by Chris Horst | Jul 15, 2009 | Blog |
It’s no longer good enough to kill two birds with one stone. We now require each stone to kill six birds. Case and point: While I’m not cool enough to own an iPhone, I have friends who are, and I am continually amazed at its diverse functionality. Mobile communication technology is an absolute marvel in itself, but it’s no longer enough for our phones to make and receive calls from anywhere in the world. Now we require them to provide email, directions, games, web browsing, news, stock trading, and blogging. Daily, the list expands. Are you pregnant and need to track your contractions? Now you can with the Birth Buddy app on your iPhone. You name it – “there’s an app for that.” Microfinance isn’t just about making loans anymore. Traditional microfinance in and of itself is transformative, but the opportunities for innovation on the microfinance framework are boundless.
Clean water is a serious issue around the world; globally, one in six people lack access. HOPE’s program in the Philippines pioneered an innovative, employment-based strategy to address this serious issue. In partnership with PepsiCo, they built a top-notch water purification system right in the branch office. Twenty of their clients took out loans to purchase the water in bulk. These water vendors then load up their bicycles with jugs of water and sell the water in some of the most-underserved communities in the city. Through this model, they collectively sell over 300,000 gallons of clean water annually. Sure, it’s wonderful that our clients in the Philippines can access financial services, but what about the dirty water they drink every day? Microfinance has an app for that.
In the Dominican Republic, many of our clients are able to run a business, but they sadly have family members who are suffering with or have died from AIDS or other sexually-transmitted diseases. When I visited a community bank in the Dominican Republic last year, the loan officer conducted a comprehensive, biblically-based STD training during one of the group’s bi-weekly loan repayment meetings using educational materials developed by a healthcare organization. It’s great our clients there have a safe place to save their money, but how do they educate their children about sexual health? Yep, there’s an app for that.
Recognizing that their clients completely lacked access to Bibles and Christian literature, HOPE Ukraine developed an innovative solution to address this disparity. They have thousands of clients throughout Ukraine and when they started distributing Bibles, the Jesus Film and Christian literature at client meetings, immediately they had created a viable distribution channel for these much-needed resources. Having access to capital is important, but what directs our clients’ financial decision-making and priorities? Do they have access to God’s word? You guessed it. There’s an app for that.
(Chris)
by Chris Horst | Jun 15, 2009 | Blog |
Perhaps the most enduring symbol of the Soviet experiment is their architecture. During the spring of 2007, I lived in an oft-forgotten corner of Romania, working to expand
HOPE’s work into the country. As with all former Soviet republics, Romania’s cities are filled with massive apartment blocks, exemplified in this picture which was taken from the window of the apartment where I lived.
Romanian Apartment Block
They aren’t pretty. These concrete, gray monstrosities line every street, each one in a different state of disrepair. Not only do they blight these communities, but it also made navigating Romanian cities a nightmare (try finding your apartment when all the buildings are carbon-copies of one another).
The shared common space of the buildings was disastrous. The façade, lobbies, and stairwells –the commons–were always in terrible condition. The interesting thing about these buildings was that once you reached the door of the apartments, the “home” began. Inside, many of the apartments were actually quite nice, though you’d never know it from the outside.
The Communist regime built these concrete palaces but did a poor job (read: terrible) of maintaining them. Individuals buy the apartments within the building, but not the building itself. As a result, nobody maintains the lobbies, the landscaping or the exterior walls. Individual apartment owners simply fend for themselves, meaning the majority of urban Romanians live in ugly housing. The Romanian government proved time-and-again that it was a terrible landlord.
Under Communist systems, the government serves owns the real estate. The
tragedy of the commons is just one of a litany of Communism’s fatal flaws. We see glimpses of this economics reality every day in simple things like the way we drive rental cars (versus our own cars) and in the condition of dormitory bathrooms. Successful economic systems take the tragedy of the commons seriously, acknowledging that when “everyone owns it, nobody does.”
by Chris Horst | May 15, 2009 | Blog |
In Kinshasa, Congo, a sprawling capital city in sub-Saharan Africa, HOPE International has a branch office with over 30 Congolese staff members and 5,000 clients. One issue for our branch manager is the provision of quality health insurance for the local staff. Brian, a friend of mine who managed this office for a few years, shared a story which typified this challenge.
