India-Chennai

Over the weekend, the Washington Post ran a story about the growing attention being given to microsavings. Here at Five Talents, we were delighted to see the story because it affirms the work we've been doing for years. It also communicates a powerful truth: that learning to save can transform one's life – even in communities where women and men do not have access to traditional banks.

"There's a common, misguided, knee-jerk reaction that if you're poor, you have no assets to save," Dean Karlan, a Yale economist, told the Post. "People who are poor obviously save less, but they still save."

We've seen this for years in our Burundi program, which by June 30 will have helped more than 10,000 women and men join savings groups and build wealth where, previously, they had none. Other Five Talents programs – including ones in South Sudan, Myanmar and Bolivia – also feature the group-led savings model.

In the case of Five Talents, however, these savings "circles," as the Post calls them, are far more than glorified piggy banks. They are microcosms of self-government and hubs for compassionate community outreach.

I saw this first-hand during my recent trip to Burundi.

Each group has a constitution (a list of rules) that is created and agreed upon by the members themselves. The rules cover everything from the number of women and men who may participate in a single group, to conditions regarding savings deposits and loan disbursement. Group members also determine their own interest rates and penalty fees.

This self-determination does wonders for members' self-esteem, and it encourages discipline and order that members can then model in their individual homes.

Even more amazing, though, is what these groups are able to accomplish for others in their community. Most savings groups in Burundi create an emergency fund, which they will only tap when the group collectively identifies a needy individual in their community – often someone who is not even a part of their circle.

We're excited to share with you our 2011-2012 Annual Report for the fiscal year running from July 1, 2011 to June 30, 2012. Click here to download the PDF.

In the report, you'll find all of the latest financial figures and program statistics, as well as stories, photos and highlights from every one of Five Talents' programs.

The report also features beautiful illustrations from one of our volunteers, Laura Bauder. So a great big thank-you to Laura, who also took on the task of designing the report.

Five Talents Program Assistant McKenzie Butler snapped this photo of a fish market during her last trip to Chennai, India. The market is located near the backwaters of Pulicat Island, just off the shore of India in the Bay of Bengal.

"Traditional fisherman are the ones who are able to fish in the Bay of Bengal," said McKenzie. "The others, because they are not traditional fisherman, or because of their caste or tribe or religion, are forced to fish in the backwaters."

In India, and all over the world, Five Talents seeks to assist women and men who are struggling to grow a survival business. They might fish or knit children's clothes. They might sell salt or refurbish homes. In every case, they have a God-given ability and family to support. Five Talents pulls alonside to provide loan capital, savings opportunities, business training and spiritual support that can empower the entrepreneur and eventually transform their life.

Over the last few months, we have seen the release of several important books about poverty and microfinance.

David Roodman's Due Diligence unpacks two studies that cast doubt on the effectiveness of some forms of microfinance. Roodman, a senior fellow at The Center for Global Development, has set off some debate with this book -- a good thing for people who want to find the best ways to reduce poverty.

You can find a thoughtful response to his work here.

Another good book on microfinance came out near the end of 2011: New Pathways Out of Poverty. We interviewed Anna Awimbo, one of the book's co-editors (she is also a Five Talents board member), in an earlier blog post. One takeaway from the book is its discussion of reforms that have been initiated by organizations like the Microcredit Summit Campaign in light of the tragedy in Andhra Pradesh, India.

A hot read that's currently climbing the charts is Katherine Boo's Behind the Beautiful Forevers. The Pulitzer Prize-winning author uses three years of immersive reporting to tell the story of several families living in a Mumbai slum. As a result, Boo puts a face on the dry data that shows the problem of poverty. For this remarkable book, she might very well win a few more prizes.

A recent article in The Economist highlighted a form of microfinance that Five Talents has been practicing for nearly a decade. The story, published on December 10, 2011, praises the savings-led model of microfinance, which involves groups of women and men who pool their savings before drawing out small loans from that pool in order to sustain and develop their micro-businesses.

