CHAPTER ELEVEN Microcredit: The Financial Revolution It is impossible to realize our goals while discriminating against half the human race. As study after study has taught us, there is no tool for development more effective than the empowerment of women. -KOFl ANNAN, THEN UN SECRETARY GENERAL, 2006 aima Muhammad would dissolve into tears every evening. She was Sdesperately poor, and her deadbeat husband was unemployed and not particularly employable. He was frustrated and angry, and he coped by beating Saima each afternoon. Their house, in the outskirts of Lahore, Pakistan, was falling apart, but they had no money for repairs. Turning Oppression into Opportunity Saima had to send her young daughter to live with an aunt, because there wasn't enough food to go around. for Women Worldwide "My sister-in-law made fun of me, saying, 'You can't even feed your child,' " Saima recalled. "My husband beat me up. My brother-in-law beat me up. I had an awful life." Sometimes Saima would take the bus to the market in Lahore, an hour away, to try to sell things for money to buy food, but that only led NICI-IOLAS D. KRISTOF her neighbors to scorn her as a loose woman who would travel by her­ AND SHERYL WUDUNN self. Saima's husband accumulated a debt of more than $3,000, and it seemed that this debt would hang over the family for generations. Then, when Saima's second child was born and turned out to be a girl as well, her mother-in-law, a crone named Sharifa Bibi, exacerbated the tensions. "She's not going to have a son," Sharifa told Saima's husband, in front of her. "So you should marry again. Take a second wife." Saima was shattered and ran off sobbing. Another wife might well devastate the family finances and leave even less money to feed and educate the children. And Saima herself would be marginalized in the household, cast off like an old sock. For days Saima walked around in a daze, her Al~I'RED A. KNOPF NEW YORK 20!0 HALF THE SKY MICHOCRED!T: THE FINANCIAL REVOLUTION bracelets on each wrist. She dresses well and exudes self-confidence as she offers a grand tour of her home and work area, ostentatiously showing off the television and the new plumbing. She doesn't even pretend to be subordinate to her husband. He spends his days mostly loafing around, occasionally helping with the work but always having to take orders from his wife. Fie is now more impressed with females in general: Saima had a third child, also a girl, but that's not a problem. "Girls are just as good as boys," he explained. "We have a good relationship now," said Saima. "We don't fight, and he treats me well." And what about finding another wife who might bear him a son? Saima chuckled at the question: "Now nobody says anything about that." Sharifa Bihi, the mother-in-law, looked shocked when we asked whether she wanted her son to take a second wife eyes red, and the slightest incident would send her saima infront ~j' to hear a son. "No, no," she said. "Saima is bringing so much to this collapsing into hysterical tears. She felt her whole her remodeled house.... She's an exemplary daughter-in-law. She puts a roof over life slipping away. home near Lahore, our heads and food on the table." It was at that point that Saima joined a women's Pakistan (Nicholas D. Sharifa even allows that Saima is now largely exempt from beatings solidarity group affiliated with a Pakistani mi- Krist~[) by her husband. "A woman should know her limits, and if not then it's crofinance organization called Kashf l'oundation. her husband's right to heat her," Sharifa said. "But if a woman earns Saima took out a $65 loan and used the money to buy beads and cloth, more than her husband, it's difficult for him to discipline her." which she transformed into beautiful embroidery to sell in the markets Saima's new prosperity has also transformed the family's educa­ of Lahore. She used the profit to buy more beads and cloth, and soon tional prospects. She is planning to send all three of her daughters she had an embroidery business and was earning a solid income-the through high school, and maybe to college as well. She brings in tutors only one in her household to do so. Saima brought her eldest daughter to improve their schoolwork, and her eldest child, Javaria, is ranked back from the aunt and began paying off her husband's debt. first in her class. We asked Javaria what she wanted to become, think­ When merchants wanted more embroidery than Saima could pro­ ing she might aspire to be a doctor or lawyer. duce, she paid neighbors to work for her. Eventually thirty families Javaria cocked her head. "I'd like to do embroidery," she said. were working for Saima, and she put her husband to work as well­ "under my direction," she explained with a twinkle in her eye. Saima aima is an unusually successful participant in the microcredit revo­ became the tycoon of the neighborhood, and she was able to pay off Slution sweeping the developing world. In place after place, markets her husband's entire debt, keep her daughters in school, renovate the and microlending are proving a powerful system to help people help house, connect running water to the house, and buy a television. themselves. Microfinance has done more to bolster the status of "Now everyone comes to me to borrow money, the same ones who women, and to protect them from abuse, than any laws could accom­ used to criticize me," Saima said, beaming in satisfaction. "And the plish. Capitalism, it turns out, can achieve what charity and good inten­ children of those who used to criticize me now come to my house to tions sometimes cannot. watch TV." Kashf is typical of microfinance institutions in that it lends almost A round-faced woman with thick black hair that just barely peeks exclusively to women, in groups of twenty-five, who guarantee one out from under her red-and-white-checked scarf, Saima is now a bit another's debts and meet every'two weeks to make their payments and plump and displays a gold nose ring as well as several other rings and discuss a social issue. Topics include family planning, schooling for girls, r86 I87 HALF THE SKY MICROCREDIT: THE FINANCIAL REVOLUTION or hudood laws used to punish rape victims. 'lne meetings are held in the women's homes, in rotation, and they create a "women's space" where they freely discuss their concerns. Many Pakistani women are not supposed to leave the house without their husbands' permission, but husbands tolerate the insubordination because it is profitable. The women return with cash and investment ideas, and over time they earn incomes that make a significant difference in household living stan­ dards. Typically, the women start small, but after they have repaid the first loan in full they can borrow again, a larger amount. 'This keeps them going to the meetings and exchanging ideas, and it builds the habit of dealing with money and paying debts promptly. "Now women earn money and so their husbands respect them more," said Zohra Bibi, a neighbor of Saima who used Kashf loans to buy young calves that she raises and sells when they are grown. "If my oshaneh ?.afar, she yearned to join. So Roshaneh took a leap of husband starts to hit me, I tell him to lay off or next year I won't get a Rthefounder rj. faith: She quit her job at the World Bank and new Joan. And then he sits down and is quiet." Kaslif, with clients in wrote a letter to Yunus telling him that she wanted a villaae (Nicholas to become a microfinancier. He promptly sent her ashf is the brainchild of Roshaneh Zafar, a Pakistani woman who D. Krist r;f) an air ticket to Bangladesh. Roshaneh spent ten K sounds more like a banker than an aid worker. Roshaneh grew weeks there, studying the work of Grameen. Then up in a wealthy, emancipated family of intellectuals who allowed her she returned to Lahore and set up the Kashf Foundation that helped to study at the Wharton School at the University of Pennsylvania Saima. and later earn her MA in development economics at Yale. Many of Kashf means "miracle," and at first it seemed a miracle would be Roshaneh's friends in Pakistan and at Wharton wanted to get rich, but needed to make it work. Pakistanis told Roshaneh that microfinance she wanted to save the world, and so she joined the World Bank. was impossible in a conservative Muslim country like Pakistan, that "I didn't want to create wealth for people who were already women would never be allowed to borrow. In the summer of 1996, she wealthy," Roshaneh said. "I thought I would go to the World Bank and started combing poor neighborhoods, looking for clients. Roshaneh make a difference. But it was like screaming against the wind. Every­ discovered, to her horror, that women were reluctant to take money. where we went, we would tell people to use better hygiene. And they "We went from door to door, attempting to convince women to start a would say: 'You think we're stupid? If we had money, we would.' I credit relationship with us," she recalled.