro–Investing

November 1st, 2009
This article is featured in the Ministry with the Poor (Nov/Dec/Jan 2009-10) issue of Circuit Rider

We have all learned the ancient Chinese adage: give a man a fish and he'll eat for a day; teach a man to fish and he'll eat for a lifetime. God showed Abraham and Sarah this truth as well, saying “By you all the families of the earth shall bless themselves” (Gen. 12:3, alt.).

Small loans called microinvestments are enabling thousands of individuals worldwide to break out of the cycle of poverty. One small blessing can empower people to bless themselves and their communities for years to come.

It started in 1974 with Bangladeshi economics professor Muhammad Yunus. Yunus realized that what he taught did not lift people out of poverty. So, he left his “bird's-eye view” of poverty from the university, and went into villages for what he called a “worm's-eye view” of poverty. He met desperately poor women who produced goods with money borrowed from lenders who required the women to sell their products through them. The women needed more money than they were paid, so they borrowed more, and the spiral of deepening poverty continued. They lived in hovels exposed to the elements. They had no access to clean water, their children were poorly clothed and fed, and hunger and disease were rampant.

Yunus had to do something, so he and his students loaned the equivalent of $27 out of their own pockets to a group of forty-two women. Clusters of four and five women launched joint ventures. Unburdened by collateral or high interest, they paid back the loans and used the balance to expand their efforts.

With astounding creativity, these poor women successfully developed their own cottage industries with these small loans, weaving cloth, baking bread, farming, fishing, etc. Borrowers rebuilt their homes and planted gardens, educated their children, and improved the health of their families. As successful borrowers mushroomed in numbers, they organized the Grameen Bank in 1983.

Participants created a new ethos of self-care, strengthened family life, and built community spirit wherever the borrowing spread. Two factors were crucial: the role of women and their basic commitments.

The loans were provided to women because they worked through existing friendship circles, which provided mutual support and nurtured accountability. Women can also generally be counted upon to care for their families. Helping the woman of the household therefore benefited five and six others. In addition, participants drafted a list of sixteen basic commitments that all borrowers were expected to pursue. The women had the mutual support and accountability to become the driving force behind comprehensive transformation in housing, education, health, and self support.

Networks of women spread across the country and trained leaders who today are calling for transformation across Bangladesh. By 2007, the original Grameen Bank and its branches had provided loans to 7 million poor people, totaling $6 million. Ninety-seven per cent (97%) were women and ninety-nine (99%) of the loans were repaid. Over time, Bank services expanded to saving and grants, insurance and pension, etc., across the nation.

The World Bank estimates that there are now over 7,000 microfinance institutions, serving some 16 million poor people, even in the United States and Europe. The total cash turnover of microfinance institutions world-wide is estimated at US$2.5 billion and the potential for new growth is incalculable. No wonder Muhammad Yunus received the 2006 Nobel Peace Prize.

Microinvesting in Your Community

Lest we are carried away with large numbers, we should notice features of this approach that are adaptable to local churches. Imagine a class of teenagers raising $50 at a bake sale or providing housecleaning services, and then loaning that amount through reliable partners in UMCOR or United Methodist Women —agencies already engaged in microloans. Within six months, their $50 is returned to their account so they can loan funds to another group. In the meantime, they have raised an additional $50, and now have $100 working with the poor to bless themselves, and others.

Imagine further, adult teachers or women's and men's groups training youth in raising funds, managing the money, and working with others. Within a few years, we could see adults and youth traveling abroad to see what they had turned loose.

Beyond just ministry with the poor, microfinancing also promotes health by increasing communities' standards of living, and it trains new leaders by empowering business and community development. In some places, this approach to poverty relief also fosters church growth. The women who gather for loans there begin their sessions with Bible study. These women's Bible studies foster openness to share hurts and hopes and provide space for the winds of the Spirit to bring new life.


Bishop Roy I. Sano is a retired bishop in the Western Jurisdiction of the United Methodist Church and now lives in Oakland, Calif. Learn more about microfinancing at

comments powered by Disqus