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Well, as the world's money markets continue to slide, the jobless rates soar and the rest of us just keep our financial fingers crossed. There are, would you believe, actually some good crisis-related stories out there. Here, for instance, is Aaron Lewis in
REPORTER: Aaron Lewis
It's dawn, and Philip Ndungu has already been to market. It's only the start of what will be a long day. Every morning Phillip prepares hard-boiled eggs, salsa and fried sausages. It's his micro-business - taking and selling a hot breakfast to his entire neighbourhood.
PHILLIP NDUNGU (Translation): Often I start my day at
Phillip's patch is the suburb of Kawangware, one of the poorest in
PAUL GANDO (Translation): What do you have? Let me see.
PHILLIP NDUNGU (Translation): I have things for 15 shillings, some for ten… and sausages.
PAUL GANDO (Translation): You have smokies, I think this is a very good idea because many boys like that guy would not do such a job. They are scared the girls would look down on them or things like that. But I am impressed by that guy because he is really committed to the job he does instead of getting involved in drugs.
A year ago, Phillip had dropped out of school - he had no money to pay the fees and no way to get a loan.
PHILLIP NDUNGU (Translation): Yes, I had a problem paying my school fees because my job was bringing in less and less money.
Then a micro-lender called Equity Bank opened up in his neighbourhood.
PHILLIP NDUNGU (Translation): I went and spoke to the bank and they were able to help me out with money for my fees.
Phillip was granted a $100 loan to start his business. That was enough for Phillip to nurture his microenterprise, take on an assistant and return to finish his last year of school - paying his own way.
PHILLIP NDUNGU (Translation): My life is going well because I’m not having to argue with anyone about taking time off to go to school. Things are going well because I am self – reliant.
Micro-loans, sometimes for as little as $10, are Equity Bank's mainstay. Today, Dr James Mwangi, the bank's founder and
DR JAMES MWANGI, EQUITY BANK
Equity's business is booming, while the major international banks are being battered. Mwangi has a very clear view of what created the current financial crisis.
DR JAMES MWANGI: That was driven by greed as opposed to a need to serve. So it was not the basic tenets of banking, it was more about satisfying human greed.
Bringing
DR JAMES MWANGI: Equity has developed a model that has incorporated them, made banking inclusive. And also done very well in terms of performance. For the last 10 years, Equity has posted growth of 100%, year in and year out. Last year, despite the financial turmoil, Equity was still able to register 110% growth in profitability.
Equity's success has also been due to its efforts to bring women into
MONICA WEAVER: They were just marketing Equity, telling us how it can empower women. I got a chance to be one of the women who were empowered by the Equity Bank.
Monica opened her own account with Equity, and started saving for her own business. The bank charges nothing to open an account and encourages its clients to deposit as little as AU$1.
MONICA WEAVER: Even to open an account with another bank other than Equity was difficult
REPORTER: You tried?
MONICA WEAVER: I tried but it was difficult for me. Because maybe I had 2 shillings with me or 100 and to take them to that big bank, it was a shame. But with Equity, even if I only have 50, I’m very comfortable to go and save my 50 shillings.
Monica had very little to use as collateral but Equity accepted her small table and television as security. James Mwangi says the bank accepts all kinds of interesting items as loan guarantees.
DR JAMES MWANGI: I think that a common but strange collateral is the matrimonial bed. We see with married women just a commitment that they will sign off their matrimonial bed. If you look at the level, the volume, in terms of the size of the loans, you can’t go beyond what they have, that is the assets that they have, and that is what they value most.
Till now, the majority of micro-businesses in
DAVID MATAEN, INVESTMENT ADVISOR: If you get to look at the books of those that have micro-lendings, their rates of delinquencies is so minimal, is so unbelievable, and that's because of the financial and fiscal responsibility of the individuals who are running these organisations. Some of them have nothing else to turn to, that is the be-all and end-all of their economic wellbeing, they depend on it. They are so emotionally invested in it that they could not let it die.
Lilian Macharia built this small hotel and pub with Equity money but a large part of it burned down recently. Never having been able to afford insurance, Lilian went back to the bank, and without even additional collateral, they gave her a second loan to help rebuild.
LILLIAN MACHARIA (Translation): I have noticed that Equity Bank, help people who can’t help themselves. You just have to make an effort to pay them back. When you pay it back they will give you another loan…I’ve seen how Equity Bank has helped me and I thank God because, if not for them, someone like me would not be able to do anything else.
Mwangi says that this isn't charity, it's good business. He claims that clients like Lilian are the safest bet in banking.
