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A Billion Bootstraps (thoughts)

March 6, 2008

A Billion BootstrapsI planned on writing about Wild Swans today, but I didn’t get the laptop until about half an hour ago, and it’s a bit too late for me write a proper review for such a book!  So instead I’m going to tell you about a short, interesting book I picked up and finished today: A Billion Bootstraps: Microcredit, Barefoot Banking, and the Business Solution for Ending Povertyby Phil Smith and Eric Thurman (as an aside, have you ever noticed that non-fic subtitles are really fond of three’s?). I’ve been interested in microcredit for awhile, probably since I read The End of Povertyby Jeffrey Sachs (great book, btw). But somehow, I never got around to reading a book specifically about it; then, it came up in a discussion with some other bloggers (sorry I can’t remember who-remind me in the comments and I’ll edit you in!) and when I visited the library I saw this in the new books section. It has a foreword by Muhammad Yunus (the man who started the modern microcredit movement), and it seemed like a good place to start.

What is microcredit? It’s when organisations, usually non-profit, non-governmental ones, provide very small loans (from around $50 to about $5,000 at most) directly to poor people in developing nations. This allows the borrower to have some capital to help his/her (usually her) business and break a really bad cycle of poverty (for more about that, see Sach’s book). The borrower pays the loan back, and usually borrows a slightly larger one. After a few rounds, the borrower is on her feet and out of extreme poverty (meaning living on $1 or $2 a day). It has been incredibly successful at combating extreme poverty and many of the problems that go with it (preventable diseases, infant mortality rates, utter lack of women’s rights, etc.).

This book is co-written by two Americans, who both come from a business background; one is a philanthropist and the other has served as CEO for several philanthropic organisations. I am not a business person; I went to a liberal arts college, and while I took three econ classes, macro stuff intrigues me much more than micro. No one in my family ‘invests’ in more than a mutual fund or mortgage, and I don’t really know any business people. Which made their tone fascinating. They’re both big enthusiasts of microcredit, and it’s pretty obvious that this book is directed at people who have made a bunch of money in business and are trying to have find a fulfilling charity experience. I had to laugh at a sentence that said something like, “Whether you donated $50,000 or one million.” I probably donate $300 all year; I just don’t have much disposable income right now! Nevertheless, this tone made the book a quick read: it explained microcredit, explained why people should expect their charitable donations to work as much as their investments, explained by microcredit gives you the most bang for your buck, told you some success stories, and then gave you the resources to begin donating to the microcredit movement. And while it was aimed at the wealthy, I think the middle-class can get just as much out of the book, since most Americans donate some money every year.

I really liked that the book didn’t look down on poor people; it begins with the philanthropist recalling his own brushes with poverty, and there are statements like the following throughout:

Poor people often do not need outsiders to tell them about business opportunities. They are keenly aware of opportunities to start or grow a microenterprise. Usually they just need a little working capital. As I got involved in microcredit, two factors became blatantly obvious. First, I was so used to living in a society washed with capital that I had a hard time conceiving of a world where absolutely no borrowed funds were available. Second, most poor people in developing countries are intelligent and hard-working. They know that if they do no work, their families do not eat.

All too often, international aid literature will almost talk-down about the impoverished in developing nations. I appreciate the change! I also appreciated how these two men were aware of women’s issues: there was a pretty extensive discussion (considering that the whole book is short) about how much it sucks to be a woman in an impoverished society. Throughout the book, there are little ‘boxes’ focusing on particular issues (and many of them quote The Economist, which is another reason I liked the book): here’s one about women that I never expected to read in a book written by men (sorry, but that’s been my past experience-I’m not insulting all men). It’s a long excerpt, but it’s about an important issue, so bear with me.

The Economistmagazine in late 2005 detailed the extent of several patterns of gender abuse: “According to one UN estimate…between 113m and 200[million] women are no demographically ‘missing’ This gender gap is a result of aborting girl fetuses and infanticide in countries where boys are preferred; lack of food and medical attention that goes instead to brothers, fathers, husbands and sons; so-called ‘honour killings’ and dowry deaths; and other sorts of domestic violence. It implies that each year between 1.5m and 3, women and girls are lost to gender-based violence. In other words, every two to four years the world looks away from a victim count on a scale of Hitler’s Holocaust. “Women between the age of 15 and 44 are more likely to be maimed or die from violence incited one way or another by their menfolk than thorugh cancer, malaria, traffic accidents or war combined. Poor health care means that 600,000 women are lost each year to childbirth (a toll roughly equal annually to that of the Rwandan genocide).

