Every once in a while, Chilo is struck by a bolt of lighting.
Not a literal one, but a metaphoric one – a touch of genius – and I had the pleasure of seeing it happen just the other day. He was sitting in his chair, staring off into the distance on a slow Friday morning.
Obviously, I hadn’t given him enough work to do.
Then it happened. I saw his expression become pensive. He turned around and said he had a question for me. Good, I thought, these are usually productive conversations.
I didn’t know what I was in for.
He wanted to know why I doubted the potential of loans to combat poverty. I explained having a loan and having a debt, and how one was productive while the other was a burden.
He sort of nodded slowly, then asked me a follow up question:
“If you guys weren’t sure you would be helping, how do you know you’re right for Honduras?” he asked.
This was a much harder question to answer, because it had been plaguing my mind too. The question was: Is La Ceiba right for Honduras? How do we know we’re right for Honduras?
I couldn’t answer him right away, and even when I did, I knew I had to work it out in a blog anyway.
But where to start…
An Ethical Institution
To ask if our microfinance institution in Honduras is right or wrong is a question of ethics.
Are we being ethical?
It’s nothing to shake a stick at; an avalanche of studies are showing the damages caused by international aid groups and NGOs. In Latin America alone, “neoliberal development” has started reinforcing gender, sexual, and cultural stereotypes we westerners created ourselves.
We’re literally changing other people’s behaviors with the crappy ones from our own country.
In part, that makes us wrong for that country.
Okay, but La Ceiba is a financial institution – an MFI – so we just handle money, right?
Well, being a financial institution actually holds you to a different set of standards. People deem us ethical if we uphold our “social responsibility” or “obligations to society.” That means efficient payment systems, asset management, advisory services, promotion of savings, and about six other things we owe society, doing what we do.
As long as we do those things, and do them well, then we’re in the right.
That’s the western view – the UK/US view – and it’s been applied to MFIs ever since McNamara denounced financial development in 1973, and Mohammed Yunus took off in 1976.
MFIs fulfill their obligations to society by providing accessible credit to those in poverty, where the banks don’t reach.
An Ethical Microfinance
Reinhard Shcmidt takes this one step further in 2010. He explains there are Development MFIs that hold to an ethics of conviction (Immanuel Kant) and Commercial MFIs that hold to an ethics of responsibility (Max Weber).
In other words, small MFIs that don’t make a profit say they’re right because they have good intentions.
And big MFIs who do profit off the client, say they’re right because they have a big, positive impact.
Schmidt takes the side of the commercial MFIs and says that as long as they aren’t naïve about proper “binding commitments” in their IPOs, they’re not wrong to profit off the poor. Good intentions, small impacts, and not covering your costs, he says, aren’t enough.
I believe he’s wrong.
Although I could debate his point on commercial MFIs all day long, let’s focus on who we are; a small Development MFI.
For those of us on this side of the aisle, grassroots development is key. We want to support financially the entrepreneurs and their businesses to grow. Therefore, according to our moral principles, if we fulfill our ten obligations to society and do so with good intentions, then we’re being ethical.
Our profit is way in the negative.
Guess we’re doing alright so far.
We are on the right track, but if one thing has been overlooked, it’s the original question:
All of this – the credit, the maxims, and the impacts – are all Western ideologies. The original question wasn’t “are we right for Kentucky?” The original question was “are we right for Honduras”!
We are blindsided by this all the time, because US law says international businesses are “beholden” to their country of origin. We assume that if it’s right by our moral code (a puritan moral code) then it must apply everywhere.
Not in Latin America.
In fact, it was this pseudo oppressive, western view that helped inspire Enrique Dussel.
Dussel took our guy’s ethics (Immanuel Kant) and said “No-no-no, good intentions may be the foundation, but they can’t determine right and wrong by themselves. They are subject to other human conditions.”
In 1998, Dussel published the Ethics of Liberation, the distinctly Latin American branch of philosophy, which outlined a better view of right and wrong in the Hispanic-Latino world.
The foundation of it is this: only discourse within the community can lead to ethical decisions.
