Why Being Poor Costs a Lot (in Senegal)

When I was living in West Africa, I learned the hard way why people are poor. And why, during the International Year of Microcredit, why the clients of the microfinance institution where I interned failed to reimburse their loans, and why that was a good thing.

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Transcript

“Why Being Poor Costs a lot”

Every morning, In Yoff Layenne, a neighborhood of Dakar, Senegal a girl goes to the shop to buy several sachets of coffee. The number depends on how many foreigners are hosted in the host family, plus one for each male member of the house. The sachets are meticulously prepared by hand by the store owner. He breaks down a 200 gram can of soluble powder into one dose servings, and those servings he balls up in a small black plastic bag.  

A banal observation, of course, except that buying in such minute quantities is much more expensive than buying one tin. That's why they say being poor costs a lot.  I assumed that the girl, let’s call her Mary, enjoyed this morning ritual—Yoff Layene is a fishing village far from the city center and it maintains a quaint atmosphere, despite hurtling urbanization. Mary greets neighbors as she walks on the path to the shop with her sandals kicking up warm sand. She is able to leave the duties of an unmarried woman, which are many. The air is fresh, she lives near the beach, and it is sunny. When she returns Mary prepares coffee and breakfast for the men of the house, in respect of tradition. 

The family drank coffee once a day, in the morning, accompanied by a baguette of processed white flour, one a piece, smothered in bread. It was a diet fit for a hole in the stomach. I drank coffee all day, whenever. So I bought a can and put it in my room and snuck a mid-morning, afternoon, evening coffee. Just enough to skip a nap or power through a hangover. Often both. 

Not wanting to hoard, I eventually placed the can of coffee in the kitchen. Low and behold, the house became an open air cafe. Two or three coffees a day per person became regular. The television stayed on longer, with the unemployed neighborhood youth sprawled out on the pleather sofa in the afternoon watching the four channels of local. They sipped Nescafe right through the blistering afternoon siesta. 

That was, until the can was emptied some three days later, all 100 doses. The can, because it sat on a shelf in a shared space, belonged to nobody and everybody at the same time. It was doled out as such. In other words, accumulation was impossible since redistribution was endless. They returned to one cup a day as they couldn’t afford more. 

The family in Dakar had developed strategies for living with this "solidarity." I put solidarity in air quotes because, as we’ll see, this solidarity is not only a give, but also a take. It's larger than the individual, just like a functional tax system, social security, or corruption. It levels the playing field with the force of a steamroller keeping an individual down. Keeping a society alive.

Mary bought coffee in small quantities to avoid sharing. Most people in the neighborhood, in the city of Dakar,  and from what I’ve seen, in West Africa, shopped in what is referred to in French as en detail. Literally detail. Further, because the boutiques that sold in detail were themselves small, most of them the size of a walk-in closet, they served only the local block. They bagged up just enough to last the morning or the evening. The mother of my host family, a master when it came to managing money once said "why do you think shops use black plastic bags at boutiques. It's to hide the bag's contents."

That there was a systematic lack of change underlined the dynamic of the economy. If you purchased a sachet of coffee with the equivalent of five US dollars, the boutiqaire would raise his arms when you waited for your money back, then ask you what else you would like to buy. These boutiques were on the corner of every block, vending in detail in exchange for bills with low denominations. If you zoomed out, you can imagine the urban geography of Dakar, dotted with tin roofed boutiques. 

…

After coffee, I waited for a bus. I would’ve preferred a taxi. But I was low on money and I had seen the same type of commuter bus flipped over the day before on the road in front of my house. The sort of things I read a deeper meaning into when traveling, fairy tales, stories I pictured myself relating to a hypothetical friend upon some hypothetical return. 

Needless to say, the bus arrived late enough for me to second guess taking it. I boarded the crowded space. In between cleaning my nails, I read a book written by an anthropologist named David Maranz. In Dakar, I was  interning with a microfinance institution. As a grad student studying Intl Dev, I was obliged to do a half-year internship in any destitute corner of the world, so I signed on with a microfinance institution. Microfinance! As if I knew how to manage money any better than a goldfish knew how to ponder the future. Yet there I was, tasked to manage a portfolio of loans contracted by small business owners and even had the margin of action to grow it. 