Throughout the book, the authors present such difficult facts in a very straightforward and optimistic matter; while things are bad, they argue, microcredit can help fix all of this.  The book is very American, in the best sense of the term; from the title to the continued arguments that we can make things better and therefore we should, in a silly way it reminded me of why I love my country so much!

I really liked the idea that you can make your donated dollar go really far (they have a ‘calculation’ where you can figure out how much it costs to affect one person’s life through different organisations in different countries; while this sounds cold, it’s not at all-they’re trying to show that charity overseas is more effective than charity in America, and that lives overseas are just as valuable), as it inspired me that even if I can’t donate a ton, I can help. As the book says,

Unleash the full power of your donated dollars instead of blindly dispatching your money to a general fund that may accomplish very little. Instead of letting resources snooze inside a foundation or donor advised fund [Eva’s note: lmao], find great opportunities and put your contributions to work.

Overall, I thought this was a great, quick introduction to the business side of microcredit (it doesn’t address any causes of poverty, philosophies, etc.-for that turn to Sachs) that motivates readers to find out more and donate to the cause. In that spirit, in the hopes that I’ve inspired you a bit with my review, I’m going to provide some links the book recommends, as well as some further reading. :)

Links: A Billion Bootstraps(the book’s site-you can read a chapter, get info on microcredit, and more), The Global Development Research Center(has a virtual library on microcredit), Microcredit Summit Campaign(has been working to increase microcredit since 1998), , The Microfinance Gateway(one of the biggest internet resources), UN International Year of Microcredit 2005 (self-explanatory)
Books: The End of Povertyby Jeffrey Sachs (I loved this book, in case you couldn’t tell; I read it in my pre-blogging life, so there’s no review to link to) (2005)
Banker to the Poorby Muhammad Yunus (remember how I was saying he’s basically the father of modern microcredit? He’s also a Nobel Prize recipient) (1999)
Give Us Credit by Alex Counts (1996)
The Poor and Their Money by Stuart Rutherford (2000)
The Road to Hell: the Ravaging Effects of Foreign Aid and International Chairty by Michael Maren (1997)
Walking with the Poor by Bryant Myers (2005)
The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good by William Easterly (2006)

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12 Comments leave one →
  1. March 7, 2008 6:27 am

    What a fascinating concept, and one which I’d never heard of before. I’m glad to know there are wealthy people who are concerned about these things and creating some solutions. And writing about it to inspire others to do the same.

    I am so not a money person – I can spend it quite well, of course, but know very little about “making it” except in the conventional ways of going to work and getting a paycheck!

  2. March 7, 2008 6:44 am

    This is not a subject I would have ever considered reading, because if I saw the book I would either think it’s not aimed at me, or it looks boring. Thus I really appreciated your review because it sounds so fascinating! It’s nice to know there’s people out there not only generous with their wealth, but also thoughtful and careful about how they use it to help others.

  3. March 7, 2008 8:10 am

    Thanks for such a great review and explanation of this concept. I had heard of Yunus after winning his award but didn’t know much else about him and this movement. I’m going to look into ordering some of these titles for our library. Thanks, again!

  4. March 7, 2008 2:07 pm

    Thanks, Eva, for this wonderful review! I am completely ignorant when it comes to economics, period. But this book sounds really fascinating. For next year’s homeschooling, Annie and I had planned on examining poverty. We have a book called What If We Do Nothing: Poverty that we’re using as a jumping off point. I’m not sure where we’ll go from there, but I’d really love to examine this whole idea of microcredit. Do you think this is a book that Annie and I would understand?

  5. March 7, 2008 2:38 pm

    A great review! I’m a huge advocate of microcredit. At the org I worked at in Australia, we occasionally gave out microcredit type loans to refugees – always to successful results!

    Have you heard of Kiva.org?

  6. March 7, 2008 4:52 pm

    I think microcredit is a fantastic. I first heard about it about it couple of years ago. I’m glad it seems to be such a successful and growing concept. In a way, it helps people help themselves.

  7. March 7, 2008 5:30 pm

    Oh, a review and a big list of microcredit books! What are you trying to do to my wish list? Isn’t it huge enough already?

    I mean, uh…thanks! :D

    The links really take me back, too. I knew some of those websites inside and out when I was a senior in college writing my thesis!

