Nada Shawish reports on how microcredit is helping China’s rural poor.
Xiyang Village, China—Sha Ximei feeds her cow in her small clay shed, and smiles with tired eyes. The crops on her farm don’t make enough money, so she has to travel to Pingliang city to take whatever labor jobs she can get to feed her family.
Jobs are becoming more and more scarce in China, especially for people living in rural areas. In the past, rural migrant workers like Sha have flocked to the city to take jobs as day laborers in factories or construction sites.
Without education or funds to start something new, they don’t have much alternative.
But with the recent economic downturn, and demand for Chinese products reduced internationally, these jobs have been cut and people are forced to return to their farms. Now, when Sha can get work in the city, it’s very hard to get there and it’s usually only for a single day.
With these kinds of jobs, Sha can barely put food on her family’s table.
Farmers like Sha make up the majority of people living below the poverty line—nearly 90 percent of China’s poor live in rural areas. And China has the second-largest population of impoverished people in the world—245 million Chinese live on less than $2 per day. You’re either rich or poor in China, and that economic gap is only getting wider.
“We don’t have enough money to survive,” Sha said.
But Sha has an idea.
She wants to have income that she can count on, so she borrowed some money from relatives to buy a cow that can produce milk and other goods to sell. She hopes to raise a herd.
Raising livestock in China can help her family earn a good living, enough to support her son’s education one day.
But Sha needed to buy a few more cows and supplies to get started. These cost money that she didn’t have, and loans are hard to come by.
Microfinance has become an increasingly vital tool in promoting sustainable livelihoods in impoverished communities in the last 30 years.
Micro-financing and micro-credit programs have existed in China for more than 20 years, but China’s micro-finance institutions haven’t had much success. And while China looks for a micro-finance model that works internally, complicated bank formalities make acquiring loans especially difficult for poor farmers like Sha.
While banks can provide larger business loans, many banks and local credit agencies in China won’t help small businesses that need smaller loan amounts.
So financing remains a major obstacle for people who want to improve their lives in places like rural China.
Islamic Relief’s Pingliang Islamic Microfinance program is giving people in China the opportunity to create means of earning a living that are sustainable. The Islamic Microfinance program makes it possible for poor people, especially poor people in rural areas, to get interest free-credit that they can invest in income-generating projects and education.
The Islamic Microfinance program is born out of the micro-finance idea and is inspired by Islamic values. The people are the owners of their work and their profits, meaning that the role of the lender is minimized. The loans are interest-free, and the borrowers, China’s rural poor, can reinvest more of their profits back into their own business, to help them get out of poverty faster.
With her interest-free credit, Sha has been able to buy the cows she needs, along with supplies and veterinary care to keep them healthy. She’s even getting training in how to grow her herd and care for the animals on her farm.
The goal of sustainable livelihood projects like Islamic Relief’s Pingliang Microfinance program is to create a sustainable means of generating income. And these types of projects are proven to reduce poverty in a lasting way.
The United Nations has consistently found that sustainable livelihood projects are better than other types of humanitarian aid projects at reducing poverty long-term. This is because they are tailored for each community and family, helping people build the situation they need to earn a reliable living. People with sustainable livelihoods are better able to rebound after a disaster, and are better equipped to grow over time. They’re empowered to improve their own lives and help create jobs for others in the community.
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For Sha Ximei, the support to start her new way of life has been heaven-sent.
“Thank you so much to all those kind-hearted people who have given their support to make this possible on my farm.” Sha presses her lips and nods. “This is my opportunity to help my situation.”
SOURCE: ISLAMIC RELIEF US