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by Mehvish Jamal

Microfinance-blog-pic1Although microfinance has been around for centuries, it was not until its popularization by Muhammad Yunus and the Grameen Bank in the 1980s that it came to be viewed as the "solution to poverty." For years it was unthinkable to openly criticize microfinance, but recently critics have started to emerge, and boy, do they have a lot to say. What once was hailed as the beginning of the end of world poverty is no longer a crystal-clear path. Many microfinance institutions (MFIs) have shifted away from the pure vision of alleviating poverty, instead making their goal profit-generation for foreign investors. Characterized by high interest rates, these MFIs have called into question the power of microfinance. Nonetheless, while the path taken by some MFIs is discouraging, the sector as a whole is far from hopeless.

Unlike many MFIs, Banco da Mulher (Women's Bank), which operated as a rotating savings fund (ROSCA) in the area around Santarém between 2007 and 2009, used members' own capitol to make loans. Its members, 52 women members from several women's groups from the region, contributed a certain amount of their savings to the fund each week. This money was then used to distribute loans to women looking to start businesses. Loan seekers had to submit business plans to the group, and once approved, they then repaid their loans with the profits from their business in scheduled increments. Additionally, the women engaged in frequent meetings with the other members to exchange advice and support.

Microfinance-blog-pic2Although difficulties with its internal structure and a restructuring of its primary parent organization, Association of Women Workers of the Lower Amazon (AOMT-BAM), have rendered Banco da Mulher inactive, it is a promising model for member-based associations throughout the region. In order to facilitate learning for local organizations, CEN is in the process of researching and writing up a report that will document and evaluate what worked and did not work for the fund, as well as recommend areas for improvement. Once the report is finished later this year, CEN plans to organize a workshop in the region to disseminate the conclusions.

Banco da Mulher had far more success in its few years of operation than many MFIs throughout the sector. The contrasting structure of many MFIs around the world is characterized by their end goal of profit maximization, not lifting the poor out of poverty. As explained by former microfinance consultant Hugh Sinclair in his book Confessions of a Microfinance Heretic, these MFIs receive money to fund their loans from charitable donations and foreign investors. As these funds come from remote sources rather than local deposits, these MFIs are not owned by their members. Without a sense of accountability to the community and the members of the fund, interest rates at these MFIs are typically sky-high. Yet, the hefty profits that result from these rates do not remain within the community; instead they find their way into the pockets of "distant managers and foreign investors" (Sinclair xiii).

In contrast to these MFIs, the Banco da Mulher was accountable to and managed by local community members, and as such, it maintained interest rates of only 0.5% per month. This is significantly lower than the 80% or higher rates charged by many MFIs worldwide. Loans from the Banco da Mulher produced many successful businesses. From motorcycle rentals to crop sales, women of the Banco da Mulher were able to produce outstanding results once given the financial means to turn their entrepreneurial visions into reality.

Although the self-interested nature of many MFIs can lead to a disillusionment with microfinance as a whole, the temporary yet groundbreaking success of Banco da Mulher in the Lower Amazon demonstrates the sector's vast potential. It is clear that microfinance itself is not the problem; what has created huge debt burdens for many poor individuals are the exorbitant interest rates charged by the many MFIs that prioritize profits above the needs of poverty-stricken individuals and communities. According to Sinclair, MFIs should be structured as "cooperative banks owned by their local borrowers and funded in their national currency" in order to generate the most success for underprivileged communities (Sinclair xiii). While the involvement of foreign investors and a quest for profit-generation has tainted the mission of many MFIs, real community-based microfinance still has the potential to meet its goal of lifting communities out of poverty.

2014 FDDS MehvishJamal 0007-smallMehvish Jamal is an American University student studying International Studies and Economics. She hopes to pursue a career in international economic development.

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Make a Real Difference... Without Having to Leave Home
Those that volunteer have a unique state of mind. They care about contributing to a better society, helping others less fortunate, and using their skills for the greater good. They selflessly invest their time and energy into a cause they believe in, and they thrive from the fact that they might be improving somebody’s life even the slightest. 
 
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A volunteer’s spirit is one of hope, passion, and drive, no matter the age.  To many, volunteering seems to be for young people taking a year or two off from college, or earning their service hours for school requirements. Or it is for the recent college graduates, travelling the world before they decide to start families and develop their professional careers. Well, the reality is that the younger folks don’t possess any more dedication or desire to make an impact than you do. They simply have the flexibility. But what they don’t have is the knowledge and invaluable skills that can only cultivate from a life of professional and personal experience, and that is exactly what we value in each of our volunteers at the Community Empowerment Network.

 
CEN is an organization dedicated to empowering poor rural communities with the ability to rise above their economic challenges on their own terms. Our aim is to provide the tools and resources necessary to help individuals improve their skills and confidence in achieving their own objectives, and not simply handing them a solution with no explanation of lasting success. We have nearly 50 volunteers working towards this common goal. And the best part? Most of them don’t even stray from their home office.
 
