Could We “Walk Away?”
Out of all that was said in the two articles this week, the “Walk Away” test mentioned by Fisher really struck a cord with me. As I see it, this is one of the most useful tools available to measure our impact. Put simply, if La Ceiba were to shutdown tomorrow, would our clients have the means to continue improving their economic well-being? If the goal is self-sufficiency and we have no definite time horizon (I’d like to believe La Ceiba will be around for a while) then we have time, this test doesn’t necessarily apply to the present, but it does apply to present policy and its ability to make our clients no longer need us (although, hypothetically, if the reach the stage at which they are self-sustained, they may still choose to use us for credit.) What makes me potentially wary is programs like the “eco-clutch” bags, which puts La Ceiba in the position of both creditor and purchaser, at which point LC also becomes the wholesaler. What worries me is that clients will become dependent on this mode of repayment/income-creation, but we, as LC will not be able to sell the eco-clutches indefinitely (the Fredricksburg-DC corridor doesn’t have an infinite market.) So, by encouraging or allowing this form of repayment, the clients specialize in these artisan goods, but if our ability to sell these items diminishes, while at the same time more and more clients would like to participate, we put ourselves in a rough position. If we were to “walk away” would the clients be able to find a market for their eco-clutches on their own? If so, then we should encourage our clients to sell to whomever is interested outside of LC. If not, then we are making them dependent on us in a way that is arguably unsustainable. To pass the “walk away” test, our clients would have to focus on domestic markets, in which they provide a service to locals. I could be hopelessly ignorant of some of the issues we face, and, if I am, I’m sure someone will let me know, but I think we must always keep in mind that our goal is for us to not be needed.
I Definitely agree. That is something we have to consider in not only the “eco-clutch” program, but all our other programs. If we stopped giving loans, for example, would everyone be able to continue advancing their personal income? I can’t say for sure. But its definitely a good point worth considering as we continue this Micro-finance program.
I agree that sustainability is something that we must look at as a group. If there is to be true change then it must continue to occur even when we as an organization are not around. However, I think that the eco-clutch bags can be a positive for sustainable impact. The “In MFI, Clients Must Come First” article, the authors discuss the other ways that MFIs can help their clients besides providing loans. One of their examples is creating value chain support for their clients. We can create a value chain for our clients and it is already in progress. By establishing a relationship between the women in Honduras and sellers in America, we are becoming the middleman, which can be taken out of the equation. If the women can sell directly to people in the United States, then La Ceiba will have provided a sustainable impact that will help in meeting our goals.
I agree with the previous poster that we are just the middleman between larger markets and the producers of the bags. This ties into a larger problem, or perhaps a goal, and that is to give the people that we work with access to larger markets. Perhaps if we walked away today then the channels through which the eco-bags are sold may close, but this offers us the opportunity to analyze the benefits and work towards introducing our clients to larger markets both in Honduras and around the world. The SHH computer center is a step forward in creating the infrastructure necessary to opening larger markets, now the loans are essential for making them more competitive by producing goods. All of the things that this organization has done so far may not be sustainable if we walked away today, but the purpose of progress is so that perhaps tomorrow they will be.