Essays Toward A Principled Economics

Mose Durst Ph.D.

5. A Principled Economics Approach To Poverty


The problem of poverty seems intractable, inherent in the human condition. Religious groups have offered models of sacrificial service to solve the problem, while secular leaders at their best have spent billions of dollars to help the impoverished masses. Still, more than one billion people barely earn enough to exist, and 40,000 children die each day from causes related to poverty.1

From a Principled Economics perspective, each human being is a child of God, a sacred being, that contains in essence the value of the universe. We believe this when we look at our own child, but it is much harder to feel when we read a statistic. Religions have difficulty translating their values into effective economic solutions, and economists have prided themselves on being among the value-free sciences. If we are to solve the problem of poverty, and the injustice inherent in such a problem, a principled economic viewpoint must draw together the values of religion and the practical wisdom of economics.

Religious people are not fools, and economists are not scoundrels. Yet, they each become foolish scoundrels if they ignore the understanding of the other in seeking to solve this profound problem. Drawing upon the norms of the classical religious traditions, they must first view the person as connected to family, community, environment, and the larger human community. From the religious traditions they can envision the person, poor or wealthy, as having great creativity, intelligence, compassion, and the host of virtues that can be found in each culture. Upon this foundation, economists can begin to understand the human as well as the technical dimensions of poverty.

A silent revolution which is now occurring throughout the world is the work of religious and secular organizations and individuals in response to the challenges of poverty. Through support of hundreds of thousands, perhaps millions, of micro-enterprises, small businesses with large potential, millions of families are drawn out of the terrible cycle of poverty toward the dignity of a fruitful human life.

By providing mostly credit to such enterprises, private voluntary organizations, often with a religious motivation, are making a major impact throughout the developing world, and have even begun to impact developed nations. The image of the poor is changing dramatically as they are activated to become the key ingredient in solving the problems which victimize them. The size and importance of what is called the "informal sector" or "the people's economy," especially in the poorest countries, is now recognized as a major asset to national economic development and the creation of wealth.

Unlike previous schemes of trying to redistribute wealth to the poor, or of supporting large-scale industry as the basis of wide-spread economic development, there is now recognition that the poor have not had the opportunity to participate in the process of wealth creation. Not only has there been a lack of access to credit, training, and technical assistance for the poor, but the laws of most countries have been skewed against them -- the major source of injustice -- as institutions have favored the participation of the well-off in economic opportunities.

With the extraordinary example of the Grameen Bank of Bangladesh, however, it is clear that even credit alone can be the elixir to awaken the genie of economic development among the poor. The Grameen Bank and other models have been replicated to such a degree, we can measure success as it tangibly affects the lives of individuals, families, and communities. We can define and promote principled economic behavior that views a borrower not merely as a "loanee," but as a whole person in a matrix of relationships.

The solutions to poverty and hunger can now be envisioned, not by overcoming simple obstacles with simplistic formulae, but by understanding the complex nature of the human person and by offering sophisticated tools in appropriate ways.

A Principled Economics Approach to Poverty

As religious organizations become more directly involved with economic development, as opposed to emergency relief and charity, they bring to bear upon the problem of poverty the richness of their religious and ethical traditions. For example, Catholic Relief Services, one of the most important international private voluntary organizations, draws upon the papal encyclicals, source of much Catholic social doctrine, in its approach to poverty:

The essential dignity of work and of the worker have remained the heart of Catholic social doctrine and a continuing theme in Papal encyclicals since Rerum Novarum. In Centisimus Annus Pope John Paul II asserts that, as all men and women have the right to live, they also have the right to earn enough to sustain themselves and their families. But work provides more than simply a means of subsistence, it also provides the means by which men and women express and develop themselves both as individuals and within their community.2

There are no stereotypes in this analysis of the poor as lazy, ignorant, passive, incapable, uncreative, docile children who must be led by those with greater wisdom and capability. Rather, the poor, like all of God's children, have the creative capability to enrich their own lives if given the resources and the opportunities. Catholic Relief Services has begun to focus on small enterprise development as an effective weapon against poverty.

If justice is to give one what he or she is due, then the poor have the right to participate in wealth creation as subjects of their own destiny. If they have access to credit, technical assistance, and appropriate technology, and if they have equal access to the social institutions (such as the formal banking system), then they can be liberated from the manacles of poverty, hunger, and injustice. The Catholic Relief Services newsletter on small enterprise development points to the 1986 pastoral letter, Economic Justice for All, written by the American Catholic bishops:

An effective way to attack poverty is through programs that are small in scale, locally based, and oriented toward empowering the poor to become self-sufficient. Corporations, private organizations, and the public sector can provide seed money, training and technical assistance, and organizational support for self-help projects in a wide variety of areas such as low-income housing, credit unions, worker cooperatives, legal assistance, and neighborhood and community organizations. Efforts that enable the poor to participate in the ownership and control of economic resources are especially important.3

If Principled Economics seeks to shape and promote the virtuous person and the virtuous society, then giving individuals the opportunities to exhibit their virtues -- hard work, productivity, diligence, prudence, temperance and others -- through ownership of their own enterprises is a high order of virtue. Since we have usually honored our captains of industry as being the paragons of virtue (who would not like to be on the boards of the Rockefeller, Ford, or Carnegie Foundations?), why not conceive of the poor as models of virtue and celebrate them for what they can achieve.

Principled Economics further emphasizes how economic activity affects not isolated individuals, but rather the individual in the context of work environment, family, community, and the larger social and physical world. In helping the poor with their enterprises, we impact the quality and stability of the family, the solidarity of the community, and the potential to eliminate the causes of violence and alienation of the larger society. To help the poor is to help ourselves.

The classical religions allow us to discourse profoundly on "the common good," while economics helps us understand the nature of wealth creation. A central good of Principled Economics is to seek the wellbeing of the individual in community with others, while also creating wealth through private enterprise. If through the classical religions we are offered a profound insight into the nature of the person (as one who is created in the mind/heart likeness of God, for example), then our economic actor is a much more rich, creative, and complex being than a statistic for economic statisticians. Poverty is foremost a human problem, how we value humans; it is an economic problem in only one of its dimensions.

As economic development is seen as a complex human problem, religious organizations are drawn more into the leadership arena in dealing with solutions to poverty:

Christian development practitioners can take much of the credit for putting the human person in the center of the development equation and for resisting those who would suggest that development economics is 'valuefree.' According to a senior executive at World Vision, the largest evangelical relief and development agency in the United States, now "no one ever talks about value-less development." Consequently, Christian agencies are finding themselves in an exciting but sometimes disconcerting position of potential leadership within the development community.?

