Social Capital and the Power of Relationships

Social Capital at Work in South Sudan

Around the world many development organizations focus on financial transactions and investments. At Five Talents, our priority has always been on building strong relationships and cultivating local resources. Rather than pouring money into projects, Five Talents helps people discover and develop their own capacity. This is because we believe that immense value is found in the relationships and resources that already exist within local communities. By strengthening and building upon these relationships and resources, Five Talents is able to stimulate social, spiritual, and economic development.

Understanding Social Capital as a Tool for DEVELOPMENT

The theory of social capital. . . can be summed up in two words: relationships matter. By making connections with one another, and keeping them going over time, people are able to work together to achieve things that they either could not achieve by themselves, or could only achieve with great difficulty. (John Field, 2003)

One of the greatest tools that Five Talents leverages to bring about lasting change is social capital. Social capital refers to social networks and the value that these relationships have within a given community. Social capital includes assets such as friendship, emotional support, goodwill, trust, cooperation, power, influence, business opportunities, shared ideas and more. While traditionally economists have focused on labor, finances, education, and technology as drivers of economic growth, recently there’s been renewed scholarly interest on the impact of social capital. We’re not surprised. Social capital is at the heart of good business.

Social Capital, Business, and Community Savings

By helping to train and form savings groups, Five Talents leverages and strengthens existing social capital.

Let’s illustrate this with an example. Consider the case of Mary. When she joins a savings group in South Sudan, Mary finds herself learning in a community of friends and neighbors. While taking lessons in savings and financial management, Mary grows in her understanding of Christian values like honesty, transparency, accountability, faithfulness, planning, and stewardship; she recognizes the importance of these values in good business.

Over the course of about a year, Mary’s group develops strong structures to manage savings and loans, and their level of cooperation and trust grows. Mary receives encouragement and prayer support each week, and her friends offer advice as she makes plans to start her own business, a small tea shop.

When Mary is ready to take her first loan, the group is eager to support her and ensure that she succeeds. They know that their continued success is linked with hers. With a new kettle and tea mugs, Mary sets up her shop. Members of Mary’s group become her first clients, and she benefits from the influence, goodwill, and reputation of her group. Mary is able to use the existing social networks to market her business - word of mouth spreads quickly among her friends. As new needs arise in her business, Mary is able to look to her group again for advice as well as to access loans of increasing size.

Over time, Mary’s tea shop grows into a restaurant employing five others from her community and serving over 100 guests a day. Mary’s respect and influence also grows. She is able to use the profits from her business to send her children to school, cover medical costs, and put a new roof on her home. While the financial loans enabled Mary to purchase assets for her business, social capital served as the driving force for her development and success. This is how Five Talents powers change - leveraging local gifts, talents, resources, and networks.

What is Poverty? A Definition from Five Talents

Five Talents serves the poorest and most vulnerable communities in developing countries

Most dictionaries define poverty as having "inferior quality or insufficient amount." 

The World Health Organization defines poverty as when individual or household income is below what is needed for sustenance.

More specifically, The World Bank identifies extreme poverty when per capita income is below the international poverty, which is currently set at $1.90 per day.

Extreme Poverty is defined by the United Nations as "a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."

While these definitions are helpful, they are also inadequate. Poverty must be experienced to be understood. Among the poor, poverty is understood in terms of shame, powerlessness, hopelessness, and humiliation. Walk in the shoes of the poor and you will understand that:

Poverty is an unmet need and an unfulfilled longing. Poverty is lack of food, shelter, and everything good. Poverty is being sick and unable to see a doctor. Poverty is never having an opportunity to go to school. Poverty means not knowing how to read and write. Poverty is clothes that don't fit. Poverty is standing on the outside looking in. Poverty is dirty water you must drink. Poverty is a man without a job and a family without a home. Poverty is a long walk without shoes. Poverty is illness without treatment. Poverty is pain in the stomach. Poverty is vulnerability to every scheme, lie, and cheat. Poverty is an empty refrigerator. Poverty is no refrigerator, no stove, no electricity. Poverty is one toilet for one hundred neighbors. Poverty is a thief in the night. Poverty is a drunk father. Poverty is a child lost to preventable disease. Poverty is a mother weeping. Poverty is injustice without appeal. Poverty is cruel. Poverty is stress. Poverty is shame. Poverty is famine. Poverty is war. Poverty is pain. Poverty is life without life. Poverty marginalizes, poverty suffocates, and poverty kills.

More than 3 billion people live in poverty. In the time it took you to read this definition, twenty six of them just died. Eight died of lower respiratory infections. Six died of starvation. Five died of water borne disease. Four died of HIV/AIDS. Two died of malaria. One died in childbirth.

At Five Talents, we fight poverty. Find out how.


