A year ago, a time which seems positively archeological now, we helped host a conference at Tufts University on Microcredit and its future. I, in my naivety, thought this was going to be a cozy chat amongst earnest development workers and community groups, but not a bit of it. Microcredit is big business these days. With deregulation in India it is the banks, not the aid agencies that provide the capital (well credit) to drive this multi-billion dollar enterprise. It is still the community groups who deliver the product and work with borrowers to manage their daily risks. In African, Banks, we were told, were starting to look longingly at the prospects of all those potential clients across the continent.
The phrase that really stuck in my mind came from one of these bankers. When asked to capture what he saw his role to be he was clear we are “blazing the trail for consumers of credit”. His point, and that of many in the room, was that there is nothing inherently wrong with linking the worlds purest two billion into the lower tiers of the global financial engine. Credit is credit, whether you borrow two dollars or two billion dollars, and it is what makes the economy go round, or rather forward. So, the bankers ask, do you want the world’s poorest to be part of this economy or do you want to exclude them from this hope (there term not mine).
That was eleven months ago. Now all has changed. Well actually no, all has not changed. Michael Balen in his wonderful book on the South Sea Bubble shows how the habit of talking up share prices, constructing make-believe realities and gambling away the future was alive and well in 1720. Then, stocks were traded at the coffee houses around London, the very same places where bets were made on the great horse races of the day. Money, greed, risk, adrenaline, all together in the same place Nothing has changed.
Today, those in Africa who have not been sucked into the great credit gamble, don’t seem so stupid. Elizabeth Blunt writing for the BBC paints a wonderful picture from Addis Abebe, where growth is fueled by remittances from relatives and from savings. OK it is slow, and if you have little to save it takes forever to move forward, but you are in the driving seat.
Savings groups, remittances transfers, the innovative use of cell phones and SMS to move cash around the country, these are the building blocks of an alternative way of doing business, and in small ways across Africa it is working.
In the early days of evolutionary theory, Darwin’s “bulldog” Thomas Huxley promoted evolution in the British middle call image, survival of the fittest, completion – nature red in tooth and claw. It is always good to feel that science, as well as God, is on your side. Half a world away in Siberia, Russian prince-turned-anarchist and biologist, Peter Kropotkin, saw it differently. He saw an environment in which survival was about collaboration not competition and in which making small savings in energy or food made all the difference between life and death. He did not see the massive competition and heady growth of the tropics with its consequential winner takes all.
So today, which political interpretation is right, competition (I’m sorry, it’s not personal, it’s just business) or cooperation?