Welcome Michaela Walsh (Women’s World Banking)  and Host Bethany McLean (Vanity Fair) (Author – All the Devils Are Here)

Founding a Movement: Women’s World Banking, 1975-1990

Back in the summer of 1975, a group of women met at the first United Nations Conference on Women in Mexico City. A Danish economist named Ester Boserup had just published an analysis noting that while women performed over 65% of the world’s work, they earned only 10% of the income, and owned less than 1% of the world’s property. And women were routinely denied commercial banking privileges. One of the attendees, Michaela Walsh, had what was at the time a radical observation: unless women got access to money and credit, they would never have power. Over the next decade, the network she created, which has come to be known as Women’s World Banking, became one of the pioneering forces in helping women entrepreneurs enter the financial world and get credit they would not otherwise have been able to access. Today, WWB is an integral part of what we all know as microfinance.

In Walsh’s new book Founding a Movement she describes Mexico City as a “game changer for my life, a complete paradigm shift.” But, as she notes, in many ways she was ideally suited for this work. Her grandfather, Frank Walsh, was a social activist who, among other things, co-wrote the congressional proposal for the child labor law. Social justice was in her blood. She grew up in Kansas City, and after college she went into finance because, she writes, “That’s where the power was, and I was fascinated by how one could use power to make people’s lives better.”

Walsh’s first job was as a sales assistant for Merrill Lynch in Kansas City. She moved to New York—and then made her way to Beirut, even though her superiors told her that Beirut was “too high risk for women.” All of her experiences helped her understand how little access women had to the real economy. She also began to realize that, as she puts it, “There was a gap between my personal values and my work on Wall Street.” And so, in 1972, she became a program associate at the Rockefeller Brothers fund.

Walsh’s methodology was not that of modern business-oriented philanthropy. “It wasn’t like she had a very clear business plan,” Marilou von Golstein, another microfinance pioneer, recounts. “The vision was the starting point, and then she had to figure out what was the best form to make it real.” To make matters more difficult, Walsh was also determined to break free of the strictures of conventional banking; not just in terms of who WWB offered loans to, but also in how they operated. “My commitment was to organize WWB as an institution in support of a movement, not a ‘top down’ directorate,” Walsh writes. And so, WWB grew up as a network composed of affiliates, thereby allowing individual groups to operate as they think best. “There was no prescribed formula,” writes Walsh. “It was never assumed that what was working in Africa would automatically work elsewhere.”

Today, WWB is still the only microfinance network with an explicit focus on women. It has 19 million clients around the world, 73% of whom are women, and operates through a network of 39 microfinance institutions in 28 countries.

“It is my profound trust that the movement of women helping each other gain full control over their economic destinies is the basis of how the world will change for the better,” writes Walsh.

Of course, the very success of WWB also raises some interesting questions that Walsh hints at in Founding a Movement—how to manage the tension between the need to produce profits that is embedded in the modern concept of microfinance with the social justice that inspired it, what’s gotten lost given that the business-like nature of modern philanthropy may not have permitted someone like Walsh to get her start, and perhaps, what lessons today’s mega financial institutions might be able to learn from WWB.

 

[As a courtesy to our guests, please keep comments to the book and be respectful of dissenting opinions.  Please take other conversations to a previous thread. - bev]

69 Responses to “FDL Book Salon Welcomes Michaela Walsh, Founding a Movement: Women’s World Banking, 1975-1990”

BevW January 26th, 2013 at 1:52 pm

Michaela, and Shamina De Gonzaga, Welcome to the Lake.

Bethany, Welcome back to the Lake, and thank you for Hosting today’s Book Salon.


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Michaela Walsh January 26th, 2013 at 1:56 pm
In response to BevW @ 1

Thank you Bev, we’re delighted to join the discussion – Michaela and Shamina

Bethany McLean January 26th, 2013 at 2:01 pm

Hi, everyone. Nice to meet you all! Michaela, I thought we could start with a question about your timeline. Maybe you could tell everyone why 1975 was such a pivotal year for you.

dakine01 January 26th, 2013 at 2:01 pm

Good afternoon Michaela and Shamina and welcome to Firedoglake this afternoon. Hi Bethany and welcome back.

Michaela or Shamina, I have not read your book so forgive me if you address these questions in there but how do you and the WWB compare with Muhammad Yunus and Grameen Bank? Do the WWB loans have either a ceiling or a floor as to the amounts loaned? What loan do you consider the biggest success?

