Wokai Blog: Introducing Microfinance To Young Professionals in Boston: Wokai China Microfinance Blog

This blog post was written by Rosie Zhang, Co-President of Wokai Boston Chapter

Tuesday nights are usually quiet for the working professionals in Boston. However, when I arrived at the Lir Restaurant in the heart of the Back Bay on July 27, I found myself in a large crowd of 80+ people. Our team had been preparing for the “Drink for a Better World” event for almost three months and had put together an evening of pleasant food, good conversation and thought-provoking presentations.

Having worked closely with 15 other team members, I was thrilled to see that our event had drawn an extremely diverse crowd. Among the microfinance enthusiasts were finance professionals, students, engineers, newspaper reporters, radio hosts, healthcare researchers and others. One of our reps, Carrie Sun, had brought along her mother. A big supporter of rural development herself, Carrie’s mother thoroughly enjoyed the event and was happy to see so many young people involved in a good cause.

Wokai Boston invited two speakers for the evening. The first speaker, Ben Clark, is a project management officer for the Innovations and Integrated Solutions unit of ACCION International, a U.S. based microfinance organization. The next speaker, Kim Wilson, is a lecturer of international business at Tufts Fletcher School of Law and Diplomacy.

Ben started the topic of microfinance by asking around the room what their current interest rates for their cars and houses were. People started shouting out numbers that ranged from 1.6% to 11% with 5-6% being the average response. In contrast, due to the lack of access to capital in many developing regions, impoverished micro-entrepreneurs often face astonishingly high interest rates, as high as 1000% in some cases. Today, 130 million people around the world receive loans from microfinance organizations, but there are 3 billion people in need of greater access to capital. Ben went on to explain the sustainability and empowerment of micro-credits. One of my favorite quotes from him was: “Charity dollars live one life; microfinance dollars live many lives.”

Kim, having extensive experience working with micro-entrepreneurs in both developing world and locally in the U.S., talked about the broader implications of microfinance, including providing financial tools for savings and creating lending discipline by having group funds. The audience was intrigued by an anecdote from her experience as a loan office in South Boston in the 90s. A seven-person borrower group had done very well in repaying loans for the past a year and half, but one person was behind and had no response to inquiries. Kim’s team did a stake out in a freezing January and waited for him. The rest of his borrower group quartered him in front of his house. Angry and confused, the borrower said to his friends: “you were supposed to be my friends, but now you are my enemies!” For him, it was a sobering moment that emphasized his responsibility as a borrower in a group setting and how his credit impacted others. For Kim, it was an unforgettable experience that had made her realize the power of group lending and its self-sustainability.

Also among the crowd was Duncan Frayne, Vice President and Program Manager of ACCION Beijing Consultation Services, who shared his experience with the audience. China, with $1.4 billion people and a significant need for micro-credits, has had no major progress in a large-scale microfinance effort compared to India, Africa and Latin America.

After the presentation, the audience engaged in passionate discussions with the speakers and the Wokai reps. 20 minutes after the scheduled end, one third of the crowd still lingered around, reluctant to leave the restaurant. Having volunteered for Wokai for almost a year, I thought I was rather knowledgeable about microfinance. However, I walked away from the evening with lots new information.

Despite the lack of statistical evidence of the effectiveness of microcredit, there has been plenty anecdotal evidence that it has been a tremendous source of help for the poor around the world. I have always been a big believer in helping people help themselves, as the old Chinese saying goes: “Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime.” Wokai, with its unique chapter model, is tapping into charitable individuals around the world. Its internet based lending model gives users the autonomy to select borrowers, monitor their repayment rate, and solve the poverty problem case by case and I was glad to be part of it here in Boston.

Check out the event pictures here