Peter Greer — Microfinance & Effective Charity
President CEO, Hope International, USA
The highest level of charity is when you can help someone get on their own feet, use their own God-given abilities to provide for their family.
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Peter Greer—A Global Leader for Micro-Enterprise Solutions to Poverty
Peter Greer is President and CEO of HOPE International, a global non-profit organization focused on alleviating physical and spiritual poverty through microenterprise development. HOPE International works in some of the most challenging places around the world, including Afghanistan, Democratic Republic of Congo and Haiti. Under Peter’s leadership, HOPE has expanded its network from 3 to 15 countries and now serves over 300,000 active clients.
Peter was formerly employed by World Relief, where he served as a microfinance advisor in Phnom Penh, Cambodia. He later managed Rwanda’s URWEGO Community Banking, which was recognized as the “best microfinance institution in Rwanda” by the United Nations. Peter also worked with CARE Zimbabwe and implemented fraud protection measures in cooperation with Harvard University’s Carr Center of Human Rights.
Peter received his undergraduate education in International Business from Messiah College. He completed a Master’s Degree in Public Policy from Harvard’s Kennedy School, with a concentration in Political and Economic Development and Executive Education from Harvard Business School. Lecturing nationally on microenterprise development, social entrepreneurship, and poverty eradication, Peter has co-authored the first faith-based book on microfinance with Phil Smith, The Poor Will Be Glad (Zondervan, 2009), which introduces ways the Church can become engaged in sustainable solutions to poverty.
Peter resides in Lancaster, Pa. with his wife Laurel and their three children.
Jeff Rutt’s Story on How Help Can Hurt
Jeff Rutt [Hope International], like many people, after the fall of the Soviet Union, saw that this was a turning point in history, and they saw that there were incredible needs. So, Jeff and his church, in Lancaster, Pennsylvania, initially wanted to help. They started getting goods and supplies. They put them on a ship, put them on a plane, sent them over. They ended up giving away food, clothes, anything that they could think of to help meet the immediate needs after the fall of the Soviet Union, in a town in Zaparosia, Ukraine. After they did that for about 2 years, there was a pastor in the city, his name was Pastor Patrenko, and he pulled Jeff aside on one of these trips, when they were doing this distribution of goods and services, and he said, “Your help is hurting.” Initially, Jeff was really taken by that, thinking, “What do you mean? We’re here, helping you. We’re doing our model of help, which is you have needs, we have an abundance. So, we’re going to give things away to you.” Pastor Patrenko realized that there were problems of dependency, there were problems in distribution, there were problems in even identifying the families that really had the needs and those that were just trying to get another handout. This comment from Pastor Patrenko, instead of that really causing Jeff to say, “Well, it’s too difficult to help. We tried. Let’s go somewhere else,” he really rolled up his sleeves and said, “Let’s think more creatively about how we help address the problem of poverty.” What they found is that there were individuals in that town that had gifts, that had abilities, that didn’t need another handout, they just needed the opportunity to start a small business. [More on Unintended Consequences]
Crisis Response vs. Sustainable Development
There are incredible needs in our world, and there are times when the most loving thing to do is to respond immediately and forcefully with just straight charity. After a natural disaster, they don’t need to start a small business at that exact moment. They need immediate relief and assistance. Unfortunately, because of the way our media works, there’s not a lot of attention to the underlying issues that allow that natural disaster to be so disastrous. There’s not a lot of focus after the immediate disaster, of what happens next. We do a great job responding to crisis, when it hits; we don’t do as good a job responding to the longer-term crisis, the underlying issue of poverty.
Made in the Image of God
We typically look at Matthew 25, at the parable of the sheep and the goats, and we look at one model that Jesus said, “You know, if someone is hungry, if someone doesn’t have clothes, if someone is sick and in prison, what did you do for the least of these?” But I think there’s a bigger picture that starts with individuals being created in the image of God. What I have seen in every place that I’ve gone, the people that I’ve sat down with and had an opportunity to interact with, they have gifts, they have work ethic, they have abilities that exceed what I thought growing up. It’s this bigger picture that we all have something to give and we all have something to receive. So, changing the power dynamics from us as just having a one-way valve, we’re going to give, we’re going to give, we’re going to give, to a recognition that we have something to give but we also have something to receive, and it really changes the power dynamics that we see in the whole field of development.
