Microfinance has a part to play in fighting terrorism

27 August 2015

A couple of weeks ago I visited our FINCA project and its clients in Nicaragua. Traveling with me was Matthew Glynn, a fine UK journalist from The Independent. We met with a number of clients who had started and grown businesses with the help of FINCA microloans.

On his return, Matthew wrote a feature piece for the Independent and a shorter piece for the London Evening Standard. In the Independent he quoted me giving my views on the role of microfinance in tackling terrorism:

“I heard someone say the other day, ‘Let’s be clear, we’re not going to fight terrorism by helping poor people with microfinance’. Well, guess what, we are, and it’s the only way we’re going to do it.

“We ignore at our peril the social ills of countries like Pakistan and Afghanistan where there is high youth unemployment and people may give their kids to a madrassa and a radical imam otherwise they might starve to death. … So how can we combat that? We have to give the family an alternative, maybe an opportunity to access microfinance – the ability to start and run their own business.

“It’s not going to be the only solution… but business, done in a responsible way and done as a social enterprise, is the solution to many of the major ills in the world, including poverty and terrorism.”

This is an accurate quote and I stand by it. I’d also like to take this opportunity to add that this is a truth that stands for any country: young people and parents must have economic opportunity or the risk of social unrest rises. In its extreme, unrest can spill into terrorism when the plight of the hopeless is used by those who would purposely do harm to others.

The first two responses I received in the wake of Matt’s two articles were, first, someone desiring to partner with FINCA for microinsurance, and second, a tweet from a former FINCA intern (El Salvador, circa 1995)-turned-microfinance-sceptic Dean Karlan, a professor at Yale, asking: “Does this really capture your view? Microcredit to fight terrorism?” We went back and forth a few times; me defending my position, he his. But this got me thinking. Perhaps it’s time I put my views on this issue right out there. So that’s what I’m doing now. I want to emphasize these are my personal views, not those of my organization.

I absolutely believe that business, done in a responsible way, is a credible alternative to delivering up your kids to being radicalized. And, for the record, I don’t accept the wide-spread premise that almost all terrorists are middle class and college educated. I’ve spent more than 40 years with people in some of the world’s poorest and most volatile places on earth and I can tell you, all the academics in the world won’t convince me to ignore what I’ve seen with my own eyes.

Many suicide bombers are brain-washed as children in madrassas by radical Imams who source poor, uneducated kids delivered to them by their impoverished parents because they can’t feed them. This is a fact. So, no, I don’t agree with author Alan Krueger et al that most terrorists are well-educated.

My albeit-short exchange with Dean on Twitter reminded me of a meeting a number of us from international NGOs had with a representative of the Bush State Department in the wake of 9/11. “Don’t think that this event had anything to do with the fact that the majority of the people of Afghanistan live in poverty, or that this means we will be ramping up spending on economic development in poor countries as a result,” he lectured us. The implication was the only way to fight Al Qaeda was with military force.

I remember thinking, groan, what a totally foolish and ignorant view! Well, we all know how that worked out. After billions spent in Afghanistan, the Taliban has regrouped and reconquered huge swaths of the country. The security situation has made much of the economic development work totally impossible. FINCA has managed to hang on there, where 90% of our clients are women supporting their families through small business efforts.

I also remembered working in Somalia with my FINCA partner, John Hatch, on a credit program for rice farmers in the Shebelle River Valley. The last trip John and I took there was just before the Barre regime collapsed, plunging the country into chaos and setting the stage for the country’s takeover by Al Shabaab, an Al Qaeda affiliate. To me, the absence of economic opportunities resulting from Somalia’s descent into ‘Failed State’ status was definitely a factor in the rise of terrorism.

I am not alone in this line of thinking. Here is a video of a very powerful TED talk by a courageous young Somali social entrepreneur named Mohamed Ali. He describes how terrorist groups seek out and recruit small-town, uneducated, unemployed young people with no prospects and no opportunities – and turns them into suicide bombers. And discusses entrepreneurship as a viable solution.

Mohamed is the Executive Director of the Iftiin Foundation, an organization that builds and supports young entrepreneurs to encourage a culture of change and innovation in Somalia and other post-conflict countries. He has a law degree from Boston College Law School. Mohamed works and lives in Somalia. He was born there, so he knows the country and the people. So if you can’t take my word for it, then take his instead.

Perhaps in the West we have a desire to overcomplicate things because we don’t have a reference point. Most of us have never experienced real hunger, real fear, real hopelessness. Most of us have never even seen people who are suffering from these things because we’ve never visited their countries – they’re ‘too dangerous’. That means, in order to make sense of the senseless, we resort to statistical and academic gymnastics.

Perhaps, if we tried harder to listen, learn and put a human face on the young suicide bomber, we’d begin to accept that the need to survive with dignity can drive people to embrace even the most senseless of options: terrorism.

If we could bring ourselves to accept that alleviating hunger, fear and hopelessness play a major role in the terrorism recruitment advertising package then we could start to see the enormous value of offering opportunity, support, hope and yes, microfinance, as part of the solution.

Rupert Scofield


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