Wednesday, March 9, 2011

The Ripple Effect of Helping Women

Written by Premal Shah, President and originally posting on The Huffington Post

There are single moments in time that can impact the course of your entire life.  For me, that moment took place when I was five years old, and it centered around the single act of a woman I had never met.

I had returned with my family to the city of my birth: Ahmedabad, Gujarat, in western India.  I had been living in suburban Minnesota for four years by that point, and had yet to remember coming across poverty.  In India, that quickly changed. 

My grandfather was a wheat farmer and like many Gujarati, our extended family is vegetarian -- so when we visited my dad's village outside of the city, we had to go to the local market to pick up fresh vegetables.  On the way there, we passed countless beggars and had to jump over a small stream of raw sewage that ran through town.  I had never seen anything like this in Minnesota, and reflexively tightened my grip around a single rupee coin my mom had entrusted to me.

Then came the moment of truth: while my mom and I were buying vegetables, I noticed an elderly woman beggar in the market watching the two of us. I don't know if it was her steady gaze or the excitement of visiting the market, but the rupee coin slipped from my sweaty hands.  To my horror, it started rolling directly towards the foul stream that I had just leapt over.  The single rupee coin kept rolling, until it came to an almost deliberate stop near the raw sewage.

To my horror, the woman reached without hesitation into the sewage to claim the coin as her own; of course, I didn't stop her.  I could tell she was grateful; after she fished the rupee out of the sewage, she raised her hands to the sky and thanked the heavens.

I was overwhelmed by the sheer injustice of the moment.  To me, a rupee was worth almost nothing (it was worth a few U.S. cents at the time).  But to her, a rupee was worth fishing out of the sewers. It felt like the only difference between us was that my family had moved to America, and hers had stayed in Gujarat, yet our lives were obviously vastly different.

I knew then and there that I wanted to help right this vast wrong.  Why should she be forced to dig through sewage in the developing world, when we had more rupees back in America? 

This moment never left my mind, and when I started college, I knew I was going to study developmental economics. It wasn't until I was taking "State, Market, and Development" during my sophomore year at college that everything came together.  Professor Meier told us about the simple genius of microcredit, and how you could make a small loan to empower an entrepreneur in the developing world.  I was immediately hooked.  Could this be the answer? 

The more I studied, the more promising it seemed.  Especially interesting was the growing consensus that microcredit was often most successful when focused on women, as women tend to help their families and then their communities, creating ripple effects that amplified the power of a microloan.  I couldn't stop thinking about how a loan might have helped that woman step out of the sewage and open up her own stall in the village marketplace.

After a few years working as a consultant and then at Paypal, I was drawn back to India while on sabbatical.  I worked at a microfinance institution, and began to wonder what would happen if you posted microloans on eBay. I tried it, but Ebay's compliance department quickly removed the loan applications.  Still, it got me thinking about combining microfinance with the Internet.  When I saw Matt Flannery and Jessica Jackley launching a site called, I knew right away I wanted to join their team.

Five years later, has enabled almost $200 million in loans from 561,000 lenders to 415,000 entrepreneurs around the world.  81% of those entrepreneurs have been women, a staggering figure which helps demonstrate the perfect fit between women and microfinance.  In order to help even more women, Kiva recently partnered with Dermalogica and strategic partners to create, a campaign to help women achieve Financial Independence Through Entrepreneurship.  The joinFITE campaign enables a contribution of $1 every time a consumer goes to the Web site and enters a code printed on FITE-themed packaging.  Dermalogica, for example, stamps these codes on five of its best-selling products.  Dermalogica co-founder Jane Wurwand has more on joinFITE here.

Looking back, I can see now the effect on my life of that moment as a 5 year old, watching the village woman take my rupee.  I never spoke to her, and I likely never will, and yet she has always been in my thoughts as I have searched for ways to right something that felt was so wrong.  Sometimes I think it's possible to see her in the women entrepreneurs I encounter on the website; when I make a micro-loan to empower a woman living in poverty, I often think of the woman who first opened my eyes.

And so, when I recently had an opportunity to visit a woman borrower to whom I had made my first loan through, it felt like it was all coming full circle.   Zongty Em was a Cambodian silk weaver whose loan I helped fund in February 2008. Zongty needed a $1,000 loan to help pay for raw silk for her weaving business and for her eldest daughter's college tuition (she has 2 daughters).  Like most borrowers listed on Kiva, her loan was 100% funded and several months later it was successfully paid back.

I would never again meet the woman who I had wanted to help all those years ago, but I could meet this woman who I had been able to help, and  hear in her own words what kind of impact, if any, the loan had on her family's life three years later.  So, I took a trip to meet Zongty and learn for myself.
Her weaving business was on the rocks: after paying for expenses, Zongty's daily take home profit was just $1.25.  In other words, she was doing a lot of work for very little money.  But her family's life had been changed in other ways.  Her daughter had used the $1,000 loan to get a university degree in tourism.  Her daughter now worked in a resort, earning significantly more than she would as a weaver. Zongty also told me how her younger daughter wanted to be like her older sister -- and she has enrolled in college and is studying accounting! Zongty, who did not have a chance to complete primary school, was radiant when she talked about her daughters, and it was evident how proud she was of them.

In many ways, microcredit has vastly exceeded the hopes and dreams of that five year old in the street markets of a village outside Ahmedabad, Gujarat.  I had hoped to help right a wrong, and give my rupees to women in need. 

Microfinance created a way to allow people to invest in each other.  And the potential impact went beyond one person: investing in a single woman could help enable education and other change in her family.  Even in a single generation, microfinance had helped Zongty build a better life for her daughters.

Over the past five years, I've been amazed again and again at how micro-lending can help both women and men across the globe.  March 8th, 2011, is the 100th anniversary of International Women's Day, where we celebrate women around the world.  And on this date, I would like to thank all the women that have helped show me my path: from the woman in the village outside Ahmedabad, to Zongty Em the Cambodian silk weaver, to Zongty's daughter - who took her mother's money and invested in her own education.  I'd also like to thank Jane Wurwand of, for tapping the resources of her company to help even more women.

On this 100th anniversary of International Women's Day, please help spread the word and encourage others to make a micro-loan.  While I will never know the story of the anonymous woman that I met as a five year old, I will always remember Zongty and her daughter, and the difference that microloans have made in their lives and the lives of millions of others.