DR JAMES MWANGI: They are very responsible people who have been responsible for their lives. It is only that they have never been understood. They have been measured through others’ lenses and standards. That’s why they fall short. It is a very parochial perception that is upheld. But if you have to do a lot of groundwork on those types of people, you realise they are very reliable, trustworthy and committed.
James Mwangi still criss-crosses all of
DR JAMES MWANGI: This bank is a product of the sweat of the Kenyan people, owned by Kenyans, managed by Kenyans and committed through financial services to transform the lives of our people.
Equity has shown that, without a doubt, the farmers, the weavers, and the hawkers in this rural crowd have something to teach the bigger players.
REPORTER: What do you think that a small businessman in
DAVID MATAEN: If nothing else, honesty.
PHILLIP NDUNGU (Translation): In the next five years I would like to continue doing business and hopefully to study business. Study business so that my business can grow so that I can help the rest of my family.
GEORGE NEGUS: Wonderful stuff, but offering the matrimonial bed as collateral, does that include the person in it? Just wondering. Aaron Lewis reporting from
eporter/Camera
AARON LEWIS
Fixer
VICTOR MUNIAFU
Editor
Producer
ASHLEY SMITH
Translations / Subtitling
JUDY NYAMATO
MICHELLE ROGER
Original Music composed by
VICKI HANSEN
BEGORRA:
It
was just 12 months ago that our veteran correspondent - he hates that
description - David Brill came back from Ireland saying he had never
seen so many cranes on Dublin's city skyline. So great was the Emerald
Isle's economic boom. How things can change! David's back this week
from an
REPORTER: David Brill
This
is Irish Grand National day. It's one of the highlights of the racing
calendar but this year the mood at the track is far from festive.
While money is still changing hands, there are signs everywhere that the economic crisis is biting.
WOMAN: It's quiet, everything is quiet.
REPORTER: Very quiet? How much has it dropped do you think?
WOMAN: I suppose its down 40% compared to last year.
It seems it's not the odds on punters minds, but another set of figures - property prices.
TIM CROWE, DAIRY FARMER: Homes have gone down an awful lot in prices.
REPORTER: Do you know what percentage they have gone down?
TIM CROWE: Well you're talking about £250,000... a £400,000 house you buy for £250,000 at least.
Tim Crowe is a dairy farmer from
REPORTER: Is unemployment very high?
TIM CROWE: I'd say it's going to rise a lot more. It's raising every week, every week.
REPORTER: Do you know what it is?
TIM CROWE: They're talking about 400,000 people shortly.
REPORTER: 400,000 people, out of what, 5 million?
TIM CROWE: Out of 4.5 million. That's a lot of people and its rising.
Neil O'Hearcain is one of those newly unemployed.
NEIL O’HEARCAIN, ELECTRONICS ENGINEER: These are our resident computer experts.
REPORTER: Are they trained by Father, are they?
NEIL O’HEARCAIN: No, no these are self-trained. Absolutely.
REPORTER: You haven't designed any chips for them?
NEIL O’HEARCAIN: No, they'll be teaching Daddy how to design chips in a couple of years.
As an electronics engineer, he was at the forefront of
NEIL
O’HEARCAIN: Things looked very good. We had quite a good amount of
business. We had some quite good contracts, we had good visibility.
But back in August last year, when the crisis began, his clients suddenly started cancelling meetings and business trips.
NEIL
O’HEARCAIN: And that was a terrible feeling. and then when you have an
unexpectedly scheduled call with the management of the company, then
you say "Oh, my goodness, what is this?" And unfortunately our worst
fears came true, and that was a terrible, terrible time. So to be
letting people go, and in particular people who were friends, was very,
very difficult.
REPORTER: What's happened to those people now?
NEIL O’HEARCAIN: So, those people have on the whole, over the last six months, people have had very little work.
REPORTER: How did you cope with that?
The
O Hearcain's are now struggling to make ends meet. Having bought a
house near the top of the property boom, they have a large mortgage.
They even considered migrating, before
REPORTER: Did you see this coming?
NEIL O’HEARCAIN: No, you know, I don't think anybody really saw it coming.
PAT
MCARDLE, ULSTER BANK CHIEF ECONOMIST: This is a new situation for Irish
people. We have had a couple of generations who've only experienced
good times. Going through a recession and an economic cycle is not
something they've been exposed to before, so they're having to get used
to that.
Pat McArdle is chief economist for one of
PAT MCARDLE: Indeed we forecast that it will continue growing up to at least 15%.
REPORTER: Of unemployment?
PAT MCARDLE: Yes.
Job losses are happening all over the country. In January, the city of
REPORTER: How bad is this for
As
JOHN GILLIGAN, MAYOR OF LIMERICK: I feel very, very bitter about the way that Dell has treated the people in this region.
