Opportunity on Loan
Monday 19 September, 2011
David Bussau AM, whose charitable foundation has loaned the poor a total of $700 million, believes that one of the keys to helping poor communities to overcome their poverty is to get them thinking about others. “You have to get the whole community to help each other, to care for each other,” he says. “That is the real indicator of success. People can’t be just self centred about taking themselves out of poverty, but they have to be thinking about others as well.”
Mr Bussau, who spoke at Warrane on Wednesday, September 9, is the founder of Opportunity International Australia which serves 2.8 million people, mostly in developing countries.
He says that the real transformation of a community means changing the whole culture of that community - something that takes two or three generations.
He says the hardest thing to change in a poor country is the mindset of the people, who are used to using money just to buy food and cigarettes. You also have to change your own mindset on how to help them. “You have to change your paradigms,” he said. “One of the best ways of solving poverty is not wealth distribution, but wealth creation.”
Mr Bussau believes that the problem with many charities and with social welfare programs is that they don’t help people get out of poverty. He sees them as part of the “Robin Hood syndrome” which takes money from the wealthy to give to the poor, but he says after centuries you still have poverty.
Instead of just giving the poor money to spend on consumer goods that they don’t really need, he encourages them to take out loans to start their own businesses. Normally he does not make loans to individuals, but encourages them to join forces with other people who want to start their own businesses as well and he gets them to “cross guarantee" each other. This means that when one person falls on hard times, the other will cover that part of the loan until he or she is able to catch up.
Because of this “community peer-group-pressure structure”, repayments of loans is nearly 100 percent. Another incentive is that when borrowers eventually repay their loans they are allowed to borrow double the amount next time.
Senior Australian of the Year in 2008, Mr Bussau started life with less than most people. Raised in an orphanage in New Zealand, he set out on his own at the age of 15, starting work in a telephone exchange by day and in a circus at night.
His first business was a hot dog stand outside a football stadium. He then moved on to a fish and chip shop, which he ended up buying, and then a hamburger bar and a home cookery business. But his biggest business success came when he moved to Australia and moved into the construction industry, eventually buying the company he worked for and then many more.
Mr Bussau, now a practising Christian, said that one of the biggest events in his wife was meeting his wife, Carol, who helped him to return to his spiritual journey.
At the age of 35 he was wealthy enough to “retire”, but instead of just enjoying himself he turned his mind to international poverty. He established a global network of microcredit institutions and the rest is history.
He says he has a simple approach to setting up philanthropic programs - he applies the same principles he would in any business.
“I look for the wealthiest business person I can find and then I motivate them to get involved in the program,” he said. “I use their contacts and local knowledge to find a manager to run the program.
“You steal the best people you can and you pay them a proper salary. Where most charities go wrong is they look for the cheapest people they can get.”