Johns Hopkins Gazette: November 13, 1995

On Campus:
Forum Provides Funding to Women in Developing Countries

Mike Field
Staff Writer

     In a forgotten barrio near the city of Santo Domingo in the
Dominican Republic, where a black and fetid stream runs past tin
shacks and barefoot children play their games amid the debris of
their more affluent countrymen, a woman has started a business.

     Her name is Balbina, and like many of her neighbors she has
endured some of the worst poverty in the Western Hemisphere in a
country where the gross domestic product stood at only $950 per
person in 1991. At dawn each morning Balbina builds a scrap wood
fire beneath an enormous black kettle on the path before her
house. In the kettle she fries chicharron, the popular meat dish
sold commonly on the streets of the capital city.

     Every evening Balbina's husband and four young men from the
community sell Balbina's chicharron. The money they earn helps
keep body and soul together; a small portion of each day's sales
goes to repay the loan that helped make the business possible.
Balbina says her business would never have come to life if she
had not received help. Like other entrepreneurs around the world,
she discovered that an appropriate-sized loan at market rates
could make the difference between success and failure in her
struggling concern. 

     But in Balbina's case, the total loan amounted to just $80,
an amount so small that ordinary lending institutions are simply
unwilling to get involved. Instead, Balbina was able to borrow
the money through the Women's Opportunity Fund, a growing
international effort that promotes economic development by
lending small amounts of money to women entrepreneurs in
developing nations. 

     Recently, a group of women associated with the Johns Hopkins
University Women's Forum decided they wanted to participate in
this unique experiment in grassroots-level economic aid. 

     "One of the things that we are trying to address is helping
women help each other," says Gayle Mowbray, a senior sponsored
projects officer at the School of Medicine and chair of the
Women's Forum. "This is an opportunity for us to be a little more

     On Monday, Nov. 27, the forum will sponsor a special program
about the Women's Opportunity Fund at 7:30 p.m. in the Garrett
Room of the Milton S. Eisenhower Library on the Homewood campus.
Susy Cheston, executive director of the fund, will present a
slide show and lecture on the organization's work in eight
countries, to be followed by a question and answer period and
homemade refreshments. Admission to the event is free, and it is
open to the public.

     "The Women's Opportunity Fund started in 1992 as a response
to the need to make a real impact on poverty in developing
nations," says Cheston in a telephone interview from the fund's
Chicago headquarters. "There has been a growing trend in the
field of international development to recognize that
micro-lending can have a tremendous impact on a person's life. A
loan of just $50 can often double a woman's income in many of the
most undeveloped economies."

     The fund seeks to identify and work with "the poorest of the
poor" in countries ranging from Columbia to Zimbabwe. A revolving
pool of money that is meant to cycle in and out of the community,
each locally administered loan fund represents not a single loan,
but a line of credit for program participants. When the first
loan is paid off, women entrepreneurs are encouraged to apply for
a second, larger one. The idea is to gradually capitalize their
businesses in small, incremental steps.

     Borrowers are organized in a group structure for solidarity
and support. Even though loans are made to individuals, repayment
is looked upon as a group obligation. Often, other members of the
group will step in to help a member with repayment if she has
suffered some financial setback. The incentive of being able to
borrow larger amounts--and thus expand her business--keeps most
loan recipients closely tied to their repayment schedule. The
Women's Opportunity Fund has a near-zero default rate and a
repayment rate that most commercial banks would die for.

     "In five of our eight projects we have a 100 percent
repayment rate," says Cheston proudly. "And in the other three
it's right around 95 percent." She credits the group solidarity--
many of the individual trust funds have chosen names like
"Aspiring Women" and "Women United for Progress"--for keeping
individual members on course. "The women tend to really band
together because they know if they don't they'll get stuck." The
market-rate interest charged on the loans helps to grow the loan
pool and cover the small administrative costs. Enlarging and
creating new funds is the responsibility of the international
organization headquartered in Chicago.

     "I think the thing that is most important is that when you
give a woman a loan you have established a business
relationship," Cheston says. "This is no handout, but an
encouragement of self-reliance. Any difference made in this
woman's life is made by her. She can choose to spend her extra
income on providing an improved diet for her family, or
installing a new latrine, or shoes for her children. It's up to
her because she's the one who earned it."

     It is this emphasis on autonomy and local control that
appeals to Cheston. She says the Opportunity Fund is unique
because it delivers maximum effectiveness with minimal dollars:
"There are lots of different interventions on behalf of the poor,
but for me, this model is the most powerful because it enables
and perpetuates itself."

     "While the Women's Forum is not at the stage where we're
prepared to take this on as a personal project, we do want to
support the efforts of a group that helps women support
themselves," Mowbray says of the upcoming event. "Our advisory
board elected to support the Women's Opportunity Fund by
sponsoring this event. We hope men and women from across the
university and in the local community will join us to learn more
about how they can help."

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