Archive for February, 2009
(Personal) Microfinance 101
My first and only post was back in September 2008 – I had just finished training for the Kiva Fellowship, although I wasn’t leaving until January and still did not know where I was going. I got word in November that I was heading to Bali, Indonesia! Since my departure dates were a little off cycle from the rest of the KF7 class, this is my first official post as a Kiva Fellow.
Since I arrived in Bali to begin my Fellowship with the DINARI Foundation, I have not stopped sweating. I expected the heat; I expected the humidity. But the combination of sudden torrential downpours followed by a glaring sun and brutal heat make this pale guy from Boston lose a lot of perspiration. After driving my motorbike about 30 km to visit the DINARI office and meet my future coworkers for the first time, I was embarrassingly sweaty upon arrival. Thankfully, no one cared and I received a hearty welcome. My first day was a sweaty one, as the rest will be – even when plunked square in front of the biggest fan I can find. Like right now.
I just finished my second week at DINARI and I’m already inspired by what I’ve seen and done so far. In typical Balinese fashion, the DINARI team a warm and friendly group and it’s been fun getting to know them. Practicing my (very beginners) Bahasa Indonesia with them has been helpful, as well as good for laugh and in turn, my coworkers have the opportunity to practice their English with an American.
If I may digress for a moment, I’d like to offer some pertinent background information on how and why I ended up here… My interest in microfinance started in college when my “Globalization Issues” professor spoke of the modest impact it was making in developing countries and its potential for widespread influence. I was struck by how neatly microfinance combined empowering low-income and impoverished people, sustainable development, and free-market capitalism. These burgeoning interests lead me to an internship at ACCION International, a fairly large and established microfinance institution in Boston. When I started at ACCION, I remember thinking “I want more of a hands-on experience” – I wanted to really do microfinance in the field. I quickly found out that was easier said than done. A little discouraged, I shelved my microfinance interests and moved to New York City to do something completely different, but I never lost my passion for microfinance. By sheer good fortune and keeping in touch with some friends from ACCION, I came across the Kiva Fellows program. It immediately occurred to me that this was exactly what I was looking for two years earlier! So, needless to say, I am thrilled to be here and am more than ready to rockstar some microfinance.
On my second day I was invited by Pak Alit, DINARI’s CEO, to attend the initial dispersal of a group agricultural loan about 30 km north of the office. Although this group was not funded by Kiva, I jumped at the opportunity, grabbed my camera, and sped away on my motorbike. Trying to keep up with the loan officers was a challenge, as I’d only been on the bike for about three days and was still going at a geriatric speed. Following the loan officers is a lot like trying to keep up with an older sibling when you first learned to ride a bike: they go too fast and push you out of the comfort zone but that’s where you get better.
We pulled into a traditional Balinese family compound: many houses shared by several generations all somehow related, a temple, and many covered, raised sitting areas. This location was chosen as the loan dispersal site because of its centrality to other farms in the area. The loan could not be distributed until all members of this group arrived. At best time is an approximation in Bali, especially in the countryside. So we waited. And waited. With me sweating profusely of course. Finally all twenty members – all women, ranging from 25 to 65 years old – sat patiently with their squirming children in arms as the loan officers to began.
I had waited a long time for this moment. The thought of traveling on a motorcycle to go see microfinance in action had sustained me during many office meetings and restless moments sitting at my cubicle back in Manhattan. When I would get all jammed up in the months before I left New York, a coworker – who well knew how restless I felt by the time I left New York – only had to say the word “motorcycles” to remind me of what I was going to do and how soon it would be reality.
This is what I came to do, why I’m here. For all the hype and preparation of this journey, I felt so moved by the gathering of these twenty proud and determined women.
This particular group was receiving a loan to purchase and raise piglets, not for the slaughterhouse, but to resell them for a profit once they were fully grown. Although I could not understand most of what the loan officers were saying, I could tell they were going over the terms of the loan, repayment dates, interest rates and general information. My friend Ferdinand, the Kiva Coordinator at DINARI’s Badung office, told me the loan officers give explicit instructions on how to properly raise a pig (must provide a covered place to live, respite from the sun, can’t feed them trash, etc.) I was also told DINARI clients are able to get quality animal feed at a discounted price through a special program set up with a distributor. After each woman signed her name, the loan was dispersed in a simple white envelope. The group gathered for a picture and then I followed the loan officers back to the office, smiling to myself the whole way. I could not have imagined a better first impression of “microfinance in action.”
