New Horizons > December 2000

Historic ECLOF-Oikocredit Joint Seminar

The seminar brought together the boards and staff of both institutions to share and discuss why and how they are involved in working with fair credit and creating new signs of hope for those who are excluded from current credit systems.
The First Lady of the Republic of South Africa, Mrs Zanele Mbeki, who is the President of Oikocredit, and Rev. Dr Christoph Stückelberger, chairperson of ECLOF, made presentations to the seminar.

Rev. Dr Setri Nyomi, general secretary of the World Alliance of Reformed Churches, provided theological reflections on the seminar theme. Rev. Dr Sam Kobia, Executive Director, World Council of Churches, moderated the encounter.

Call for Co-operation
In her remarks, Mrs Mbeki said she hoped that both organisations would be able to inspire each other at the start of a new millennium in realising the added value of being Christian organisations working to promote community. She called for more formalised co-operation between ECLOF and Oikocredit on the basis of an evaluation by the two boards on the current status of the co-operation.

The First Lady explained that the services of ECLOF and Oikocredit were a sign of hope for people who have lost hope. She emphasised that separately the institutions would not alleviate or eliminate poverty, and that only by working together and establishing alliances with others could they avoid the pitfall of “window dressing” their services as opposed to effecting change by fighting poverty.

In his address, Dr Stückelberger seconded Mrs Mbeki’s call for further co-operation between ECLOF and Oikocredit. He then expounded on the seven criteria for fair credit of John Calvin the Reformer (see page 15) as the basis on which to proceed towards finding a course for both organisations to follow.

Dr Kobia praised both institutions for their efforts to broaden opportunities for the poor. He pointed out that both ECLOF and Oikocredit had begun providing their services long before micro credit had become an accepted practice. The glory in the services the two organisations provided, he added, was not to have a system of winners and losers but to bring about justice.

Dr Nyomi analysed the effect of credit by referring to the story Jesus told of the man who went abroad and put his capital into the hands of his servants (Matthew 25:14–29; cf. Luke 19:11–26).

In his analysis, Dr Nyomi highlighted a number of new lessons about credit and concluded that credit could be a great sign of hope if extended justly and in a spirit of working with people who otherwise cannot access it. (See page 16 for the full text of Dr Nyomi’s presentation).

Case Studies
ECLOF and Oikocredit each presented a case study to illustrate the challenges and achievements of giving credit to the poor.

Dr Jennifer Riria, a member of the ECLOF Geneva board and also Managing Director, Kenya Women Finance Trust, which is an institutional member of the board of ECLOF Kenya, explained the credit programme, processes and products offered by ECLOF Kenya.

On behalf of Oikocredit, Erik Heinen, Regional Manager for Eastern Europe, illustrated the impact of Oikocredit’s lending activities in Eastern Europe.

Then, Pilar Ramirez, ECLOF board member, and Gert van Maanen, General Manager of Oikocredit, gave presentations on possible areas of co-operation between the two organisations.

The overriding sign of hope that came out of the seminar was that both ECLOF and Oikocredit agreed to set up a joint working group to develop areas of co-operation with a limited time span for follow up.

Fair Interest: Seven Criteria of Calvin the Reformer
By Christoph Stückelberger

ECLOF/Oikocredit seminar, 23 November 2000

Up to the time of Reformation, it was forbidden to charge interest in Europe, not least due to the prohibition of taking interest in the Old Testament (Exodus 22, 25; Deuteronomy 23, 20f.). However, this prohibition was actually eroded by many exceptions. The renowned Reformer, John Calvin of Geneva (1509–64) got to a fundamentally positive attitude as to the charging of interest. He justified his attitude by maintaining that the intention of the biblical prohibition was to protect one’s neighbour and especially the poor and weak. Hence, also in matters of charging interest, servicing one’s neighbour was vital: He was led by the eighth commandment “Do not steal” (Ex. 20,15) and by the Golden Rule “Do for others what you want them to do for you!” (Mt. 7, 12). Thus, he developed the seven criteria (“exceptions” in French; “restrictions“ in English – a kind of qualifying exception) as a guideline to charging interest (Calvin, Johannes: Corpus Reformatorum C.R. vol. 38/l, p. 248f.):

“The first restriction is that you are not allowed to charge interest from the poor and that nobody may be forced to pay interest when being in a plight or visited with misfortune.