Over the course of a few weeks, a number of the local staff members stepped into Brian’s office and shared that the doctor connected with their insurance plan was misdiagnosing their problems. They shared that he treated them poorly, overcharged for his services and failed to appropriately address their health concerns. As the complaints piled up, Brian paid the doctor a visit.
When they met, Brian confronted him with the frustrations and complaints of his staff, advocating on behalf of those who this doctor had wronged. While Brian shared, the doctor interrupted and said, “Well, have any of them died yet?”
Talk about confusion on how success is defined. No, none of the staff members had died—but that doesn’t mean that he was successful! Defining success is critical to the success of any organization. Recently, I have spent significant thinking about that in regards to HOPE’s work.
One of the primary reasons I believe so deeply in HOPE’s work is because of HOPE’s commitment to the proclamation of the Gospel. Woven into the fabric of our organizational culture is a belief that the story of the cross truly changes lives. Helping the poor in their physical state is wonderful and important, but if we are just helping those that are oppressed become oppressors—is that success? Is it success if we are helping vulnerable individuals create wealth only to neglect their communities once they obtain it?
I believe in HOPE’s holistic approach because I believe in the power of the Gospel to reshape attitudes and soften hearts. When that happens, and hearts are changed, then we achieve success. Then we see our clients begin to reflect Christ’s love back into their communities as they rise out of poverty.
Clients like Berky & Rafael, a Dominican couple who started a school for the poorest kids in their neighborhood with their business profits. Clients like Oleg who started an aftercare ministry for men coming out of prison, providing many of them with jobs in his furniture manufacturing business. They have given back to their communities because their hearts have been changed. That for HOPE, and nothing less, is how we define success.
by Chris Horst | Apr 15, 2009 | Blog |
A few weeks ago I met with a church group in Boulder, Colorado. One of the group members asked pointedly, “Why do you charge interest to the poor? Why not just offer interest-free loans or grants?” I started sharing a lengthy, detailed response when I was interrupted by another member of the group— “It’s not that complex,” she said, “It actually makes a lot of sense why they charge interest.”
She shared that when her practice first opened, decades ago, she provided free counsel to underprivileged women—single mothers, former inmates, etc. “They rarely showed up for our scheduled sessions. If they did show up, they kind of blew it off.” She went on to discuss why she now charges these at-risk clients. While she discounts her service significantly, she still charges a fee. The change, as she described it, has been remarkable. “Now these women value my services. They come on time, they are invested, and they soak up every minute of their sessions. It’s been a dramatic shift since I’ve started charging a fee.”
I smiled sheepishly and said, “Yes, thanks for your comment. That’s why we charge interest.” Her simple story from her counseling practice, and the clear personal conviction with which share shared, powerfully communicated what no amount of complex development theories, supportive statistics or quotes from field practitioners could. It just made sense.
Ok, so it works logically. But, as Christians, we are not always called to act logically. At times, we’re called to act contrary to what “makes sense” to everyone else. The Bible actually has a lot to say about this subject. Some of it, at first glance, actually has made me squirm. Exodus 22:25 says “If you lend money to one of my people among you who is needy, do not be like a moneylender, charge him no interest” (NIV). That feels fairly straightforward. It seems clear that we aren’t to charge interest to the poor. Upon first seeing that passage, I began wondering if working at HOPE was even biblically permissible!
The Hebrew word for moneylender, neh’-skek, as used in this passage, is also used in Nehemiah 5:7, when Nehemiah rebuked the wealthy in his community for taking advantage of the poor. “I pondered them in my mind and then accused the nobles and officials. I told them, “You are exacting usury from your own countrymen!” Here, it is translated as “extracting usury.” The word used in both of these verses, in Hebrew, literally means “to bite” or “to strike with the sting of a scorpion.”