  8. March 7, 2008 8:17 pm

    RavenousReader, I’m not a money person either-it really intimidates me! This book made it seem much simpler. :)

    Jeane, it was a quick read and very engaging! I’m a geek regarding international relations, though, so I was prepared for something crazy dense if necessary. lol

    Lisa, awesome! You’re such a good librarian. :)

    Debi, I definitely think this is a book you and Annie would understand; it’s written in a straightforward manner. There are a few business concepts/terms that you might have to look up, but not many. You make me so jealous of Annie sometimes!! lol

    Alisia, no-I’ll add it to the post! Ohhh-microcredit w/ refugees in the developed world is an interesting idea (this book only looked at the developing)…I love that it seems to work so well. :)

    Stefanie, I agree-it’s a much more dignified solution!

    Megan, I thought you were the one who had mentioned microcredit, but I didn’t want to say that in case it wasn’t you and you were like “Eva’s losing her mind…” What an interesting topic for your thesis! I did a really big project (100+ pgs) on nation-building and Bosnia, and then a smaller senior thesis on the 1996 Russian elections (around 40). I thought you were a poli sci girl? Are you really an ir girl in disguise? lol (At my school, even though poli sci and ir were in the same department, we had different professors and the ir kids *never* took poli sci classes)

  9. March 7, 2008 9:01 pm

    What a good review! some day, when I have enough money to donate more (right now it’s a mere pittance we donate each year, moving around the world and starting over again has that affect on finances!), this is something I would like to do – ‘green’ investing, and putting my donations where they really affect a life. I’ve been poor, and I know the difference a job makes. The book you reviewed gives me hope that our society can learn how to give better – using a parable, it’s better to give a man a fishing line and teach him how to fish (give him money for a business that he creates and is responible for) than to just feed him for a day – welfare money. Not that money is bad! It’s what we do with it that counts – and microcredit sounds fascinating – helping people start their own business. Thanks, Eva, I’m going to look out for this book now!

  10. March 8, 2008 12:03 pm

    My school didn’t have an IR major, but if I had gone to a school that offered one, I would have been an IR kid. Instead, the best chance I had of being an IR kid was to go poli sci but go heavy on the IR bracket. There were four “subcategories” of our poli sci dept. – IR, Political Thought (which still makes me cringe), American Government (I’m an IR kid with a solid understanding of the combined genius and idiocy of American politics!), and comparative politics – and we had to take classes from each. So, I took lots of IR-ish classes as well as the loosely lumped together history/econ/poli sci classes which constituted what they referred to as an International Affairs Concentration – which is neither major nor minor nor much of anything at all but included some classes I found quite interesting including a capstone seminar in which my class almost went on a fully-funded trip to Nicaragua or Northern Ireland over spring break but since all the irritating prepster kids in my class already had their Cancun trips booked instead used our trip funding to drink wine and eat Chinese food and a literal boat load of sushi with our two weird econ department professors just down the street from school but that’s another very long story entirely. And aren’t you impressed with my school now? LOL!

    So yeah, at some point I read Banker to the Poor, found it very fascinating and ended up extolling microcredit’s virtues and trying to create a means of measuring its capacity to empower women both in developing countries and right here at home in my very own poli sci honors’ thesis which was pretty much the coolest academic thing I did in college. *sigh* Maybe someday I’ll get a Masters and actually do something with all this stuff that I loved so well…

  11. March 8, 2008 1:19 pm

    Megan, book to prepser kids!! Hmmm…sushi or travelling? *rolls eyes* We had majors in international relations and international affairs (but the latter involved a regional speciality) and minors in ir or comparative politics. Your honors thesis sounds really fascinating! Mine was the coolest academic thing I did in college as well. :) You know, last year when I was a senior I decided not to apply to master’s programs because terminal MAs are so expensive, but now I’ve realised I’ll never get a job in ir without one. So, I’m just going to suck it up and take out more loans. Because it really is a love! (Have you considered applying for the Foreign Service? Not sure how you feel about working for the government, though)

  12. March 13, 2008 5:03 am

    Susan, somehow I missed your comment originally, but I agree with everything you’ve said! This is definitely a hopeful book, albeit business hopeful. :)

Thank you for commenting! For a long while, my health precluded me replying to everyone. Yet I missed the conversation, so I'm now making an effort to reply again. It might take a few days though, and there will be times when I simply can't. Regardless, I always read and value what you say.

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