Prominent Banker Esther Ocloo Dies at 83

Banking lost one of its leaders a few weeks ago. This banker never took a writedown on third-world debt, never figured out what a derivative was all about, never cut the ribbon for a gleaming new bank headquarters. In a way, though, Esther Ocloo was a banker in the finest sense, a throwback to the days when, of all the Cs of lending, character ranked at the top.

Never heard of her? Esther Ocloo pioneered the concept of microbanking in Africa, primarily in her native Ghana. The idea was simple: Poor Africans, especially women, had talents that could be turned into small businesses making beads, baskets, and agricultural-related goods. To capitalize on those talents, they needed, well, capitalu00e2u20ac”very small amounts of it, a few hundred dollars or so, often less. Ocloo knew these women. She knew they had goods to produce. And most important, she knew they had the character to make the business worku00e2u20ac”and to pay back the loan.

“Women must know that the strongest power in the world is economic power,” she once said. “You cannot go and be begging to your husband for every little thing, but at the moment, that’s what the majority of our women do.”

Esther Ocloo never begged for anything, unless it was for the world to pay attention to the potential for microbanking.

In 1975, at a conference in Mexico City that spawned the United Nations Decade for Women, it became clear that the idea of microbanking was working in a number of third-world countries, with loan repayments actually exceeding an eye-popping 98%. Soon after, Women’s World Banking was formed by Esther Ocloo, who became its chairwoman, along with New York investment banker Michaela Walsh and Ela Bhatt, who had pioneered microbanking in India.

Today some 25 million people across the world have benefited from microloans, most of them to women, and a heavy percentage of them through the still-vital Women’s World Banking. WWB arranges larger loans, no more than a few million dollars, from major financial institutions. The money is then allocated to the thousands of applicants in 50 or so third-world countries. These are true loans, not only with an expectation for repayment, but with interest rates normally a bit higher than for conventional business customers. Repayment experience continues to be uniquely high.

Esther Ocloo got her own start when she was given a dollar, turned it into a dozen jars of marmalade, and turned that into a profit. In a world of Enrons and Global Crossings and transactions that even bankers can’t understand, it’s nice to remember what a simple concept our industry is based upon, and what good it can do when the proven recipe is followed.

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