Small loans, big results Microcredit: Catholic Relief Services' project shows strength of investing in women.

April 06, 1997

MICROCREDIT HAS become a buzzword in international development, as well as in domestic efforts to help welfare recipients and the working poor find a solid footing in the economy. But the strength of this idea is best understood in the stories of poor families.

As The Sun's Ernest F. Imhoff reported from Ecuador, microcredit programs designed to provide small loans focus zTC primarily on women, but end up benefiting families and communities. Catholic Relief Services, the Baltimore-based agency featured in Mr. Imhoff's stories, loaned $3.8 million last year to some 33,500 borrowers. Nearly all were women like Maria Carlotta Rosero, whose small loan enabled her to begin raising and selling chickens.

Like most microentrepreneurs, she started small, with a $50 loan. But as her profits increased, so did her family's living standards. Her husband was able to buy new equipment for his carpentry business. For other women, the intangible results of their efforts are every bit as important as their economic success, such as self-respect, community respect and, often, better treatment from their husbands.

Microcredit programs give poor women an alternative to usurers who charge interest rates up to 400 percent. But they also include training in how to manage money and make good decisions. Groups of borrowers usually decide who among them should get the next loans, creating peer pressure to succeed while providing a group in which to discuss business problems and build a network of support.

CRS has a long history of helping those in need around the world. But there is nothing quite as inspiring as seeing their successes in helping families move from poverty to self-sufficiency. Microcredit programs have already reached 10 million poor people, including some in the U.S. Proponents of microcredit have set an ambitious goal of reaching 100 million of the world's poorest people by 2005. No group can do that alone. But, loan by loan, CRS and other lenders are making a difference.

Pub Date: 4/06/97

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