The second restriction is that anybody who lends money should neither be so anxious about profit that he neglects his duties, nor should he–by safely investing his money–disrespect his poor brothers.

The third restriction is that in case of an interest-bearing loan one should not allow anything to interfere that would not correspond to natural understanding (what is naturally just and proper). And if the matter is checked according to the rules of Christ, i.e. what you want others to do for you etc., then it should be considered as generally valid.

The fourth restriction is that whoever borrows should profit as much or even more from the borrowed money (than the creditor).

Fifth, we should neither judge according to the usual and traditional customs (concerning the charging of interests) of what we are allowed to do, nor measure injustices against what is right and proper; much rather should we draw our behaviour from the word of God.

Sixth, we should not only consider the personal benefit of those with whom we have to deal, but also should we take into account what may be in the public interest and serve the community as a whole. Because it is manifest that the interest paid by the merchant equals a public attainment. Therefore, great care has to be taken to make the agreement serve the public good more than it may damage it.

Seventh, one should not overstep the limits set by the local or regional laws, although this is not always enough, as they often allow what cannot be amended or restricted by law. Hence, one needs to give preference to what is just and proper under the circumstances and restrict whatever may go beyond.”

(English translation from the original German version)

Credit as a Sign of Hope
A Bible study by Rev. Dr Setri Nyomi, General Secretary, World Alliance of Reformed Churches
Matthew 25:14–29 (cf. Luke 19:11–26)

Today’s reality:
Is credit a sign of hope?

A glance at the reality in the world today reveals that in many ways credit has not been a sign of hope:

1. The credit that many countries received as colonialism yielded place to self-government and self-determination, and has led to the situation in which many countries are now indebted and subject to the conditionalities imposed by creditors. These conditionalities subvert life-giving policies in the interest of people especially in the South.

2. The conditions under which many nations live are such that debt servicing continues to deny many poor people basic rights to education, health and food

3. Because of imposed structural adjustment programmes as a result of credits taken, unemployment, increased cost of living, loss of value of currencies of the South, etc. have resulted.

4. Even for individuals, major risks are involved in utilising credits extended.

Thus for many people, the topic of credit as a sign of hope may not immediately carry positive images.

Credit can be a source of hope only if it helps build the oikos (economy) and the processes by which it is managed.

The problem of managing the oikos without adequate resources is a major one that confronts many individuals, institutions, churches, businesses and nations. While a small minority of individuals, institutions and countries have more than they can manage, and in fact continue unjustly to take from those who do not have, others are suffering because they do not have access to the resources to manage.

The parable of the talents has often been told and quickly spiritualised away. Some people even focus on the rich becoming richer and the poor doomed to be cast away into utter darkness. This kind of interpretation has far too often characterised the church’s view of this passage, and has accentuated the despair that the poor feel. Today, I would like us to re-read that account.

Ground rules
Before we turn to the passage itself, I would like us to establish the basis on which we do our re-reading of it.

1. There is a clear scriptural and theological evidence of God’s preference for identifying with the poor and oppressed. In the very self-understanding of His ministry, Jesus affirmed his coming as a fulfilment of the scripture:

“The Spirit of the Lord is upon me, because he has anointed me to preach good news to the poor. He has sent me to proclaim release to the captives and recovering of sight to the blind, to set at liberty those who are oppressed, to proclaim the acceptable year of our Lord” (Luke 4: 18– 19)

2. God’s disdain for and judgement against injustice in any form is very clear. In one of its expressions recorded in Isaiah 58, many forms of injustice are noted and strongly condemned. Verse seven for example places a strong emphasis on God’s view of a more just resource sharing with the poor and dispossessed as a sign of God’s preferred “fast”.