From his office, the mayor of
JOHN
GILLIGAN: In my own family, I have one daughter who was redundant about
three months ago, maybe a little bit longer. I have another daughter
who went redundant last month and her husband who worked in Dell also
was made redundant - all within a month. This is the biggest thing that
ever happened to us. This is a catastrophe on the scale not seen
before. This is equivalent to a nuclear attack on the
Among the employees getting the bad news in January was Eamon Ryan.
EAMON
I
caught up with Eamon, in his local pub, to see how he was coping three
months on. He's still working for Dell but his days are numbered.
EAMON
Like many people in
EAMON
BRIAN
LUCEY, ASSOCIATE PROFESSOR OF FINANCE: There's a widespread perception
that the government don't want to go hard on the banks because the
banks were heavily indebted to the property developers. Property
developers were the major supporters of the major party of government.
So, there's a perception of a cosy cartel of crony capitalism.
Brian Lucey teaches finance at
BRIAN LUCEY: So
for the last five years, up until last year, we borrowed lots of money
from international markets and we thought we could get rich by
basically selling houses to ourselves. That stopped once the
international credit crunch happened and once the property boom here,
the property bubble in fact burst. So who's to blame? We're all to
blame.
The construction industry has now come to a standstill. Credit is scarce and
PAT
MCARDLE: It's that triple whammy that has led the Irish economy to
experience a contraction in growth this year which will probably be the
highest in the developed world, of the order of 8% - possibly even
slightly higher.
Compounding
PAT MCARDLE: Even the government of
As a result, dole queues are now lengthening all over
PAUL
KELLY, CONSOLE HELPLINE: We have people phoning up who are on the brink
of ending their lives because they see no hope because their house is
going to be repossessed, their car has been repossessed, they're losing
their jobs, they've got serious financial worries and there is
tremendous marital strain and a great sense of failure. We've had some
very prominent businessmen here in
REPORTER: What, to suicide?
PAUL KELLY: Yes, through suicide.
REPORTER: Because of the recession?
PAUL
KELLY: Because of the economic climate and especially those in the
construction industry and where their businesses have collapsed.
REPORTER: I suppose at the end of the day that's what it's about?
NEIL O’HEARCAIN: That's what it's all about, absolutely. Four healthy kids growing, changing almost by the day.
Despite
the hardships, Neil O'Hearcain is trying his best to be positive. All
the forecasts are for a few grim years ahead. But he's holding onto the
hope that one day soon, the good times will be back.
NEIL
O’HEARCAIN: I'm confident that, you know, as the world begins to
recover that businesses here will also play a role in that and from a
personal perspective, I'd be able to get back doing what I do best.
Reporter/Camera
DAVID BRILL
Researcher
VICTORIA STROBL
Fixers
FIONA MACARTHY
EMMA McNAMARA
Editor
DAVID POTTS
Producer
AARON THOMAS
Translations / Subtitling
OLGA VAN BAREN
Original Music composed by
VICKI HANSEN
It
was just 12 months ago that our veteran correspondent - he hates that
description - David Brill came back from Ireland saying he had never
seen so many cranes on Dublin's city skyline. So great was the Emerald
Isle's economic boom. How things can change! David's back this week
from an
REPORTER: David Brill
This
is Irish Grand National day. It's one of the highlights of the racing
calendar but this year the mood at the track is far from festive.
While money is still changing hands, there are signs everywhere that the economic crisis is biting.
WOMAN: It's quiet, everything is quiet.
REPORTER: Very quiet? How much has it dropped do you think?
WOMAN: I suppose its down 40% compared to last year.
It seems it's not the odds on punters minds, but another set of figures - property prices.
TIM CROWE, DAIRY FARMER: Homes have gone down an awful lot in prices.
REPORTER: Do you know what percentage they have gone down?
TIM CROWE: Well you're talking about £250,000... a £400,000 house you buy for £250,000 at least.
Tim Crowe is a dairy farmer from
REPORTER: Is unemployment very high?
TIM CROWE: I'd say it's going to rise a lot more. It's raising every week, every week.
REPORTER: Do you know what it is?
TIM CROWE: They're talking about 400,000 people shortly.
REPORTER: 400,000 people, out of what, 5 million?
TIM CROWE: Out of 4.5 million. That's a lot of people and its rising.
Neil O'Hearcain is one of those newly unemployed.
NEIL O’HEARCAIN, ELECTRONICS ENGINEER: These are our resident computer experts.
REPORTER: Are they trained by Father, are they?
NEIL O’HEARCAIN: No, no these are self-trained. Absolutely.
REPORTER: You haven't designed any chips for them?
NEIL O’HEARCAIN: No, they'll be teaching Daddy how to design chips in a couple of years.
