Edwina Hunter interviews, Chairman, Edward Kerr and Chief Executive Officer, Robert Dunn of Opportunity International Australia, both of whom are working to raise communities out of poverty, all around the world through microfinance.

LOCAL, Edward Kerr, Opportunity International Australia’s Chairman, visiting onion sellers in the Philippines

Can you tell us a little about Opportunity International Australia and how supporters’ funds are being used?
Opportunity International Australia empowers families through community development programs and small loans. Currently our work is focused in India, Indonesia and the Philippines. Two areas we focus on are: (1) Microfinance and (2) Community development programs. Microfinancing is a way to give people a hand up by making small loans available to families living in poverty. With as little as $70, people can start their own business and begin to earn an income in order to afford the things that we so easily take for granted living in Sydney, such as food, clean water, proper shelter and an education. The people who apply for loans are very poor. With no credit history and no assets, their desire to get out of poverty drives them to succeed. Success allows them to make repayments and it breeds hope for adults, as they know that this is a ticket out of poverty for their kids. As one adult explained, “I expected to live my life in this slum, but I don’t want my kids raising their kids in a slum.” The other way funds are being used is to make sure the programs Opportunity is involved in are as impactful as possible. Opportunity works through local partners in the Philippines, India and Indonesia. The local partner from Opportunity International will go into an area and introduce programs to community leaders and identify those interested. They in turn, hold a town meeting and discuss the opportunity. All it needs is a little spark of interest.

So who does this all work?
Microfinance isn’t just about loans, it’s about insurance and savings and all the other things we consider financial services. There is a lot of information to unpack and it is generally done over a three-day period so that the community has time to understand what it’s all about. From here, small groups of five people then decide to go ahead and those five people will generally guarantee each other’s initial loans. Initially it’s a support structure that helps to build confidence but as everyone progresses and people begin to repay the loans, then the program moves to an individual model. Whether a business opens its doors in Sydney or India, we all need the same things, including the provision for superannuation. In India, the government has said that everyone needs super but how does someone arrange superannuation when some people don’t even have access to a bank account? We suggested to the Indian Government that they make our local partners aggregators for their scheme, since they already did financial transactions with these people. Now there are 354,000 families that have superannuation accounts. On average the typical loan is around $200. Ninety one percent of loans are made to women, mostly mothers, because men are more likely to be employed in contract work as labourers or overseas workers. The women use the loans to start their own businesses, in order to earn a regular income and provide food, water, shelter and an education for their children. Ninety eight percent of these loans are repaid.
For us here in Sydney, the amount of these loans doesn’t seem much and can easily be spent on a family activity. However, overseas the same amount of money makes a difference in peoples lives. Our generosity can make a real impact to people in real need. As the loans are repaid the women grow in confidence and importantly the women begin to earn a credit history. Each time a loan is repaid she is able to take a much bigger loan. She will generally have a shop or a roadside stall, selling daily products like soap or foodstuff. She will also raise animals out of the back of her shop. One amazing businesswomen that we partnered with in India started a small bicycle repair shop which now her son runs. She has become a successful entrepreneur and now runs a restaurant and employs four people. There are many success stories. Another example is about a village in the Philippines. We helped create an industry for the village around weaving cloth. The community built a distribution network and now the village has community assets like a health clinic, a community hall, a chapel and even a basketball court. One third of the people in the village weave and supply all manner of businesses with cloth.

With a small loan, mothers living in poverty can start a small business and provide for their children

What challenges do your clients face?
The ultimate challenges in life are the same whether here or overseas but the complexities of life’s challenges are so much more in these countries than we might face here in Australia. The individual client runs into all the issues that a small business does here but she has no safety net and little help. She is poor and some of these countries place strict restrictions on what women can and cannot do. To succeed, it takes a ton of drive and our role is to come alongside and empower her with a loan as well as some business and literacy training. For the small business owner on our North Shore, they have access to public hospitals, public transport and all the schools because these things are important but it’s not the same overseas. That’s why we try to partner with organisations that are health providers and those who are involved with sanitation or water programs or education or housing.

Are your clients hopeful for a better future?
Our clients have hopes and dreams for their kids just like we do here in the North Shore. They have a fantastic optimism and hope, which comes from their community relationships, as they tend to help each other out. They do community a whole heap better than we do. You see it even in the rubbish tips in Manila. Look at the failure rate of small business here in Australia. The difference in these countries is that they won’t let small business fail, they help each other up. So it’s very inspiring.
A huge benefit for a woman running her own business can often mean that her husband can move back home from working far away which reunites the family and allows them all to work in the family business. The strength that is shown in these communities is something we can really learn from. There is such a remarkable difference between what we are like here on the North Shore or in Australia at large. Sometimes here in Australia, people don’t talk to each other and often people don’t even know who their neighbours are. They may drive into the garage, put the electric garage door down and walk into their own house and hardly communicate with the people around them. It is so different from these communities we see overseas. Life is challenging wherever you are but these clients face more than most. Some of the hardships they face are tackled when they have community assets brought about because these communities helped each other out with microbusinesses.

What other ways are people being helped?
Two of our partners have apprenticeship schemes. They provide loans to women who can start their own businesses and they also provide loans to young men and girls who are ready to learn a trade. They are then matched with masters of the trade so it becomes a master-apprenticeship relationship. This is different from a typical microfinance client who might buy two pigs to breed or bring produce home from the market to cook and then sell food. It’s getting training in a formalised way and building confidence in business along the way, which leads to having access to a much bigger loan. They are both terrific programs because they look after the children of the women who have built up a successful business. They can have an apprenticeship whereas before they wouldn’t have had access. When a typhoon or a disaster hits these countries, the microbusinesses are protected by microinsurance – which they would never have had access to before. There was one story about a loan officer emailing us that he had rescued about 15 of his people from the floodwaters. The loans were rescheduled and Opportunity provided extra food and blankets. Microinsurance is one of the fastest growing areas in microfinance and its actually been working effectively when disaster happens.

How can we help?
It’s easy to turn a blind eye to the rest of the world because people see helping as too hard or they don’t know what they can do to help, so instead they do nothing. We understand that it’s hard to relate to things that you don’t see or experience. Instead it becomes easier to compare ourselves with others closer to home. Kids these days may grow up and think that because they don’t have the latest phone that they are deprived, but in reality this is far from the truth. We know what is happening in other countries and we need to educate people about the real plight of others in a way that is not destructive or distressful. We see this as a justice issue. It is the right thing to do to help people with a hand up. The multiplier effect of the dollar that you give today being used time and time again, means that the gift keeps on giving. It’s very impactful. The more loans made available, the more people and communities will be impacted. By supporting Opportunity International Australia, individuals or businesses can help families start their own businesses and transform their lives, their children’s futures and their communities. Donations can be made direct at www.opportunity.org.au or over the phone on 1800 812 164. Businesses may also like to consider offering workplace giving to Opportunity International Australia for their employees.