By Elizabeth Keach
A blind man walks towards me as he whispers prayers through broken teeth and parched lips. His kaftan skirts the dust before him, sweeping rhythmically left to right through the seething Medina market, undisturbed. Heaped spices tumble next to chopped and feathered fowl, and leafy mint bundles are tossed into vats of boiling sweet tea water.
“Amerikya” I say, with a diffident smile as some teenage boys start to follow me, joyfully shouting out nationalities.
I pass the turtle stall where three different sizes of turtle can be purchased, then the jellyfish and carpet shop to my right, the pajama stall, the date, nut and raisin man with the moustache, the olive vendor… For several moments, time is irrelevant and I witness what hundreds of years in this ancient city of Rabat have barely changed. One dusty, veiled woman squats before her pottery. Three skinny boys chase fruit flies with palm fronds through the maze of a thousand white stucco façades that stretch skyward, encasing mosaic windows and hidden riad interiors.
Here I am in Morocco. For three months, I’ll be working for Al Amana, the largest microfinance institution (MFI) in the country. Despite Morocco’s status as a middle-income country ($3,800 GDP per capita), its poverty rate is a shocking 19% due to the expansive rural zones where 65% of the population live on less that $2 a day. Due to the dire conditions, local NGOs began to take interest in development via microfinance the 1990s, following the lead of successful implementation of other microfinance ventures such as the Grammeen Bank in Bangladesh that pioneered microfinance in the 1970s. Answering the call for a Moroccan-based microcredit system, Al Amana was founded in 1997 with help from a hefty grant from USAID. Today, it serves nearly half a million active clients offering loans ranging from 1,000 Dirhams, ($125.00) to 50,000 Dirhams, ($6,200) with the goal of improving working and living conditions throughout the country, facilitating social and economic development for the poor of Morocco. Roughly half of Al Amana’s clients are women.
The Author (right) with Aicha, a Seamstress
I’ve spent the day visiting the “antennes” or branches of Al Amana, which are scattered around the city limits of Rabat. These are the forgotten slums of the city, where diseased cats feast on strewn waste, and poverty is as apparent as the Arabic graffiti that’s scribbled across the destroyed façades of colonial villas. Each Al Amana branch has five employees and serves up to 400 clients, offering services such as prêts solidaires (group loans), prêts individuals (individual loans), and prêts de logement (housing loans). Aicha Oufel is one of four women who have taken on a group loan, each guaranteeing one another, each pursuing different micro-businesses. A seamstress, Aicha has come to pay a third month’s installment on the 7,000 Dirham loan she has taken out to purchase more material. She tells me that she hopes to get a housing loan next but that it may be difficult since she has no residence papers. When I ask her how her family responded when she took out a microloan, her wrinkled face turns serious. Glancing at me hesitantly for a moment, she admits in a whisper, “my husband doesn’t know.”
It may seem strange that a microfinance institution would provide housing loans as one of their main services, but the reality is that most Moroccan women at this level of society are not encouraged to venture out of their homes to find jobs. Thus women tend to take up work that can be easily done at home, and if her house is not properly built and secure against theft or the elements, a woman could lose both her home and her business.
This is also why Al Amana, like many other microfinance institutions, wishes to expand its services: it wants to adapt to its clients’ needs. By 2011 Al Amana hopes to obtain full status as a bank in order to provide its client base with services such as deposits, savings accounts, money transfers and electronic accounting while at the same time keeping its non-profit tax benefits. Regardless of Al Amana’s profitability and wish to transition to bank status, its directors feel that its particular social mission should still exempt it from taxation as a for-profit bank. In Morocco, as in other countries, there has been considerable grey area in categorizing MFIs as for-profit or not-for-profit institutions. Al Amana is categorized as a non-profit organization with a social mission yet it has, over the past decade, turned into a self-sufficient multi-million dollar institution, issuing bonds to banks it borrows from and facilitating for-profit transactions.
Al Amana is also in direct competition with the 11 other microfinance institutions in Morocco. However, yesterday, I came across a term on Al Amana’s Web site that captures what it claims to strive for: “co-opetition.” To achieve its goal of alleviating poverty in Morocco, the organization plans to increase transparency and relay information across the Moroccan microcredit sector so that all institutions can learn from one another. The more the merrier, Al Amana’s CEOs seem to be saying. And yet, Al Amana is still eager to be the first to reach the estimated 5 million impoverished Moroccans who have yet to take out a microloan.
Whereas some Moroccan institutions charge interest rates that are as high as 80%, Al Amana has kept its rates low. While some say these predatory rates are necessary to cover high transaction costs and build the organization so that it reaches the maximum number of clients, I wonder if these institutions have lost sight of microfinance’s original purpose. Meanwhile, major investment banks such as Citigroup and Deutsche Bank are starting microfinance programs, which makes me wonder what their true motivation is. As I see it, any form of exploitation on their part would erode the social mission of microfinance, and would only serve to undermine positive outcomes in the long term.
In the afternoon, I go with Muhammad, a former banker from Montreal, to the ancient town of Salé to shadow him as he visits the studio of a carpenter who crafts intricately carved pieces of furniture with traditional Moroccan designs. Mohammad introduces me to Omar the carpenter, who tells me in broken French that his other job is “actor” and that he hopes I will take him to Hollywood one day because he loves America. We sit down, and I watch as Muhammad go through his list of questions in Arabic and takes inventory of saws, chisels, hammers and nails lying about his work space. Omar passes us some photographs of a recent project: a carved cedar bed frame that he has just sold to a shop in the medina.
Several days later, I find myself alone in Rabat’s Kasbah at sunset. I stumble upon a ruined cemetery and make my way into its midst to watch the fading colors play over miles of tombstones stretching into the sea. After another busy day of meeting with clients, I am once again able to have my own thoughts, to feel my own two feet on the warm Moroccan earth. A bone-thin man crouches near by, smoking. To my relief he gives me a brotherly, toothless smile as if to say, “this is my cemetery and you are welcome here, you strangely unaccompanied, western woman.” I smile a silent “thank you” and seat myself on the warm granite stairs leading down the cliff. The sea air blows lightly across my face. And at this very moment of hushed splendor, a thunderous boom splits the air around me—the cannon from the Royal Palace signaling f’toor, the breaking of the Ramadan fast at sundown. Over the ancient PDA system comes the now familiar chant, “Allahhhhhhhhhu akbar! Allahhhhhhhu akbar!” God is great!
Though three months in this country is hardly enough time to make even the smallest dent of a difference, my appetite has been whetted, my curiosity ignited, and I am thrilled to be part of this emerging and cutting-edge sector. Microfinance may or may not halve poverty by 2015 as the UN Millennium goals have called for, but I do believe that within this smart sector of banking lies the answer to much of what global aid programs have been trying in vain for decades to achieve. In the words of Muhammad Yunus, “Poverty is caused by the failure at the conceptual level, rather than any lack of capability on the part of people.” If we can continue in this direction, evolving our concepts of banking to the needs of the world’s poorest people, our potential for eradicating poverty is unprecedented, enormous and very exciting.
Elizabeth Keach is a Seattle native and a recent graduate of Mount Holyoke College, where she earned her degree in International Relations.
