It is one of the great paradoxes of the developing world. Those individuals in most need of banking services and credit are the most likely to lack sufficient collateral to support it. In the past decade, there has been increasing focus on microfinance as a tool to alleviate poverty and sustain business models.
Microfinance is not charity. There is an increasing perception that charity perpetuates poverty whereas it is believed that microfinance can enable an individual to build on their skills and provide a sustainable method of improvement.
Lendwithcare.org recently launched in the United Kingdom. It is an initiative from Care International UK in association with The Co-operative. We speak to Dr. Ajaz Khan, CARE’s Microfinance Advisor, about microfinance, Lendwithcare.org and what you can do to get involved.
You lived and worked in Bosnia-Herzegovina between 2000 and 2006. Could you please tell us about the work that you did there? What motivated you to make the move to BiH?
Although I spent most of my time in Bosnia & Herzegovina, I was also working in Kosovo from 2002 onwards. Initially, much of the work involved the physical reconstruction of homes, schools, health facilities and water supply systems, that is the infrastructure that had been damaged or destroyed during the conflicts. However, after the reconstruction phase most of my work revolved around creating employment and income earning opportunities. My particular area of expertise is microfinance and I helped to create two microfinance institutions, one in each country that provided thousands of loans to microentrepreneurs, mainly women, to develop their businesses.
Prior to working in the Balkans I had spent around nine years working in Latin America, largely with small scale farmers, and was looking for a new challenge. I had during the 1990s followed the Balkans conflicts very closely. There was a particular resonance for Muslims such as myself who had been born and brought up in Europe – at the back of our minds there was always a feeling that if this could happen in Eastern Europe could it happen in Western Europe as well? I was grateful when the opportunity arose for me to work in the Balkans and make a small difference to improving the lives of those affected by the conflicts. I left the Balkans to go on to work in Pakistan following the Kashmir Earthquake and then Sudan.
Microfinance is a relatively new concept but one that uniquely puts members of the public in a position where they can achieve a great social good. It is different from and more sustainable than giving charity. Could you please describe microfinance in simple terms?