Elliott January 26th, 2013 at 2:04 pm

Welcome to the Lake you two

Bethany – thank you for your work revealing the corruption that was Enron. I’m from Pennsylvania and couldn’t figure out who was behind the push for electricity deregulation because I knew it wasn’t from the general population – and then I started seeing the ENRON ads on my TV. What a difference your reporting made in our world.

Michaela – I’m fascinated by the microfinance movement which I associate with Muhammad Yunus, learning about it through 60 Minutes and my friend Millineryman. I know of its power in underdeveloped countries, is it a big deal in the 1st world?

Michaela Walsh January 26th, 2013 at 2:06 pm
In response to Bethany McLean @ 3

1975 marked the first time a United Nations Conference on Women was held- I was told to attend by the RBF. I had never before focused on the role or needs of women, or met committed entrepreneurial women from around the world -I was one of the only women in finance present and from then on became deeply committed to help solve a problem and realized what a strong feminist I really was.

Michaela Walsh January 26th, 2013 at 2:10 pm
In response to dakine01 @ 4

WWB is an independent global network of women’s financial institutions in 40 countries. Grameen Bank is a national bank in Bangladesh. Mr. Yunus was a brilliant voice. In WWB, all members are leaders in their respective country and shared a global voice. Each WWB affiliate is run differently so there is no organization-wide ceiling or floor- There is no way of evaluating which loan constituted the “biggest” success.

Bethany McLean January 26th, 2013 at 2:11 pm

Michaela, it’s so interesting that your concept of “decentralization” seemed to be key to you from the very beginning. Can you talk about why you felt so strongly about that?

Teddy Partridge January 26th, 2013 at 2:17 pm

Welcome to FDL! What a remarkable movement.

women performed over 65% of the world’s work, they earned only 10% of the income, and owned less than 1% of the world’s property.

Can you tell us what these statistics are now, more than 35 years later?

Thank you.

Michaela Walsh January 26th, 2013 at 2:17 pm
In response to Elliott @ 5

WWB was established as a local loan program. “Micro” evolved later as an industry. Less industrialized countries have much diversity in their economies. While there were several WWB affiliates set up in the US and in other industrialized countries, in the US, for example, given that it is a very centralized economy, it was difficult to maintain.

Michaela Walsh January 26th, 2013 at 2:20 pm
In response to Bethany McLean @ 8

We did not know how business was done country by country and were trying to create a network that would connect and benefit women around the world. For women to have ownership of their own production and access to the formal economy they had to work under the rules of their own Central Bank. Therefore, we could not dictate rules and regulations from above.

Bethany McLean January 26th, 2013 at 2:22 pm

Early in the book, you write that “I was struck by my own sense that the American way was the only way, and at that moment it became clear to me that there are many ways to arrive at a successful outcome.” Can you tell us about that moment, and the impact it had on you?

Michaela Walsh January 26th, 2013 at 2:24 pm
In response to Teddy Partridge @ 9

Ester Boserup’s quote was from the 1970s – the statistics today we want to believe are better, but we also have to recognize that there is more poverty in the world today than there was then – which predominantly affects women.

Michaela Walsh January 26th, 2013 at 2:29 pm
In response to Bethany McLean @ 12

I was managing a Merrill Lynch staff in Beirut, Lebanon, from 1960-64. I asked the young office messenger to do something and his reply was “why do I have to do it your way, when we’ve always done it this way?” I was speechless and then realized that my approach, the American approach, was not the only way. It affected me for months to come and impacted me in my views about trusting and respecting diversity.

Bethany McLean January 26th, 2013 at 2:29 pm

I love the part of the book where you quote Ela Bhatt saying at meetings, “Nobody talks about poverty and women. Is that perhaps an issue we can talk about? It seems that when you’re trying to run a complex start up on a shoestring, it’s easy to lose sight of what you’re actually trying to achieve. Why do you think that happens?

Michaela Walsh January 26th, 2013 at 2:33 pm

The entire first decade of WWB – my presidency of the organization -included disagreements and tears at every board meeting, because of the conflict in the perception of whether WWB was to be an institution or a movemennt. The experience of bankers, entrepreneurs and international development professionals from different parts of the world produced discussion about the bottom-line focus of what we were doing. Ela and I often debated whether we were serving members who were “poor women” or “low-income women.”

Bethany McLean January 26th, 2013 at 2:35 pm

What do you see as the distinction between those two descriptions – “poor women” and “low income women.”

Bethany McLean January 26th, 2013 at 2:36 pm

Also, perhaps, elaborate on the distinction between an institution and a movement. It seems to me that institutions can easily become immovable, but maybe that’s just my reading!