Good and responsible ethics in developing Latino countries is rooted in the “precariousness of community life.” In other words, we think public opinion and talking something out means we’ve thought it through thoroughly, so the solution must be right.
In Latin culture, the solution is only right when we talk it out within the community.
In Central America, diplomacy tempers truth. Here I’d like to go in for the kill and claim that yes, La Ceiba MFI is right for Honduras.
Why? It’s because our model adheres flawlessly to a liberationist’s view of an ethical MFI.
Client demand essentially designs all of our programs. We only have to listen and build. When there’s a decision to be made, we go to the community and talk it out. From there, we change what’s needed and launch the product. What’s more, everyone’s voice is held equally, between students, staff, and clients, so that no one position in the institution ‘violates’ the ethical discourse.
The client base assures that we hold ourselves accountable to our own intentions when fulfilling our obligations to society.
That’s a mouthful, but the point is:
La Ceiba is right for Honduras, because we act in good faith as an MFI, and we do so within the Honduran context of right and wrong.
Universals be damned, we did it.
This is how I would have answered Chilo on that slow, Friday morning at the office. I feel a subtle sense of closure now that I’ve put it down in virtual ink.
Instead, when Chilo asked me “why did you come to Honduras?” I provided him with a different answer:
I told him there were two things most La Ceiba members wanted to do: to travel and to give back. Working in Honduras let us do both.
This seemed enough to abate the fire in him, sparked by the bolt of lighting.
However, before the conversation went in a different direction, he had one last thought on the subject, and it’s been with me ever since. He asked:
“Is there poverty like this in the United States?”
“Yes,” I said, and listed off a few states.
“Why do you ask?”
“I’m not sure,” he replied, “it’s just that I could never go to another country to help someone, unless I had put in the effort to help my country first. It’s only fair. That’s just how I think, though. You decided to come here and that’s on you. You have to work it out.”
It’s good that our coworker caught his attention then, because at that moment, my heart dropped out of my chest.
With a simple comment, Chilo had uprooted the whole foundation of the argument above. All he had to do was flip the question.
He wasn’t asking if we, La Ceiba MFI, were right for Honduras. Now he wanted to know if I was right for Honduras.
What am I doing here?
This is more insidious, but I’m not sure I can work it out in a blog. Every one of us should ask ourselves this question, talk it out, and think it through.
If you’re like me you’ll probably end up waiting around on slow, Friday mornings, for a bolt of lighting to strike.
Carmona, E. (2010, May 18). Journalism, Ethics, and Democracy: Ernesto Carmona. Retrieved from http://hondurasculturepolitics.blogspot.com/2010/05/journalism-ethics-and-democracy-ernesto.html
Flores, W. (2010, January 15). Los principios éticos y los enfoques asociados a la investigation de la gobernanza en los sistemas de salud: Implicaciones conceptuales y metodológicas. Centro De Estudios Para La Equidad y Gobernanza En Los Sistemas De Salud. Guatemala, 12(1).
Lind, A. (2008, March). Querying Globalization: Sexual Subjectivities, Development, and the Governance of Intimacy. International Studies Association.
Pitta, D. A., Fung, H., & Isberg, S. (1999). Ethical issues across cultures: Managing the differing perspectives of China and the USA. Journal of Consumer Marketing, 16(3), 240-256.
Prior, F., & Argondoña, A. (2009, October). Credit Accessibility and Corporate Responsibility in Financial Institutions: The case of microfinance. Business Ethics: A European Review, 18(4).
Rivera-Sepúlveda, Á A., & Montaño-Peña, N. (2013, June). Ética del discurso y comunicación público-política. Una lectura desde América Latina. Pensamiento Y Cultura, 16(1).
Schmidt, R. H. (2010). Microfinance, Commercialization and Ethics. Poverty & Public Policy, 2(1), 99-135
Important questions to ponder. As for the last one, why go far away to help while those at home suffer, I think each person has a right to find the balance of activities that serves them so they may serve others. All the “shoulds” in the world are pointless if they don’t fuel you to do what you do. Great article.