I found the dog eared page in my book. That a white guy, and not a local, would teach me more in one sitting may strike you as tactless. But I’m of a different opinion. Oftentimes, a foreigner living abroad is best placed to seize on the specifics of a given culture. Sometimes better than a local. After all, doesn’t a cat know better than a fish that the fish lives in water? 

I digress—one of Maranzs observations was that West Africans readily share space but are possessive of knowledge. As a Westerner fighting for space on an armrest I found this to be true. I am a person who is willing to speak to anyone about anything. Hell, I created this show to talk about anthropology, which everyone knows is a euphemism for mansplaining. 

In the office, I poured myself a second coffee. It was early and I was struggling. Always one to appreciate local culture, I had gone out to a nightclub the night  before. I had left work, ate a sandwich, called my Senegalese friend and took a bucket shower while I waited for him to arrive. With the equivalent of thirty dollars wadded in my pocket, the white guy and the local, I felt invincible when the sun went down. I could finally blend in. 

At the bar, I snapped my fingers for a pint. A woman approached me. She wore a weave and a form-fitting shirt. 

“You are the best-looking guy in the club,” she said.

I laughed because it was far from the truth—if I had been born any uglier, I would have had difficulty with the opposite sex. But I wasn’t, so there I sat, in a room full of men who dwarfed me in height and build. I was thin and far from any model of masculinity. With the local diet of rice and fish, I had lost ten pounds, which was a lot for somebody with all bones. My head was shaved short because the cheapest barbers in town knew only how to get rid of hair, not style it. Each time I left the barber’s, I looked as if I’d enlisted in the military. Sitting on a bar stool in my Sunday best, I had two things going for me: first, the unassailable urge to converse and listen, and second, that I was white. And white meant money, or at least it was perceived as such by some—the prostitutes. I wasn’t the best-looking in the bar, but I may have been the whitest guy in the bar. 

In nightclubs in Dakar, in between checking to see if I still had my wallet, I often talked to prostitutes. I talked to everyone while traveling. I was interested in the lives of prostitutes. I was interested in any other life but my own. She patted her wig and put a beer on my tab then blew her name into my ear  . 

Here's the catch, the nightclubs that were free of entrance attracted what we in the West would call prostitutes. They were women looking for sugar daddies, a few drinks, or gifts of all shapes and sizes. They wouldnt call themselves prostitutes, they call themselves their names. Over the thump of the bass, I deciphered something with a sound like S. Saran, she repeated. 

“I’m from America,” I answered her question over the sound of the DJ, “but I’ve been living in France for the past eight years.”

“I’m from Guinea.”

“You came all the way from Guinea to hook?” I said, thinking there must be some alternative to traveling a thousand miles to sleep with strangers for money.  

She pulled her head back into her neck. “And you, you came all the way from France for  an internship?” She was clearly offended and cast an eye over the room.

“Touché, chérie!” I decided to keep it physical and grabbed her hand. We dodged couples to the dance floor. On the parquet, she slid my palms on her hips. We sweated through several songs, or maybe it was only several measures, who knows. Time moved slowly on the dance floor because I was so uneasy I watched myself dance. When the strobes hit, I spotted the other foreigners lost in the rhythm of Mblax, the staccato drum heavy music with unexpected drops. 

“Sorry about earlier.”

“Don’t worry,” she pushed her bangs behind her ear. “You white boys are all the same.”

Swaying, I formed an apology and I didn’t say.  “I’m tired of being white.”

Saran nodded her head. The strobe caught the fog that pumped from a machine. I deduced she had bleached her skin because of the splotches of darkness near her hairline. 

I didn’t go home with her, or any other Senegalese locals, and instead took the moral high road home to my bed alone. Culture isn’t everything, you know. 

