By Adam Preston, KF9, Philippines
I was perusing through my IPhoto gallery when it occurred to me, I am almost done here. Since October, I have been working at the head office of Alalay sa Kaumlarun or ASKI. I have been on two week long field visits, a day trip to deliver relief goods to typhoons victims, 4 ASKI client annual meetings, and even day of team building through sports and exercise, where I participated in a cheer competition. Needless to say, it has been a very full three months.
As I page through the photos and videos of borrower visits, I feel that I should have a resounding conclusion on microfinance or at least of P2P banking or at least of of Kiva. But I don’t. I have traveled throughout northern Luzon and meet with over 80 ASKI clients. I have found that the Filipinos are proud, hardworking people not looking for handouts, but rather for opportunity. There were the visits to people, like Jelly, who is not renewing her loan. She is taking a break from selling banana chips to focus on caring for her newborn baby. She has no plans to renew. Others, like Lourinda, a smart, strong center chief women, is a pillar in her community. She has renewed her loan multiple times and was recently recognized for her achievements as a business woman in the 2009 annual client meeting. Still others like, Jose who is not renewing his loan due to an farming accident earlier this year. Right now, he can’t work. He said that once he recovers, he might renew. While I have not made any startling discoveries, I have made a few observations:
Microfinance Requires a Team Effort
One thing I came into the Kiva Fellowship with is this idea that Kiva helps regular people make a direct impact in the life a poor person. In my mind I envisioned a women living in a grass hut only needing my $25 loan to start a business to finally lift herself out of poverty. After reading A Banker to the Poor, can you blame me? You as a lender are making a difference, but when you hit that lend now button you not acting alone to help this borrower out, you’re joining a team. What I have learned since being here is that it takes a finely tuned machine to lift communities out of poverty – and that finely tuned machine is the MFI. Just at ASKI, there are the loan officers (or project officers as they are called here), who routinely risk their safety to visit borrowers to collect the payments. There are the documentation officers, who reside in the branches and transfer and translate the loan applications to posted loans on Kiva. There are the communications officers who reside in the head office who oversee and coordinate documentation officer’s work. And this is just the tip of the iceberg of the MFI. There is a team of people working tireless behind the scenes to produce that one photo and the borrower profiles. And this isn’t even counting the Kiva staff responsible for keeping the Kiva platform humming. To achieve this this noble goal of alleviating poverty it requires a sustained, team effort.
It’s the Percentages, Stupid
We hear a lot about how Kiva isn’t perfect or that microfinance isn’t perfect. You don’t have to go very far on the internet to find criticism of microfinance in general or even Kiva in particular . One thing that I have learned since being here is that you can not judge the effectiveness of microfinance based on success of single MFI client (or even a single MFI for that matter) anymore than you can judge the effectiveness of baseball player by a single at bat. I do not have to go far to find examples where additional credit did not result in a prosperous business. But a simple fact remains; access to credit is essential for any business to function. As ASKI Executive Director Roland Victoria once said credit is the lifeblood of an economy. By supplying life to even the road side sari-sari store, gives the small business owner the best chance and climbing to that next rung. Over time, making credit more accessible will result in a higher percentage of stronger, healthier businesses.
Poverty Alleviation Requires More than Microcredit
One reoccurring message I have heard here is how ASKI is “Going beyond microfinance.” To truly lift an individual from poverty, credit is important, but so are other services such as insurance, savings programs, vocational training, community development, and disaster relief. Last week, along with the ASKI management team, I attended 4 ASKI client general assembly meetings. These meetings attended by up to 1500 ASKI clients are usually held around Christmas and serve as an opportunity to update the ASKI clients on the various ASKI programs. Local government officials are also there detailing government run social programs and also educating the audience on a variety of topics such consumer rights . These meetings require a considerable amount of work to plan and run, but are a great example of how ASKI is going beyond microfinance.
Mature Microfinance Institutions, such as ASKI, offer their clients an array of services that previously were not available to this segment of the population and these services are not purely financial in nature. I think mistakenly many of the academic studies are out to find a silver bullet. What I have learned in my short three month Kiva fellowship is that there is no silver bullet. However this should not dissuade us from participating. This is a very interesting time in our history where we finally have the technology to harness the collective power ordinary people for social good, and Kiva is leading the charge.
Adam Preston is a Kiva Fellow who proudly served at Alalay sa Kaunlaran, Inc (ASKI), Philippines.