South African Township's Dignity is Restored

The Mdantsane Township Project lends money to give start-up businesses fighting chance

The Toronto Star, Toronto, Ontario,
Friday, December 24, 1999, Page M3
By Cathy Dunphy


She: private school girl, born to Toronto privilege.

He: South African-born priest, imprisoned for anti-apartheid activities, released only when Archbishop Desmond Tutu personally intervened.

Together they've created what may be South Africa's first microbanking project, up and running in record time.

Just seven months after lawyer/financial banker/entrepreneur Martha Deacon met Reverend Lulama Noshing at an international church conference in Zimbabwe one year ago, 45 women living in a dusty township in South Africa's Eastern Cape province were receiving startup loans for their home-based businesses.

The Mdantsane Township Project was born.

Named after the sprawling township housing more than a million people outside East London, the project lends $125 at a time, at five percent interest a month, repayable weekly. "This is business," Martha deacon says leaning forward in her seat. "It's not a charity." She and Ntshingwa did their research, she says. They needed an interest rate of 60 per cent a year to succeed.

The alternative in a township where the unemployment rate is 65% - the highest in South Africa - is to go to loan sharks who charge 50 per cent interest a week. "Five per cent a month is a joke to them, it's so low," Deacon says. She and Ntshingwa were in Toronto recently to raise the project's banner. Their information session attracted 300 people to the Timothy Eaton Memorial Church hall and raised about $20,000. Their next stop was Vancouver for an evening gala, followed by a day in Seattle, where a group of black executives at Microsoft has, in effect, adopted the fledging project.

Microbanking, or peer lending of small amounts to small enterprises, first began in the mid-1970's in Bangladesh and Latin America, says Martin Connell, founder of Calmeadow, a non-profit foundation involved in microbanking since 1984. "My guess is, microfinance is now touching more than 25 million lives throughout the world," he says. "But microbanking takes a lot longer to set up than people think. It takes deep pockets, a good structure and committed local managers."

Got it all, says Deacon. "You're looking at one of the best political organizers you'll ever meet" she says of Ntshingwa. As chief ecumenical officer for the Eastern Cape Provincial Council of Churches, Ntshingwa was part of several key local organizations which had pinpointed poverty as the primary cause of crime, violence, poor health and dependence. He has run a campaign asking South African women each to donate one Rand (about 25 cents) to a Poverty Eradication Fund, getting them to literally buy into the cause. "We want to fight poverty (the way) we fought apartheid," he says.

Deacon came to Africa last year with the microbanking project in mind. The day after the church conference, Ntshingwa introduced her and her idea to some of South Africa's most influential church leaders. When she returned in April, she and Ntshingwa toured the South African countryside for a month, meeting every church organization and women's group in the province, asking for grassroots support for the project.

The trip was a revelation to her, Deacon says. The first day, she was ushered into a "dark, dingy hotel" where people were sitting in a circle around a white man with hooks for hands. Father Michael Lapsley had received a letter bomb in 1989. Now he was leading a workshop on healing apartheid memories. "So they could see their way through their pain and lead their communities forward," Deacon says. "I was so moved I didn't know if I could continue." Ntshingwa made sure she did.

Together they sought out projects. "Starting income-generating projects was something we had been working on (for a time)," Ntshingwa says. "When people become self-reliant their dignity is restored. They will not be begging." They also had the network. The South African Council of Churches had built one of South Africa's most trusted and well managed institutional networks, funneling money and help from the international aid community until 1994, when Nelson Mandela was elected president.

Already the Mdantsane Township Project has had its success - woman selling baking, women making and selling woolen sweaters. A banker is running the project and there will soon be visits from international banking consultants to refine the operation.

Deacon is working on acquiring computers to allow church groups in townships across South Africa to communicate with one another. She also plans to establish a community health clinic in Mdantsane. She plans to devote the next 18 months of her life to the project, she says. At the moment, she is living out of two suitcases. Her only address is email.