But back to work. I emptied the second coffee and read a business plan in prep for a meeting with a prospective client in 10 minutes. She was looking for 100 dollars to buy a cooler, a cart, and a stock of ice cream to sell in the hot, dry season.

Ndiaye entered with her child under arm. She wore a wax print shirt and her son faded Spiderman pajamas. Her third child she said. I said congratulations. I always knew that it took a bigger person than myself to raise a child. During the screening process, I asked about her past experience, her estimated monthly profit from her business, and a proposed repayment schedule. I explained that the 3% interest covered the fees for our peer-to-peer platform, online, in which donors, mostly from North America, could collectively sponsor a start-up. In return, it was expected she would interface with these donors by sharing photos of her business’ progress, or how the money helped her. Heart warming messages clients rarely wrote or slick photos that clients rarely sent, either because they didn’t have the time, capacity, or internet connection to do so. Or maybe they didn’t understand that they were to perform a little dance for Nance and Rand from Canada . 

Ndiaye calmed her child, and began “I’ve sold ice cream in the past, mostly in my neighborhood, but the cart will allow me to travel to other neighborhoods and increase sales.” I sensed she was nervous so I mentioned I liked ice cream, just a little something stupid to calm her. It wasn’t because I wore a collared shirt that I was important. 

I asked her what had happened. Why did she need money to start her business again? She mentioned, in passing, that sales dropped off during the cooler rainy season and consequently, she went broke. I pointed to the calendar on the wall, I asked her when that was, to which she responded “in three months.” Because her son was antsy, she pulled out her breast. I left her, not that she probably cared, and I certainly didn’t, but hey. I told her I was going to make a call and tried to find a workaround and while she breastfed her son. I placed a phone call. 

From the window I heard music, a sort of dirge. I had often heard similar music in the neighborhood, and followed the sound of the drums and song to its source, at first mistaking it for festivities. I later learned it was a funeral. Happened once a week at least, and today was the day. 

Suppose that means that people living in precarity didn't have the luxury of thinking of the future. Sitting in my office, with a fan on maximum, there was a feeling of dissonance. Sure, I was doing good, why else were people knocking on my door. I pulled the purse strings and was liberal, increasingly liberal with money, or should I say, other people’s money. Correcting this injustice, as if it were my duty, I began handing out loans. To raise poultry, to open an internet café, to buy a taxi to cross the capital for profit. One client ran cell phones from Mauritania where the wholesale prices were cheaper and sold them in Dakar. It was funny/not funny that I could blow through money on a night out and the next day harp on financial literacy to prospective clients. They would sit through the spiel of an interview, a formality, but, without fail, I would sign off on loans for anybody that knocked on my door. 

I tried to improve my clients business plans. When I returned to the room I suggested Ndiaye sell processed fruit when the rainy season came and I put her in touch with another client who packaged mango in her neighborhood. He broke each fruit down into detail and turned a decent profit. I told Ndiaye I would call her once her loan profile was put on-line and her business was funded. Adding it was a matter of several days.

Counting out the money in my pocket, I assessed the damage, as it were, from the night before. It was evident that the relationship to money is different from the way I, a Westerner, viewed it. Where I come from, the saying goes, "If you want to make an enemy out of a friend, lend him money." 

To wit: Numerous clients defaulted because an aunt broke an arm and needed cash to pay the bill. The cost of a funeral of a loved one wiped out the savings of a phone reseller. That's why he came knocking on my door. He dragged his heels and he appeared down, perhaps not only due to the death but because he felt undignified asking for a handout. A handout he intended to pay back, but a handout nonetheless. 

So. In Dakar, sharing money within an extended family doubled as a kind of social security. Abdou and many other entrepreneurs were torn between his or her responsibility to respect social constraints versus that of saving to repay a loan. Suppose I was often in the same boat though, torn between my obligation of working part-time teaching English and my desire to ask my parents to just wire me some money. 