Michaela Walsh January 26th, 2013 at 2:38 pm

What made WWB unique at the time, and perhaps still today, was that there were many founders, all committed to the same cause, but diverse in experiences and cultures. Although this generated frustration, misunderstanding and lengthy processes, it helped preserve the integrity of the network and voices of all the members. We hope that this book can help make the case for a different concept of leadership.

Michaela Walsh January 26th, 2013 at 2:44 pm
In response to Bethany McLean @ 17

Several of the founders from Africa often said “we may be poor in terms of money, but we’re not poor in spirit.” By saying that we were working with entrepreneurial women who were low-income, we were acknowledging them as active business people, which is often not included in the concept of “the poor.”

Michaela Walsh January 26th, 2013 at 2:45 pm
In response to Bethany McLean @ 18

I agree – part of the distinction was about the allocation of resources. Many wanted a very efficient large top-down institution, as opposed to distributing more resources into the programs around the world and strengthening local capacity.

Bethany McLean January 26th, 2013 at 2:45 pm

Your point about a different concept of leadership raises an interesting question, one I thought you hinted at in the book. Do you think today’s big financial institutions could learn something from WWB?

BevW January 26th, 2013 at 2:46 pm

Michaela – have you noticed any difficulties in making the loans to women because of a lack of “education” in third world countries? Meaning, with a limited reading/writing/math background – how well do the women preform in their businesses?

DWBartoo January 26th, 2013 at 2:47 pm
In response to Michaela Walsh @ 19

Thank you for joining us this evening, Michaela and Bethany.

Michaela, you just said the magic words: ” … a different kind of leadership”.

That is precisely what humankind must now forge, a different kind of leadership, broad based and receptive.

And who, better than women, who invented agriculture, after all, to lead the way?

DW

BevW January 26th, 2013 at 2:48 pm

Where were the first loanes you made? How much money? What was the business the women were funding?

TobyWollin January 26th, 2013 at 2:49 pm
In response to Michaela Walsh @ 19

Michaela – What has been WWB’s experience that is the same for female entrepreneurs all over the world that you serve versus the major difference between female entrepreneurs in the US or Canada and other countries?

tuezday January 26th, 2013 at 2:49 pm

What type of businesses are these women running and what are they producing? And for whom?

Michaela Walsh January 26th, 2013 at 2:49 pm
In response to Bethany McLean @ 22

ABSOLUTELY! we’re hoping that by engaging with students at universities around the world, younger people will have the confidence to launch their own “movements!”

tejanarusa January 26th, 2013 at 2:50 pm

So,how did you get money to lend out? Do your local banks take deposits, and make loans from that capital? Or did you start with grants from institutions like Rockefeller, which perhaps is why you had so many of the tradtional view at board meetings?

dakine01 January 26th, 2013 at 2:51 pm

Have there been any/many WWB ‘branches’ that have had to be shut down due to opposition from national banks? Or opposition from religious leaders?

Elliott January 26th, 2013 at 2:53 pm

It’s fascinating that this goes all the way back to 1975 – did you realize then how life-changing this would be for women?

Michaela Walsh January 26th, 2013 at 2:55 pm
In response to BevW @ 23

Training was a crucial part of our strategy – in those days, women had no experience in how to write a business plan or make a loan, some had no ability to read or write, but we helped them acquire the skills to defend a loan application. In many cases, the lack of formal schooling didn’t imply lack of business savvy and many did not require literacy to run their small businesses. At the same time, we also trained literate women be loan officers.

Michaela Walsh January 26th, 2013 at 2:56 pm
In response to DWBartoo @ 24

We agree – good leaders do not create followers – good leaders create leaders.

Michaela Walsh January 26th, 2013 at 2:58 pm
In response to BevW @ 25

The first loans were given by the Cali Colombia affiliate. ONe of the first was to a woman who was helping her husband set up a bicycle repair shop. She later came to the US and was interviewed in the Today Show with me. When Shamina interviewed her for the book (almost 30 years after the initial loan), we learned she now owns three large retail stores in Colombia.

BevW January 26th, 2013 at 3:01 pm
In response to Michaela Walsh @ 34

That is a great success story. From one loan, many families and lives have been touched and made better.

How many loans are given out annually now by WWB?

Michaela Walsh January 26th, 2013 at 3:02 pm
In response to TobyWollin @ 26

WWB was designed to address the economies of local communities. Every individual entrepreneur is shaped by the culture and economy in which she is producing. Theoretically entrepreneurs everywhere are similar although their needs and opportunities vary according to scale and other factors. Today’s global economy did not exist when WWB was founded, which is why we emphasized lateral learning and exchanges throughout the network.

