John Hatch
Encyclopedia
Dr.
John Keith Hatch (born November 7, 1940) is an American economic development expert and a pioneer in modern day microfinance. He is the founder of FINCA International
and the Rural Development Services (RDS), and is famous for innovating village banking
, arguably the world’s most widely-imitated microfinance
methodology.
, Washington. His father, a college professor, could trace his ancestors back 14 generations to the first Pilgrim baby born in the New World
. His mother, born in Costa Rica
, had ancestors which included an authentic conquistador
, a railway-builder, and a co-founder of Pan American World Airlines
and a BA in History from Johns Hopkins University
, in July 1962 Hatch joined the Peace Corps
for a 2-year tour of duty in Colombia
. Trained as a "community development" volunteer, he was assigned to a semi-urban barrio
known as Hoyo Sapo ("Frog Hole") on the outskirts of Medellín
. There, he helped organize the community to construct sewer lines, streets, a community center, library, soccer field, and a footbridge. It was also in Medellin that he became fluent in Spanish
, embraced Latin culture, and was first exposed to severe poverty, infant malnutrition
, and illiteracy. Little did he realize at the time that he had just embarked on a career of service to the world's poorest families that would continue uninterrupted for the next four decades of his life.
Following his duty tour in Colombia he briefly served as an instructor in two Peace Corps training programs. Then, in early 1965 he was recruited as a regional Peace Corps director for Peru
. Over the next 30 months he supervised some 55 volunteers working in agricultural cooperatives and credit unions serving the poorest. He returned home for graduate studies at the University of Wisconsin–Madison
, obtaining an MA in Economic History (1970) and a PhD in Economic Development (1973). In between (1970–71) a Fulbright grant allowed him to spend two crop cycles as a hired labor to 30 peasant farmers in Peru, documenting the power and wisdom of their traditional farming practices. The experience taught him deep respect for the subsistence skills of the poor. For the next 12 years he worked as a consultant in the design, management, and evaluation of mostly agricultural projects seeking to benefit the poor, eventually completing over 55 assignments in 28 countries of Latin America
, Africa
, and Asia
. Sadly, he found himself documenting dozens of foreign assistance failures that came closer to destroying than assisting their intended beneficiaries. He longed to create an organization that would allow the poor themselves-not bureaucrats, consultants, or other outsiders-to manage their own development initiatives.
, en route to a consultant assignment in Bolivia
. He grabbed in-flight cocktail napkins, scraps of paper, and a pen and began writing down ideas, equations, and flow charts as fast as he could. By the time he landed in La Paz
, he had the outline of a radically different approach to poverty alleviation: a financial services program that put the poor in charge. “Give poor communities the opportunity, and then get out of the way!” he said. The means to achieving this purpose were "village banks", a self-managed support group of some 25 borrower-owners. Its purpose was to provide the poorest families, particularly those headed by single-mothers, with loans to finance self-employment activities capable of generating additional household income. The story of FINCA-which has been called a "World Bank for the Poor" and a "poverty vaccine for the planet"-is quite remarkable and even miraculous. FINCA currently operates village banking programs in 23 countries and since 1984 it has assisted over 1,000,000families, lending over $360 million (in 2007) to the world's poorest families with a repayment rate of 98%, while also generating enough income to completely cover the operating costs of the field programs themselves. Moreover, there are now over 800 village banking programs worldwide in 60 countries created by about 30 other nonprofit agencies.
"...looking ahead to the year 2025, at the age of 85 I plan to take my great gandchildren to visit the "Poverty Museum" in Washington, DC, so they can understand how half the human family used to live, but found a way to lift themselves out of poverty"
Doctor (title)
Doctor, as a title, originates from the Latin word of the same spelling and meaning. The word is originally an agentive noun of the Latin verb docēre . It has been used as an honored academic title for over a millennium in Europe, where it dates back to the rise of the university. This use spread...
John Keith Hatch (born November 7, 1940) is an American economic development expert and a pioneer in modern day microfinance. He is the founder of FINCA International
FINCA International
The Foundation for International Community Assistance is a non-profit, microfinance organization, founded by John Hatch in 1984. Sometimes referred to as the "World Bank for the Poor" and a "poverty vaccine for the planet", FINCA is the innovator of the village banking methodology in microcredit...
and the Rural Development Services (RDS), and is famous for innovating village banking
Village Banking
Village Banking is a microcredit methodology where-by financial services are administered locally rather than centralized in a formal bank. Village banking has its roots in ancient cultures and was most recently adopted for use by micro-finance institutions as a way to control costs...
, arguably the world’s most widely-imitated microfinance
Microfinance
Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....
methodology.
Childhood and Family
Hatch was born in 1940 in PullmanPullman, Washington
Pullman is the largest city in Whitman County, Washington, United States. The population was 24,675 at the 2000 census and 29,799 according to the 2010 census...