CEN offers numerous volunteer opportunities ideal for those on a tight budget and simply cannot supply the funds to travel very far to volunteer. Or maybe you do not have the free time to devote to travelling abroad. We have a wide range of volunteers, many of them professionals and retirees with various backgrounds such as IT, government, and business. We work collaboratively as one team, but you are given the opportunity to directly utilize your existing skills for the mutual mission of improving the quality of life for individuals in poor communities around the world.  
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For example, say you like to write. We care currently looking for a blogger to write for our blogsite, the Empowerblog,  to explore and offer your own personal insights on a wide variety of development issues related to our work. Or maybe you are in the advertising business. We are looking for an Online Marketing Specialistto generate interest in CEN’s community-based tours to the Brazilian Amazon. Do you love online marketing? Our Online Shop Manager will be responsible for maintaining our online shop,which consists of many different products such as handbags and sandals made by an artisan groupCouro Ecológicoin the Amazonian community of Maguary. Your responsibility would include keeping the online shop up to date, implementing and developing ways to increase traffic and sales, and coming up with new products.
 
Why should you volunteer?
 
Through our roles, you use what you know to become an active volunteer, and you learn a lot in the process. You will get to learn more about international development, micro-entrepreneurship, micro-finance, and much more, as well as build new skills while you are developing the ones you already have. Our positions are mostly expected to contribute about 10 hours a month with a minimum of 3 months commitment. Although deadlines are scheduled for certain tasks, these hours are flexible enough for you to work around your own life. Volunteers are happy with the schedule and the ease of working at home, and they know they are making a difference and contributing to a community's success. We have the privilege of bringing people from all different backgrounds, and with various skills, together to make one amazing team. 
 
Please visit our volunteer pageto find out how you can channel your passion and what YOU can do with what you already know to help break the cycle of poverty.  Help empower those living in poverty to help themselves. 
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Thinking Away Poverty

Is it really possible to think away poverty? I believe that it is. That's because the mental state of a person has a lot to do with keeping them there. What a person believes about their situation determines their response to that situation.

CEN strives to show people who live in rural poverty that they are able to give themselves a better life, and that they can have a controlling hand in eradicating poverty in their communities. In the past, CEN's done this by organizing programs that focus on building the right mindsets in program participants. They teach participants to be self-reliant so that they do not have to wait or depend too much on the government or any other outside source for help.

The mindset of self-reliance is not enough to solve poverty by itself: However, it is with this mindset that people begin to truly understand that their destinies are in their own hands.

It is with this understanding that the individual needs to choose to say no to poverty. They have to choose whether to accept the help that is given to them. They have to choose to participate in the skill-building and self-development programs CEN organizes. They, essentially, are the ones who have to decide to make good use of the knowledge they have acquired and change their economic situations. Lastly, they have to choose to think and work themselves away from poverty. No government or foreign aid worker can do this for the individual.

CEN focuses on helping rural community members to make the necessary mindset shift from feeling stuck and helpless, to feeling empowered and self-reliant enough to improve their lives and community. This way, communities can tackle whatever problems and challenges they face, whether in the form of health care, education, governance or a myriad of issues that they will inevitably need to address in the future. This way, they can leave a legacy for generations to come: a legacy that says that self-reliance is a sure route out of poverty.

Claire Abdul-AzeezClaire Abdul-Azeez is a freelance writer and blogger with many passions, including helping the less privileged. She is also the founder of OrganizedProductivity.com, where she regularly blogs. Claire is a CEN volunteer originally from Africa who currently lives in the Ukraine.

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girl texting smI can’t imagine what I would do without my MacBook Pro, iPhone, Facebook or the million other technologies that I take for granted every day. It seems like the end of the world when I’m unable to Facebook message my friend or enjoy YouTube videos. I’ve also cried my heart out for not getting that A in a class or over fighting with my parents about cleaning my room.

My biggest worries are getting into a good college, having an exciting social life and finding a job. Chances are, your worries are quite similar. Though these problems seem overwhelming at times, when I think about it, all of these issues are so petty, especially when I think about the issues that confront people who are less fortunate than me. And that is why I volunteer for nonprofit organizations.

I volunteer with nonprofit organizations not only because I am helping those in need, but also because it helps me gain a better perspective about my own life. Whenever these times come, when I feel like crying about school or having to work so hard, I think about the millions of other children who would love to be in my place. These children who would give anything to attend school for the sake of learning. Children who would love to clean their room because that would mean that they actually had a place to live. In comparison to their realities of poverty, abuse and neglect, my worries seem so insignificant and minuscule.