If doctrine often divides the religious community, service has been a great unifier, especially as religious organizations of all types act as the local coordinating agencies in service to microenterprises. The Trickle-Up Program, a donor organization in the United States, works through 402 coordinating agencies in 62 countries. Some of the agencies are:

Christian Children's Fund -- Ethiopia
Islamic Relief Agency -- Malawi
Catholic Mission -- Tanzania
Methodist Church of Pakistan -- Pakistan
National Spiritual Assembly of Baha'is -- Philippines
Theosophical Society in the Philippines -- Philippiness

Religious organizations can be models of principled economic focus, for their primary mission is to apply their religious world views to the well-being of the human community. Their view of the person is primarily as a spiritual being in the context of family, community, and society. These religious communities are responding to the material needs of people secondarily. They may realize that man does not live by bread alone, but if he is to live with dignity and fulfill his spiritual purpose he must create material wealth. Consequently, religious organizations realize that their dedication, commitment, and high ideals must be used in conjunction with the practical wisdom of economics.

A major shift, then, is taking place among religious communities, for they are beginning to see the solution to poverty not as the redistribution of wealth, but the creation of new wealth. Wealth creation is, therefore, not a zero-sum gain, where someone gains wealth at the expense of another. Rather, wealth creation is an ever-increasing process where more and more people can participate.

The Oxford Conference on Christian Faith and Economics illustrates this shift in thinking within the Christian community. The book which documents the proceedings explains "... that the success of credit based income-generation programmes in poverty alleviation should be proclaimed wide and far." Further, emphasis is placed on "the role of income generation and wealth creation, as distinct from wealth re-distribution activities, in alleviating human poverty, with particular reference to the role and activities of Christian and other development organizations working in this field among the poorest of the poor in developing countries."6

Microenterprises and the Informal Sector

Perhaps the most comprehensive discussion of microenterprises and the informal sector was held in Washington, D.C., in June of 1988. Sponsored by the Committee of Donor Agencies for Small Enterprise Development, it brought together such experts as Hernando de Soto from Peru, Muhammed Yunus from Bangladesh, and Jacob Levitsky from Europe and the United States. In Levitsky's "Summary Report of the Conference," he explains how the participants defined microenterprises and the informal sector:

In general the conference regarded the microenterprise sector as identical to the informal sector, but some participants did consider the term microenterprises as comprising a broader target group. Most speakers did not see great purpose or benefit in a prolonged discussion as to a suitable size definition to define a microenterprise. They did agree that the term referred to very small income generating units, owned and managed by entrepreneurs who worked in it themselves, from which they derived most of their livelihood, which employ very few people, if any, mainly relying on family members, and using very little capital. In most countries this was largely synonymous with the informal sector but in some cases could include traditional family, cottage industries or artisan units and the self-employed.7

The informal sector, or in Prof. Yunus' preferable definition "the people's economy," is not to be equated with the illegal sector. For while many of these microenterprises may not be large enough for formal regulation, they often pay their share of taxes through bribes to the formal authorities, or they are unjustly discriminated against by being prevented from receiving the benefits normally accorded to larger enterprises.

We can distinguish between the informal sector in the urban and rural economies. Hernando de Soto's surprise best-selling book, The Other Path, describes the urban informal economy of Lima, Peru, as compromising extensive housing, transportation, and trading networks. While setting up barriers to discourage the poor from entering the formal sector, the government has failed to realize the potential for economic development that lies within its own citizenry. De Soto explains,

The concept of informality used in this book is based upon on empirical observation of the phenomenon itself. Individuals are not informal; their actions and activities are. Nor do those who operate informally comprise a precise or static sector of society; they live within a gray area which has a long frontier with the legal world and in which individuals take refuge when the cost of obeying the law outweighs the benefit. Only rarely does informality mean breaking all the laws .... 8

In discussing the rural economy of Bangladesh, the arena in which Professor Yunus' Grameen Bank has been so effective, we have the following definition of the informal sector:

Broadly defined, the informal sector is the portion of the economy characterized by family ownership (the family as a unit of production as well as of consumption), small scale of operation, labor intensity, use of adapted or indigenous technology, skills acquired outside the formal schooling system, ease of entry, and an unregulated and competitive market. This definition would seem to cover the largest part of the economy in its unrestricted, unformalized (or natural) state. A more neutral term for the informal sector might be the microenterprise sector, with microenterprise defined as any undertaking or activity by a poor person to generate an income to improve his or her social or economic condition. Such undertaking might include manufacturing, trading, processing, service delivery, or other activities.9 

What we are defining here has its significance in reference to the poor. They generate enormous economic activity with great diligence, creativity, and resourcefulness. The poor, seen only as the victims of a mysterious poverty, will always be with us. The poor, however, seen as a potential force for economic development, worthy of credit, training, and technical assistance, can lift themselves out of poverty. The informal sector, the people's economy, as opposed to large industries, may generate as much as 30% to 50% of the income in developing nations. The central question is how to facilitate this income-generating, employment-producing process and merge it into the formal economy.

In a report to the United Nations Development Programme, Jeffrey Ashe and Christopher Cosslett estimate that between 1989 (the publication of the report) and 2000, 120,000 jobs are needed each day in the developing world.10 It is more than doubtful that such jobs can be supplied by large industries. However, the people's economy continues to grow. There is abundance of labor in developing countries, yet a scarcity of capital, training, and access to the formal economy by the poor.

As experts on developing nations point out, ... there are three main reasons for paying attention to the informal sector: first, the majority of the population are poor and most of them are in this sector; second, the formal sector is structurally incapable of absorbing the existing large number of unemployed and underemployed, not to speak of the increase in the labor force projected for the next twenty years; and third, the informal sector is a reserve of productivity, creativity, and initiative, and earning power, and it provides opportunities for self-employment, and thereby empowerment, for the poor. The sector's potential is still far from being fully exploited."

Previous Failure in Developing the Informal Sector

We have learned through economic success stories that mind, creativity, and cultural habits are often more important than physical resources. How we understand our challenges can be of greater importance than the material obstacles. If we review how the problem of poverty was understood in the minds of many people engaged in economic development, perhaps we can understand the basis for past failures and future success.

