Wally Kroeker, MEDA's director of publications, wrote the following to present last week in Harrisburg, PA, at a Mennonite World Conference seminar. Unfortunately, he couldn't make it, so we share it with you here today. For more than 60 years MEDA has been a mechanism for Mennonite businessfolk and others to share their skills and resources with the less fortunate. We have sometimes been described as a “mission arm” of the Mennonite business community. Perhaps it is bold to say so, but I believe we have redefined the nature of ministry and whole-life stewardship as we’ve helped people in poverty to build livelihoods that last. If you look through our early archives you’ll see photos of white-faced (maybe sunburned) Mennonite men riding around on the backs of pickups, trudging through jungles, and sitting under trees eating watermelon with indigenous Paraguayans. Back home in California and Ohio these men ran large companies and employed hundreds, maybe thousands, of people. Ed Peters, our first president, was described by Life magazine as a “shirtsleeve millionaire.” We began in 1953, a time when Mennonite refugees from Russia and Europe had been dislocated following the Second World War and had ended up in Paraguay. MCC had generously provided them with food and shelter. But those who had left trades behind could not get the working capital to build businesses to provide goods and services in the Mennonite colonies. The local banks wanted exorbitant interest rates because they had no collateral or credit history. Orie Miller, the head of MCC, knew all about business and the need for working capital. He worked for a successful shoe business back in Pennsylvania. He knew how important it was to have productive enterprises to provide an economic foundation for a community. He decided to recruit other Mennonite businessfolk from North America. He organized trips for several of them to visit Paraguay and see for themselves what could be done. These visitors immediately saw the need, and just as quickly saw a way for them to fit in. They formed a new organization – called MEDA – that would provide not only capital funds but also personal engagement to develop enterprises. Loans and investments were made. Members were assigned to sponsor certain projects and to visit their partners to provide ongoing encouragement. As the loans were repaid, other projects were proposed and new loans were made. The first project was the Sarona Dairy in Paraguay’s Fernheim Colony. Native Paraguayan bush cattle produced only a couple of quarts of milk per day. MEDA formed a partnership with local farmers to clear some bushland and import a high-grade bull for cross-breeding. Before long, milk production was boosted to several gallons a day. If you go to Paraguay today, and eat breakfast at a four-star hotel in Asuncion, you may be served yogurt or chocolate milk from one of the numerous Mennonite-owned dairies. Today, two-thirds of Paraguay’s dairy production comes from the Mennonite colonies. The next project was to help a small undercapitalized tannery make leather from cattle hides. Erie Sauder recalled that before the tannery was built the people used to stretch out cattle hides to dry in the sun, but wild animals would come at night and chew them up. A cattle operation and a tannery led quite logically to MEDA’s third project, a shoe factory to make shoes, boots, saddles and motorcycle seats from the leather from the tannery. You can see they had a few ideas about vertical integration. By the late 1970s the factory was producing more than 600 pairs of shoes a month. And so it went.
The need for MEDA’s brand of help was immense, and invitations came from all over the globe. Soon MEDA found itself working in Africa. Eventually there would be more than 100 projects in places like Tanzania, Zaire, Somalia, Ethiopia, Ghana, Kenya and Nigeria, working with the poorest of the economically active. Along with its success, MEDA learned important lessons. One painful discovery was that loans were often made by local committees on the basis of family ties, or friendship, or even to augment authority. We learned that if you give a village pastor the combination to the safe you are combining spiritual power with economic power. When this combination is abused, it is a very potent brew. MEDA learned to practice sound lending based on business criteria. The Africa years also taught important lessons about dependency – lessons that not enough well-meaning agencies have learned. Some borrowers thought North American money was a magic currency that did not have to be repaid. Debts were seen as an imposition rather than as an obligation. Sometimes tough love was needed – “If you don’t repay, we can’t lend to your neighbors.” MEDA had to convey what some of us learned as children – there is no Santa Claus. Today we are known worldwide for, among other things, micro-enterprise development, having been a pioneer of this movement. We helped prove that the poor are bankable. One of my favorite client stories is of Vincenta Pacheco of Bolivia. I met her twice – first in 1990, and then 10 years later. She had been injured in a kitchen fire and needed money to pay her medical bills. A small loan from MEDA enabled her to buy sewing equipment so she could set up shop as a tailor. The additional income covered her medical costs and eventually enabled her to create some jobs for her neighbors. A decade later I went back to Bolivia on an evaluation mission. I asked the local staff if Vincenta was still around. Yes, she was. I went to visit her. Her little shop had expanded and she had created more jobs. I asked if she still needed microfinance loans. “Oh no,” she said, proudly. “Now when I need to upgrade equipment or buy fabric, I use my savings.” That is music to our ears. We like to work ourselves out of a client.