By Sam Trauffer, Kiva Fellow

“The surest way to corrupt a youth is to instruct him to hold in higher esteem those who think alike than those who think differently.”
Friedrich Nietzsche

Kyrgyzstan is one of the dark spots (source: www.transparency.org)

Kyrgyzstan is one of the most corrupt countries in the world. In the Corruption Perception Index 2009, it ranks 162 out of the 180 countries that were covered. I knew this when I arrived here in Bishkek two and a half months ago to start my Kiva Fellowship but I didn’t know what the reality looked like nor how corruption affected everyday life.

The good news is that I haven’t had to pay any bribes in the last ten weeks (which has honestly surprised me). However, signs of corruption are obvious at many levels of public life. One of the most shocking examples occurred when I learned that many of my Kyrgyz friends work fulltime while finishing their studies simultaneously. I have always been impressed by people who can study for hours after work and have to admit that I would not be able to do this for a long time. I asked my friends about this and they only smiled and said that it is not that difficult to pass their exams: “Instead of studying all year I just pay the professor when exams are near! That’s all you need to do. Everyone else does the same thing…”

Professors are not the only ones who top up their salaries with bribes. In an environment where the (now ex-) president allegedly installed a rule of corruption and nepotism, taking and paying bribes has become the rule rather than the exception. Other factors which breed corruption include:

  • low salaries for public employees which makes it an attractive (and sometimes necessary) way to increase their income
  • a weak national identity which lowers the inhibition threshold to cheat the central state
  • a high level of bureaucracy which only makes it possible for officials to offer “short-cuts” to the official procedures
  • little transparency due to the absence of independent media
  • a sense of complacency among the population

…just to name a few. All of these are present in Kyrgyzstan.

What can microfinance do to fight corruption? The MFI itself must take measures to prevent its staff from being involved in corruption to insure its very survival. In particular, a high degree of transparency towards stakeholders is vitally important to getting international funding. Lenders expect a strict adherence to a Western standard of both accountability and ethics from the organizations they invest their money in.  If an MFI were to be non-transparent, no-one would ever invest in it.

Beyond this, microfinance can also help its clients to live without (or with less) corruption. While common jobs are often acquired by knowing the ‘right people’ and giving favors, self-employment becomes the alternative for those left out of the loop (be it due to a lack of connections, the unwillingness to pay bribes, etc.). Microcredit, delivered with the absolute minimum amount of red tape, gives an equal chance to every willing person to improve his or her living situation. One important remedy to alleviate corruption is to offer alternatives to simply paying a bribe. I’m proud to say that Bai-Tushum & Partners is helping to provide options for people who want them.


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