First, when we speak of poverty, who are the poor? How do we view them? Are they helpless victims to forces they cannot control, or are they active problem-solvers, anxious to improve their lives and as concerned with their families and the future of the children as the wealthiest among us? The stereotypes about the poor often determine the programs we develop to help them.

Muhammed Yunus, who has created perhaps the most effective program to lift the poor out of the various stages of poverty, explains:

Myths and half-truths about the poor have been fed and promoted by all institutions which never had any participation from the poor. Anybody will be told with a hundred percent certainty that the poor need to be trained before they can undertake any income-generating activity, that the poor cannot save, that the poor are in the habit of consuming anything that they can get their hands on, that they cannot work together, that poor women have no skills -- it is useless to talk about a programme for the poor women, that the poor cannot make rational judgments, that they have a very narrow view of life, that they are uninterested in any change, that the influence of religion and customs is so strong on them (particularly on women) that they cannot move an inch in any direction, that it would be impossible for the poor women to keep their income to themselves, husbands will torture them to death to grab any income the women will make .... 12

With a set of stereotypes such as those above, it is no wonder that many programs to help the poor were designed with an image of the poor who were to be worked upon, not trusted, and incapable of doing very much for themselves. Consequently, whether the program involved foreign aid, domestic policy, or pure charity, the poor very rarely participated in solutions that they believed would be most effective in ending poverty.

During the 1970s the governments of the industrialized nations, as well as numerous private banks in such countries, made multi-billion dollar loans to the developing nations. This, of course, was the beginning of the huge global debt crisis that burdens developing nations as well as the international economy. These loans were made, presumably, to help solve the problems of economic development, poverty, and unemployment in developing nations.

Unfortunately, whatever money remained after capital flight to Swiss banks, construction of prestige projects to enhance the image of the national leader, or the building of huge industrial enterprises -- often owned by the state -- very little "trickled down" to the impoverished masses. The huge industries that were built actually employed relatively few of the unemployed; they were usually uncompetitive monopolies that were not run profitably; and the wealth of the nation as a whole declined because of the enormous debt burden. Here, indeed, was an example of the failure of "trickle down" economics.

Until recently, the bias toward building large-scale industries forced developing nations to employ huge bureaucracies in operating them:

The roots of the informal sector problem can be found in the bureaucratic model of development, which focuses on government promotion of large-scale enterprises and advanced technology as the essential tool in a successful development strategy. This model, accepted and followed by many policy makers in developing countries and some scholars until the early 1970s, was influenced by the belief that development depended on transform ing traditional society, which theorists believed was retrograde and therefore a 'problem' that policy should aim to 'overcome.' This model looked to bureaucratic enter prises to replace traditional economic and social structures with modern (post-traditional) ones .... It has a weak concept of individuals and citizenship. It also devalued local community, seeking instead to build a national community linked to nationalism and the nation state.13

Other writers, such as Hernando de Soto, point out that economic development is usually skewed in such a way as to bypass the poor and serve the existing elites. The Other Path is one long Jeremiad in which de Soto reviews how many obstacles -- from bribes to bureaucratic delays and endless "taxes" -- obstruct the poor from equal participation in the economic life of the country: "...Peruvians realize that wealth is not so much the result of labor as of political wheeling and dealing.14

Where there has been significant development in the developing nations, it seems to bypass the poor. A visitor to Caracas, Nairobi, or Jakarta suspects this with an untrained eye. Development experts confirm what the naive only suspect:

The reality is that successful development in the Third World has largely been for the few and bypassed the poor. There has not been a broad-based distribution of the benefits of the substantial development that has occurred in the Third World.15

As de Soto describes domestic policies which discriminate against the poor, the banking system in developing countries reinforces such discrimination by the "normal" system of bank operations. Anyone who has ever tried to get a bank loan -be it in developing or developed nations -- knows that credit is extended to those who have collateral, the asset support for the loan. Obviously, the poor have very few assets and thus are usually considered unacceptable risks for loans. Further, the need of the poor in any specific loan situation is usually so small (as the bank views such things) that banks are unwilling to go through the administrative costs for extending loans. Finally, the forms and formality of a bank are usually of so imposing a nature as to intimidate the most courageous of the poor. Thus, it is the banks that follow "traditional ways of behaving" and assume that the poor are not worthy of credit.

Although religious and charitable groups have historically responded to the poor with greater compassion than government agencies offering foreign aid or private banks, their charity has also failed to empower the poor beyond an emergency period. As the founder of a food bank in Oakland, California, I know the value of food to families seeking immediate emergency relief. However, such relief is only temporary and must be coupled with a larger vision of aid if the poor are truly to benefit. Continuous receiving without giving becomes demeaning. Even in our food bank, we ask the recipients of food to volunteer in processing the food and in serving others.

The central task in overcoming poverty is to create wealth. Charity in itself does not enable the poor to participate in the income-generating process. Responsible entrepreneurs are not the products of welfare or charity systems, as much as these systems may be necessary. In the successful credit programs which assist the poor, loan repayment is usually close to 100 percent. Muhammed Yunus explains that responsibility must be demanded of the poor, and that any loan program which is not close to 100 percent payback is a failure.

In summary, the poor have suffered because of the failure of foreign aid, of misconstrued "trickle down" theories of economics, of bias toward large-scale industry, and of bureaucratic approaches to poverty. They have been unable to participate fairly in the economic and political policy-making of their countries. They have been excluded from the formal banking systems, and thus they have had very little access to credit. National policies discriminate against the poor, and international charity often has the unintended effect of demeaning them. The "friends" of the poor are the money lenders who charge as much as 20 % interest a day, and who exploit helpless women who are desperate to earn money for their families.16

What the poor need, then, if they are to be lifted out of poverty, is first to be understood in a holistic way: as creative human beings in the context of family and community. Next, they need credit organizations to approach them, in a realistic way, with a genuine purpose of serving the poor, with financial tools which enable the poor to help themselves. Economic and social policy must be made with the participation of the poor, and they must be allowed to participate in wealth creation fairly. Policies discriminating against the poor must be eliminated, and the informal, people's economy must have access to institutions within the formal economy. Banks, for example, must go beyond their traditional ways of lending, based on collateral, and understand new, creative, yet still profit-making ways to serve the poor. Women, especially, must no longer be objects of exploitation, but rather they must be given the opportunities to borrow and to create the businesses that can literally save their lives.

