Microfinance has largely become a city-based endeavor, but one example suggests it would be more useful if focused on rural communities
Microfinance -- the practice of personal small loans to spur creativity in developing nations -- has well-known rural roots. Of late, I had assumed that the practice had become a city-based endeavor, in concert with other programs, targeting the world's burgeoning urban populations.
Time spent in Africa earlier in the year did not change that perception.
However, after following up with community economic development friends back home, I learned that fostering a rural middle class should spur reflection among those passionate about cities. Sometimes, finding a way to keep a meaningful rural existence trumps city life.
According to Cole Hoover, director of programs for Seattle's Lumana, whose work focuses in rural Ghana:
Although there is an amazing potential for growth and innovation in cities and urban areas in Africa, I think it is important to recognize that it's not for everyone. Many people do not have the resources or connections to migrate to cities and some, quite frankly, even when possible, do not want to do so.
Lumana is a small, Seattle-based organization founded by young, multi-national entrepreneurs. In Ghana, Lumana helps people reach their personal and financial goals through microfinance, business education, planning for savings, and local mentorship. Lumana also employs four Ghanaians who work in rural areas, out of choice and for connection with their communities.
According to Hoover, these Ghanaians have affinity for their home villages, fellow residents, and a slower pace of life. In addition, they take pride in helping to lead operations that can make rural areas more livable.
Hoover's observations confirm Lumana's rural-based initiatives:
There is an amazing amount of people who appreciate their traditional way of life and the slower pace that rural life allows. We initially got involved working in rural Africa because its people are some of the most underserved in the world. It is our goal to use our programs to do community economic development that increases opportunities for rural people and makes it easier for them to thrive in the villages they choose to call home.
Today, microfinance work focuses on cities more often than not, leaving a huge amount of underserved populations in rural Africa, said Samantha Rayner, executive director of Lumana. Rural areas experience poverty based on disconnection from services and resources.
"Poverty does not just mean having no money," Rayner explained. "It means having no opportunities."
Hoover told the story of "Anna" from the village of Dzita. Anna was a case study of Lumana's accomplishments since 2010, helping rural Africans get limited available resources, including access to basic services, such as health care, drinking water, education, and a consistent income.
It was in rural Dzita, not a large city like Accra, that Lumana also helped villagers understand how to make their businesses more profitable and to prepare for unforeseen emergencies by creating specific savings plans for education, future businesses, and emergencies.
In addition, in a three-day class, villagers typically learn to better understand supply chains, small and medium-sized businesses, and how they influence and affect the total economies of the rural communities.
"Rural Africa is an amazingly beautiful place," Hoover explained. "You see and feel it in the bright-colored clothing, laid back way of life, and support of a close-knit community of hardworking and collectively-minded people"
I queried Hoover on the fundamental precepts of urban poverty, something I saw firsthand in several instances overseas, and considered in recent writing about Gary Hustwit's film, Urbanized.
Hoover acknowledged the shared burden of urban and rural poverty. But he cautioned that for many people in Africa, moving to the big city is not the goal:
Rural areas still have many endearing aspects that people are sad to lose when forced to move on when faced with a lack of opportunity. Rural Africans are some of the most amazingly resourceful people on Earth. They live with a little, and do a lot. Despite the constant poverty many experience on a daily basis, they learn to get by, supporting themselves and those who they love.
Rayner elaborated on the limits facing older generations in rural areas:
They have been around and have deep roots in these communities, including families, established businesses, and homes. However, many times, they struggle to make ends meet because of the lack of opportunities. We try to help by addressing their limits on accessing capital and teaching better ways to save and make good business decisions with the money they earn. With many of these people, their life is in the rural villages, so we want to help make it easier for them to thrive there.
Based on Lumana's learning about generational views of the city, the children often do not want to leave their villages. Both Hoover and Raynor contrasted American assumptions about their own "Gen Y" -- often labeled as an increasingly urban-oriented cohort.
Rural communities appeal to younger Africans, at a fundamental level, Rayner said:
Many young people are not rushing to the cities because they want to, but because it is their only option. A growing number of young Africans are flooding the big cities in search of jobs, leaving behind a better quality of life at home. Many are there to advance their career, go to university, or to make increased amounts of money with opportunities only available in the city so they can remit money back home to their families living in the rural areas.
Based on Lumana's three years of work in Ghana, young people who move to urban areas often do not get better jobs, a university education, or more income for their families back home. Rather, many end up living in worse conditions than circumstances they left, in areas far away from those they hoped to help.
Ironically, Hoover concluded, "many are looking for ways to advance their careers, become educated, and then return to the rural communities they love best."
Sitting with Lumana representatives back home in Seattle, I could only wonder whether recent emphasis on cities risks losing sight of universal principles, easily forgotten in an all too competitive world.
Hoover and Rayner referred me to their lead Ghanaian loan officer, Eric Fiazorli, who spoke of helping the rural poor, his family, and community. His closing words need no elaboration:
Working in my community is important and I want to find ways with my life to change the rural places I love so much. I want the future to be better for my family to grow up here.
For more about Lumana, click here, or see this recent video from Seattle's PBS affiliate:
Images: Charles R. Wolfe.
This article also appears on My Urbanist, an Atlantic partner site.