This article shows how microfinance can be a vehicle of tackling poverty and reaching the poor with the gospel.

Source: Faith in Focus, 2003. 4 pages.

The Poverty Issue The Christian response, good news, and good works

After decades of economic growth in the developed and developing world, the poor are still with us in large measures. The situation today is that, even after three decades of economic growth in Asia, 70 percent of the world’s poor still live there. Over 900 million Asians are trying to get by on less than US$1 a day. The World Development Report of 2003 states that currently 2.8 billion people live on less than $2 a day – almost all in developing countries (World Bank, 2003). Almost one in three people in the region is destined to spend his or her whole life without enough food, proper shelter, or safe drinking water. When they get sick, they won’t be able to see a doctor. They will probably never learn to read and write because they won’t have the chance to go to school. They won’t have a future and nor will their children. They will be powerless. (ADB undated, 2).

How can we as Christians reach out to the poor? What do Scriptures tell us about the poor and about our responsibilities?

The Old Testament classifies the poor in three groups (Stott, 1984). They are, economically speaking, the indigent poor, those people deprived of the basic necessities of life; sociologically speaking, the oppressed poor, who are powerless victims of human injustice, and spiritually speaking, the humble poor, who acknowledge their helplessness and look to God alone for salvation. All the teachings of the Old and New Testament tell us that God cares for the indigent poor, champions the powerless poor and exalts the humble poor. In each case ‘he raises the poor from the dust’ (Stott, 1984:220).

Many of the poor do not end up where they are because of personal incompetence. They are born into it. Children born to poor parents have greater health risks and have fewer support services available to them. They are locked into a cycle of poverty, encouraged to some extent by our economic system, and exacerbated by natural disasters to which they are vulnerable. These people live in a ‘culture of poverty’ and it is nearly impossible for them to get out of it.

Material poverty is often measured solely in terms of income, e.g. income below US$1/day, and while this measure is still used widely, it is also universally agreed that such a definition is too narrow. Many today understand poverty to mean a lack of access to essential assets and opportunities. Individuals and societies are also poor, if they lack the ability to participate in making the decisions that shape their lives. Therefore, reducing poverty must also involve eradicating feelings of powerlessness (e.g. social exclusion due to barriers against ethnicity and race, gender, age or physical handicap).

Good news for the poor🔗

The Old Testament writers saw the poor (who included widows, orphans and aliens) as people to be cared for, not blamed. They are regarded not as sinners but as “the sinned against” – an expression popularised at the 1980 Melbourne Conference by Raymond Fung.

God champions the poor, rescues them from their misery, and transforms paupers into princes. Many passages can be quoted, showing that God upholds the cause of the oppressed, gives food to the hungry, lifts up those who are bowed down, and the Lord loves righteousness. (Ps. 146:7-10). According to Clouse, if Christians do not work to bring social and economic justice to the people of the world who suffer from such wrongs, they have useless gospel (Clouse, 225). We may not solve all of the problems, but we must try to approximate the vision of God’s coming world (see e.g. Isaiah 65), which differs so radically from our own.

In this time between the ‘now’ (the Kingdom come) and the ‘not yet’ (the Kingdom coming) we affirm that God is at work in human society. It is our task as Christians, members of the redeemed community, to penetrate society like salt and light. Jesus set the example for us and He intends us to influence the world for good, by hindering decay and dispelling darkness, or by bringing healing, education, social justice, improved working conditions, protection of the weak and the vulnerable (Stott, 1992:390).

God is a missionary God. God loves the lost and broken world, a world and people lost without Christ, and a world in which God uses our evangelistic efforts to move history toward the goal of the coming kingdom (Rom. 10:14-21). When we look at Jesus and His work we see that mission is holistic. Jesus used both word and deed in to minister to people in announcing the coming of the God’s Kingdom. The Bible records: “Jesus went about all the cities and villages, teaching in their synagogues and preaching the gospel of the kingdom, and healing every disease and every infirmity” (Matt. 9:35, Acts 10:38). Now Jesus sends his disciples into the world as the Father has sent him (John 20:21). The disciples are to share in His ministry and to follow His examples in obedience to His command to love God and one’s neighbour (Matt. 22:38), and His commission to make disciples of all nations (Matt. 28:19-20). Love to one’s neighbour is comprehensive, we must love the whole person with all his/her needs. As we take seriously the Great Commandment, to love others, we cannot escape the social responsibility of the church’s mission (Chongnahm Cho, 1985:215).

The Lausanne Covenant in 1974 affirmed that evangelism and social political activity are both part of our Christianity, and in its “Consultation on the Relationship between Evangelism and Social Responsibility” held in Grand Rapids in 1982, this relationship was teased out further. Social activity was seen as (Nichols, 1985, 8) a consequence of evangelism, a bridge to evangelism, and a partner to evangelism.

Social action, far from diverting us from evangelism, will make it more effective by rendering the gospel more visible and more credible.

How to put this in action?🔗

There are many ways in which we can show social concern. Three of the main ones are relief, development and structural change.

Relief is where we help victims of natural or social disasters. We minister to victims of disasters seeking to provide immediate handouts of food, shelter and other necessities so people can survive. Relief work is often a highly sophisticated and technological activity and often secular and Christian organisations, with well-trained people, are involved in this.

Development is where we help people to obtain appropriate tools, skills and knowledge so they can care for themselves. “Give a person a fish, you feed that person for a day, but when you teach a person to fish, you feed that person for a lifetime.”

