From Debt to Success in Egypt

By Jennifer Atala

Eight years ago, Taheya and her family were struggling to make ends meet. Living in one of the poorest villages in Egypt, she was worried about food and clothing for her 11-year-old son, Mustafa, and 7-year-old daughter, Sahar. Then Taheya's husband passed away, leaving her with an astonishing debt of over $7,000: six times Egypt's average annual salary. During that time, Taheya said, she was "just trying to survive."

One day about three years ago, Taheya's niece, Hana, saw a sign on the street in her neighborhood advertising microfinance credit loans. She decided to apply, taking out a loan of about $90 to support her small grocery business. She asked her Aunt Taheya to join her, and Taheya agreed, using her larger ground-floor home to house the small grocery business.

The grocery flourished. Starting with the initial $90 loan, Hana and Taheya have expanded their business over the last three years so that they are taking the highest loan available—about $540.

The quality of Taheya and Hana's lives, along with their families, has improved tremendously. Hana's family can now afford to eat meat twice a week instead of only once. She has also been able to buy a bicycle, telephone, refrigerator and other items. Hana is also raising some poultry for family consumption, and has even started to sell some birds to family and neighbors, adding to her profits. Combining her income with her husband's has allowed them to build two floors on top of his family's home so that they can live in their own separate quarters; before, their family lived in his parent's home, along with his brother.

The success of their business has improved Hana's emotional state as well. Prior to taking the loan, she was having marital problems with her husband because of their tight financial situation. She "had no personality," she says, and "stayed home, with the door closed," waiting for her husband to bring her money for the household.

'I am Independent'

Now, Hana says, "I am independent. I have more people to talk with and more relationships in the community." With a thriving local business, she feels an increased sense of worth and belonging in her community.

This success story is just one of many "microfinance miracles" Catholic Relief Services and our partners have seen in Egypt. Giving small loans to impoverished but motivated people who do not have access to bank services often improves not just one family, but entire communities.

CRS-funded microfinance programs create units made up of 5 to 8 people. Each member of the unit receives a loan on a rotating basis and is responsible for paying it back. Because each group is generally made up of friends and relatives, they are less likely to default on their loan, which would cause their friends and relatives in the group to either repay on their behalf or lose their access to future loans.

The loan program has made a world of difference for Taheya as well as Hana. Like her niece, Taheya has invested in household items like a telephone, refrigerator and washing machine. But more important for Taheya, she is able to financially support her children in their weddings. Following Egyptian custom, she has provided an apartment above her own ground-floor home for her son and his bride, and has also been able to buy her future daughter-in-law a few items of jewelry.

September 2007, during the Muslim holy month of Ramadan, was particularly memorable for Taheya and her family. After three years of building the grocery business with her niece, she finally finished paying off her late husband's lingering debt. To celebrate, she invited the entire neighborhood to her home and shared food with them. They took over the streets in excitement over the once-poor widow's amazing achievement.

Jennifer Atala was part of CRS' International Fellows program from 2007-2008 and was based in Egypt.