Michaela Walsh January 26th, 2013 at 3:04 pm
In response to tuezday @ 27

There are countless types of businesses, responding to the local needs. In Kenya today the Kenya Women’s Finance Trust has one million members, 90% of whome are in rural areas, dedicated to agriculture, as well as the provision of other products and services for their local communities and regional economies.

Michaela Walsh January 26th, 2013 at 3:07 pm
In response to tejanarusa @ 29

One of the unique aspects of WWB was to establish a global Capital Fund that provided guarantees to local banks to make loans to people who were regarded as “too high risk” (women – especially low-income). Most of the funding came from European and Canadian government development agencies and individuals and was matched by the local banking, individual and business deposits.

Michaela Walsh January 26th, 2013 at 3:12 pm
In response to dakine01 @ 30

The affiliates that were disaffiliated were either not in compliance with agreed to practices and operations, or lacked sufficient local funding. To my knowledge, WWB affiliates had encouragement from Central Banks and were never shut down due to pressure from religious communities.

dakine01 January 26th, 2013 at 3:14 pm
In response to Michaela Walsh @ 39

Are there any countries where WWB is not operating today? WWB choice or local choice?

Michaela Walsh January 26th, 2013 at 3:14 pm
In response to Elliott @ 31

In hindsight it was life-changing for many of us, but we certainly did not know that it would be so impactful – an encouraging sign for others to think about taking some risks.

Michaela Walsh January 26th, 2013 at 3:16 pm
In response to BevW @ 35

I don’t have that information in hand, but WWB’s Annual Reports are available – I can get one for you if you would like.

Bethany McLean January 26th, 2013 at 3:17 pm

At one point, you mention that efforts to make WWB self sustaining by developing a for profit component hadn’t taken off by 1990. Why is that important, and has it changed?

Michaela Walsh January 26th, 2013 at 3:21 pm
In response to dakine01 @ 40

At the end of the first decade, there were about 50 affiliates in formation. Today there are 39 registered affiliates (many are national banks)in 28 countries. All affiliates join WWB by choice and agree to a set of criteria for membership. If that criteria is not met then affiliation is not possible.

Michaela Walsh January 26th, 2013 at 3:25 pm
In response to Bethany McLean @ 43

In order to be self-sustaining, we had hoped for an equity fund and then learned that we were over-ambitious in terms of funds available for international development for women. Today there appears to be an increasing interest in equity investments in less industrialized economies. Let’s hope a portion of that goes to women entrepreneurs.

BevW January 26th, 2013 at 3:27 pm
In response to Michaela Walsh @ 32

In many cases, the lack of formal schooling didn’t imply lack of business savvy and many did not require literacy to run their small businesses. At the same time, we also trained literate women be loan officers.

Have any of these women gone on to head major financial institutions or banks?

BevW January 26th, 2013 at 3:29 pm

Do you have any stories you would like to share about individuals you have met, success stories?

Bethany McLean January 26th, 2013 at 3:30 pm

Russell Phillips says that “I imagine that if Michaela were to appear today with the same kind of context, she would have a hard time getting funding, because she wouldn’t be able to show quantitative results in eighteen months time.” If that’s true, do you think that’s a problem in today’s philanthropy?

Michaela Walsh January 26th, 2013 at 3:34 pm

an interesting shift that i believe is taking place as a result of technology is from centralized leadership to greater engagement of civil society – namely young people who need to innovate – we are finding that “Founding” has strong interest within schools and universities -

tuezday January 26th, 2013 at 3:35 pm

I was just reading some of the profiles on WWBs website. I was struck by the fact that many of these women have husbands who are unemployed, underemployed or disabled and one quit his job to work for his wife, does this cause any cultural problems at home? Or do the men have to be fully onboard, and supportive of their wives starting their businesses and taking out loans, before they receive loans?

Michaela Walsh January 26th, 2013 at 3:36 pm
In response to BevW @ 46

many of the loan officers were already in business when we trained them – many went on to lead affiliates. many of the daughters of the original borrowers’ who had no formal education, have now graduated from college – the challenge now is jobs -

Michaela Walsh January 26th, 2013 at 3:40 pm
In response to Bethany McLean @ 48

Absolutely, that is a problem. The accounting requirements that are now imposed by many donors do not allow for any flexibility. As a function of these dynamics, many local organizations tailor programming to suit the funders’ guidelines. Lilia Clemente’s chapter describes our accounting for the first decade.

Teddy Partridge January 26th, 2013 at 3:43 pm

What can the US government or US banks (hahaha!) do to promote women obtaining capital and businesses, actions that don’t seem on their radar at all now?