The Grameen Bank

The challenge of a Principled Economics is to focus on the human element of economics, with a value perspective, and then to identify and to promote concrete models that have been successful. The Grameen Bank of Bangladesh is perhaps one of the most successful examples of how the power of heart and ideal in one person can transform the lives of more than one million people. From its humble beginnings, the Grameen Bank can be a proud example of what can be accomplished in the most difficult circumstances.

To understand the human component of economic development, it is worth quoting at length how Professor Yunus began:

I started visiting the very poor people in the village because that's where the problem is: Why can't they improve their living conditions? I kept on talking to them not as an economist, not as a teacher, not as a researcher -- but just as a human being, as their neighbour. Why do things remain the way they are?
I learned so many things. I started feeling that this is the real university that I missed out all my life. In my textbooks, I never learned all these things that they're saying now. Among the many things I learned and many people I talked to, one woman's story led me to a series of events which finally culminated into a very special kind of bank. I came across a woman who earned only two pennies a day by making bamboo stools. I couldn't accept why anybody should work so hard and make only two pennies. She explained why she makes two pennies: she doesn't have the money to buy the bamboo which goes into the bamboo stool. So she had to borrow money from a trader, the trader who buys the final product. He lends her the money to buy the bamboo. When he buys the final product, he offers her a price which barely covers the cost of the raw materials. Her labour comes almost free, she works almost like a slave. I said to myself, there is no reason why it should be this way. This can be solved very easily. It doesn't need big theories to solve this.
If somebody could make this money available to her she can buy her own bamboo, she can sell the product wherever she gets a good price. I took a student of mine, went around the village for several days to find out if there were other people like her who were borrowing from traders and missing out what they should earn. In a week's time, we came up with a list of forty-two such people. The total amount needed by all forty-two of them was only thirty dollars. I was terribly ashamed of myself for being part of a society which could not provide thirty dollars for forty-two able, hard-working, skilled persons to make a living for themselves, and for teaching fancy "development" theories in the class room.
My response to this situation was to take this thirty dollars out of my pocket and ask my student to distribute this money to the people who needed it, telling them that it's a loan, they have to pay me back. They can sell their product wherever they want, wherever they get a good price. Having done that, I thought I had found a solution to this problem. A couple of days later I started feeling down again. I felt that this was not a solution.
Every time they needed money they could not come to me because I was not available to them. I was a teacher in a university, I was not in the money business. I thought there must be some institutional way of handling this than handling it in a personal way.
I thought of a bank. I thought that the bank is the right institution to take this responsibility. Bank should give the loans. When I went to the bank, talked to the manager, he gave me a big laugh. He thought it was such a funny idea. I said, "Why?" He said, "This little money is not even worth all the papers they have to fill in, and bank is not going to do that." I said, "Why not? To them this is really important." Then he said, "Well, we can't give loans to the poor people." "Why not?" "They don't have any collateral." I said, "So what? You don't need collateral, you want your money back." "Of course we want our money back, but at the same time we need collateral." "To me it doesn't make sense if somebody can be sure that the money comes back, why do we need collateral?" He said, "That's our rule." He said, "I can't help you. Why don't you go and talk to the officials in higher positions than me to see if they can help you."
I tried. I moved around, ran around to different offices trying to persuade. Everybody said the same thing: "Look, this is the rule. We can't do anything else." Somebody gave an idea: "If you could find a guarantor in the village for each loan, a well-to-do person, then we can give the loan." "No, I can't do that because then the guarantor would treat the other person as a slave because he became a guarantor of the loan." I said, "I won't do that." I got an idea. I said, "Why don't I become the guarantor? Why don't you accept me as a guarantor? I would sign all the papers you give me." Then they were put on the spot. They thought about it and asked me, "How much money are you talking about?" I said, "Oh, altogether probably three hundred dollars, not more than that." And they said, "Okay, we'll accept you as a guarantor up to three hundred dollars, but don't ask for more money. That's all we can give you." I said, "Okay, that will be enough for me." After all this discussion, when I really wanted the money, they said, "No, we need permission from the head office." It took six months of writing back and forth to get it formalized and finally, at the end of 1976, I succeeded in taking a few loans and giving it to the poor people at the village.
I wanted to make sure that people do pay back so that the bank did not stop this procedure. People did pay back. So I gave more loans and it became wider and wider. I then told the bank, "Why don't you do it yourself? Why do you need me as a guarantor? It's working. You said people will not pay. Now they're paying." "No, no, you can do it in one village, you have your students with you, you yourself work very hard, but if we do it, it won't work." I said, "That's funny." I said, "Okay, let me try." I tried it over several villages. Still it worked. But the bankers were not satisfied. They said, "No, this is not big enough." So I did it over more villages. Then I was challenged to do it over a whole district. I did it over a whole district. Still it worked. But the bankers remained unpersuaded.
I said to myself, why am I running after the bankers? Why don't I set up my own bank and just settle the whole issue? Then I started running around in the central bank and the government offices to give us permission to set up a bank which will work only for the poor people. It took a long time. Finally in 1983, government permitted us to set up a bank and Grameen Bank was born as an independent bank.
Grameen Bank lends money only to the poorest people in Bangladesh -- landless, assetless people. Today this bank serves one million borrowers. We work in twenty-three thousand villages out of 68,000 villages in Bangladesh. We have nine hundred branches. Grameen not only lends money to the poor people, it is owned by the same poor people that we lend money to. They become shareholders of the bank by each buying one share of the bank which costs three dollars. Out of the one million borrowers that we have today, ninety-two per cent are women. Our average loan size is seventyfive dollars; maximum loan is one hundred eighty dollars. Our repayment rate is over 98 percent. In other banks repayment rate is much lower. Repayment of agricultural loans is less than thirty percent. For industrial loans, repayment is around ten percent. If you compare Grameen with any other bank, we stand out as the real bank. Other banks look like charity outfits for the rich.17

I quote at length from Professor Yunus, for his story illustrates how compassion, intelligence, and genuine commitment to his fellow human beings brought about a miraculous transformation in the lives of more than a million people. Professor Yunus, moreover, was not a soft-headed altruist in his work with the poor. He demanded responsibility, accountability, and he designed a system whereby almost 100 percent of the loans could be repaid.

First, he realized that his personal experience with the poor demanded that he, as a source of credit, go to the poor and find out their situation. In a most humble way he listens to them, he seeks to understand their needs, and he responds to the needs as they perceive them. He does not make unreasonable conditions for the loan, but realizes there must be a long-term, trusting relationship between those who lend and those who borrow.