3. It is therefore inconceivable that Jesus would use this parable or any other to teach a lesson of the rich becoming richer while the poor become poorer.

The parable
Let us take a close look at the main characters in the parable:

1. The man going on a journey. We do not know much about him, except the assessment of one person to whom he seems a wicked person, who takes advantage of others. The other two people in the story did not share in that assessment. Whatever his motivations, one thing is clear, the man extended credit to people who did not have initial resources, apparently according to his knowledge of the recipients. Matthew did not indicate the man’s instructions. In a passage, which shares several elements (Luke 19:11–27), Luke seems to indicate that he instructed them to invest profitably: “Do business with this until I come back (verse 13).

2. Then we have a sampling of the recipients.

a) One received five talents. He worked hard on what he has received, apparently without knowing what was in it for him. Most likely, the only benefit he thought of was the opportunity to work because there are resources to work with.

b) A second received two. He, like the first, welcomed the opportunity offered by the credit to work, doubling his initial capital.

c) The third received one. This one did an analysis of the giver and drew the conclusion that there was nothing in it for him (the recipient), therefore it did not symbolise an opportunity. He also weighed the risks involved and decided to be inactive, thinking he was playing it safe. The result was that he did not benefit from the extended credit, in fact in today’s expertise, one would say he lost. The value of the capital he was now presenting must have been less than what it was when given, if you factor in inflation and other factors.

In Luke’s version we are still given a sampling of three, but Luke clearly states that there were ten of them. Luke also indicates that each was given the same amount. One made a profit ten times the amount received, another five times the amount received and a third hid it in the same manner and with the same rationale as the third person in the Matthew account.

What can we learn?
1. The passage (especially as Matthew presents it) is not primarily concerned about the extension of financial credit. Luke’s version seems more open to linkages with extension of credit. Whatever the case, by using the example of extension of credit to describe the kingdom value of responsibilities expected of those who belong to the Kingdom of God, it lends itself to being the basis on which we can see the hope offered through adhering to such kingdom values. The same God who expects the accountability of humanity in how we have used the credit facilities of our life, energy, health, opportunities and resources, through the use of this image opens the possibility for us to applaud what can be done if just credit facilities are available. Those for whom such credit facilities have been extended can be in a good position to give joyful accounts.

2. The expressed objective of the parable was to communicate something of the kingdom of heaven (kingdom of God). While historically the church has placed much emphasis on the eschatological nuances in these parables, there is more to it than the eschatological. The eschatological, as well as other aspects of the parables recorded in this part of Matthew, seem to point to the responsibility that inhabitants of the household of God (oikoumene) have for one another and how we will be held accountable [cf. the parable immediately following (verses 31–46)]. Thus the picture of the kingdom values could be deemed to include responsibility for how credit is extended and used to enhance the lives of those whose poor circumstances could be transformed by it.

3. At the end of the parable we can see that the extension of the credit was intended as a sign of hope. Here you have people who had no capital, being given the possibility through the extension of credit. The three recorded for us understood the capital as belonging to the man. Two saw the hope it offered and immediately set to work utilising it to bring life. The hope of working was strengthened by the discovery that they were not merely working for a despot who would take the fruits of their hard work and keep them. They were rewarded with the fruits of their hard work. The credit given by the man brought into being realities which would not have been possible to the first two who doubled the capital (Or, as in Luke’s gospel, multiplied it by ten and five)

4. The credit extended here would not have been a sign of hope if the assessment of the third person had been right. The credit in this case was truly intended to benefit the recipient as portrayed by the rewards pronounced on them. There are many sources of credit that, however, fit the description of the third person. Credits, for example, which further impoverish the recipients with interest rates so high that it makes no sense, or credits which both givers and recipients know are contracted and used in very unjust ways. These kinds of creditors abound for nations, institutions and individuals, and they have been sources of despair and death.

