The microcredit became famous with the economist Muhammad Yunus, who was awarded with the Nobel Peace Prize in 2006, as a form of financing for people who are unable to access credit. End Poverty, an international organization based in the United States, who works in partnership with local partners in Asia and Africa, believes that this can be the beginning for reversing the poverty cycle.

After three years working at ICM, International Care Ministries, an institution focused on education and poorer families, Madalena Santos is working in End Poverty, as Director of Operations for almost two years. She is aware that microcredit isn’t "a magic solution" for all problems, but it has the potential to solve poverty in many situations. "It’s a misconception that people have that microcredit makes sense in any business volume, but it doesn’t. It makes sense in small business. For me, the democratization of access to credit is one of the most interesting issues in microcredit, but it doesn’t mean that all businesses are practicable. If it’s a business that has no growth potential it won’t succeed because of microcredit. Besides, it also has risks such as the over-indebtedness of the families that can increase the situation of poverty of the families ", she says. 

End Poverty works with partners in eight countries - Uganda, Zambia, Cameroon, South Africa, Guatemala, India, Bangladesh and Philippines - supporting them in organizational development and in the financial component, channeling donations for business projects. "I would say that these are very small businesses that don’t have the potential to scale at the country level, but have the potential to improve the living conditions of that family, that community and, often, the turn into another type of business", says Madalena Santos.

End Poverty’s director of operations explains the organization's model is differentiated by the sustainability strategy rather than traditional charity. "It’s to give families the possibility to invest in their own businesses, but then they have the chance to make decisions, with the limited resources available. Families have this freedom to make decisions. And I think it’s very important to give them dignity, "she explains.

In 33 years of activity, the organization has supported more than 200,000 small businesses in 37 countries. "We have several business cases that have a huge development from families that were able to get out of this trajectory of poverty. In general, we are talking about very small businesses, of one or two employees, that often are family members. In many cases the woman is at home for various reasons and the business is done at home, for example sewing, or selling products in front of the house or on a street market ", she explains.

Madalena Santos recalls two projects that she recently visited in Uganda and Bangladesh. Two businesses with different approaches, but both with potential to be sustainable. One, in northern Uganda, a very complex area that has been in war for many years and where there are many refugees - they are refugees currently fleeing the military conflict in South Sudan (30 km from the headquarters of the End Poverty local partner where is currently the largest refugee camp in Africa) - there is a carpentry, a family business from an uncle and a nephew who has a physical disability and who has adapted the business to his condition. "A very encouraging example of an entrepreneurial mindset" says Madalena Santos.

The other business, in Bangladesh, is a textile business, which already employs 25 women. They sew traditional costumes at home that are distributed and sold by the business mentor, who is also a woman. "This has a huge economic potential not only for the family, because it’s a source of income, but also for women's financial independence, to have an important role in the family structure, in the decisions and in the management of the family budget. In addition, at a social level, they can motivate these women and develop leadership skills. It's a change adapted to culture, in line with cultural translations, but at the same time empowering them in that environment", says End Poverty's director of operations.

"The MBA provided me a broader view in understanding the world"

Madalena started to work as a psychologist and social projects always had a special meaning for Madalena. She worked in Alentejo, in the southern region of Portugal, in a government programme with children with high retention rates, with the aim was to integrate them in school and in society.

Currently, Madalena lives in Hong Kong, where she works at End Poverty. The huge change happened after MBA, that she completed back in 2013. "I made an MBA because I was frustrated. I was working in the social area with NGOs and partners and I realised that even though people had very good intentions, had a good heart and willingness to do good things, they lacked management skills and therefore, there was a huge waste of resources, human, financial, and talent", she says.

The MBA gave her management skills and a broader perspective. “The MBA brought me a wider view in understanding the world. With the 'lenses' of the MBA I can look at each one of these families and, as a whole, I realize that there is something in common that can be applied to all, with potential to scale, that with my 'lenses' of psychology I couldn’t see. I changed my way of thinking regarding end poverty solutions, the way it is improving the living conditions of the poorest families in the world", she recalls.