Many communities in rural areas such as the Eixo Forte lack basic necessities, such as water systems, that are essential to performing any activity. Impoverished families living in these areas make a living through subsistence farming and thus are barely able to support themselves, let alone the costs of constructing a water distribution system and a well. The lack of these basic necessities hinders the education of children and development of the community. Essentially, the lack of basic necessities creates an endless cycle of poverty that the residents in these rural areas are unable to escape.

So while our biggest worries may include earning more money to buy the newest iPhone, there are many people in the world whose worries are finding clean water and putting the next meal on their table. I think it is only right if we take just a few minutes out of our day to appreciate all that we have and volunteer to help those less fortunate. Whether it be volunteering at a local school or donating a few extra dollars to help build wells in rural areas, you will not only give someone else a brighter future, but gain a more enlightened and optimistic perspective on your life as well.

Maitreyee JoshiMaitreyee Joshi is currently a senior at Lynbrook High School in San Jose, Calif. She is an aspiring tech and social entrepreneur and is in the process of founding a social entrepreneurship company to build software technologies to assist the disabled and the impoverished. To learn more, please visit her website.

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LucieneA few years ago, the lives of Margarete, Luciene, and Maria Eugete were notably different. Like many other people in communities in the Brazilian Amazon, these three women faced significant obstacles that prevented them from building sustainable livelihoods. Magarete had the potential to become a successful baker, but her family literally kept eating her profits. Luciene was a skilled tailor, but she needed to find new customers and buy a new sewing machine in order to expand her business. Maria Eugete had plenty of resources, but needed to develop key business skills and discipline in order to more effectively use those resources to get her clothing production project rolling. Plus, the women lacked faith in their ability to really better their lives.  All of these obstacles and more prevented these women from building the successful, sustainable livelihoods they needed to improve their own well-being, provide for their families, and contribute to their community’s overall process of development.

MarareteIt is because of the situations of people such as Magarete, Luciene, and Maria Eugete that CEN ran its cCLEAR Pilot Project in Suruacá from May 2008 to October 2009. This project created a culture of learning via CEN’s provision of information and resources, which were necessary to helping individuals, such as these women, become truly empowered with the skills, knowledge, and attitudes they need to be successful in their endeavors. Indeed, these three women as well as 13 other program participants in Suruacá, Maguary and Jamaraquá developed stronger critical thinking and problem-solving habits, empowerment through an understanding of both their situation and their capability of success, numerous important business skills, and more as a result of CEN’s project.  Their participation in the program not only helped increase their profits, better provide for their families, but also provided them with the strong foundation they needed to become more self-reliant, break the cycle of poverty, and foster long-term, sustainable development.

However, the true test of success for CEN’s work would not come for some time. This is because it was necessary to see if the knowledge, skills, and attitudes developed by the participants would persist throughout the years, thus proving CEN’s work to have a long-lasting effect on the lives of people in Suruacá.  Such empowerment of people in a sustainable manner is paramount to helping communities in the Brazilian Amazon become self-reliant enough to break their cycle of poverty.
 
Thus, CEN is very proud to announce that its project has indeed stood the test of time! During the organization’s most recent trip to Suruacá in February, CEN was pleased to discover that many of the program participants, including Magarete, Luciene, and Maria Eugete, had all made considerable progress in their business endeavors as a result of CEN’s work.


 "A key difference between cCLEAR and other programs I’ve participated in the past is that CEN didn’t give me the answers to my problems but made me discover them myself. This way I learned better ways to solve problems for myself."


Luciene Souza dos Santos,
Participant in cCLEAR Pilot Project


  • Magarete now has great business management skills that allow her to increase her sales. She keeps careful records of her expenses, production, and profit, which allows her to realize that she must respond to higher wheat costs by slightly decreasing the size of her rolls to continue to be profitable. She also applied to a bank loan to produce a greater variety of bread and other products, and thus further expand her business.
  • Luciene and Maria Eugete has a partnership that allows them to pool resources, utilize each other’s strengths, and provide each other with the support they both need to be successful in producing and selling women’s lingerie. Maria Eugete contributed a new sewing machine that Luciene, as the more skilled tailor, uses to produce a lot of the clothing.  Luciene describes Maria Eugete as being “gifted with the mouth”, and thus she makes an excellent saleswoman. Together, they produced and sold 100 articles of clothing in just two months earlier this year, demonstrating the importance of CEN’s work in getting entrepreneurs to collaborate. The two women are looking into creating labels and tags to sell their clothing in larger surrounding cities, thus further expanding their business as well.

It is uplifting to see the tangible effects of CEN’s work in the significant accomplishments of these women, as well as others. The communities are continuing to make solid steps forward on their paths of self-empowerment, self-reliance, and long-term, sustainable development. CEN greatly looks forward to seeing what is next for these and other communities throughout the Brazilian Amazon.

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