Relief prevents starvation today; development brings self-sufficiency (at least in principle – in an ideal world). However, we do not live in an ideal world, but in a world, where many of the fishponds are owned and controlled by small groups of powerful, wealthy persons. Teaching the people how to fish is not enough, if abusive power and inflexible structures don’t allow these people to have a share of the fishpond (Sider, 1993:138). Therefore, at times Christian social action will speak out on issues of injustice, abusive power, and inequitable resource distributions.

Christian can be involved in all three, because in our involvement we show concern and love, the outworking of God’s love in our own lives. It is in the area of development that microfinance is used as a tool to reach the poor.

Microfinance – case study story🔗

Let me start with a story of a lady I visited in the Philippines. Her name is Grace. She is 44 years old, has seven children (ages 4­-21). Her husband is a truck driver. She joined the microlending programme in the year 2000. At that time, her family income was approximately NZ$200/month (This is close to the poverty income level defined by the Government for this region). Her house is a simple corrugated iron shack. The economy of the area had a downturn and her husband was out of work. They couldn’t afford to send all the children to school (even sending them to a public school costs money, since they have to ride a jeepney and need money for lunches), and some had to go and find work. Grace borrowed NZ$100 to start a sari-sari store (a tiny grocery store) from her home. The money was to buy stock. Parts of the stock are little sausages, which she buys in the city and sells in the neighbourhood and at construction sites. Grace works very hard. A typical working day is 4.30 am-8.30 p.m. The store is doing well, and some days she makes more than NZ$10 net. Last year she went into her fourth loan cycle (P4000). Her husband still hasn’t found permanent work in their town, but is able to pick up some casual work from time to time. He is very happy with what his wife is doing and he is very supportive (he looks after the store if she has to go somewhere and he has no work). The children are all back at school, and they have managed to save money to send the oldest to college (which costs them US$350 per semester).

It is a lovely story. There is more to this story, however. Grace is, as you can imagine, a busy woman and used to spend most her day in and around the house. She told me that she was rather shy, and her social contact circle was mainly her family and next-door neighbours. Grace didn’t go to church, although she had been brought up a Christian.

When Grace got her first loan, she joined a group of 14 women. These women meet weekly to repay the loan, to share the Gospel, to have fellowship, share recipes and sometimes produce, talk about the community and plan for the future. Today Grace has a much wider circle of close friends, and Grace has changed. Yes she is still busy, but is now also much more involved in community life. Today she is the treasurer of the group and she and her children go to Church on a regular basis.

By any economic measure, Grace today is not rich. But she is happy, Grace has hope for herself in her Lord and Saviour and hope for her family, because she now has the ability and the means to provide for them.

This is the story of microfinance, or as some call it Christian Micro Enterprise Development Plus. It is a programme in which we help people to help themselves by giving them the means to do so, but the Christian discipleship of showing love is accompanied with evangelism. Some call it holistic development, or holistic mission.

Microfinance – process🔗

I have heard the story of Grace many times. Not always are the stories as successful – there are also failures (but very few). How does it work? It starts with money. An organisation, e.g. a church, a Non-Governmental organisation, or a foundation makes loan money available for loan funds. The organisation goes into a community, and with the help of local officials identifies the poor. The microfinance scheme is explained to the poor and they are asked if they are interested. Joining requires commitment, in the form of training. After graduating from training, they can form themselves into groups (say 7-14 women). All members of the group get a loan of NZ$100, which has to be paid back weekly over a 3-month period. The group members are responsible for each other. If one member cannot pay back her dues for that particular week, the members of the group have to pay them and get the money later from her.

The people pay interest on the loan (3%/month or 36% per year). Exploitation? No!

Microfinance is not cheap, but compared to what you pay to a loan shark it is (ever heard of 4/5? You borrow 4 at the start of the day and repay 5 at the end – 20% daily interest). It also needs to be remembered that the poor have no alternative sources of capital. The banks don’t want to deal with them, since the loans are too small and the poor have no collateral. They are a risk.

With the scheme comes a compulsory savings scheme and a mortuary fund which pays out when one of the members (or a family member) dies.

The weekly meeting starts to mean a lot to the members. They are times of close fellowship and may lead to the group working on collective activities not only to improve their own well-being, but that of the community they live in as well. In one community, the group started a collective business enterprise with the specific aim of being able to employ some of the unemployed in the community. In other cases, groups from their own money build bus shelters for the protection of the children and elderly in the raining season, or conduct training sessions to teach other poor people in the community skills to get into enterprises.

However, as wonderful as the above sounds and it is, it does not always reach out to the poorest of the poor. The poor can often be divided in two groups – the poorest of the poor, and the entrepreneurial poor. The entrepreneurial poor often have skills, and sometimes even small businesses. Often what is lacking to bring them above the poverty line is capital. Microlending is aimed at them. The poorest of the poor often lack skills or abilities, do not have any economic enterprise, and often suffer from ill health or disabilities. To give them loan money would be very risky, since they often would not be able to repay. Members of microlending groups know this too, and they also know that they are responsible for any money not repaid. Hence, the poorest of the poor often do not get invited to join groups.

Community development helps us to reach those for whom microlending is not appropriate. In community development, we work with the whole of the community. Through a needs analysis we identify which is lacking in the community, especially in terms of minimum basic needs for the poorest of the poor. This analysis is done in co-operation with the poor in the community, who are involved in analysing the situation, looking at the results and determining actions.

The actions chosen can range from training and education, to involving local government and central government in providing minimum basic needs, and creating employment opportunities through projects.


We reach out to the poor for the sake of Christ’s name, so that He might receive the honour it deserves. Microfinance helps us to reach those in need both with the gospel and the love of God.

Add new comment

(If you're a human, don't change the following field)
Your first name.
(If you're a human, don't change the following field)
Your first name.

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.