Very quickly, Professor Yunus realized that loans should be extended to individuals who comprised a loan group of five members. The group could choose its own members as long as there was a commonality of community and business experience. Only one member of the group at a time would receive a loan, but there would be no second loan until the first one was repaid. The moral pressure of the peer group would ensure the repayment of the loan, and the group could act as a source of advice and moral support to the individual borrower. Thus, this solidarity group could help provide confidence and accountability.

The virtue of humility on the part of the lender is central to the success of the Grameen Bank. Professor Yunus explains how representatives of the Bank will go to a village and, unlike previous officials who stayed with the wealthiest families, settle in a small hut. Then, with great patience, as they recognize that establishing a new village bank will take the time that trust demands, they explain how credit can be extended to the poorest of the poor.

Rather than demanding that borrowers fill out elaborate forms as to how the loan will be used, they explain the function of a solidarity group, of the necessity of using the loan for income-producing purposes, and then offer the simplest of loan papers. The representatives of the bank will often walk miles to answer questions from the villagers, and it quickly becomes clear to everyone that these bank representatives are like none they have ever encountered before. Even previous government officials who visited villagers with economic development schemes made it clear that they were there to be served, not to serve.

Lest one think that the social environment of rural Bangladesh is ideal for a system of credit to the poor, nothing could be further from the truth. Women, for example, were usually restricted to their homes and almost never participated in any formal economic institution. Islamic religious lenders, moreover, cast grave doubts about the motivation of the Grameen Bank representatives who came to the villages. The husbands of the women, too, often threatened them if they had anything to do with these strange "money-lenders."

The women, nevertheless, were desperate to help their families out of a brutal, abject poverty. They risked the scorn of village elders and the violence of husbands. A solidarity group which had borrowed successfully and increased their income would then tell their story to other women. More solidarity groups would form, and they in turn would be successful. Religious leaders and husbands realized that the credit enhanced income production and was neither a threat to the family nor the religion.

Because women were the most responsible for the home, children, and the family, and had been the most sacrificial in maintaining the family in the midst of poverty, the Grameen Bank recognized that women would be the most responsible in the use of credit and the repayment of loans. As the women had been the most exploited by the moneylenders, they should have the best opportunity for receiving credit, so the Grameen Bank reasoned. Also, as women were most concerned about the education and the future lives of their children, they would be able to manage credit with an eye to future income generation.

Where other banks ignored the poor, the Grameen Bank made humble, sacrificial effort to serve them. The bank insisted that a certain portion of the loan should be used for savings, so that the poor could begin to accumulate capital. An emergency fund was established among solidarity groups that became members of larger organizational center groups. The fund was in essence the first type of insurance the poor had known which could protect them from the hazards of nature or the death of the family head. Housing loans were made to the poor for the first time, as the Grameen Bank acknowledged that most of the microenterprises are located in homes. Further, a school fund was established so that the poor could have a tangible means by which to educate children for the future. The bank also brought groups together, as a cooperative venture, so that credit could be extended to larger projects like a shrimp farm and a fish farm. In all, the Grameen Bank lists more than four hundred different business activities for which credit has been extended.

It is hard to imagine the dramatic and life-transforming impact of credit on the lives of the poor: enabling families to move beyond hunger and starvation to reasonable nourishment; strengthening dignity and self-esteem within individuals; offering the hope of education for future generations; ending the exploitation of moneylenders; building family and community solidarity; and, of course, providing employment and income generation, in the case of the Grameen Bank, for over one million people.

A single, snap-shot look into one dimension of a borrower's experience with credit can help us imagine the multifold impact described above. To Chase A Miracle by Jayanta Kumar Ray describes hundreds of personal profiles of Grameen Bank borrowers:

In course of a single week, a poor villager (and his family) may go through the following experiences. On Day one, he may have three meals. The first meal may consist of rice and fish, he has not paid for the fish, he has caught it in a nearby ditch/lowland/river. The second meal may consist of rice and pulses, and the third of rice and chillies. Rice may be warm or cold, depending on one's capacity to pay for the fuel and to cook rice separately for each meal. On Day Two, this poor villager may be able to manage two meals, each consisting of rice and such vegetables as grow on the homestead land. On Day Three, he may have only one meal consisting of leaves and roots gathered by his wife and children from woods, river banks or roadsides, if not by borrowing or begging from a neighbor. On Day Four, this person (and his family) may have to go without any meal. On Day Five, he may have two meals, each consisting of a paste of unrefined wheat flour (atta), salt, water, and chillies. On Day Six, he maybe able to arrange two meals, each consisting of rice, salt, and chillies. On Day Seven, he may have two meals, one consisting of rice and pulses, and the other of rice, salt, and onions. This person (call him A), may report that he and his family suffered from occasional starvation in pre-GB days in accordance with the seven-day scenario sketched above, or some variation on it. For example, A and his wife might forego meals on two days a week so that their children did not have to starve on any day in the week.
When A... joins the GB, makes a proper use of one or more GB loans, he (and his family) move above the poverty line. This means, at least, that all family members can take three meals every day, and satisfy themselves about their ability to consume the desired quantity of rice. This satisfaction is hard to appreciate, especially for one who has never experienced hardships or starvation, unless he catches the light in the eyes of the respondents who express this satisfaction with inadequate words but with great emotions, some of them failing to restrain tears, which demonstrate more of a sense of triumph than of sorrow.18

Success for Professor Yunus is very much related to helping the poorest of the poor. By 1999 he envisions the Grameen Bank having 3,000 branches serving 24 million people in Bangladesh. This translates into a vast network of microenterprises, small enterprises, and cooperatives that will impact, slowly and incrementally, everyone in the nation. As credit is extended, investment and savings increase, and there is the excellent potential of greater income. The vicious cycle of no credit, no investment, no savings, and no income has been broken.

Jayanta Kumar Ray exclaims:

The present study, therefore, can hopefully conclude with the observation that the Grameen Bank of Bangladesh has conveyed a challenging and thrilling message to the ruling circles in low income countries: the message is that IT CAN BE DONE, that rural poverty can be removed at a relatively low expenses within a reasonably short period of time by a non-revolutionary government.19

Finally, Professor Yunus offers us the most central challenge if we seek to overcome the complex reality of poverty. It is a principle economic challenge for it focuses on the heart, desire, and will of the human person, not just the cleverness of our technical designs:

Before we start to design a poverty alleviation programme, we should be asking ourselves the following questions: a) How sincerely we want to end poverty, b) How much of poverty we want to eliminate? How soon? c) How far poverty is unacceptable to us? How intolerable it is to us to see another human being living like a lower animal? d) How eager are we to save the creativity and productivity of a human being from being wasted away because of a lack of opportunities, and help him in utilizing his potential to create a better life for himself?20

(If Professor Yunus has not won the Nobel prize for peace by the time this essay is published, let this be a formal nomination.)

