Forgotten Children

Microcredit

FORGOTTEN CHILDREN pursues its charitable and educational goals disproportionately through microcredit to women so that they can generate income for the education of their daughters.

The word “microcredit” is of relatively recent vintage. A definition was adopted in 1997 by the Microcredit Summit (February 2-4, 1997): “noun; programmes extend small loans to very poor people for self-employment projects that generate income, allowing them to care for themselves and their families.”

Since its inception, FORGOTTEN CHILDREN has engaged in microcredit with the following criteria:

Size – loans are “micro,” or quite small in size;
Select credit recipients – loans are almost always directed to low-income women who are also mothers with young girls; most loan recipients operate through self-selected (sangam) community-based groups;
Use of funds – the funds may be used in a variety of activities, including enterprise development and emergency situations;
Terms and conditions – most terms and conditions are flexible and easily understood; repayment is required but loans may be forgiven in certain mitigating circumstances; a second loan will not be granted without repayment of the first loan;
Interest-free – loans are interest-free and collateral-free, the only condition being that mothers must use income to educate their daughters in lieu of bonding them into forced labor or committing them to an early marriage;
Administration – strong, effective, and responsible administration is necessary; administration is delegated to self-selected community-based groups; education and monitoring is handled by trained social workers and other responsible individuals; as stated above, microcredit recipients must expressly commit to the group that they will not send daughters to school and not arrange early marriages for daughters or make them work at child-labor activities before they have finished high school (if commitments are not respected (which is rare), microcredit recipients are excluded from the group).

Microcredit is not only about money, it is also about information, management organization and empowerment. Microcredit is not solely about consumption; it is designed to create self-employment opportunities, promote social welfare (the betterment of community) and provide basic human rights, such as minimal health care.

FORGOTTEN CHILDREN’S goals are transparent and fundamental: to help poor families, primarily in rural India, to provide for their care and well-being by giving mothers self-employment opportunities in exchange for educating their daughters.

On a larger scale, FORGOTTEN CHILDREN strives to provide educational opportunities to young girls through the economic empowerment of their mothers (and fathers). The long-range goal is the betterment of the human condition in a global environment. In the apt words of Muhammed Yunus (recipient, along with the Grameen Bank, of the 2006 Nobel Peace Prize), “poverty is a threat to peace”:

“Peace should be understood in a human way – in a broad social, political and economic way. Peace is threatened by unjust economic, social and political order, absence of democracy, environment degradation and absence of human rights.

Poverty is the absence of all human rights.”

Nobel Prize acceptance speech (December 10, 2006).

FORGOTTEN CHILDREN is not a bank and does not operate as one; it is a non-profit charitable organization. Furthermore, although FORGOTTEN CHILDREN is not faith-based, its guiding principles are rooted in doctrines adhered to by all major religions. With years of on-site practice, FORGOTTEN CHILDREN is able to learn and experiment with microcredit at the grass-roots level. FORGOTTEN CHILDREN espouses Dr. Yunus’ vision. Based on experience, four fundamental points prevail.

First, poor people who are not creditworthy will repay their loans. Here are three examples. M. Arockia Mary is a widow with three children. She lives with her parents. She toils as a coolie (manual labor) worker. She assumed a loan for making some tiffin (snack) items for sale in order to obtain income for her family. N. Radha is physically handicapped and yet she toils at coolie work to earn a living. She has one son who attending primary school. Her husband is an acute alcoholic, who not only drinks to excess but also daily ill-treats her. She took a loan to repair a leaking roof. P. Vijayakurami has two children. Her husband is in ill health and unable to work. She was given a loan in order to cultivate the land. All three of these poor women have repaid their loans.

Second, women who borrow money will give a high priority to their children’s welfare. In the candid words from a field report of Sister Mary Therese:

A womans’ group (named Sigaram) has 12 members. This group is completely a Dalit group, the members of which are marginalized and oppressed by the other caste people. Until now, they had no interest in education. They tended to keep their children to look after the siblings at home. Time has changed as they came to know us and take part in the activities of our Self-Help Groups. They have regular meetings. They are given a lot of training to have self-confidence, self worth and ability to enter into new ventures. We have seen a lot of growth in them. This school academic year, 11 children who previously dropped out in class 5, have come to our school to continue their education and many other younger ones have joined the primary school in their own village. On 13th October [2007], we have the local village President Elections in which one of the members, Gandhiammal, is contesting. They have shown signs of taking responsibility for themselves and their children. They also show their concern towards developing the neighborhood. This is seen in the way they reimburse the loan they have received from Forgotten Children. These 12 families have received the loan of goats. Now these goats littered and the kids are a joy to the families. They experience a different situation now. It is our wish to see that they also save something for themselves.

