Submitted by James Lucas, this post is a continuation of yesterday’s review of microcredit and the United Order.
Here is how microcredit works:
(1) All microcredit efforts have been initially are launched through private donations, beginning with Muhammad Yunus making $27 worth of personal loans to some poor Bangladeshi villagers so that they could buy straw to weave without paying all of their earnings to loan sharks.
(2) All microcredit participants own and run their own microenterprises. The microcredit organization never claims any ownership in the borrowers’ property, not even as collateral for the loans.
(3) The microcredit organization provides ongoing funding as the participants grow their businesses. Ideally the organization is supported by the interest paid on the microloans (an imperfect but easy to understand form of reconsecration of surplus) and is legally owned and governed by the participants as a mutual bank. Self-government also operates more locally in that lending is made to small groups who cross-guarantee each others’ loans and who determine who in the group is to receive new loans.
(4) In providing credit to poor people who would not be deemed creditworthy by regular commercial banking standards, microcredit has achieved amazing results in lifting millions out of poverty. Significantly it has done so by providing the means for them to become self-supporting through their own work and initiative.
Elder John A. Widtsoe of the Quorum of the Twelve once wrote that “the nearer any scheme for economic betterment conforms to the principles of the United Order, the more likely it will be to assist mankind.”See Question #65 here. The success of the microcredit movement, as acknowledged by last week’s Nobel Peace Prize, bears evidence that the principles of the united order are as relevant and applicable today as they were in pioneer times, or as we think they will be in a future millennial age. Indeed, as the demonstrated by the establishment of the microcredit-based Perpetual Education Fund, the principles of the united order may be most needed right now.
If you are interested in getting more involved with microcredit, Warner Woodworth has assembled some good information. You can also contact the Marriott School’s Center for Economic Self-Reliance. I would also recommend a great documentary on microcredit called Small Fortunes which was produced by LDS film makers.