Listen in on our first audio discussion with SKI Charities founder, Shyam, as he talks about his most recent trip to Lebu, Chile where he had the opportunity to connect with local Mapuches artists. Be sure to check out our next “Conversation with Shyam” when he returns from Zimbabwe!
Handmade in Lebu!
While the Grameen Bank gave SKI Charities its infrastructural model, the main impetus behind creating the organization was very personal. SKI Charities founder, Shyam K. Iyer, credits his mother for inspiring him to make the charity a reality:
“In her family, my mother is 8 of 9 kids and the older girls were just sort of married off. We have a term in much of the developing world, not ‘getting your daughter married,’ but ‘getting her married off.’ To have her become someone else’s responsibility, and be led by someone else.
By the time the family got to my mom, number 8, and her sister, number 9, the family was so exhausted with the traditions that they just let them do whatever they wanted. And when you give women like them space to do what they are capable of doing, they do great things. My mother studied hard, came to the U.S., and is now a very successful physician. She’s a role model for the community and inspiring the people all around her. I feel that if women are given this type of chance, not given an extra opportunity, just simply given a chance, women have always proven they can do great things with it.”
Through his work and travels abroad, Shyam became very sensitive to imbalances in economic status, the divide between the haves and the have-nots, and particularly the struggles of mothers. He continually observed that, in many countries, “mothers are the pillars of both family and economy but are even more disenfranchised than poor men.” These patterns were begging to be changed.
Choosing to work with female participants came from the belief that, “When you empower women and especially mothers you’re truly empowering the entire community, you’re not just empowering the individual.” Shyam tells men who inquire about the organization to “observe what women do, what our mothers, sisters and daughters do. They add to the community. They lead our families. They make our lives so much better.” Ultimately, Shyam reasons that “if you want the wealth to go further, usually the best way is through women.” He continues,
“So when any mother is empowered, when she starts to take charge, what will she do? She will grow her business, hire more people, and support more vendors. When she makes money she will emphasize her kids’ education, which of course increases the human capital of a society and is the single most important thing. She’ll also tithe more consistently to her church, strengthening the community. She will herself become more respected and be a leader to all. She will inspire her sons and daughters, encouraging these same effects on a bigger scale.”
He witnessed his own mother have a successful career and inspire so many when she was given the space to do so and hopes that in giving mothers a chance – just a chance – they will do great things. So far, this method has proven to be largely effective, with the benefits extending well beyond a single SKI Charities beneficiary. Shyam could not be more proud of the charity’s mothers, as they have not only improved their personal quality of life, but also the lives of their children, husbands, and communities at large. Just like all of our mothers, everywhere in the world. Happy Mother’s day!
SKI Charities founder, Shyam K. Iyer, is the first to admit that he did not invent the concept of microfinance. Nor did he pioneer the idea of extending microfinance opportunities specifically to women. Iyer comments,
“What we’re doing, we think it’s unique in the places we’ve gone, but I didn’t invent the concept of micro-finance. Muhammad Yunus, the Nobel Prize Winner from Bangladesh, pioneered micro-finance on the large scale, and he focused on women – which we replicated and are tailoring for our communities.”
Iyer was inspired to structure SKI Charities much like Muhammad Yunus’ Grameen Bank, a project that began in Jobra, Bangladesh in 1976. Touted as a “bank for the poor,” Grameen utilizes the concept of micro-finance to empower otherwise disenfranchised women. The bank does not require any collateral and focuses on a person’s potential, rather than their acquired assets. The Grameen methodology is one based on four specific principles: discipline, unity, courage and hard work.
Like any unconventional project, Grameen Bank began small. As of October 2011, however, the total number of borrowers was 8.35 million, of which 96% of them were women. Now, the bank has 2,565 branches and works in 81,379 villages. The staff totals at 22,124 individuals.
Yunus also pioneered the idea of solidarity lending, which places borrowers in 5-member groups. Though each individual is responsible for their own repayment, group members are meant to support and encourage each other’s endeavors and entrepreneurial spirit. SKI Charities adopted a similar model, Iyer comments:
“We also do solidarity lending so that they can support and monitor each other and help each other out. All of these concepts, including the idea of women, have been tested. It’s all been studied. People much brighter than me have written papers about it and done the hard research side of things.”
Treating borrowers with respect and autonomy has yielded excellent results for both the Grameen Bank and SKI Charities. The bank’s loan recovery rate is 96.67%, and so far, no SKI participant has failed to pay back her loan. “None of them have defaulted on us, which tells us that we’re doing it right for the environment that we’re in,” says Shyam.
“In fact, a lot of the women have taken me aside and said, ‘You know, you could be charging us more, it’s okay.’ Basically, we’re treating them with more standard terms. We give them a shorter time frame, we give them a month, and we do charge a very small interest rate. The reason behind the interest rate is, of course, you can’t go to any bank without an interest rate. And we’re not in the business of providing aid, we’re providing people with access to finance. So we treat them on an equal level, just like you or I going into a bank. We don’t want to receive free money, we receive a loan, with an interest rate, and we would pay that back and get these women to pay it back every month.”
Shyam contends that treating participants like empowered individuals “inspires the women and the families to work harder because they know that we respect them, that they are our equals, and that we believe it’s a community project.”
For more information and interesting facts on the Grameen Bank, click here.
Encyclopedia Britannica will tell you that microfinance is “a means of extending credit, usually in the form of small loans with no collateral, to nontraditional borrowers such as the poor in rural or undeveloped areas.” It was a concept institutionalized in 1976 by Bangladeshi economist Muhammad Yunus and adopted by SKI Charities founder, Shyam K. Iyer.
Shyam describes microfinance as “basically a bank for people who have little to no income, probably no collateral, definitely not a formal job maybe not even an informal job.” Microfinance enables those who don’t have a track record or resume to get small microloans. In general, “it’s impossible for them to get a loan from anybody else,” Shyam contends.
Treating otherwise disenfranchised individuals as mainstream clients who could obtain a loan if they so desire is SKI Charities’ way of empowering their participants. It is not only a way of leveling the playing field but also of spurring entrepreneurship, self-initiative, and responsibility in rural and/or impoverished communities. “We treat them on an equal level, just like you or I going to a bank,” says Shyam. They pay an interest rate, just like anyone else, but work with more manageable sums of money and with a shorter timeframe. SKI Charities beneficiaries have an average of three months to pay back their loans.
SKI Charities is “not in the business of providing aid, we’re providing people with access to finance. We’re able to provide low cost finance to them and then we’re able to help them run their businesses. Like any businessperson!”
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