Entrepreneur for the poor

July 28, 2008

Millions worldwide watched on television as the pelaton swept into the Champs-Élysées last Sunday on the final sprint of the Tour de France. Many would have recognised the familiar orange-and-blue costumes of the Rabobank team, hot in pursuit of the podium honours, as representing one of Holland’s leading banks. 

Yet few would have known the bank’s origin as the RAiffeisen BOeren lending bank, beginning in Holland as a collection of small rural cooperative banks, run for and by farmers at the end of the nineteenth century.

And not just in Holland. Behind the name Raiffeisen and the chain of banks blanketing the German-speaking countries, and now stretching from Kosovo to Kazakhstan, is the story of a man whose life motto was taken from the words of Jesus: Inasmuch as you have done it for the least of these, you have done it for me. (Matt. 25:40)

For Friedrich Wilhelm Raiffeisen (1818-1888), Christ’s instructions to love one’s neighbour compelled him to find practical ways to help struggling farmers to survive Germany’s hunger winters of the 1840’s.

Raiffeisen was only 27 years old in 1845 when he was appointed mayor in Weyerbusch, a farming district east of Koblenz. He soon witnessed how devious loansharks manipulated small farmers, evicting them and their families from their properties, which they claimed at a fraction of their true value. Despair and apathy seemed to grip the rural population.

Yet the young ex-soldier wrote to his 18-year-old fianceé, Emilie, about his personal source of hope and strength: Each morning, everything begins with God! I am convinced He is with us, blesses us and will always watch over us. We need to begin and complete everything with Him. Amen!

To one of his several friends who studied theology to become pastors, Raiffeisen said that while there was no shortage of preachers in the world, there was a lack of those who translated ‘higher religious thoughts into deeds’.


With evangelical zeal, he campaigned for the government to help impoverished farmers whose crops had failed in the winter of 1847. When eventually a column of sleighs arrived laden with flour for bread, the mayor was hailed as saviour and hero. Only after the flour had been safely stored, and everyone had gone home in glad anticipation of receiving their share the next day, did Raiffeisen discover the official instructions: The shipment was no gift. Payment should be in cash. Flour should be distributed only to those who could pay for it.

Raiffeisen was dumbfounded. That was simply unjust! Help should be made available for all, not only those with means! Even if it meant disregarding orders and risking his future as mayor, he had to follow principle and conscience.

Calling the 22 village heads from the district together the next day, he announced plans to form a poverty commission, and to draw up a list of those needing urgent help. To a man, they stood behind the mayor’s decision to distribute the flour to all in need.

A new spirit of solidarity now began to infuse the whole district with a fresh sense of purpose and hope. The mayor would help them see the harsh winter through! But Raiffeisen knew the shipment was only temporary relief. And that sooner or later he had to settle with the authorities.

When eventually he did report to the district commissioner, he defended his actions as ‘compelled by his Christian conscience’. “What should I have said to the hungry poor?” he asked.

The official, twice the young mayor’s age, had never encountered  such disregard of official orders. But he agreed not to pass on the report yet to his superiors in Koblenz. If Raiffeisen could not find the payment for the shipment, however, Koblenz would have to be informed.

On the home trip, it was clear to Raiffeisen further help could not be expected from the government. The people of Weyerbusch were simply left to help themselves. Help themselves! That was it! he realised. What individuals could not achieve alone, perhaps many together could-if they would only work together!

A plan began to develop in the mayor’s mind of cooperative self-help-first to build a bakery, then to form a ‘bread-society’, financed by loans against income from future harvests. Seed-potatoes would be purchased from other regions, and farmers from the whole district could work together to ensure a secure future for all. No-one was to profit from the loans, which were for the sole purpose of enabling the poor. Money was the means, not the goal. Brotherly love and Christian duty were to be the two foundational principles of such undertakings.


Raiffeisen shared his radically new ideas with the poverty commission members, who slowly began to grasp the potential of working together. The mayor’s entrepreneurial skills realised that forest timber could be sold off to pay the government for the flour shipments. His people skills enabled him to raise the loans for his plans from financial institutions in Cologne.

The result was a transformation of the district over the next two years, spreading Raiffeisen’s reputation throughout the Rhineland. In 1848 he was appointed mayor of the larger Flammersfeld, and later of Heddesdorf (Neuwied). In both places he continued to help farmers and labourers work together through cooperative societies. In 1864, he founded the first cooperative lending bank, in effect the first rural credit union. 

Despite increasing blindness and the death of his first wife at age 37, he united the rural banks into regional cooperatives. In 1876 he formed a national cooperative out of the regional societies, all still based on the principles of brotherly love and Christian duty.

Before he died in 1888, his ideas had been eagerly applied across Germany and in Austria, Switzerland, Holland, France, Belgium, Sweden and Hungary, bringing hope and cohesion to countless farming communities across Europe. 

Till next week,

Till next week,

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