I just attended a conference in San Francisco featuring John Hatch, the founder of FINCA, one of the largest micro-financing institutions is in the world.

At a glance, FINCA operates today in 23 countries and has assisted over 1,000,000 families since 1984, lending over $360 million (in 2007) to the world’s poorest families with a repayment rate of 97%.

The conference was not about FINCA (John retired from FINCA last year); it was about eradicating extreme poverty from our planet by 2025!!

Before presenting his project, John laid down some hard facts:

On poverty:

• 28,000 children die every day from predictable causes (malaria, diarrhea, etc.), which means over 10 millions children a year!
• Each year, more than 8 million people around the world die because they are too poor to stay alive
• 10% of the world population is consuming 86% of the goods of the world
• 50% of the 15-24 year-old of the planet are unemployed
• The world population is roughly divided as shown below with a rough 1/6 of the population falling into each of the category:

  

On micro-financing:

• There are about 10,000 micro-financing institutions worldwide
• $3 / day is the average daily return from each of an estimated 100,000 borrowers. That is over $1.09 billion a year! This money is usually recycled into new loans every 2 weeks.
• The borrowers purchase an average of $300 in goods and supply every month; that means an amazing contribution to the global wealth of $360 billions a year!!

Having spent a large part of his life empowering the poorest, first as a peace corps volunteer, and then as an officer of FINCA, John is now convinced that:

• Micro-financing institutions are doing a great job at addressing the intermediate layers shown on the above chart; however, they are not equipped to address the extreme poverty, i.e. people living with $1/day or less. There is something to be done to reach these people and lift them up
• Neither our governments, nor the UN, nor the large corporations have the desire, the capability or the required understanding to end global poverty. Hatch’s response to a question from the floor was that it would be easier for a camel to pass through the eye of a needle than for a banker to lend money to a poor. How true!
• The media are all focused on the top-down globalization, the one that has to do with corporations expanding more rapidly ever; A little only is said on a second globalization that is happening at the same time, a bottom up globalization where wealth is created through helping the poorest get out of poverty. Making this second globalization a success can only be the result of a grassroots effort
• No Federal tax is going to change anything. John’s estimate is that 1/3 of a penny only from our average taxes goes to helping the poor (peacefully!). If we want extreme poverty to be eradicated, we better take action ourselves directly.

All of the above led John to focus his efforts on the people living in extreme poverty ($1 and less per day). According to him, they are feeling so disempowered, with so little self-esteem, that are not even in a position of picturing themselves as entrepreneurs. Hence, the need for a preliminary phase aimed at providing them with a “ramp” to access the first step of the ladder.

Providing this ramp is the whole purpose of ASAP (Association of Students Against Poverty), his latest venture.

ASAP is not about lending money; it is about teaching how to save money. Hatch believes that the poorest can still save money, even if only a penny a day. What matters really during this preliminary phase is not the amount of money saved; it is the process of saving the money.

ASAP will help their members save more efficiently by matching their savings. This whole process will help develop a sense of empowerment, and after a certain period of time, most members should be ready to enter into the cycle of micro-financing, thus lifting themselves up out of extreme poverty. Isn’t great?

That said, Hatch recognizes that one of ASAP’s major challenges will be reaching out to the poorest. Based on his experience with the Peace Corps, Hatch believes that the generation Y is the most likely to be the first to embrace his ideas and help make his dream come true. ASAP is working hard to offer significant incentives to students who enroll, from grants to student loan repayment facilities, etc. in exchange for their involvement in reaching the poor

The math is simple: ASAP wants 2 million donors to reduce their consumption by $1/day so these savings can be invested in helping the world’s most destitute families escape poverty. By 2025, he hopes to have raised $8 billion on behalf of 50 million of the world’s poorest families.

Yes, It takes only 2 millions Americans to remove extreme poverty ($ 1 / day or less) from this planet by 2025!!!!

It would be so wonderful to hear more often about this other globalization, and may be less about large corporations flooding our planet with their less-than-needed products.

For more, you can visit the WEB site of ASAP, Hatch’s new initiative [by clicking here], or have a look at his page on Wikipedia, by [clicking here].

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