I live in Washington, and we get demonstrators in the springtime the way folks with beachfront property get houseguests in the summer.

Among our most recent guests were the occasionally unruly folks who came to town intent on disrupting the meetings of the World Bank and the International Monetary Fund but succeeded primarily in breaking the overtime budget of the Metropolitan Police Department.

Because it's difficult for a layperson to understand precisely what the World Bank does, it was difficult to figure out exactly what the protestors were against, and almost impossible to say what they were for. I think this accounts for the fact that most D.C. residents approached the protests almost exclusively in logistical terms, a matter of whether to get off at a different metro stop or to eat lunch in a different restaurant, in order to avoid unpleasantness.

But the protestors' failure to arouse much in the way of public support points to a more pervasive problem that faces religious and civic organizations attempting to focus attention on the plight of the poor. That problem, in a word, is history. At the moment we seem to be on the wrong side of it.

The collapse of socialism has extinguished what little faith Americans had in a planned economy. Welfare reformers have persuaded us that financial assistance is as likely to prolong poverty as to relieve it, and the rampaging United States economy has raised enough boats to distract our attention from those still left on shore.

Too many world aid agencies have behaved as though they could conquer poverty without learning anything about the poor.

In this kind of atmosphere, it's easy to believe that the free market works toward moral ends, and that the "invisible hand" that Adam Smith spoke of is actually the hand of God. In fact, several theologians, comfortably ensconced in conservative think tanks, have made a nice living saying so. They have been abetted, unfortunately, by the mistakes of world aid agencies, too many of which behaved as though they could conquer poverty without having to learn anything about the poor.

We are in an era of malign neglect, and we've gotten here in part by accepting the notion that consuming is a virtuous activity, and in part because, when it comes to attacking global poverty, it's hard to understand what individuals can do.

In an effort to address that second issue, I offer this story:

Until a few years ago, I belonged to a Catholic parish that had a "sister" parish in San Salvador. During El Salvador's civil war, refugees from the countryside streamed into the capital every day, fleeing the army and seeking food, shelter, and medical help. In such circumstances, it wasn't difficult to figure out how to respond. We sent money. We sent supplies. We remembered the parish in our prayers.

But when the war ended, we, like other donors, were faced with a more difficult question: how best to help rebuild the parish. By this point, we'd had the benefit of observing other people's mistakes. We'd seen what happened when aid agencies gave the parish something that the agencies thought it needed--a woodworking shop was built but not much used. We'd seen what happened when the parish was overly optimistic about what an untrained labor force could accomplish--equipment was donated that no one could operate. Mostly we'd seen programs get started but die out as soon as outside support dried up.

This was in the early 1990s, and the success of the Grameen Bank in Bangladesh and other "micro-lending" establishments was just coming to public attention. You can learn most of what there is to know about micro-lending from FINCA International, which works with more than 120,000 families in 18 countries. Suffice it to say that FINCA lends to people too poor to receive conventional credit; that its repayment rate--96%--is better than that of most commercial banks; and that its success has inspired CARE, Catholic Relief Services, and other international aid agencies to sponsor similar programs.

We liked village banking because it confronted, head-on, the types of problems that have handicapped other foreign-aid programs. First, it put money directly into the hands of the poor. Recipients spent their loans however they chose. They owned their new ventures right from the start.

Second, while village banking rewards individual initiative, it also fosters a sense of communal responsibility. Recipients live and work together every day. If a man defaults on his loan, he knows that his friends and neighbors have to make it up.

Third, agencies like FINCA teach the recipients bookkeeping and management skills that eventually allow the loan recipients to run the bank themselves.

And finally, village banking is inexpensive. Establishing a bank requires an investment of about $3,000 a year for three years. That's not much of a stretch for a middle-class parish, or a group of 10 friends, or an individual who has just come into a little money. And the results are immensely gratifying.

Loans of as little as $50 can buy a man time to make the belts he will sell in the market, or help a woman open a one-skillet tortilla shop, or pay for the day care a parent needs to look for a job. And once given, the money keeps on working. Recipients receive a succession of gradually increasing loans, and by the time they have repaid them (a period of about three years), the donors' original investment has been recouped. And it's available to start another bank.

Our village bank gave its first loans eight years ago. The money went to 30 women, most of whom used it to start or expand tiny businesses, such as a two-hot-plate pupuseria, or a fruit stand, or a two-person belt-making operation. Everyone paid back the first loan and took another one. They began to amass small savings accounts. Their businesses, bit by bit, got bigger, and some of the women actually became employers.

That first bank was so successful that it spawned others. Today Catholic Relief Services helps the people of our sister parish operate 10 such banks. The repayment rate on their loans is about 99 percent.

I don't want to overstate my old parish's commitment. We were giving of our surplus. I don't want to suggest that the ideological struggles over foreign aid are pointless, only that they rage at a great remove from most of our lives. And I don't want to exaggerate our banks' accomplishments. Our sister parish remains a desert of need, and all we brought was a garden hose of aid.

It's not enough. But that's no reason not to open the tap.

Jim Naughton, a Beliefnet columnist, is the author of "Catholics in Crisis: The Rift Between American Catholics and Their Church."

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