Did the Microfinance Industry Sow the Seed of Instability?


By J. Yanqui Zaza ([email protected])

Beginning 2004 to the date of the August 26, 2018 article written about BRAC’s $330 loan lent to 27,010 clients, I have come across many petty retailers. I interacted with them at Red-Light and ELWA Junction in Paynesville; at Caldwell Junction and on Randall Street in Monrovia, Montserrado County in 2004, 2013, 2017 and 2018. I bought goods from them in Kakata, Margibi County as well as in Gbarnga, Bong County, and Ganta, Nimba County, in 2013 and 2018 respectively. I observed them in Zwedru, Grand Geddeh County in 2013, and I talked with a few of them in Zorzor, Lofa County in 2018.

They sell a few merchandise, some in wheelbarrows, some in buckets, and others in hand. Some of the inventory is made up of a few pairs of socks, six to ten T-shirts, a wheel barrow full of assorted goods. Some sellers run behind moving cars to sell one to two sticks of chewing gum, etc. Was it possible for these petty traders to make a profit with a small inventory, my colleagues and I have and continued to wonder? If they are making a profit, are the school-age children using the retail-business to escape the duties of teenagers such as school attendance, for example?

During the 60s and 70s, adolescents, including me, sold cornbread, pop-corn, cool-aid, roasted meat, etc. to augment the meager wages of our parents. Nowadays, many of the school-age children have no parents and have to fend for themselves, I surmise. In fact, UNICEF 2016 Report says “…approximately 62%, or nearly two-thirds of primary-aged children in Liberia are out of school.” However, will our “precious jewels” (i.e., our children) find it difficult to survive or make a living if society does not allow money hustlers to influence them?

Shouldn’t our society encourage our traumatized children to enroll into camps and learn skills and moral values? Better yet, why not discuss with profiteers how best to get our school age-children engaged into less-money driven activities? It is a bad idea to expose children to money; worst still, to profit-making, according to Ms. Brennan Jobs? Ms. Jobs, the daughter of the late founder and chairman of Apple, Inc., Mr. Steve Jobs, stated that her father frowned on the practice of giving money to a child.

In her book titled “Small Fry,” she narrated that her father “withheld money from her even as his wealth ballooned…all because…” he was teaching her that “…money can corrupt,” according to Ms. Nellie Bowles of the NY Times. Also, Mr. Paul Piff, a doctoral student in psychology at the University of California, Berkeley, stated that based on his research, “having more money leads to more aggressive attitudes, selfish and morally reprehensible behavior, and usually steals when he/she cannot make ends meet.”

Even the Holy Bible advises good-loving citizens not to have the love of money, according Ecclesiastes. Verse 10 of Chapter 5 of Ecclesiastes says: “Whoever loves money never has enough; whoever loves wealth is never satisfied with their income…” I am not against the advancement of entrepreneurship. Not so. In fact, in 1979, I was employed to serve as one of the extension officers at the Small Business Department under the Liberian Investment Commission. The Small Business Department did not recruit borrowers who were undeveloped, nor did it appropriate insufficient capital and/or demand repayment of loans within one year.

In fact, it did not only interact with potential would-be borrowers, but also assisted them to prepare a five-year-feasibility study (profit/loss analysis), to obtain loans from the World Bank funding programs, to organize their bookkeeping and accounting systems, etc. Okay, profiteers have coerced governments into outsourcing their lending functions to NGOs. But NGOs such as BRAC, for example, do not prepare profit/loss to determine if the US $330 is profitable, nor do they assist clients to keep books and records.

I am sure that the microfinance industry is aware that insufficient capital does not only generate loss, but also is the primary reason why small businesses fail, according to Investopedia (most common reasons why small businesses fail). If the industry is aware that insufficient capital is not profitable, why do they continue to recruit undeveloped clients? Or better yet, what kind of business practices BRAC and other microfinance institutions are using to get their 27,010 clients to repay the loans since they might not have exchanged collateral for the loans?

Most importantly, BRAC and other lending institutions do not offer adequate loans to Liberians, to invest in lucrative businesses such as diamond, gold, real estate, etc., thereby excluding them from lucrative businesses. And, unfortunately, not only are the microfinance clients failing to make profits, but are discouraging school-age children from preparing themselves to become productive citizens. More so, the money-making culture is now encouraging more school-age children to join the retail business or seek employment with the diamond or gold mining industry.

Learning skills or joining societal organizations, including religious institutions, is no more the way of life. And unfortunately, our government cannot deter and/or ban school-age children from activities such as microfinance, gold digging, etc., all because it is not a stakeholder or a decision-maker. When society allows money making entities such as BRAC to put money making ahead of societal interest and/or relax discipline, etc., chaos or instability becomes inevitable. America is a point in case.

Before Opioids permeated American white communities, the rich propagated that blacks, etc., were the problem. Guess what, now that Opioids kills 115 persons a day, corporations want government’s involvement to solve the drug epidemic. Attitude is contagious; therefore, Liberia should not repeat America’s delay in fighting the drug epidemic or else it will face the penalties in allowing BRAC to train its youths to love money.


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