Sister Mary-Therese continues:

Since many mothers in the locality have got some support or the other from the Forgotten Children Project, the feeling of jealousy is not there. On the contrary, they encourage each other to come for meetings and to reimburse the loan so as to help other women in their area. The mothers also identify the families in need and also identify the students who go to work to earn a living for the family. They encourage such students to come to school.

In the final analysis, the combination of microcredit, self-help empowerment of women acting through group governance, and maternal love, operates to the benefit of children and is a powerful antidote to poverty.

Third, borrowers who join a group of other borrowers are more likely to espouse group values and repay loans. With few exceptions (such as for elderly and homeless widows), borrowers are required to join groups and espouse group values. FORGOTTEN CHILDREN now has 25 women’s microcredit groups which include 340 mothers. All the mothers live in the hills surrounding the town of Kodaikanal, Tamil Nadu, India. Most of them come from low social strata of traditional rural Indian society (Dalit and Tribal) and live in abject poverty. Currently, the women establish their own groups, and then come to see the Sisters of the Presentation Convent in Kodaikanal to qualify for a loan. The average group loan varies from $50 to $300. All the mothers who participate in FORGOTTEN CHILDREN’s Mother-Daughter Project, by an express commitment, give high priority to their daughters. They also have to commit to weekly and monthly meeting organized by our two social workers and the Sisters. During these meetings, women share their difficulties but also learn about the importance of saving and monthly repayment of loans in order to qualify for further loans.

As described by Sister Mary-Therese, groups operate through general principles:

All the groups have their meeting every week and once in a month with the coordinators of other self-helps groups. They are functioning well and they are having small savings. They are aware of womens’ rights, legal status, problems of women, women’s status in the society etc. Their husbands have become more responsible and helpful to the mothers. We feel happy to see in their families a spirit of togetherness and readiness to co-operate with each other.

Sister Mary-Therese describes a woman’s group (named Sakthi) with 10 members which took a loan to produce cleaning detergents:

Our women are developing day by day. Their production unit is developing, and it is generating income for them. They have gained much knowledge about detergents and also confidence to approach people for their sale. They reimburse their loan regularly. One of the members is contesting for council election, which is due on 13th October. One of the drawbacks is that they have no place for their production unit. At present they are producing in their own home, which consists of one or two rooms. So it is very difficult for them. They have grown to be responsible to educate their children. They have built rapport with other women in the group, in order to help themselves in a cooperative way…. They have learnt to work together, hold responsibility for the money they take as loans and find ways and means of using the help in a way that it is beneficial to them and others. The groups reimburse the interest-free loans regularly. The leaders of each group are trained to monitor the receiving and repaying of the loans. This system helps more needy families. We are able to reach out to many more women in our area in the interior villages of Kodaikanal. Most of the women stopped borrowing from the money lenders with high interest. This way the burden of our people is less now. In times of need, the people know that there is someone who is ready to help them. The number of dropouts has come down very much.

Each year (in July), the women attend an award ceremony that recognizes the groups (and women) that have paid back their loans. At the ceremony, the pride associated with loan repayment is reinforced by presentation of a diploma or a prize (be it a water container, clock or kitchen utensil). Pride is manifested on every face. The recognition of mothers in the presence of their daughters provides a double message, giving positive feedback to the mothers but also teaching the daughters the merits of self-sacrifice and personal empowerment.

Fourth, groups create social capital and are more likely to promote community activities such as ending child labor, environmental protection, and basic education. In fact, all twenty-one of FORGOTTEN CHILDREN’s groups in rural India require their members not to engage in child labor and not to arrange early marriages (for daughters) and, in lieu thereof, to provide basic education to daughters. Several groups engage in organic gardening, and create natural hand soaps, detergents, candles, cooking oils, among other products. At least one mother has risen to the level of running for public office.

As daughters receive the education that their mothers (and grandmothers) never received, a new generation will be created, a generation removed from the awful grasp of poverty. Some of these young women may even attain higher education (as the four girls profiled herein) and be equipped to give back to their communities. In this way, the seemingly endless cycle of poverty will be broken.

FORGOTTEN CHILDREN is an IRS 501(c)(3) approved tax deductible charity #54-1716373.

Contact: Mrs. Francoise Remington, Executive Director
1031 North Edgewood Street, Arlington, Virginia 22201, U.S.A.

Phone: (703) 351-9270 Fax: (703) 351-9270
E-Mail: francoise@forgottenchildren.net