Is it possible to create a sustainable system that works everywhere in the world? I am lucky enough to know two of them and recently I realized that they have striking resemblance. They are Village saving and lending group (VSL) and Toastmasters (TM).
Since Muhammad Yunus’ winning of Nobel Peace Prize in 2006, the microcredit has been known to the world as panacea for the global poverty. Surprisingly, yet there is no published study that proves it does lift people out of poverty. Still arguments are going on around this theme and people are wondering why Bangladesh, a country replete with microcredit, still remains poor.
For me, microcredit does work, but not for everybody. True, there are cases such as Kiva.org, in which people can directly lend entrepreneurs in the developing countries via internet and withdraw their loan whenever they wish. The repayment rate reaches almost 99%. The great success of Kiva entrepreneurs, however, is not in the money they receive but rather in the international attention and technical support. Actually these entrepreneurs are not there alone; all belong to local or international NGOs called microfinance institution (MFI) and receive constant guidance and supervision from them. It means if these NGOs withdraw, the program will most likely to cease.
By nature, Microcredit demands engagement and commitment of outer institutions, making the system not so sustainable. If people do not succeed, in many occasions, that is because these MFIs did not provide proper support. In fact there are numerous cases reported about people who wind up in more debt. Here in Colombia I’ve met many such people.
The village saving and lending program (VSL) is emerging as alternative for the problem caused by microcredit. While in microcredit the loan usually comes from donors, in VSL there is no external monetary input except initial training. A group of people (less than 20) save by themselves (0.5~2 dollars per week), accumulate asset and lend each other. However insignificant it might seem, this money satisfies urgent needs, fosters solidarity and empowers people tremendously. No negative impact has been detected from this methodology and it has been working equally well in Africa, Asia and Latin America for the last 20 years.
The beauty of this program is in its impact in changing mindset of people; People start making decisions about their own lives and many invest money for education of their children or of themselves. They learn that dream is attainable as long as they make plan and make efforts. Here there is no need for the external agents constantly keeping eyes on. It works and multiplies by itself.
Toastmasters has much in common with saving groups. They equally promote collective leadership, discipline, punctuality and respect for each other. Group saving helps people learn saving skills while Toastmasters help with speech skills. Both groups meet regularly and all members must contribute; In saving group people must save and in Toastmasters people must perform. Both keep rules and regulations agreed by members. In both groups, if you invest little, you end up reaping little, but if you put your time and passion, your constant growth is guaranteed.
In saving groups people help each other economically, and in Toastmasters with encouragement and advice. In saving groups people become creative diversifying their income generating activities while in Toastmasters, people become creative to deliver their messages more effectively. Saving groups work well in many countries just like Toastmasters do. Saving group multiplies by itself mostly by people who believe in its value, so does Toastmasters. Both keep growing and spreading fast. Most importantly both groups help people appreciate others more and often produce lasting friendship.
I think the world is designed for people to be together and help each other. Alone, it is more difficult to grow. I cheer and encourage all Toastmasters out there that you are in the right track for a constant growth. Keep it up!
Everytime you take responsibility FOR someone,you take responsibility FROM them, creating dependency & weakening them. -Rick Warren
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