Big Congregations helping with Small Banks

The United Church Observer, February 2000

A couple of large Canadian congregations have thrown their support behind an economic development program that promises to help South Africans lift themselves out of poverty. Timothy Eaton Memorial United in Toronto and Vancouver's Canadian Memorial United each hosted fund-raising concerts late last year, promoting and raising capital for a new micro-banking endeavor called Mdantsane Township - the project offers loans of $125 to individuals, letting them start small businesses.

Launched last year with $15,000 in "seed money" from Canadian Memorial United and a $10,000 grant from a foundation, the Mdantsane Project has already made 90 loans. The borrowers, mostly women with businesses selling fruits and vegetables, baking bread, raising animals, hairdressing and other small enterprises, meet weekly in "lending circles," where they pay weekly loan installments. Each circle is collectively responsible for the loans (repaid over a six-month period) and the reward for successful repayment is increased credit, up to a ceiling of $625 per person.

The resulting collective encouragement brings a repayment rate of about 97 percent, says Martha Deacon, a United Church member who founded the project along with Rev. Lulama Ntshingwa, a South African Anglican priest and chief ecumenical officer for the Eastern Cape Provincial Council of Churches. Deacon is a lawyer and former investment banker with links to both Timothy Eaton Memorial and Canadian Memorial. Recently "on sabbatical" after selling a parking-lot business in Vancouver, Deacon had visited South Africa and was a guest at the 1998 World Council of Churches meeting in Zimbabwe, where she met Ntshingwa and got the Mdantsane Project off the ground.

The Toronto concert, featuring Montreal-based South African singer Lorraine Klassen and a Toronto-based South African children's choir, raised $25,000. The Vancouver event was also expected to push the project closer to its eventual goal of $3 million in capital.

While loans (repaid with interest, ensuring an ongoing effect in the community) are important, says Deacon, their influence on the borrowers is more than financial, providing "confidence, transformation of individuals, as they realize they can actually help themselves."

Timothy Eaton Memorial's Rev. Andrew Stirling, a former theological student in South Africa, says he hopes the project will strengthen the "bond of fellowship" Canadian churches built with South African Christians during the fight against apartheid. South Africa may be rid of apartheid but it will take decades to erase its lingering effects, says Stirling. "You can have political liberation and spiritual liberation, but you also need economic liberation."