…

I hailed a motorcycle with my big white hand. Heading toward town, the salty ocean breeze became tinged with the smell of exhaust and smoldering trash. It was wind though, and it felt good on my face. The beauty in travel, in movement is that nothing touches you, not your looks, your insecurities. But all your problems are still there when you arrive, they trailed your vehicule like empty cans on a car whose rear window reads "just married." I bartered with the mototaxi, with him ultimately overcharging me. I was, after all, white, and this cut through many of my exchanges. 

I paid a visit to Sireen. As a Seereer, raising goats was in his family's history. They had done so in the Senegal River basin, just south of the Mauritanian border,  he said, until they moved to Dakar, where the extended family lived in a sprawling compound. There were several buildings, each being a simple house made of cinderblocks. 

Sireen had asked me to visit his place and met me at a shop. He pointed to the shop, said it was his, that he paid his cousin to work the day. At his house, goats ate and tore at the plants and scrub. It was unusual that he had called me, his loan payment wasn't even in arrears. It was an uneventful afternoon, possibly even forgettable, except that it was a relief to be free from requests for loans, so I’ll remember it for the rest of my life. It was refreshingly banal and bordered on genuine. It was this: no matter how much you would like to fit in to a foreign society—you could learn the language, codes, you could marry in, sleep with the president even, but you will rarely go local. 

There were other successful clients, which is why I never saw them. A tailor that cut bespoke suits always paid on time. The poultry business of a young man produced golden eggs and he sent his loan repayments plus interest  directly to the bank. It was only the problematic clients that I visited, so inevitably, that’s what I saw—problems. Here is my theory: White people talking Africa are often middle class. We travel to countries where that middle class was fledgling. Of course we are witness to poverty, as a white person we practically attract it, as we walk around town with an X on our forehead. 

A woman begging reminded me of this when I told her I had no money to spare. I believe my exact words were "I'm broke." She responded, "You bought a plane ticket here, so not that broke." She looked at the beer sitting on the plastic table. Our eyes met. 

I went on.  

"Look, you can ask people for money, not everybody will give you something, but some do. For me though, nobody is going to spare any change for a white guy in Dakar." 

"you've been here for awhile" she responded and then moved down the terrace to the next table with her hand stretched out. 

The second part of the theory is this: if, in some alternate reality, if I traveled across class, and was shuttled the same white person around in a limo to the stunning gated communities throughout West Africa, he or she would, upon their return home, deliver you a TedTalk about the economic sleeping giants of African economies. 

That what is most shocking about traveling in Sub-Saharan Africa is not the poverty but the wealth says more about the observer than the observed.

…

I began asking clients, people I prefer to call them, how they coped. Some of them diversified what they sold, say the phone retailer. He left his collection of smart phones in a display case at a friend's shop and began driving a motorcycle taxi. Some saved profit, or started their business with savings, or pooled resources and opened shop. Most had recourse to credit rather than savings. Other than diversification and accumulation, I would ask clients if they were the only similar business in their area. The answer was categorically, no. The image of the flipped over bus returned, why think of tomorrow when you’re not sure you, or one of your loved ones, would make it through the day. 

Also, if you’re poor, why take an unnecessary risk on innovating when to look around you, petty trade worked. In other words, specialization was rare due to precarity. Which is why there are so many phone retailers, and boutiques, why cheap Chinese imports have allowed millions of persons to enter the global economy of pedaling shit to one another—because it works. Ask yourself next time you're in Europe why there are so many kebab shops or why you can now find Mexican food in almost every town in the US. 

…

I found that a client was more likely to default if there was asymmetry in the number of persons that he or she could ask for money versus those he or she could ask. I drew up a little graph for my Masters dissertation. The extreme case was a 10:1 ratio. The client defaulted on his loan after two months. 

Then there were the outliers, several of whom fled their responsibility and hid their business and profits. There was Miriam. She would travel to buy second hand clothes wholesale in the Colobane 

Neighborhood, where two containers of used clothes from the port would arrive each week—Imagine every shitty vacation bible school T-shirt from Midwestern America. Imagine There’s a lot of faux-Greek from sororities events.I saw a homeless man wearing a shirt that read, “I’m a keeper,” and a teenager with a “Worlds Best Dad,” sweatpants. Well, I guess that last one could’ve been true.  Think of the flotsam of formless fabric. It's a shortcut back home for an American, perhaps, for an African it's a trip around the world, to sport a Starter Brand hoodie or to score a pair of Jncos. 