5. The hope offered is not only the responsibility of the giving persons or institution. It is also offered by the way in which the credit is received. Critical analysis is very important in order to discern the difference between just and unjust credit facilities. The first two persons did the critical analysis which led them to feel comfortable with this credit, and then utilise it effectively to usher in hope. The third did a rather poor analysis apparently based on a “poor me” syndrome which led to inaction. This comes usually when the analysis begins on a selfish or unrealistic base or it is filled with a sense of “nothing will work out”. Credit needs to be used. Yes, as in any management of economy, there are risks. But appropriate analysis and planning on resources made available can bring a source of hope. Inaction will perpetrate a sense of hopelessness.

6. Even with the limited resources today, many do not have hope because they are simply not aware of sources of credit or have simply given up on the possibility, and therefore do not see even those sources which exist in their communities.

7. Credit is a sign of hope when it is available, accessible and affordable. For many people, credit is not available. For others, it is not accessible. Take all those countries in which even today a woman cannot access credit except through the husband, or where the interest rates are so high and the collateral expected is simply out of reach for the prospective lender. There are many who have the ability to turn capital around, double it or even triple it, but they just cannot access the credit. Institutions who are faithful to God’s inhabited world (and who have the means) will be offering hope to many who do not have the possibilities if they offer appropriate credit facilities as the man in our parable did. ECLOF has been able to do that in many settings. Women’s groups, churches, young people and others who, like our first two recipients, would not have dreamed of the possibility of being productive, have experienced hope because of credit offered through ECLOF, EDCS (now Oikocredit), and other such institutions who understand kingdom values.

8. The punishment pronounced on the third person is not a sign that God prefers the rich. It is a confirmation of the rewards of utilising the hope offered through the resources placed at our disposal to increase hope.

9. It is possible to view this parable only from the standpoint of banking practices today and miss the entire point of how credit can be a sign of hope. Banking systems are so skewed towards the rich and against the poor. There is an implicit assumption that the poor are bad credit risks. Thus collateral demanded is out of reach for the poor and small business entrepreneurs. Yet, experience and studies have shown that the poor are good risks and have better payment records. In this passage, the man in the parable invested in servants, and proved that they are not poor credit risks.

10. On the contrary, the credit served as a source of hope for these servants. Many poor persons have the skills and abilities to transform their situations into life for themselves and others who depend on them. Credit can be that source of hope for such. Because the poor are generally faithful at using the credit extended, and paying back, the credit itself can be a source of hope even for the lenders. It is good business. It is a source of hope for those in the servant position and their dependants. Its multiplier effects can be so much.

11. It is also a source of hope for the church and other institutions which aim to make a difference in the lives of persons. Through the extension of credit, such institutions redeem themselves from the error of working for the poor with dubious results and fund themselves working with the poor, posturing themselves for lasting results. This is sustainable development. In the parable, the man worked with the “former servants” and therefore saw them as owners of the resources they have generated, not merely recipients.

12. It is a source of hope for entire communities, because the credits make possible results beyond just those who receive. Productivity increases and there are possibilities of employing some unemployed persons. Given the ability to effectively utilise credit demonstrated by the persons in the Lukan version, the parable indicates that the first two servants were given charge over entire cities. Given the resources made available through credits many otherwise impoverished people have started micro-businesses which has given employment and hope to others.

Conclusion
While there are problems with drawing direct analogies from the passage, we can at least draw these lessons. As God’s instruments for transformation, we can confirm that credit indeed can be and has been a sign of hope. For those engaged in extending it and advocating for it, let us continue the good work. Many persons depend on it.

Can credit be a sign of hope? Certainly, good, just, affordable credit given in a spirit of working with people who otherwise cannot access credit is a great source of hope.