After studying the Grameen Bank, we recognize the unique cultural dynamics in Bangladesh that may allow for its success. Our next question is: To what degree can a Grameen Bank be replicated in other countries?

Accion International

Another important organization that operates in a similar way to the Grameen Bank is ACCION INTERNATIONAL. In its way it has probably been as successful as the Grameen Bank, and it is very possible that the organizations have cross-fertilized each other, and that together they offer many possible combinations for replication.

ACCION began in 1961 as a non-profit organization that focused on economic development in Latin America. Its major concern was poverty and hunger, and it sponsored young Americans to work in the poorest communities. This work led ACCION to realize that self-employment and microenterprises were perhaps the best means for the poor to lift themselves out of poverty and hunger. Subsequently, in the 1970s ACCION began extending credit and offering business training to the owners of the microenterprises.

ACCION developed a methodology whereby capital from the United States would be used for loans to microenterprises in Latin America. These loans, as well as business training, would be offered through local, intermediate, private, voluntary organizations. Unlike the Grameen Bank, ACCION offers loans to individuals if they have collateral. However, if no collateral is available, the individual may join a solidarity group of between three to eight members. Here, too, is the moral pressure and confidence-building mechanism that insures that loans will be repaid or there will be no further loans to the group. The ACCION affiliates claim a 98% payback rate, so that on this particular criterion they fulfill one of Professor Yunus' standards of success.

ACCION's loans, like those of the Grameen Bank, are offered at market rates. In the case of Grameen Bank this is as much as 20% a year. The poor, apparently, have the discipline of repaying a market rate loan, for in Latin America and in Bangladesh this can be 1 /365th of what moneylenders would charge. ACCION explains that a loan of $375 can create a new job, and that in 1990 loans to 68,000 microenterprises created 40,000 jobs which benefitted 300,000 family members .21

ACCION has developed a unique financial tool that allows it to increase the monies available to its affiliates in Latin America:

The Bridge Fund was created in 1984 to leverage funds in Latin America for the loan portfolios of ACCION's affiliates. The Fund is capitalized with loans and donations from individuals, churches, and institutions .... Bridge Fund monies, which remain in the United States, are used as collateral to back guarantees in the form of standby letters of credit issued in favor of local banks in Latin America. Backed by this letter of credit, these banks then make loans to ACCION's affiliates.21

One can envision other creative financial instruments that can be used to deliver credit to the poor. ACCION has a series of goals it hopes to reach by 1995 (starting in 1991): To serve 748,000 microenterprises, with one billion dollars in loans, creating one million new jobs.23 With the goals and achievements of organizations like the Grameen Bank and ACCION, poverty and hunger may, God willing, be horrors of the past.

Finally, Americans reading this essay may have begun to wonder about the application of these micro-loan programs to the United States. ACCION has also thought along these lines and has initiated projects in New York City, Albuquerque, Chicago, San Antonio, and San Diego. In New York, during 1991, ACCION dispersed loans totalling $469,000 to 141 entrepreneurs: taxi drivers, mechanics, hairstylists, restaurant owners, seamstresses, carpenters, and cooks. Obviously, these projects are still inchoate, but they offer a vision for the future and hope to the poor.

Other Credit Programs

Inspired by the Grameen Bank, the Southern Development Bancorporation, an Arkansas community development bank, established a non-profit Good Faith Fund. The bank became operational in 1988 and the Good Faith Fund, with its initial $500,000 capital contributed by foundations, began making loans in 1991. Seventy-nine borrowers have, with an average loan of $952, started their own businesses.

Good Faith Fund is a community-based, self-employment program which provides training, technical assistance, savings programs, and a revolving loan fund for very small, short-term loans to local residents interested in self-employment ... The borrowers join groups of up to 10 businesses. Members of a group will be from unrelated businesses and there can be no household member in the same group. Each group is required to open a savings account at a local bank. The groups meet bimonthly to discuss their progress, make deposits to their savings accounts (requirement for each member) and make their loan payments.

Each group is responsible for the actions and performance of each member of the group. They counsel each other regarding personal and financial matters, review past due loan payments and internally function as a loan committee regarding subsequent loan requests from group members submitted to Good Faith.24

Although the Good Faith Fund is too young and too small to offer a significant record to evaluate, it is a visionary pilot project that has obvious similarities to the Grameen Bank. Professor Yunus has suggested that the Grameen Bank-type program may offer significant insights to solve the problems of welfare and poverty in the United States.

Opportunity International, with headquarters in Oak Brook, Illinois, explains that its work is "motivated by Jesus Christ's call to serve the poor." As with ACCION, Opportunity International works through partner agencies in developing countries in extending credit to the poor and offering business training to complement the credit. In 1993 Opportunity International made 16,797 loans totalling $8.2 million. 53,013 jobs were either created or strengthened, 66 percent of the loans were made to women, 23,624 participants attended 1,429 small business seminars, and the loan payback rate was 94 percent.25

Self-reliance is a major theme of Opportunity International's credit program, as it is with the other programs studied, although there seems to be a greater emphasis on business training in conjunction with the credit. Although Opportunity International operates on four continents, it relies heavily on local partner agencies to manage the credit and business training. Local community groups and churches, for example, give references to individual borrowers, and typical loans are $500. Solidarity groups do not appear to be part of the credit process.26

The 1992 annual report explains:

Here's how Opportunity's unique program of self-help works. A mother of two children is abandoned by her husband. Her children stop attending school to help the family eke out the barest survival. Despite skills as a seamstress, she cannot afford to set up a business. She turns to the people of Opportunity's Partner Agency in her country, who help her prepare a business plan. She also receives comprehensive business training and marketing assistance. Then they loan her money for a sewing machine and an inventory of cloth. Their support continues with visits every few weeks from a counselor to check on the young enterprise and suggest ways to develop it further.
The woman was working before, but her effort did not provide a viable income. Now it does. We record that as a job salvaged. As her small venture grows, she hires one or two more workers. We regard that as new job creation. But there is also a wonderful ripple effect. The two or three families involved in the business have more to spend with other businesses in their community. Quickly the local economy starts improving.
In only a few months, the woman's hard work has paid back the loan. Those same funds become credit for another would-be-business-person. Everyone benefits. Children return to school. Aging relatives receive medical care. Everyone is healthier because they can now buy adequate food.27

Opportunity receives donations from churches, private foundations, the U.S. Agency for International Development, and individuals. Since the directors underwrite USA administrative and fundraising costs, all donations go directly to the credit programs. On the board of advisors are prestigious individuals such as Senator Paul Simon, Father Theodore Hesburgh, and Professor Martin Marty.

