The galvanizing power of culture in microfinance and economic inclusion

Anyone, including countries with evident structural disabilities like Nigeria, can walk among the clouds and stand on mountains. Oh yes indeed they can; provided they let their heads sit squarely on their shoulders and not between their legs; and far worse if they have only one leg (monoculturalism). So much has been written about culture and how it forms the underlying wire mesh that guards a society. Many have described culture as the amalgam of the ideas, customs, traditions and social behaviour of a particular people or society. It has also been called the identity of a people; their shared patterns of interactions and general customs and beliefs learned overtime by the process of socialization. However we view it, culture is essentially a compound of the cognitive constructs, way of life, art, music, religion, cuisine and social habits of a particular people that are innate in their members.

The term culture is of Latin origin. It comes from the word “colere”, which means tending to the earth and to grow, cultivate and nurture. Culture shares general etymological foundations with many other concepts and words relating to the promotion of growth. Thus, culture tends to be dynamic – an attribute that is critical to its survival.

From the foregoing, we find that culture is very important in defining a people. With their behaviour, which is essentially a manifestation of their cultural background, people could easily be identified as belonging to a given group. Sometimes, culture is so strong that it becomes a barrier to the integration of people who diverge on it. This is why it is often difficult to mould people together if their cultural differences are hard and fast, especially when tinted with a tinge of religious fanaticism. The role of government and indeed any human organization, therefore, is to ensure that the good elements of culture are advanced and promoted ahead of the negative ones, especially in a multicultural environment, to help the building of cohesive societies. The role includes a proper understanding of such cultures to be better able to use them as instruments of social, economic and political advancement.

Microenterprises are the basic units of the business endeavours of humanity. They are closest to the individual person and reflect his cultural tendencies, more than any other category of business enterprise. By their very nature, microenterprises provide employment, first to the individual and then to members of his family. As expansion and growth happen, more people and nonrelatives may come on board. Thus, the dominant culture in a microenterprise is usually that of the founder or keyman and his family.

This feature of microenterprises is understandable. Most of them begin as suppliers of goods and services, either by way of petty trading or artisanry activity. In most cases, the business revolves on the founder’s most evident skills, which relate quite usually, to their culture –foods, arts and crafts. This is why it is critical for those who profess to support and promote these enterprises to understand their cultural underpinnings, which are complex and deep. Culture literally governs everything we do. Getting a grip of the culture of clients could therefore point the way to success or failure in many intervention programmes for the poor. Most microfinance programmes that have gained recognition for success around the world have the common attribute of understanding and working their clients’ cultures.

Often, when we speak of culture, we are focused on the corporate culture of the organization we are interested in, and not on the cultural background of those it serves. This is a vital crack in the wall and a major missing link in our search to effectively deliver services to clients. By definition, the shared values and attitudes that characterize the people in an organization is their culture. Generally rooted in the goals of an organization, corporate culture defines the approach of any institution to its customers, internal and external, as well as product offering. Critical as corporate culture may be, it fails to make the mark if the cultural traits of the customer or client is not an element in the service equation.

Grameen bank’s success has been partly attributed to its culture, which enables it to combine two attributes that make it a hybrid organization. It is committed to poverty alleviation and social improvement, which is a social objective often left for the not-for profit entities around the world. But Grameen is an entirely self-financed organization like any other for-profit entity. These attributes make it a hybrid organization set to take on the challenges of both worlds. However, another essential and probably more critical attribute or success factor is the ability of Grameen to understand and integrate the culture of its clients in its product and service offerings.

I would like to note the activities of some microfinance institutions in Nigeria, which have begun to demonstrate that they too understand the value of culture in some of their products either by way of financial inclusion or other poverty reduction activities. Two of the leading top five microfinance institutions in Nigeria, Grooming Centre and LAPO Microfinance Bank, both offer various target loan and savings facilities. These two institutions, one a not-for-profit and the other a for-profit, have developed various loan products to suit different situations, including Festival Loans.   These loans are dedicated ordinarily to special events or periods. For the clients of LAPO, the loan is for those who experience high demand and sales during festive periods. Of course, other MFIs may also have this product. But Grooming Centre now allows its clients to access this Festival Loan for purposes of utilizing any profitable business opportunity anytime of the year. This flexibility was informed by a better understanding of the traditions and culture of the clients and the uncertainties that attend some of the established cultural or festive events. It has set this institution apart and promises to further its mighty strides taken since inception in 2006.

The major reason why Nigeria may continue to be a poor country richly endowed with huge but unattainable potentials for greatness is the inability of its leaders due to their largely low quality education to understand that cultural differences can be weaponized as instrument of rapid transformation. A military-inspired unitary central government, largely bereft of creative capacity, as evidenced by the lack of any truly innovative policy over the past decades, controlling the conduct of practically all human affairs in every corner of the country and expecting shared prosperity is fruitless. It can only produce the current mediocre performance of almost all units of government in Nigeria because it obliterated the need for competition and deep thinking, and the urge to excel.

Nobody walks among the clouds with their heads buried between their legs. The ice now forming on the overdue power devolution (forget the resort to semantics by mostly dishonest leaders) reflects either of two things that mean one thing: dishonesty and denial, especially by beneficiaries of the current discredited state. Leading microfinance institutions use the cultural strengths of clients to advance their objectives. Nations should do the same. Sadly we fail to see that our collective safety and greatness lies in promoting not stifling the good cultural abilities of our many peoples.

Emeka Osuji