I am by no means a biblical scholar. However, after doing some research, there seems to be fairly clear consensus that these, and other similar OT passages, are an indictment of usury and exploitative interest. The Bible is clear in its condemnation of profiting off the backs of the poor. And, make no mistake about it; God has a strong distaste towards charging exorbitant interest rates to those on the margins.
What HOPE is doing across the world, however, is trying to put moneylenders out of business. Whenever we start working in a new community, we undercut the loan sharks. While it is common for these loan sharks to charge 200 or 300% APR or more, HOPE is offering reasonable and transparent rates. HOPE’s rates are a breath of fresh air for the poor who have been trapped in poverty as a result of these moneylenders.
Through charging interest, HOPE has sustainable programs, which treat our clients as clients, not as needy recipients. They value the services we provide—because they experience the dignity of legitimate exchange and because the rates are clear and reasonable! We are bringing justice in the communities where we are working, as we seek to strip loan sharks of their clients. I believe, just as the psychologist from Boulder said, that charging interest to the poor “just makes sense”—logically and biblically.
*Thanks to my former colleague, Dave Larson, upon whose research I drew upon for this.
by Chris Horst | Mar 15, 2009 | Blog |
As a tribute to the late Paul Harvey, who passed away last month, I’d like to share “the rest of the story” of HOPE’s beginnings. You think you know how HOPE International began? Yes, the Ukrainian pastors approached Jeff Rutt (HOPE’s founder) and his church and asked them to stop with the hand-outs. And yes, HOPE began with twelve enthusiastic Ukrainian entrepreneurs shortly thereafter. But, do you know what happened in-between those two incidents? The story is actually a bit grittier than what gets printed in the brochures.
As HOPE’s web site history correctly states, Jeff “returned from the trip with a strong drive to find a solution. He plunged into research and eventually discovered the concept of microfinance.” “Eventually” is the key word. When the Ukrainian pastors approached Jeff in 1997 and asked him and his church to change their missions strategy, Jeff started thinking. What these pastors asked for was a long-term, sustainable solution to the abject poverty which existed in their communities.
Jeff and his church thought through and researched close to 50 different ideas and eventually landed on a promising plan. The plan they decided on was to help these churches process and sell sunflower seeds, as sunflower seeds are one of the most abundant resources in Ukraine. They wrote a comprehensive business plan and then raised $2,000 to buy a top-of-the-line sunflower seed processor. Through this plan, Jeff estimated the Ukrainian church members would be able to generate thousands of dollars to fund the ministry of the church, eliminating the need for his church to bring the hand-outs.
They excitedly took care of all the shipping and logistical issues to ensure it got to Ukraine. Jeff led a group of enthusiastic members from his church to Ukraine to be there for the delivery of the machine and to help train the Ukrainians on how to use it. They celebrated the machine’s arrival, took their pictures arm-in-arm with their Ukrainian friends, and flew back home—solution found!
Not exactly… One year later, when Jeff and the church returned, they found the machine exactly where they had left it. The Ukrainian church leaders were embarrassed to even show them the unused machine. “There was absolutely no evidence it had been used…it was in the exact same spot we had put it,” Jeff shared with me. Cobwebs and dust littered the gears and levers. Remarkably, the processor hadn’t moved an inch from where it had been delivered. It hadn’t even been turned on.
Why did this happen? The issue, as Jeff describes, was ownership. “It wasn’t their idea. It was our idea. When you have your own idea, then you will do whatever it takes to try and make that idea work, but they didn’t have any ownership of this idea.” Ownership is the name of the game. Often, charity, while well-intentioned, fails to truly stimulate long-term change. Even in the case of providing an income-generating piece of machinery, Jeff found that without local ownership, the idea and machine wasn’t ultimately theirs.
We need to continue to find creative ways to partner and empower the poor, to break the perpetuity of poverty. Real transformation and development happens when we partner with local ingenuity and ideas. Jeff and his church learned that lesson in a very real way—and HOPE was birthed out of that realization. And now, today, in some of the most challenging communities in the world, hundreds of thousands of industrious and innovative individuals are having their potential, dreams and ideas awakened and resourced. In the words of Paul Harvey, “And now you know…the rest of the story.”
(Chris)