Michaela Walsh January 26th, 2013 at 3:45 pm
In response to tuezday @ 50

Although Founding is not about current members, there are many anecdotes from Founders about how funding women in villages affected the culture of the village and women’s families. Husbands’ approval has never been a prerequisite for receiving loans in WWB. Some affiliates provide individual loans to men, as well as to women.

Bethany McLean January 26th, 2013 at 3:47 pm

I loved Lilia Clemente’s comment, “one basic attitude we try to embody in our WWB work is a distrust of grandiose schemes.” We could all learn from that!

tuezday January 26th, 2013 at 3:47 pm

I have read that small farmers in India have taken out small loans to buy genetically modified seed that is not really suitable for their climate, although marketed as the greatest seed ever. The seed doesn’t produce a crop, the farmer can’t repay the loan and this goes on for a couple of years (vicious cycle) until the farmer commits suicide. To what extent does WWB guide women to avoid pitfalls similar to what I just described happening in India, and elsewhere I am sure?

Michaela Walsh January 26th, 2013 at 3:47 pm

Local community banks in the US have a better track record in terms of making local loans and supporting small businesses than do the large banks. It would appear that this would have a direct bearing on women-owned businesses.

Michaela Walsh January 26th, 2013 at 3:49 pm
In response to Bethany McLean @ 55

I hope some day you get to meet Lilia Clemente – she is one of our dearest friends and in the very beginning, was responsible for WWB’s survival.

DWBartoo January 26th, 2013 at 3:49 pm
In response to Michaela Walsh @ 51

The “challenge” is, indeed, jobs, Michaela, and jobs that match the level of education obtained, often at great expense, by young people living in less civilized nations and societies (and I include the USA, by the way, in that “less civilized” category ). As this this now, as you say, is a global economy, an interconnected “system”, that challenge is ubiquitous … and I wonder if you might name a country or region where there is a sustained and informed effort underway to meet that challenge? How do you see the current widespread infatuation with “austerity” playing into this, in the near-term, as well as in the “long run”?

DW

BevW January 26th, 2013 at 3:50 pm

As we come to the end of this great Book Salon discussion,

Michaela, Shamina, Thank you for stopping by the Lake and spending the afternoon with us discussing your new book, and the Women’s World Bank and its lasting impact on the world.

Bethany, Thank you very much for Hosting this great Book Salon.

Everyone, if you would like more information:

Michaela’s website (WWB) and book (Founding A Movement)

Bethany’s website (Vanity Fair) and book (All The Devils Are Here)

Thanks all, Have a great weekend.

Tomorrow: Donald Tomaskovic-Devey / Documenting Desegregation: Racial and Gender Segregation in Private-Sector Employment Since the Civil Rights Act; Hosted by Dr. June Carbone

If you would like to contact the FDL Book Salon: FiredoglakeBookSalon@gmail.com

FDL Book Salon has a Facebook page too

Michaela Walsh January 26th, 2013 at 3:50 pm
In response to tuezday @ 56

Part of WWB’s mission is to help borrowers make informed decisions about loans, since they represent a risk in their business.

Bethany McLean January 26th, 2013 at 3:54 pm

Thanks to everyone at firedoglake for introducing me to Michaela and her work! Michaela, I do indeed hope I get to meet both you and Lilia at some point. Congratulations on all you’ve done.

DWBartoo January 26th, 2013 at 3:55 pm

A most fascinating and informative Book Salon!

Thank you, Michaela and Bethany, for joining us.

Thank you, Bev, as always.

My appreciation, always, to the denizens of the lake who gather here.

A pleasure to spend time with you all.

DW

DWBartoo January 26th, 2013 at 3:56 pm
In response to Bethany McLean @ 62

I hope that you and Michaela might drop by the lake whenever time and opportunity permit, Bethany, as you both would always be most welcome here.

DW

Elliott January 26th, 2013 at 3:57 pm

Thank you both,
Michaela, best of luck with this book.

(and thanks Bev, once again)

Michaela Walsh January 26th, 2013 at 3:57 pm
In response to DWBartoo @ 59

More creative opportunities – a new generation of innovators responding to today’s needs, just as the WWB founders were responding to the needs of their time.

karenjj2 January 26th, 2013 at 3:58 pm
In response to Michaela Walsh @ 61

Thank you so much for visiting with us today, Michaela; very interesting and informative discussion of your work.

Michaela Walsh January 26th, 2013 at 3:59 pm

Thank you Bev, Bethany and All for your challenging questions and interest. We hope to meet one day.

Teddy Partridge January 26th, 2013 at 5:05 pm

Thanks to one and all for this enlightening and informative discussion.

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