As an electronics engineer, he was at the forefront of
NEIL
O’HEARCAIN: Things looked very good. We had quite a good amount of
business. We had some quite good contracts, we had good visibility.
But back in August last year, when the crisis began, his clients suddenly started cancelling meetings and business trips.
NEIL
O’HEARCAIN: And that was a terrible feeling. and then when you have an
unexpectedly scheduled call with the management of the company, then
you say "Oh, my goodness, what is this?" And unfortunately our worst
fears came true, and that was a terrible, terrible time. So to be
letting people go, and in particular people who were friends, was very,
very difficult.
REPORTER: What's happened to those people now?
NEIL O’HEARCAIN: So, those people have on the whole, over the last six months, people have had very little work.
REPORTER: How did you cope with that?
The
O Hearcain's are now struggling to make ends meet. Having bought a
house near the top of the property boom, they have a large mortgage.
They even considered migrating, before
REPORTER: Did you see this coming?
NEIL O’HEARCAIN: No, you know, I don't think anybody really saw it coming.
PAT
MCARDLE, ULSTER BANK CHIEF ECONOMIST: This is a new situation for Irish
people. We have had a couple of generations who've only experienced
good times. Going through a recession and an economic cycle is not
something they've been exposed to before, so they're having to get used
to that.
Pat McArdle is chief economist for one of
PAT MCARDLE: Indeed we forecast that it will continue growing up to at least 15%.
REPORTER: Of unemployment?
PAT MCARDLE: Yes.
Job losses are happening all over the country. In January, the city of
REPORTER: How bad is this for
As
JOHN GILLIGAN, MAYOR OF LIMERICK: I feel very, very bitter about the way that Dell has treated the people in this region.
From his office, the mayor of
JOHN
GILLIGAN: In my own family, I have one daughter who was redundant about
three months ago, maybe a little bit longer. I have another daughter
who went redundant last month and her husband who worked in Dell also
was made redundant - all within a month. This is the biggest thing that
ever happened to us. This is a catastrophe on the scale not seen
before. This is equivalent to a nuclear attack on the
Among the employees getting the bad news in January was Eamon Ryan.
EAMON
I
caught up with Eamon, in his local pub, to see how he was coping three
months on. He's still working for Dell but his days are numbered.
EAMON
Like many people in
EAMON
BRIAN
LUCEY, ASSOCIATE PROFESSOR OF FINANCE: There's a widespread perception
that the government don't want to go hard on the banks because the
banks were heavily indebted to the property developers. Property
developers were the major supporters of the major party of government.
So, there's a perception of a cosy cartel of crony capitalism.
Brian Lucey teaches finance at
BRIAN LUCEY: So
for the last five years, up until last year, we borrowed lots of money
from international markets and we thought we could get rich by
basically selling houses to ourselves. That stopped once the
international credit crunch happened and once the property boom here,
the property bubble in fact burst. So who's to blame? We're all to
blame.
The construction industry has now come to a standstill. Credit is scarce and
PAT
MCARDLE: It's that triple whammy that has led the Irish economy to
experience a contraction in growth this year which will probably be the
highest in the developed world, of the order of 8% - possibly even
slightly higher.
Compounding
PAT MCARDLE: Even the government of
As a result, dole queues are now lengthening all over
PAUL
KELLY, CONSOLE HELPLINE: We have people phoning up who are on the brink
of ending their lives because they see no hope because their house is
going to be repossessed, their car has been repossessed, they're losing
their jobs, they've got serious financial worries and there is
tremendous marital strain and a great sense of failure. We've had some
very prominent businessmen here in
REPORTER: What, to suicide?
PAUL KELLY: Yes, through suicide.
REPORTER: Because of the recession?
PAUL
KELLY: Because of the economic climate and especially those in the
construction industry and where their businesses have collapsed.
REPORTER: I suppose at the end of the day that's what it's about?
NEIL O’HEARCAIN: That's what it's all about, absolutely. Four healthy kids growing, changing almost by the day.
Despite
the hardships, Neil O'Hearcain is trying his best to be positive. All
the forecasts are for a few grim years ahead. But he's holding onto the
hope that one day soon, the good times will be back.
NEIL
O’HEARCAIN: I'm confident that, you know, as the world begins to
recover that businesses here will also play a role in that and from a
personal perspective, I'd be able to get back doing what I do best.
Reporter/Camera
DAVID BRILL
Researcher
VICTORIA STROBL
Fixers
FIONA MACARTHY
EMMA McNAMARA
Editor
DAVID POTTS
Producer
AARON THOMAS
Translations / Subtitling
OLGA VAN BAREN
Original Music composed by
VICKI HANSEN