, Washington. His father, a college professor, could trace his ancestors back 14 generations to the first Pilgrim baby born in the New World
New World
The New World is one of the names used for the Western Hemisphere, specifically America and sometimes Oceania . The term originated in the late 15th century, when America had been recently discovered by European explorers, expanding the geographical horizon of the people of the European middle...
. His mother, born in Costa Rica
Costa Rica
Costa Rica , officially the Republic of Costa Rica is a multilingual, multiethnic and multicultural country in Central America, bordered by Nicaragua to the north, Panama to the southeast, the Pacific Ocean to the west and the Caribbean Sea to the east....
, had ancestors which included an authentic conquistador
Conquistador
Conquistadors were Spanish soldiers, explorers, and adventurers who brought much of the Americas under the control of Spain in the 15th to 16th centuries, following Europe's discovery of the New World by Christopher Columbus in 1492...
, a railway-builder, and a co-founder of Pan American World Airlines
Education and early career
After high school in MassachusettsMassachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
and a BA in History from Johns Hopkins University
Johns Hopkins University
The Johns Hopkins University, commonly referred to as Johns Hopkins, JHU, or simply Hopkins, is a private research university based in Baltimore, Maryland, United States...
, in July 1962 Hatch joined the Peace Corps
Peace Corps
The Peace Corps is an American volunteer program run by the United States Government, as well as a government agency of the same name. The mission of the Peace Corps includes three goals: providing technical assistance, helping people outside the United States to understand US culture, and helping...
for a 2-year tour of duty in Colombia
Colombia
Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...
. Trained as a "community development" volunteer, he was assigned to a semi-urban barrio
Barrio
Barrio is a Spanish word meaning district or neighborhood.-Usage:In its formal usage in English, barrios are generally considered cohesive places, sharing, for example, a church and traditions such as feast days...
known as Hoyo Sapo ("Frog Hole") on the outskirts of Medellín
Medellín
Medellín , officially the Municipio de Medellín or Municipality of Medellín, is the second largest city in Colombia. It is in the Aburrá Valley, one of the more northerly of the Andes in South America. It has a population of 2.3 million...
. There, he helped organize the community to construct sewer lines, streets, a community center, library, soccer field, and a footbridge. It was also in Medellin that he became fluent in Spanish
Spanish language
Spanish , also known as Castilian , is a Romance language in the Ibero-Romance group that evolved from several languages and dialects in central-northern Iberia around the 9th century and gradually spread with the expansion of the Kingdom of Castile into central and southern Iberia during the...
, embraced Latin culture, and was first exposed to severe poverty, infant malnutrition
Malnutrition
Malnutrition is the condition that results from taking an unbalanced diet in which certain nutrients are lacking, in excess , or in the wrong proportions....
, and illiteracy. Little did he realize at the time that he had just embarked on a career of service to the world's poorest families that would continue uninterrupted for the next four decades of his life.
Following his duty tour in Colombia he briefly served as an instructor in two Peace Corps training programs. Then, in early 1965 he was recruited as a regional Peace Corps director for Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
. Over the next 30 months he supervised some 55 volunteers working in agricultural cooperatives and credit unions serving the poorest. He returned home for graduate studies at the University of Wisconsin–Madison
University of Wisconsin–Madison
The University of Wisconsin–Madison is a public research university located in Madison, Wisconsin, United States. Founded in 1848, UW–Madison is the flagship campus of the University of Wisconsin System. It became a land-grant institution in 1866...
, obtaining an MA in Economic History (1970) and a PhD in Economic Development (1973). In between (1970–71) a Fulbright grant allowed him to spend two crop cycles as a hired labor to 30 peasant farmers in Peru, documenting the power and wisdom of their traditional farming practices. The experience taught him deep respect for the subsistence skills of the poor. For the next 12 years he worked as a consultant in the design, management, and evaluation of mostly agricultural projects seeking to benefit the poor, eventually completing over 55 assignments in 28 countries of Latin America
Latin America
Latin America is a region of the Americas where Romance languages – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...
, Africa
Africa
Africa is the world's second largest and second most populous continent, after Asia. At about 30.2 million km² including adjacent islands, it covers 6% of the Earth's total surface area and 20.4% of the total land area...
, and Asia
Asia
Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...
. Sadly, he found himself documenting dozens of foreign assistance failures that came closer to destroying than assisting their intended beneficiaries. He longed to create an organization that would allow the poor themselves-not bureaucrats, consultants, or other outsiders-to manage their own development initiatives.
Founding FINCA
In 1984, Hatch finally created his own nonprofit agency-the Foundation for International Community Assistance (FINCA). He was inspired with the idea of FINCA while in an airplane high above the AndesAndes
The Andes is the world's longest continental mountain range. It is a continual range of highlands along the western coast of South America. This range is about long, about to wide , and of an average height of about .Along its length, the Andes is split into several ranges, which are separated...
, en route to a consultant assignment in Bolivia
Bolivia
Bolivia officially known as Plurinational State of Bolivia , is a landlocked country in central South America. It is the poorest country in South America...