Quick Fixes vs. Relationships
Doing the long-term development, helping people provide for their own needs, is not a quick fix. The easiest thing to do is to have an abundance of things, and to give it away, and that’s going to make a difference for today. It’s much more difficult to work with that family, help them get on their feet, help them provide for their own needs. That doesn’t happen with a light switch. It doesn’t happen by just giving them something. It happens through relationship, it happens through long-term investment of time and resources to build up individuals, so that they can take care of their own needs and take care of their own families.
Charity Putting People Out of Business
We would have a shoe drive at church, and we’d all give our excess shoes. We never knew what happened, but we knew that we were responding to this desire that we had to help the poor, the vulnerable. What I experienced living overseas, especially in Rwanda, was the end of the story and I had my eyes opened to this through a friendship with Jono. Jono was a friend in Rwanda, and he told me the story that after the Rwandan genocide, that he had a church from Atlanta, that started sending over eggs, and ended up just distributing eggs in a small community outside of Kigali. This seems like a great thing to do, right? The church wanted to help after the genocide, but Jono, a few years before, had started a small egg business himself. He’s in a small community, he put the investment in the eggs, in the hens. He put this investment in all the materials that he needed to start this egg business. His business was starting to grow, was starting to take off. Then, all of a sudden, in one summer, there become this surplus of eggs that were flooding the market in his area. Jono described that he couldn’t compete with a free good. This desire that the church had, to really take care of a need, it did take care of a need, but the problem is that it put Jono out of business. He ended up selling his hens. Then the next year, the church decided to focus its attention to somewhere else in the world, meaning that there was no local provider of eggs. Jono was out of business, no one else was there providing eggs, so they had to bring the eggs in from another community. This desire to help in that community, according to Jono, actually had a long-term negative impact on that community. The local community had to pay more for eggs, they didn’t have the same availability until someone like Jono could start a small business again.
The Highest Level of Charity
The highest level of charity is when you can help someone get on their own feet, use their own God-given abilities to provide for their family.
Getting the Problem Wrong, the Solution Wrong
The way that we look at the problem of poverty, we get the problem wrong. So, we’re always going to get the solution wrong if we think that poverty is just a lack of stuff. That’s why just giving more stuff is never going to solve the underlying problem of poverty. You take a step back, and you think about what’s the best way to help the poor? Well, to help them not be poor anymore. The only way to help someone not be poor anymore is to give him or her a job or have some form of employment.
The Importance of a Business Foundation
Instead of seeing business as this necessary evil just to accomplish other ends, business is the ends; it is the way in which individuals can work their way out of poverty. No nation on earth has ever developed without a business foundation that really has been the engine for all the other aspects of flourishing an economy, of a society.
Business and Relationships
Business is the place where relationships happen. It is the place where life is lived - for most people, the majority of the hours that we’re awake. It’s the place where, of all other places, where good can happen, where individuals can use the gifts and abilities that they’ve been given to create value, to provide meaningful jobs.
The Reason for Charging Interest
I remember that when I first heard about microfinance, an individual said that we charge the poor interest. That, to me, didn’t really make sense. These people are poor. I could understand giving money so they could start a small business, but why would I want to give them money and then have them repay with interest? There are a couple of reasons why that makes sense. One is that that enables the next person in the community to have that same access to capital that that one family benefited from. But the other thing is, I was with a woman, and she was describing her business, and she ended up showing her business. Because she had repaid the loan and because she had repaid with interest, she knew, deep down, this was not another just aspect of charity that she had received. You could see her stand up, and as she came in and she repaid her last loan with interest, she could say, “This is something that I, with my ability, with my capacity, that I was able to do.” There was pride and there was dignity, and there was just no question that she was a passive recipient of some extra-special favor. She didn’t get a special favor, she just has an opportunity. She repaid that loan, with interest, and you saw the dignity in her body language as she repaid that final loan.
Problems in the Microfinance Sector
There are some problems with the microfinance movement in Southern India. Part of that is because there was this huge number of players that came in and were chasing short-term returns. They were giving loans out, but they weren’t really caring as much of what the loans were given for. If you wanted to do it to buy that television, that’s fine. Tthere was a lot of microfinance that was not being used for productive investment, but it was used for purchases that probably were not increasing the assets and investment and capabilities of a household. That’s why I think this crisis that we’re seeing, this crisis that’s brewing, really. Some of the core principles of why microfinance was successful had been violated.