Tomorrow,February 2, I am packing up my Yamaha Nouzo motorbike – aka the “hog” – and driving out to DINARI’s west Bali branch in Melaya for the week. There are dozens of Kiva clients in the Melaya area that need to be interviewed and have their stories told. It will be an educational, interesting, and exciting trip. I will surely have more stories to share at the week’s end.
Why Doesn’t Lonely Planet Have a Guidebook on Tajikistan?
Pamir Mountains - Photo by Oytun Orguil
When I set out to research Tajikistan a few months ago, I figured that it would be challenging but didn’t realize exactly how difficult it would be to find accurate, up-to-date information on this small, land-locked country in Central Asia.
Aside from a single chapter in a Central Asia guidebook by Lonely Planet and a few websites, there is relatively little information available for those interested in traveling to Tajikistan.
As a whole, it’s not considered to be a big tourist destination (aside from the outdoor enthusiasts) – nor is there any real tourist infrastructure setup in the country. A few hotels in the capital, a couple of travel agencies organizing trips into the mountains, and that seems to be it.
Traveling to Tajikistan is relatively complex as well. It borders China, Kyrgyzstan, Uzbekistan and Afghanistan – and most of these countries don’t make it easy for you to get there.
Map of Tajikistan
More About Tajikistan
Tajikistan currently has a little over 7 million people living there with about 80% of them being Tajik, 15% Uzbek, 1% Russian and 4% of other nationalities. The amount of Russians has been declining steadily over the years due to emigration. Plus, a large number of Tajik men go abroad to find work and sent remittances back to their families – in fact, remittances is one of the 3 major drivers of its economy (cotton and aluminum being the other two).
It’s currently one of the poorest countries in Central Asia and has one of the lowest per capita GDP among the 15% former Soviet Union republics – ranging between $1,000 – $1,800 (depending on where you look). Compare that to over $15,000 per capita in Russia or $48,000 per capita in the United States.
Although the the government claims an unemployment rate of just 2.4%, I’d make a wild assumption about the number being inaccurate. About 70% of people live on around $2/day. When a liter of gasoline costs about $1 or a liter of bottle water goes for $0.40c (according to Lonely Planet – I’ll verify!), it makes things difficult to say the least.
Energy Crisis
On top of many financial and infrastructure issues affecting the citizens, the country has also been dealing with a severe energy crisises over the last few years. Although it has a lot of potential capacity through its hydroelectric plant, it winds up relying on importing electricity from its neighbors – as the water freezes in the Winter, at a time when the demand is the greatest.
Last winter, the situation got particularly difficult with temperatures reaching -20c and Uzbekistan and Turkmenistan limiting electricity supplies due to their own shortages. In the mountains, rivers froze, leaving hydropower stations without water needed to run their turbines. Electricity was rationed to about 9 hours/day in the capital and other major cities and only 3 hours/day everywhere else. In ’09, the situation seems less dire – but we’ll see what it’s like over the next few weeks.
Kiva Lenders and Central Asia
Going back to the microfinance aspect of things, one particularly interesting thing that I picked up at Kiva’s training this week is the overall trend towards Tajikistan and the whole region among its lenders. When a new loan goes up on Kiva, it has 30 days to get funded before it expires. Most of them get funded within 24-48 hours.
However, what’s interesting is that loans from Central Asia typically take longer to fund then, say, loans for Africa. Although generally all of them wind up getting the money anyway, lenders seem to prefer to lend to certain regions vs. others. I wonder if that’s because they are less familiar with Central Asia (it does get a lot less attention than other regions) or perhaps that poverty is viewed differently somehow in one place versus the other. The numbers are interesting.
Hopefully, I’ll get some insight into that over the next few months.
Signing off from United States! 
==================================
* This post has been written by Boris Mordkovich, a Kiva Fellow working for 10 weeks in Tajikistan for MLF Humo and Partners. Check out currently fundraising loans by Humo and join Kiva Lending Team – Supporters of Tajikistan *
