I think the “spread too thin” problem you note is the real issue. The services needed to get people to the point where they can take advantage of micro-credit don’t kick back revenues like the micro-credit loans.

I think this is one problem with relying on microcredit alone to solve the problems of poverty. It is certainly a powerful tool and should be a centerpiece of efforts to help the poor. But the reality is that the resources for these services can only come from grants/donations from rich people in rich countries. At least, I’m not aware of anyone who’s found a way to enable the very poorest “help themselves” like is possible through the micro-credit option. Hence, rich people in rich countries can provide a subsidy or continue to watch the poorest die.

With respect to reaching the most needy, one of my criticisms of microcredit organizations is that in some cases they suffer from “mission drift,” that is that over time they tend to gradually shift away from the “poorest of the poor” toward clients who are less poor, better educated, and so forth because they believe such individuals will be less risky to give a loan to.

We saw this in HELP Honduras the first year. Over time our partner NGO began seeking clients who hadn’t been so completely devastated by Hurrican Mitch. Gradually we observed that new clients were being targeted who tended to have suffered fewer losses and who were more literate than the original impoverished families. So my students and I decided to innovate by creating another NGO, which we called Accion Contra la Pobreza (Action Against Poverty). We sought out the very poorest victims of the hurricane and gave them smaller amounts of loan capital independently from our partner. We created smaller solidarity groups and had to provide much more intense business training. But the impressive thing to me was that these so-called “high risk borrowers” actually paid back their loans 100 percent!

In terms of Norbert’s surprise that so few of his post-mission friends had been affected by the poverty they had seen in their Third World missions, I would agree that this is often the case. The reason is that many individuals are somewhat disconnected from the crushing poverty around them. Some are that way as a kind of self-protection because it can be so disturbing and depressing. Also, they do not really know what to do about it because their calling is one of proselyting.

You can find interesting statements by Church leaders who were acutely aware of the ill effects of poverty on the conversion process. Matthew Cowley used to comment that until we helped the poor of the South Pacific temporally, doing missionary work would not be effective. Likewise, Harold B. Lee said that we might as well throw our hats in the air as expect the poor to achieve spiritual growth and stay active in the Church without helping them temporally.

Through our BYU student outreach programs we have discovered that returned missionaries are a huge source of volunteers for summer internships in Third World countries. Many want to go back. For some of them, they really want to understand the suffering that exists and use their new found tools and methods to alleviate the human condition, not only the religious aspects. They are now able to do this because they are not part of a top-down, strict missionary regimen. Instead, they are free to design hands-on iniatives in partnership with the poor that lead to innovative solutions.

Katy Ericson’s post inquires about the costs of volunteering. Most of the participants who go with our organizations are not the wealthy. They do need help. So instead of just reaching out to those who can pay “full fare,” we offer fund raising events and detailed training for them to generate their own required resources. Through their extended families, along with friends, neighbors, ward members, etc. most of them succeed in raising the $2,100-$3,500 needed, depending on where in the world they will be volunteering. This becomes quite viable to achieve.

In a later post I’ll send a list of many of these organizations with their links.

To drastically oversimplify, many people in poor countries do in fact have substantial assets but live in nations without legal frameworks that properly document ownership. Many people in such countries can’t leverage their existing assets to create more wealth, except within a tiny circle of friends and family. In the US (and I suspect in Canada) the most common form of business financing is a mortgage on the entrepreneur’s home. Citizens of countries where it takes 18 years to prove ownership of a property, or a year’s fulltime work and three years’ wages to legally register a business, never have that option.

Solving systemic problems like those documented in De Soto’s book can have a huge long-term impact on the ability of citizens in other nations to lift themselves from poverty. Which is to say, the opportunities for helping don’t end when you stop being a student and start having kids. On the contrary, if you have the education and influence to tackle systemic problems like these, you may also have the power to effect even greater changes for good.

Travis: great point. There has been an increased interest in the relationship between health and microcredit recently. I am certainly not an expert on the subject, but I know that Food for the Hungry has had had some success. Kirk Dearden at BYU will be working with this project.

By the way, I hope this is not a thread-jack, but Kirk, Jini Robi, and Claralyn Hill have been organizing a dinner in Provo with a “microcredit and health” theme in February or March. You can get details here.

For me, serving a mission really opened my eyes about the actual state of the world as opposed to the bubble of middle-class affluence in which I was reared. It changed me deeply, and I was surprised to return to BYU and find so few of my friends unaffected by what they had seen. I found it bizarre and upsetting.

Does missionary service generally result in a broader understanding of the condition of the world? If not, why not?