As an organization that proudly emphasizes its religious motivation, Opportunity points out that small businesses have a good lineage: Jesus was born into the home of a carpenter, and among his disciples were Peter, the fisherman, and Paul the tentmaker. At a seminar sponsored by Opportunity entitled "Enterprise, Compassion, and the Marketplace," in Thailand, "participants discussed the theology of community transformation, spiritual principles behind work, and microenterprises in times of crisis..."28

Catholic Relief Services, Caritas, National Councils of Churches (such as the one in Kenya), and other religious groups are making a bridge between religion and economics as never before. Liberation theology certainly made the theoretical bridge, but as communism as a philosophy and as an economic system has been almost totally discredited, religious groups have begun to look at the relation of religion to public life with greater discernment. Certainly, they have learned what the Jewish sage uttered: Poverty may not be a great shame, but it is also not necessarily a great honor.

The Trickle Up Program, founded by Glen and Mildred Robbins Leet in 1978, has helped start 29,000 businesses in 98 countries. While Trickle Up has its headquarters in New York, in 1992 it worked with 402 coordinating agencies, among which we find a great variety of religious groups.29 If these groups highlighted their ability to work together for the benefit of the human family, religious ecumenism would probably take a giant step forward.

Unlike other groups we have studied that offer credit, Trickle Up offers grants of up to $100 to be paid in two $50 installments. The process of receiving grants follows several steps. First, as with many credit organizations, grants are given to groups of five or more. They must plan enterprises with the help of coordinating agencies, and pledge they will work 1,000 hours on the enterprise within the first three months. As a profit must be anticipated, they must re-invest at least twenty percent of the profit. A simple, final report completes the process and insures that recipients will received both $50 grants.30

Although Trickle Up claims that 80 percent of businesses continue for one year or more, there are no in-depth analyses, as with the Grameen Bank, that indicate the quality of long-term sustainability. Certainly, Trickle Up seeks to promote individual self-reliance, the solidarity of a support group, and the technical and moral support of coordinating agencies. Yet, the revolving and increased amounts of credit appears to be the great benefit provided by other credit programs.

A unique variation of the Grameen Bank, embodying many of its features, is FINCA international (Foundation for International Community Assistance):

Founded in 1984, FINCA is a non-profit, tax-exempt agency headquartered in Alexandria, Virginia. It presently coordinates a network of 14 affiliated agencies in 12 countries. Collectively these affiliates are rapidly evolving into a World Bank for the Poor which already serves over 42,000 borrowers through at least 1,600 village banks. On total current lending of $4.5 million, FINCA's on-time loan repayment rate is an astonishing 99 % . Its average loan per borrower is only $105. More remarkable still, the accumulated savings of FINCA village bank members already exceeds $1.5 million.31

The Village Bank concept consists of a peer group of 20-50 poor women. As women have been the most excluded from the financial institutions of developing nations, yet most often bear the difficult responsibility of maintaining their families, they are the ones who manage the bank and extend self-employment loans. No collateral is required for the loan, and "a reasonable rate of interest is charged." Dignity and self-respect are the immediate benefits for the poor who organize the village bank. They elect their officers, define the rules, and make all management decisions.

Peer group pressure and self-discipline are of great importance to the success of the village banks, for the group must be responsible for the failure of an individual loan, and no new loans can be extended until the outstanding loan is paid. El Salvador has been the location of the largest village bank program, and after two years 26,000 women received loans averaging $67. While the on-time repayment rate has been 99.25 percent, $700,000 in voluntary savings has been accumulated.32

Defining Success

Poverty debilitates, physically and spiritually, individuals, families, communities, and nations. Starvation, loss of self-worth, family breakdown, and dysfunctional communities are some of the signs of this ancient curse. Success, on the other hand, means a restoration of physical and spiritual wellbeing. Individuals attain physical health while exhibiting the God-given creativity to define their own destiny. Families cohere and become the creative matrix from which current and future wealth is generated. Communities become the caring, nurturing life support system for individuals and families. We have, then, the true wealth of nations: material wealth along with the wellbeing of persons in healthy communities. Such is the ideal of a Principled Economics.

We have observed in our study how success for individuals can be measured on a physical level by simple criteria: from starvation to an adequate diet, from malnutrition to reasonable nourishment. Self-employment and income generation allow individuals, moreover, to feel the dignity and self-respect that comes from knowing that one is in charge of one's own life. The poor individual begins to feel pride in knowing that he has the self-discipline to save, invest, and overcome the fear of being a victim to unknown, hostile forces. Skills are utilized that are discovered for the first time. Women, especially, feel liberated from the powerless social role assigned to them, where they have no access to money other than through exploitative money lenders.

Families begin to cohere more tightly as income generation from employment improves diet, shelter, medical care and schooling. Hope for the future replaces despair, as families feel the security from emergency insurance. Brigitte Berger has argued that "the nuclear family is the precondition rather than the consequence of modernization and economic development," and the studies of how credit is used by the family seem to reinforce her observations.33

Success for communities, especially through the solidarity groups needed for credit, eliminates mistrust and exploitation, and makes the "common good" a more tangible goal in daily activities. Cooperation and mutual benefit become the operational principles when wealth is seen as something that has infinite possibilities, not as a fixed sum where someone benefits at the expense of someone else.

Central to all aspects of success is the success of the institution delivering credit. Professor Yunus cautions that lending programs should not be considered effective unless the repayment rate is close to 100 percent. The reason for his statement relates to the sustainability and growth of credit programs. If a program must rely on donors or charity, if it does not charge enough interest to cover its expenses, and if it does not continue to seek efficiency, it cannot look forward to a predictable future. Where credit programs have failed, agencies did not take seriously the need to make a profit. Consequently, they provided neither training to the poor nor demanded accountability from them. Wealth creation must be a goal of the credit institution as well as the recipients of the credit.