All these Americans paving the road to hell with their good intentions—they  create employment, 

dress everybody in the capital, on the continent, and otherwise bury the local textile industry who used to tailor fabric. 

Under a button-down I too wore a shirt, a NOFX shirt, that I had bought from the wholesale market in Colobane. The only thing punk left in me was that I was anti-authoritarian, which is probably why I rarely skyped with the supervisor of the microfinance institution back in San Francisco. 

Thanks to Rand and Nance, Miriam will find the choicest cuts in the wholesale market and hang them in the store front window in a neighborhood far from her home and anyone who could drop by with an inopportune request for cash.  

I visited her boutique, the clothes were choice, looked nice, and customers came in and out while I was there. So, in a sense, loaning her money allowed her to accumulate wealth, but she did at the expense of her social constraints. She mentioned she never told even her family that she owned a boutique. 

…

I returned home, to a miniscule room on the beach and popped a beer.  I worked on a dissertation, the other grad school requirement. The intro read: 

Microfinance has experienced increasing popularity in development policies, and specifically, in the fight against poverty. The latter is embedded in neoliberal ideologies ascendant in multilateral institutions (IMF, UN, etc.). Concretely, policy discourse includes the promotion of individual entrepreneurship as a means of fighting poverty. In this paper, we will use discourse analysis to highlight these ideologies and their implications for microfinance institutions active in the fight against poverty.

Neoliberal discourse, as a break with former development policy, now promotes the informal economy for its capacity to create employment within the context of global economic downturn. However, social relations within the informal economy create what can be considered its own political economy. To underline these social relationships, we will study the socio-cultural aspects of the informal economy.

We will investigate these social relationships as they pertain to risk management strategies for microcredit beneficiaries. In this research paper, we study a microfinance institution in Dakar, Senegal. Hence, we underline how managing risks tied to entrepreneurship, as well as in the “informal” context (lack of health care, steady salaries, or banking institutions) can impact loan reimbursement.

Thus, the research question is the following:

To the extent that policies in the fight against poverty address individuals active in the informal economy and recommend credit access for poverty alleviation, are these policies suitable with business owners' risk management strategies in this economy?

We confirm, in part, our hypotheses, as certain Zidisha beneficiaries have the tendency to manage risk by pooling money between extended families. Hence, there is a disjuncture between neoliberal, individualist, discourse and the creation and preservation of social capital. To speak of “individual entrepreneurs” is, therefore, an underestimation of the dynamics at work in the informal economy. However, when it is a question of veritable “individuals”, those who manage risk and money within the enterprise, there will be noticeably less difficulty in loan reimbursement.

Of course, because it was a Masters level dissertation, I had only scratched the surface of this complexity. My sample size of 30 clients was not as representative as should be. The dissertation was some 120 pages. Turns out you can't say much in 120 pages. After defending my dissertation, the professor who tutored the study asked if I'd like to do a PHD, to develop what I had started. I politely turned him down and decided to fuck off to travel. 

I went to the beach to watch the sunset, feeling that doing good was going to be more difficult 

On the beach, I saw something that, for once, made me think of the future. In the wicker huts erected as shelters from the wind, I spotted a foreigner. Easily over fifty, his white, sunburnt arm clashed with the dark brown skin of a young woman. I kept them in my peripheral vision as I trudged through the dry sand toward their camp. Reclined on a chaise longue, they fed each other beer. Her arm moved slowly, with his weight bearing down on her movements. Closer, I saw his face was leathered from the sun and alcohol. Swimming in drunken cataracts, his pupils examined the beach until our eyes met. I read in his drowning eyes a warning against the rootlessness inherent in nomadism and the cliché of aid workers living between two airports with the warm bodies of prostitutes as their only home.

But the problem of belonging is a subject for another episode.