A handshake rather than a handout

Opportunity International helps third world business get on its feet

By RAMON GONZALEZ
WCR Staff Writer
Edmonton

So says Wayne Johnson, executive director of the Canadian arm of Opportunity International, a Christian aid organization that gives loans to the poor of the Third World.

While there are many ways to aid the poor, Opportunity International believes in helping others to help themselves. The kickstart comes in the form of a modest loan for capital start-up that would otherwise be denied the poor by conventional banks.

"What Opportunity International does is to help the poor break out of poverty on their own," Johnson says. "What we do is provide microloans which can make a major difference in providing big business for the poor."

In Edmonton March 22 to address a group of businessmen, Johnson said last year Opportunity International lent about $105 million to 310,000 clients in 25 countries creating more than 480,000 jobs.

The average loan is under $300. "And with $300 they can start a small business so that with the profits they can improve their nutrition, their housing."

While "motivated by Jesus Christ's call to serve the poor," Opportunity International doesn't wear its religious heart on its sleeve.

It does not proselytize, although Johnson, a Baptist, concedes loan clients do get a subtle exposure to Christianity. Meetings usually start with a short devotion but participation is voluntary. In India, 95 per cent of clients are Hindus and in Indonesia, 75 per cent are Muslims.

Staff members worldwide, however, are Christians, which Johnson believes provides for cohesion.

Opportunity International began in 1971 when Al Whittaker, president of Bristol-Myers International Corp. in the U.S., launched a program in Latin America. Today it operates in 25 countries in Latin America, Africa, Asia and Eastern Europe with partner organizations in Canada, Australia, New Zealand, England, Germany and France.

The organization has over 3,000 indigenous staff in the developing world who lend money to the poor and oversee its use. "It's not the white gringo who is lending to the poor," Johnson said. "It's a Nicaraguan staff member who is lending to the Nicaraguan. We empower the local people to help their own people."

The Toronto-based Opportunity International Canada started in 1998 and focuses on the Latin American countries of Honduras, Nicaragua, Colombia, Costa Rica and the Dominican Republic.

Contributions are from individuals, corporations, foundations and community groups. The federal government's Canadian International Development Agency matches these donations.

The organization has four staff in Canada plus 210 in Latin America who are local residents.

In the developing world, the poor can't expand their businesses because they have no access to credit. Banks do not lend to the poor who have no assets and no collateral. Plus, banks aren't interested in lending sums as small as $200.

Opportunity International operates on the belief that no business is too small for a loan and that good business practices are a better solution to poverty than aid.

Aid, says Johnson, increases dependency, and for 90 per cent of the world's hungry there's plenty of food. The problem is a lack of cash.

For many in the Third World their only recourse is a loan shark who might charge up to 40 per cent interest a week.

"If you can help a poor person start and run their own business, with the profits they can feed their family, send their children to school, improve their housing, afford to buy medicines and escape the grip of poverty," Johnson said.

This year Opportunity Canada, founded by London, Ont., businessman David Stiller, is extending a total of $3.35 million in loans to 4,800 clients in Nicaragua, Honduras and Dominican Republic.

Johnson says 86 per cent of the organization's loans are made to women who, according to the United Nations, do 67 per cent of the work but only earn 10 per cent of the world's income.

Each of the loans is payable in four months and last year more than 98 per cent of the loans were repaid.

One positive outcome of loaning to women is that they invest the profits in the family, Johnson said. This means that their children no longer have to go to work and can go to school so the cycle of poverty may be broken for the future.

However, Opportunity International doesn't just hand money over to anyone who wants to start a business.

The first stipulation is that there has to be a group, usually 15 to 30 individuals, all of whom have a small business of some kind. Typical businesses include variety stores, vegetable and fruit stands, used-clothing sales and small bakeries.

The second stipulation is that they undergo training in money management and how to select leaders because the loan is made to the group, not individuals.

The group sets up a trust account and members guarantee each other's loans. If one defaults, all are held responsible.

Accountability is vital for success, Johnson says. "One of the things we have learned is we don't give a handout. We give a handshake because we help the poor and we trust them."

When training is complete and the trust account established, the loans are given out.

Clients with the resources, skills and stability to manage without peer group support are eligible for larger loans of $500 to $2,200 which are paid back over eight months.

For information, call Opportunity International Canada at 1-416-444-2448.

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