By Father Juan J. Molina, O.Ss.T., PhD, Advocacy Program Coordinator, Catholic Relief Services Southwest. Leer una reflexion en español (PDF).

In speaking about the global financial system, Pope Benedict XVI in his recent encyclical, Caritas in Veritate, states that "it is certainly useful . . . to launch financial initiatives in which the humanitarian dimension predominates" (No. 65). He further accentuates popular microfinance programs in the developing world as both a means of helping the poor get out of poverty and a tool through which investors can help bring about the common good through actions of solidarity with the poor and vulnerable.

His Holiness' statements are words of encouragement to the many microfinance and microcredit programs around the world that are run by Catholic institutions. Microfinance and microcredit schemes are popular among Catholic institutions because they are compatible with Catholic social teaching: these programs aim to foster not just material well-being, but overall moral and ethical well-being. Such programs are designed to help people not merely survive, but to thrive and flourish with a vision of a better future for their families.

Catholic Relief Services, the official humanitarian relief and development agency of the U.S. Catholic community supports microfinance programs in 36 countries around the world, serving more than one million people. CRS' programs focus precisely on many of the aspects of Caritas in Veritate. The Pope writes that "without internal forms of solidarity mutual trust, the market cannot completely fulfill its proper economic function" (No. 35). Crucial to many CRS-sponsored programs is the emphasis placed upon building community cohesion and solidarity, especially in places where peacebuilding is needed. In Ghana, for example, programs that encourage the formation of microfinance programs by members of different ethnic groups create social cohesion where members begin to see each other as mutual, trusting partners.

Microcredit and microfinance structures help facilitate human development both in terms of creating financial capital and much needed social capital among individuals and communities. Although these programs are only one or two elements among a plurality of options to assist the poor and promote solidarity, they are nonetheless valuable approaches. This is one reason why CRS promotes the use of microfinance programs in conjunction with other projects being implemented in a community to foster all aspects of human development.

In addition, addressing the aspect of charity through microfinance not only helps the poor get out of poverty, it also helps educate young people at Catholic colleges and universities to become business leaders concerned with promoting the common good. At the University of Saint Thomas in Houston, TX, where educating "Leaders of Faith and Character" is at the forefront, students participate in a Microcredit Program that pedagogically fosters both their academic learning about microcredit along with their social responsibility. The program seeks to offer students a unique opportunity to learn first-hand how to run a non-profit organization, conduct risk and loan assessments, manage loans, conduct field surveys and identify business opportunities, among other skills that will be useful during their professional careers. The program also grants thousands of hardworking individuals the necessary cash flow to apply their entrepreneurial spirit toward income-generating enterprises that will move them and their loved ones out of the cycle of poverty.

Most importantly, students also address the pivotal question: what does it mean to be connected to the world in an ethical way? Throughout this program, students learn necessary business skills to be successful entrepreneurs and, at the same time, understand the spiritual and humanitarian dimensions of business endeavors.

The MicroCredit Program at the University of Saint Thomas and the microfinance programs that CRS supports around the world put into practice Catholic moral and social teachings. We can see how The Pope beckons everyone to realize that true growth entails not just economic and technological advancement, but fostering a loving solidarity of humanity oriented by truth.

For more information, visit www.crs.org/microfinance, or www.stthom.edu/microcredit

Juan J. Molina, O.Ss.T., PhD, works with Catholic Relief Services in the Southwestern Office in the United States. John Francis Burke, Ph.D, teaches political science at the University of St. Thomas and directs the Rev. William J. Young Social Justice Institute at UST.

Rogelio Garcia-Contreras, PhD, Micro Credit Program Director, teaches international development at the Center for International Studies of the University of St. Thomas