We at Five Talents were delighted to see The Economist's coverage of savings groups, but we would like to make a few additional points that show how savings groups can also be an avenue for community transformation.

Five Talents has been working with this model for nearly a decade – especially in India, among communities that were devastated after the tsunami in 2004. What is most compelling about the savings group model is that it can reach – and empower – the very poor. In other words, those people who are too poor even to have access to mainstream microfinance organizations that are giving loans of $60 or more.

You probably know the story of the Magi who followed a mysterious star to the town of Bethlehem more than 2000 years ago.

In late November 2010, our Director of Program, Suzanne Schultz, found a "Christmas star" in a place where she least expected it – among a community of women in India.

She had flown to India for a routine program visit. But what she experienced on one particular afternoon made the trip unforgettable.

"I was sitting in a savings and loan group meeting of women who produced baskets, and I was admiring their products and talking with them, when one woman stepped up from the back and gave me a hand-made star, woven from Palmira leaves," Suzanne said.

"I asked through the translator if it was something they made frequently. They said no, and that they really made this for me because they knew that I, as a Christian, would soon be celebrating Christmas."

Five Talents partners with the local church but works all over the world with people of all faiths. In every place, however, we pray that the love of Christ shines through. The story of this basket-weaving savings and loan group in India is a perfect example. And it's just one of the countless stories of hope that you make possible by supporting Five Talents.

Anna Awimbo, a Five Talents board member, directs two projects at the Microcredit Summit Campaign and recently released the book New Pathways Out of Poverty, available at Kumarian Press. Here, she gives us her take-away from the 2011 Global Microcredit Summit, which was held in Spain in mid-November, and discusses the new book.

You weren't able to attend the 2011 Global Microcredit Summit, but you were heavily involved in planning and supporting it. Considering the broader context of microfinance in late 2011, how was this year's Summit different than previous ones?
The 2011 Summit was unique because it was the first opportunity for the Microcredit Summit Campaign to bring together a large group of its members since all of the scrutiny last year [due to] the problems that occurred in Andhra Pradesh, India. The sector was tarnished by Indian microfinance institutions (MFIs) allegedly over-lending and, in some cases, using aggressive collection tactics. And so the Summit in Spain presented an opportunity for everyone to get together and collectively address the challenges presented to the industry and more clearly highlight the fact that there are key differences between the profit-maximizing MFIs, many of whom ran into these kinds of problems, and those MFIs that are more focused on maximizing their own ability to transform the lives of clients, their families and their communities where they work.

What was the mood coming out of the Summit? Are people optimistic?
I think people are very optimistic, and what went on in India has actually, in large part, led to a new initiative where a core group of microfinance networks and leaders in the field have come together to develop what we are calling a 'seal of excellence' for poverty outreach and transformation in microfinance. One of the most important chapters in the book focuses on developing the seal of excellence. We're going to come up with core indicators that can be related to the contribution of microfinance to development. MFIs could then be ranked according to these indicators within the context of the seal of excellence.

On November 13, many churches around the country will read an old story that Christ once told on a Galilean hillside: Three servants received large amounts of money from their master. Two invested their stipend, doubling the return. One dug a hole and buried an opportunity to exercise his gifts.

I am talking, of course, about the Parable of the Five Talents in Matthew 25:14-30, from which our organization takes its name.

One of the key verses reads that the master gave talents to his servants "...each according to his ability." This phrase – "each according to his ability" – contains a liberating message for the poor, and also for ourselves. This Gospel reading suggests that we are made in the image of God and, therefore, all of us have value and gifts to use for ourselves, our families and our communities.

Five Talents is built on this belief. The poor have value and can be empowered to tap their own unique gifts and abilities to create a better life. When Five Talents began 11 years ago, words like sustainability, economic empowerment, and self-supporting churches were just beginning to be whispered. Now these words are being shouted from every corner of the world.

I dare say Five Talents has helped to lead that conversation as a means of growing God's Kingdom.