Savings and Training
Some of the things that make the model that we employ a little bit different are one, we do emphasize savings. We think savings, in many cases, are more important than access to a loan, for many families. We believe that training is critically important; that if you’re not making sure that the capital’s being used for those right initiatives, then you might not be helping a family. And worse, you might be actually over-indebting them if they’re not using those loans wisely. That’s why we think microfinance is broader than a loan. Microfinance is bigger than just giving someone access to $150. It’s a bigger system of providing training, saving money and, in the right opportunities, giving small loans.
Microfinance Not a Panacea
I remember when I first heard Mohammad Yunus give a talk on microfinance. He gave it in such a compelling way, and he talked about that we were going to have to build museums, because people weren’t going to remember what poverty is like. I remember that that was this incredibly enthusiastic statement. And we really did believe that we had a tool that could significantly impact global poverty. The problem is anytime you get involved in something, anytime you’re looking for one tool that’s going to be the silver bullet for a significant problem like poverty, that has its hand in so many, there is no one tool that’s going to work. There is no panacea for poverty. I’ve grown in my understanding that microfinance is a powerful tool, a very powerful tool in providing access to capital for small-scale entrepreneurs, provide a place for savings to happen, and allowing the seeds of entrepreneurship to begin to grow. But it is not going to solve global poverty on its own. It’s too complicated.
The Microfinance Stories You DON’T Hear
One of the first people that I helped start a small business in Rwanda was named Florian. Florian started a gardening business, and ended up giving him the tools and capital that he needed to get this business up and running. After working with him for several months, I went to his home, and I got to see his home. I recognized that his home had not changed at all from when I first helped him get a job. I remember feeling this disconnect. I knew what he was making, and yet there was no impact on his family, no impact on his kids. His kids still weren’t in school. There were no improvements. It really baffled me for a little while. I visited several months later and there, again, was no improvement. It turns out that he was spending his increased profit on other women and on alcohol. I remember feeling incredible let-down that I had this promise of microfinance, this promise of employment, and all of my enthusiasm that it was going to change lives, and yet I saw an individual that had a thriving business and yet his life and his family’s life had not changed at all. I remember, at that moment, recognizing there’s got to be more than just in a change in a wallet for significant change to happen. I think that is where certainly the church and the faith community has something materially different to offer than just another loan, just another job.
Microfinance’s Christian Roots
William Carey, who many see as the father of the missions movement in the 1800’s, went from Britain to live in India, as one of the pioneering missionaries. I read a biography of William Carey. I wasn’t reading it to learn about microfinance, but I was amazed that, in India, he recognized that there were women that had no way to provide for their needs. He wanted to care for the widow, the orphan, foreigner. What he found is that the best way to help these women was to help them get in small groups, where they would meet every week, and they would start saving money. Then every week, one of them would get the accumulated amount of capital and be able to have then, a lump sum to start a business. As I read this biography of William Carey, my eyes got big and I recognized he was doing microfinance – the exact same model that he was using at that point is actually one of the models that we employ in India, in a similar spot. It’s almost like the church forgot this incredibly powerful tool that we had. Mohammad Yunus is credited as really the father of the modern microfinance movement, but he’s not the father of the microfinance movement, if we define the microfinance movement as groups of people that are getting together to mobilize capital and to make sure that investments are made in places that can help the poor work their way out of poverty. It was in the founding of the missions movement. Unfortunately, we just have walked away from that. I think the church is now in a period of rediscovery of what microfinance is and the benefit that it can have on the lives of the poor. We did a survey with Barner Research, and asked what percent of the church pastors in America are familiar with microfinance. We found that 59% of pastors in America have never heard the term microfinance. We found that 1% are actually doing anything in this space. As much as I think that everyone knows about microfinance, the reality is it still is a tool that the church has not embraced. Worse, they haven’t even heard about it yet, in large numbers.
An Atheist on God’s Role in Development
One of the most interesting articles that I read this past year was Matthew Parris’s article that was titled “An Atheist’s Take On Why Africa Needs God.” What he said was there is a difference, when he saw the faith community involved in poverty alleviation, and he saw a difference from the programs that were just going in and just trying to help people, but had no ability to talk about a moral foundation. They were doing all this great work, but without a moral foundation. He saw that that really crippled the impact of the goods and services that they were providing. His article says that there is a difference; that Africa does need God if it’s going to work its way out of poverty. And it’s true. Without that moral foundation, I’ve seen this in the places that I’ve traveled to, that the impact is always going to be limited. But I guess I find it a little bit surprising that Matthew would say that Africa needs God and the United States doesn’t or Europe doesn’t.