Vered’s Blog

Yesterday I had a meeting with a banker. In today’s world bankers are not usually associated with any social interests.

However, this banker and bank is another example how the Feminine Leadership principles can be implemented even in the most business and so called male organizations. The bank is Triodos Bank and it is a micro-financing bank.

Microfinance is often considered one of the most effective and flexible strategies in the fight against global poverty. It is sustainable and can be implemented on the massive scale necessary to respond to the urgent needs of those living on less than $1 a day, the World’s poorest.

Microfinance consists of making small loans, usually less than $200, to individuals, usually women, to establish or expand a small, self-sustaining business. For example, a woman may borrow $50 to buy chickens so she can sell eggs. As the chickens multiply, she will have more eggs to sell. Soon she can sell the chicks. Each expansion pulls her further from the devastation of poverty.

Microfinance institutions offer business advice and counseling, while clients provide peer support for each other through solidarity circles. For example, if a client falls ill, her circle helps with her business until she is well. If a client gets discouraged, the support group pulls her through. This contributes substantially to the extremely high repayment rate of loans made to microfinance entrepreneurs.

An equally important part of microfinance is the recycling of funds. As loans are repaid, usually in six months to a year, they are re-loaned. This continual reinvestment multiplies the impact of each dollar loaned.

Microfinance has a positive impact far beyond the individual client. The vast majority of the loans go to women because studies have shown that women are more likely to reinvest their earnings in the business and in their families. As families cross the poverty line and micro-businesses expand, their communities benefit. Jobs are created, knowledge is shared, civic participation increases, and women are recognized as valuable members of their families and communities.

This type of banking contradicts our usual concept of banking which their sole interest is on bottom line results and having more and more profit. The Micro finance banks are interested in double bottom line which is a business term used in socially responsible enterprise and investment.

While all businesses have a conventional bottom line to measure their fiscal performance—financial profit or loss—enterprises which seek a second bottom line look to measure their performance in terms of positive social impact.

This trend of more banks becoming involved in social entrepreneurship and in becoming concerned with social responsibility just shows that the Feminine Leadership principles are becoming recognized as valuable in our world.

If we will support more organizations to become socially responsible and enhance micro finance banks we can create a change even in the most toughest arena of the old male concept world – the world of finance.