Finally, from a nation's point of view, credit programs for income generation and employment must reach a large enough number of people to make a significant impact on poverty. The Grameen Bank, for example, is not only a successful model of lending to the poor, but also in its massive impact on the country. When we add up all the people helped by credit programs, we are still dealing with less than 1 % of the world's poor. Nevertheless, that 1% is tens of millions of people. Most government policies, before institutions like ACCION and the Grameen Bank, prevented the poor from contributing to the wealth of a nation.

Now, international agencies, such as the United States Agency for International Development, are increasing by millions of dollars their aid to microenterprises. They realize that a stable nation and world peace are dependent upon reducing poverty, making countries self-reliant, and helping them become democracies. Extending credit to the poor has been called the democratization of credit. A nation moves from poverty to prosperity only as more of its individual citizens create wealth.


The removal of poverty is not an emergency action, but an ongoing process. A Principled Economics approach to poverty first focuses on the nature of the poor: individuals created in the image of God who have infinite potential, creativity, and value. This nature seeks liberation for the fulfillment of self, family, and community well-being. Creation of wealth, and thus the elimination of poverty, is the central challenge faced by the poor. If they can have access to credit, along with reasonable training and appropriate technology, the poor can create material wealth as well as the basis for a virtuous society.

As all the studies mentioned in this essay have acknowledged, an enormous expansion of credit programs for the poor is needed and justified. A World Poverty Bank can address the needs of the poor on a global scale. Funds from religious organizations, corporations, governments, and individuals could be mobilized for this purpose. Private philanthropy (non-governmental) in the Unites States alone in 1993 approached $120 billion. Much of this money consisted of individuals contributing to religious organizations. Even loans made available to a World Poverty Bank could enormously increase the amount of credit available to the poor. Surely, many financial tools, such as ACCION's Bridge Fund, could be designed to leverage borrowed funds and make huge sums available. All of our studies indicate that the poor are not only good credit risks, but they may be more virtuous than the wealthy who are involved in billion dollar savings and loan scandals.

Religious organizations can work together to facilitate the marketing of goods and services which the poor make available. These organizations can provide the principled commitment of service, sacrifice, and suffering on behalf of the poor. What better way for the religions of the world to make peace than by working together to serve the poorest among us.

The alleviation, and perhaps eradication, of poverty is an attainable goals in our lifetime. It will take the commitment of all people of good will. But only then will we approach the ideal of peace on earth, good will toward all God's children.


1. "Fact Sheet" published by FINCA INTERNATIONAL, INC. (901 King Street, Suite 400, Alexandria, Virginia 22314).

2. "Rerum Novarum, Centesimus Annus, and Small Enterprise Development," Innovation & Transfer [a publication of Catholic Relief Services (January, 1992), pp. 3-4 (volume 1, No.2); p. 3.

3. Ibid.

4. Amy L. Sherman, Preferential Option: A Christian and Neoliberal Strategy for Latin America's Poor (Grand Rapids, Michigan: William B. Eerdmans Publishing Company, 1992), p. 5.

5. As reported in "Coordinating Agencies 1992" Trickle Up Program (New York, 54 Riverside Drive, 10024-6509).

6. Joe Remenyi, Where Credit is Due (Boulder and San Francisco: Westview Press, 1991), p. vii.

7. Jacob Levitsky, "Summary Report of Conference," in Microenterprises in Developing Countries, ed. Jacob Levitsky (London: Intermediate Technology Publications, 1989), pp. xiii -- xxxviii; p. xviii.

8. Hernando de Soto, The Other Path (New York: Harper & Row, Publishers, 1989), p. 12.

9. Muzammel Huq and Maheen Sultan, "Informality in Development: The Poor as Entrepreneurs in Bangladesh," in A. Lawrence Chickering and Mohamed Salahdine, eds. The Silent Revolution (San Francisco: ICS Press, 1991), pp. 145-183; p. 148.

10. Jeffrey Ashe and Christopher Cosslett, Credit for the Poor (New York: United Nations Development Programme, 1989), p. 17.

11. Huq and Sultan, p. 150.

12. Muhammad Yunus, "On Reaching the Poor," in David S. Gibbons, ed. The Grameen Reader (Dhaka, Bangladesh: Grameen Bank, 1992), pp. 78-90; p. 89.

13. A. Lawrence Chickering and Mohamed Salahdine, "Introduction," The Silent Revolution, pp. 1-14; pp. 2-3.

14. de Soto, p. 198.

15. Remenyi, p. 16.

16. Ashe and Cosslett, p. 18.

17. Muhammad Yunus, Grameen Bank (Dhaka: Grameen Bank, 1992), pp. 6-9.

18. Jayanta Kumar Ray, To Chase A Miracle: A Study of the Grameen Bank of Bangladesh (Dhaka: University Press Limited, 1987), pp. 6-7.

19. Ibid., p. 231.

20. Muhammad Yunus, Steps Needed to be Taken for Poverty Alleviation (Dhaka: Grameen Bank, 1992), p. 6.

21. Much of this information is in the ACCION publications "Linking Socially Responsible Investors to the Micro-Entrepreneurs of Latin America" and "Mexico," a background essay. These are available from ACCION International, 130 Prospect Street, Cambridge, Massachusetts, 02139.

22. "Linking Socially Responsible Investors to the Micro-Entrepreneurs of Latin America," p. 4.

23. "Gran Salto," a pamphlet published by ACCION (n.d., n.p.).

24. Information from fact sheets and an article reprinted from Independent Banker (January 1993), sent by The Good Faith Fund, 400 Main Street, Suite 118, Pine Bluff, Arkansas, 71601.

25. Information from brochure "Opportunity International: Summary of Accomplishments" (Opportunity International, P.O. Box 3695, Oak Brook, Illinois, 60522).

26. Opportunity International, 1992 Annual Report, p. 3.

27. Ibid., p. 1.

28. Opportunity International brochure, "Just From Reading the Bible..." (n.d., n.p.)

29. Information on the Trickle Up Program from the 1992 "Trickle Up Program (54 Riverside Drive, New York, NY 10024-6509).

30. Ibid., p. 1.

31. "Fact Sheet" published by FINCA INTERNATIONAL, INC. (901 King Street, Suite 400, Alexandria, Virginia 22314).

32. Ibid.

33. Brigitte Berger, "On Cultural Sources of Prosperity," The World and I (August, 1992), pp. 453-461; p. 454.

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