. He grabbed in-flight cocktail napkins, scraps of paper, and a pen and began writing down ideas, equations, and flow charts as fast as he could. By the time he landed in La Paz
La Paz
Nuestra Señora de La Paz is the administrative capital of Bolivia, as well as the departmental capital of the La Paz Department, and the second largest city in the country after Santa Cruz de la Sierra...
, he had the outline of a radically different approach to poverty alleviation: a financial services program that put the poor in charge. “Give poor communities the opportunity, and then get out of the way!” he said. The means to achieving this purpose were "village banks", a self-managed support group of some 25 borrower-owners. Its purpose was to provide the poorest families, particularly those headed by single-mothers, with loans to finance self-employment activities capable of generating additional household income. The story of FINCA-which has been called a "World Bank for the Poor" and a "poverty vaccine for the planet"-is quite remarkable and even miraculous. FINCA currently operates village banking programs in 23 countries and since 1984 it has assisted over 1,000,000families, lending over $360 million (in 2007) to the world's poorest families with a repayment rate of 98%, while also generating enough income to completely cover the operating costs of the field programs themselves. Moreover, there are now over 800 village banking programs worldwide in 60 countries created by about 30 other nonprofit agencies.
Retirement
In 2006, Hatch announced his retirement from day-to-day operations at FINCA headquarters in Washington, DC, although he continues to support FINCA in his capacity as a board member, fundraiser, and guest lecturer at universities. He currently lives with his wife Marguerite in Santa Fe, New Mexico, where he is pursuing a lifelong interest in watercoloring and screen writing. He is also co-founder of a new nonprofit—the Alliance of Students Against Poverty (ASAP)--which has a goal of ending global poverty by getting two million Americans to pledge "$1/day for those living on less than $1/day, thus raising $10 billion by the year 2025 to be distributed to those microfinance agencies with the best track record of serving the "poorest of the poor". On June 26, 2009, Hatch will be presented with the Sargent Shriver Award for Distinguished Humanitarian Service by the National Peace Corps Association.Quotes
"Of course, our work is far from done. Yet considering current growth trends, I know that by the time I retire over 200 million households worldwide will have been benefited by the poverty vaccine of microfinance and/or village banking . What I also know is that my grandchildren will inherit a world where severe poverty has been abolished.""...looking ahead to the year 2025, at the age of 85 I plan to take my great gandchildren to visit the "Poverty Museum" in Washington, DC, so they can understand how half the human family used to live, but found a way to lift themselves out of poverty"
Publications by John Hatch
- Innovations from the Field. A Daringly Brief Summary of a Huge Phenomenon. By John K. Hatch & Sara Levine, Pathways Out of Poverty. Innovations in Microfinance for the Poorest Families. Kummarian Press (2002)
- Poverty Assessment by Microfinance Institutions: A Review of Current Practice. By John K. Hatch & Laura Frederick, Development Alternatives, Inc. (1998)
- Our Knowledge: Traditional Farming Practices in Rural Bolivia Vol:1 Altiplano Region., Vol.2 Temperate Valleys, Vol. 3 Tropics, By John K. Hatch, (1983)
- MSU rural development series. By John K. Hatch, Dept. of Agricultural Economics, Michigan State University (1980)
- An Evaluation of the AIFLD/HISTADRUT project proposal to assist peasant federations in Honduras, El Salvador and Guatemala. By John K. Hatch, Rural Development Services (1977)
- A Report on the National Association of Honduran Peasants (ANACH). By John K. Hatch, Rural Development Services (1977)
- Group farming in the Dominican Republic. By John K. Hatch, Rural Development Services (1977)
- Strategies for Small Farmer Develop-ment,vol. 1. By Elliott R. Morss, John K. Hatch, Donald R. Mickelwait, and Charles F. Sweet, Boulder, Colo.: Westview Press (1976)
- The corn farmers of Motupe: A study of traditional farming practices in northern coastal Peru (Land Tenure Center monographs ; no. 1). By John K. Hatch, Land Tenure Center, University of Wisconsin–Madison (1976)
See also
- FINCA InternationalFINCA InternationalThe Foundation for International Community Assistance is a non-profit, microfinance organization, founded by John Hatch in 1984. Sometimes referred to as the "World Bank for the Poor" and a "poverty vaccine for the planet", FINCA is the innovator of the village banking methodology in microcredit...
- Village BankingVillage BankingVillage Banking is a microcredit methodology where-by financial services are administered locally rather than centralized in a formal bank. Village banking has its roots in ancient cultures and was most recently adopted for use by micro-finance institutions as a way to control costs...
- FINCA AfghanistanFINCA AfghanistanFINCA Afghanistan is a nonprofit microfinance organization and an affiliate of FINCA International. Its headquarters is based in Kabul, Afghanistan.-Background and history:...
- MicrocreditMicrocreditMicrocredit is the extension of very small loans to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit...
- MicrofinanceMicrofinanceMicrofinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....