MICRO FINANCING AND GRACE

by: Pieter Bos
date: 2/5/2007
Category: Society

This article is the follow-up of a discussion with a banker on micro financing. After that discussion I found myself upset, and continuing our discussion in my soul long after we separated. It took a while before it dawned on me what I had missed: grace! How can micro financing be a means to earn money?

0 In short:
I understand poverty to be a spiritual problem. Micro financing as a way to make money is an economic approach to address a spiritual problem and therefore it will fail. God gives many suggestions with economic relevance but in a comprehensive (spiritual, it you like) setting, to alleviate poverty. In tithing He gives an alternative way of thinking.

I am not an economist; I am a thinker. Two of my articles that touch on the subject at hand are:
- “Africa’s poverty and her hope”, which treats poverty as a spiritual problem and shows spiritual approaches to break out.
- “Tithing and Eternity”, which shows an interesting aspect of “resourcing” from a spiritual perspective.

1 Definition and context.
The short definition of micro finance is: “banking for the poor”. A more elaborate definition, still covering many variants, is ”Providing unsecured small amounts of money to the poorest portion of the populations in developing countries, to help them start a self supporting business”.
The internet provides an enormous amount of data and insights. One quote, from Small Enterprise Development Agency (seda) in South Africa, covers my initial indignation to write this article: “There are a number of not-for-profit organisations who are active in this field, and who focus on developing entrepreneurs. There are also commercial micro finance businesses who are profit-focused; be careful of dealing with these - their interest rates are often very high and their conditions onerus”.

2 An economic solution to a spiritual problem?
Poverty is a spiritual problem, a curse or a circumstance connected with a curse, however severe this may sound (see the article on Africa). If poverty is a spiritual problem, a solution can only be strategic if the spiritual component is recognized. A purely economic approach cannot be structural.
Micro financing is a structural approach only in the economic sphere: it is indeed more structural than continuously feeding the poor, which does not bring about any structural improvement, because it only deals with a symptom: hunger.
Other approaches, like providing jobs, providing education/training, establishing women’s rights, are more structural, because besides the economic aspect, they carry social/spiritual aspects. Each of these approaches is certainly very important. However, when the focus in these approaches remains mainly on the economic results, the social/spiritual aspects are easily abused, giving way to ungodly values. Any solution needs to be evaluated in all its aspects.

3 God hates usury.
When I asked the banker about the interest rates he is charging he was doubly evasive. First he told me at how high a rate he borrows the money himself, and then he said that he lends “mostly under 20%”. This banker is working in Eastern Europe. In Africa we heard of rates up to 35%.
Lending mostly under 20%, and up to 35%, that is usury. God hates usury. These rates are so purely economically determined, that they strip micro financing of any spirituality. This cannot achieve anything against the spiritual condition called poverty. A banker might say: But how can a bank then make micro financing profitable? The bank cannot and should not ever try to earn any money through micro financing! Stronger: how does the bank dare to suggest earning money over the backs of the poor?
The founder of micro financing, Dr. Mohammad Yunus, author of “Banker to the poor” (1997, ISBN 90 5689 057 3), wanted to help first of all; he took risks in order to help.

4 This type of micro financing lacks grace and sometimes increases poverty.
If, as I believe, poverty is a spiritual problem, the question must be asked: what is the spiritual aspect, and what is a comprehensive approach? May I refer here to the article on Africa.
When in micro financing payment is due, the sword of Damocles is hanging over your head, so to say. Besides the glorious reports from many banks in Africa and Asia, there are (as many?) reports and testimonies where in the end the banks owned huge tracts of land, negotiating with international investors for their economic goals. These bankers do not care about their former micro financing clients, who did not make it (and who are now poorer than ever!!).
In Africa we, especially my wife Helene, met a few promoters of micro financing but also a number of serious antagonists.
An economic motivation to micro financing denies the aspect of grace.

5 Tithing is paying “after the harvest”.
God established tithing as a way of life; see the article mentioned above.
I am introducing the concept of tithing here not as an alternative to micro financing, but as an alternative way of thinking.
I see no fewer than six beautiful aspects in tithing:
1. In tithing you pay not at a fixed time but “after the harvest”.
2. In tithing you pay not according to your debt but according to “the harvest”.
3. In tithing you pay max. 10% and not “almost 20%” or even 35%.
4. In tithing you pay not to an intimidating financial institute but to a merciful God.
5. In tithing your payment releases wealth for Kingdom purposes, whereas paying to a bank accumulates wealth for survival purposes.
6. Tithing does not require the trust and calculation of the bank towards the aspiring business(wo)man, but requires the trust and faith of the aspiring business(wo)man in the gracious Heavenly Father. And that dependence on God, that trust in God is the very entry for God to move in with his grace and abundance.
These are six elements of grace that the banks “cannot afford”, economically oriented as they are, trying to survive. NB: survival, in the economy or wherever, is an ungodly motivation, at any level of society, by any individual or institution in society; see my article on tithing.

6 The banks have a limited role in poverty alleviation.
Since poverty, by its very nature, is spiritual and since the bank, by its very nature, is economic, the bank has no key role in poverty alleviation. The bank has got money, but money is not the key. This must be noted by bankers, and by institutions, ngo’s, and ministries, involved in poverty alleviation.
NB: I am not saying that the bank is un-spiritual or anti-spiritual. What I am saying is that the economic realm is smaller in scope than the spiritual realm. Therefore, when an economist tries to explain and cover all of life, speaking into a larger realm than fitting to his discipline (and many have done so), he steps outside his limited and limiting boundaries. It is then that economy, and a bank, run the risk of overlooking, substituting or even denying the spiritual. When an economist manages to observe the limitations of his realm, and observes the wideness of the moral and spiritual realm, and starts to support a ministry that stands in that wider realm, he can be of great help with his money and experience. A bank as an institution is purely economic; a bank as an organism can widen “her realm” and do social things, outside the economic realm, but in that case, of course, without the motivation to make a profit.
An approach might be that the bank gives its tithe (many businesses do) towards micro financing, to be carried out by a mercy ministry. This ministry then should bear in mind, and facilitate, that the dependence on a financier has and should have the element of dependence on the grace of God, so that the way for God is not blocked but opened for Him to move in with his grace and abundance!
An example is provided by the publisher of my book on nations: Sovereign World Ltd is an economic entity, making money by publishing (Christian) books; Sovereign World Trust is a charity, giving away thousands of (those) books to pastors in Third World nations.

7 Conclusion.
As long as micro financing is undertaken as a way to make money, it is an economic approach to a spiritual problem; it will fail, or even increase poverty.
To alleviate poverty, we should avoid a one-sided economic approach, which is by its very nature limited, and potentially damaging. Mercy ministries need banks, but cannot hand over the control to them, because the “mercy” aspect is only, if anywhere, safe in the hands of a mercy ministry. God gives many suggestions with economic relevance but in a comprehensive (moral, social and spiritual) setting.
Tithing is not a law but a way of practically confessing your dependence on God and at the same time involving yourself in Kingdom projects... like alleviating poverty.

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