  1. World Health Organization. Multidimensional Poverty. Accessed 2018.
  2. World Bank. The 2017 global poverty update from the World Bank. 10/16/2017.
  3. United Nations. Report of the World Summit for Social Development. March 6th - 12th, 1995.
  4. Narayan, Deeta. (2000). Poverty is powerlessness and voicelessness. 37. 18-21.
  5. Maternal and child undernutrition and overweight in low-income and middle-income countries. Black, Robert E et al. The Lancet, Volume 382, Issue 9890, 427 - 451.
  6. Top Ten Causes of Death by Country Income Group, World Health Organization (2012)
  7. Pneumonia and diarrhoea: Tackling the deadliest diseases for the world's poorest children, UNICEF (2012)
  8. Levels and Trends in Child Mortality; UNICEF, WHO, World Bank, UN-DESA Population Division (2015)

Micro-Enterprise Development in Indonesia: A Conversation with Five Talents Program Director Suzanne Middleton

Each of Five Talents' microfinance programs are tailored to meet the needs of the communities they serve. Here, Five Talents Program Director Suzanne Middleton explains how micro-lending, training and mentoring are transforming lives in Indonesia, where Five Talents partners with The GERHATI Foundation.

What makes the Indonesia program unique among our other programs in Asia, Africa and Latin America?
The Indonesia program is different to other Five Talents programs in two main ways. One, Five Talents was responsible for the development of this program from the very beginning, when the first request came from the Indonesian Anglican church for a micro-enterprise development program among the communities they serve. From board development and training to management and staff hiring and training, Five Talents has been the key partner from the start. Two, GERHATI's outreach is to predominantly Muslim communities. In fact, over 95 percent of the program recipients are Muslim.

If we were to take a walk through one of the communities served by Five Talents in Indonesia, what might we see, in terms of living conditions? What does the family unit look like in such communities?
Many of the communities suffer from poor or non-existent sanitation services, such as sewers or storm water drains. Access to clean water is often difficult and expensive. Many families – which, on average, consist of three to four children – make do with water from polluted water ways, and many suffer sicknesses as a result. Communities are often marked by uncollected rubbish, which pollutes the water ways and areas surrounding houses, attracting rats and other health hazards. Poorer communities are usually in areas prone to flooding, which occurs sometimes multiple times each year.

We talk a lot about the importance of Five Talents' local partnerships with indigenous organizations. Can you explain why such partners are critical to the success of the programs?
Helping indigenous communities and churches to help themselves and achieve meaningful empowerment and self-determination is at the core of the Five Talents mission. Assessing what key indigenous people want to achieve for their communities and country is crucial to working out the best methods of helping them achieve this. Partnering with a local organization enables Five Talents to align values and objectives to a well-governed and well-managed program that knows precisely what it wants to achieve and who to target. A strong local organization is well-grounded in its own environment and is there to stay.

Our partners are always striving to meet the needs of the women and men in the program. What are some of the ways that the Indonesia program has been evolving to meet members' needs?
GERHATI strives to "unlock" the natural gifts and strengths that people have through skills training and provision of a forum that enables them to discover, with each other in groups, the many different ways, individually and corporately, that will enhance their income, knowledge and general quality of life. Basic skills, such as numeracy, literacy, hygiene, book keeping, etc., can be taught by trainers who also encourage dialogue and discussions that help the group learn to work together.

In your mind, what's the measure of success for a program like this? What do you look for when evaluating the program's positive impact on individual group members and on the community at large?
One of the biggest indicators of success is the expression of hope for the future by the individuals and groups that our partner GERHATI works with. When people, after participating in the program for only a few months, begin to see new opportunities and possibilities for their families in terms of education, new business ventures and income opportunities and healthier living, then we can feel assured that the program is on the right track and its mission and vision is being achieved.

Savings-Led Microfinance – It’s Not New, But It Is Transformational

A few years ago, The Economist highlighted a form of microfinance that Five Talents has been practicing for nearly two decades. 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. The savings approach to microfinance is much different than the microcredit model that is widely used.

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 two decades.  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.

Through this model, Five Talents has helped to facilitate loans as small as $7. There's the story of Leonie, a mother of eight children in the African country of Burundi. She joined 15 others to form a savings and loan association they called "Nyarumanga", which means, "Let's pray for each other." (In the above photo, the savings group is holding a meeting.)

None in the group had ever saved or borrowed, so in order to create some capital, they all labored together by carrying construction materials for a builder and pooled their pay. With Leonie's first loan of just $7, she bought salt and sold it for a profit in her community.

As it turns out, the primary beneficiaries of her success have been her children. "I can pay for school fees so my children can go to school," she told us. "All will go to school – I won't keep any at home because I was kept at home and I don't want that."

Group-led microfinance can also lead to significant social change. In 2007, Five Talents helped to build a community bank in a rural village in South Sudan. The village was subsequently burned down by a rival clan from a neighboring community, but the bank survived the pillaging. Later, the members who had savings in the bank became a force for reconciliation and brought the different clans together. Now the formerly rivaling clans live in peace and are using their savings to be productive and not destructive.

What's just as important as seeking to bring financial benefits to the poor is seeking to bring the social benefits of financial literacy, leadership development and unity. Thus, savings groups are engines for leadership development, empowerment and dignity – not just for financial gain.