Author Archive
The Working Poor vs The Unbanked.
By Drew Loizeaux, KF11, Uganda
When talking to people about microfinance, many times the poverty level of the clients is brought up as a big way to measure an organization’s success. I felt this way for a long time and it makes sense. We have all heard stories of a poor farmer expanding his business or a “phone women” in a Bangladeshi village. As I have spent more time at microfinance institutions however, I’ve realized that view is incomplete. Yes, empowering the poor is a very important part of microfinance, but they are only a subsection of the really important group that a successful MFI must target; the unbanked.
Many times, poor and unbanked are synonymous, but other times they are not and it is important to recognize the difference between the two and how each group can help a community. To illustrate this point I want to introduce you to Fred.
Happy Entrepreneurs and Harsh Accusations: Conversations about Microfinance
By Drew Loizeaux, KF11
Conversations about microfinance are a near daily occurrence in the life of a Kiva Fellow. Sometimes they are with happy recipients of loans and other times they are with skeptics who question its value or impact. No matter what the topic or tone, I always learn something new and usually leave with an even stronger commitment to microfinance than before. In hopes to relay this experience, I want to share with you a recent sampling of some of the conversations I have found myself in.
A Closer Look: Group Loans
Most of you also know that the idea behind group loans is to provide a way to secure loans without having to rely on collateral like banks do. But do you know about the different type of group loans? Do you know where and why they are used? If not, up your microfinance IQ and read on.
Introducing HOFOKAM!
By Drew Loizeaux, KF11, Uganda
I’m pleased to introduce HOFOKAM to the Kiva community. HOFOKAM is based out of Fort Portal, Uganda and maintains four branch offices that serve over 15,000 clients. HOFOKAM focuses most of its efforts on serving rural clients in the western part of the country.
Hofokam's Headquarters
Originally three different organizations, HOFOKAM was formed in 2003 by the merging of separate projects of the Catholic Dioceses from Fort Portal, Hoima and Kaseese. In addition, HOFOKAM receives funding and support through a partnership with Catholic Relief Services (CRS). Though HOFOKAM has many loan products its two main offerings are village bank and solidarity group loans. In addition to these loan products, HOFOKAM has also created several specific products to meet the needs of their clients such as agriculture loans, school fee loans and solar loans.
Andrew and Helen uploading borrower profiles to Kiva
Though I’ve only been here a week, I have been overwhelmed by the staff’s dedication, not only to HOFOKAM mission, but (more…)
The power of your loan
By Drew Loizeaux, KF8 Philippines
The last 4 months working as a Kiva Fellow have allowed me an up close look at many different sides of microfinance. It has been fascinating for me to see and made me look at the loans I make through Kiva in a different way.
As Kiva Lenders, our money not only goes to the borrowers themselves, but through our interest free loans we are also directly supporting each Kiva Partner that we lend through. Each Kiva Partner is different, and no matter what your reason is for believing in the power of microfinance, there is an organization that will fit your philosophy. In the same way that you may buy local, fair trade or made in the USA products you also can put your money in an MFI who’s mission you connect with. This is a powerful tool that each lender can, and should appreciate.
At ASKI for example, the MFI I am currently working with, the revenues from the microcredit program go to fund many other social programs that help enrich the lives of not only their clients, but also the communities in which they live. Below you can see are a few videos that highlight the ripple affects our loans can have.
This is a presentation I attended last week, where a member of a local ASKI sponsored youth group explains a village water project they are working on.
ASKI has always looked to provide more than just microcredit to their clients; ASKI Foundation was created last year to formalize and strengthen some of ASKI’s “Beyond Microfinance” programs. You can see ASKI Foundation General Manager, Bogg Burbos, talk about its programs further in the video below.
What a difference a government makes
Four weeks ago I left my first placement in Cambodia and came to the Philippines where I started my second assignment with Kiva Field Partner ASKI. With each day at ASKI I have been more and more impressed by the dedication of the staff and the amazing programs that they are running.
Last week I started working on a blog post where I plan to conduct video interviews with staff that work on what ASKI calls, their “Beyond Microfinance” programs. These programs include; health insurance, life insurance, community development, housing loans for government built low income housing units, marketing training, finance training and a whole foundation that provides everything from child care to scholarships to toilets.
As I began to research each program’s operation it became obvious that each one of them were a testament to the staff’s tireless efforts to serve their clients in every possible way. Most of the programs are funded directly through profits earned in their core micro credit business, which I thought was an incredible use of profits. There was something else I discovered that struck me as well; many of these programs would not be possible without partnership with or support from the Filipino government.
I found that the health insurance, life insurance and housing loan programs are in direct partnership with the government, and the community development program helps villages work with the local government to complete valuable infrastructure projects.
I immediately thought back to my time in Cambodia and I asked myself:
Breaking up the Band
Over the last three months, four Kiva Fellows (Katie, Julie, Jeff and Drew) have been working and living in Phnom Penh, Cambodia. We are so lucky to have spent this time together in such a wonderful place. Alas, our time has come to an end but we have put together a video to share both our time at our individual MFI’s and our time together outside of work.
It is unusual for multiple Kiva Fellows to be located in the same city, but Phnom Penh is a unique place in the development world and the Cambodian Microfinance landscape is highly active – creating a phenomenal opportunity for us to share our experiences and learn from each other as we entrenched ourselves at our respective MFI field partners: HKL, AMK, Credit and MAXIMA.
While this is the end of our time together each of us will be moving on to new and exciting things. Julie will be attending law school in the fall (law school TBD ), Jeff will be begin studying for his MBA at MIT, Katie will be working with Microfinance in Cambodia in a new capacity, and Drew will be going to Kiva’s partner ASKI, in the Philippines.
We would like to thank all of our great coworkers, especially our Kiva Coordinators for all of their hard work and help. Also, a special thanks to all of the Kiva Lenders who make Kiva and all of our great experiences as fellows possible. We feel privileged to have been able to serve as Kiva Fellows in Cambodia and would love to see interest in Kiva and the Kiva Fellows program continue to grow. If you have enjoyed reading Kiva Stories from the Field please help spread the word and share the link with a friend!
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Fellow-vision
I think that most Kiva Fellows will agree that anytime we meet with Kiva Entrepreneurs we are confronted with a gauntlet of emotions from happy to sad, from inspired to depressed, from energized to drained. While for the most part, for me anyway, the experience tilts towards the positive side of things you never know who or what you are going to run into when you hop on the back of your credit officer’s moto.
I spent the beginning part of this week meeting with twenty-five Kiva Entrepreneurs and felt practically every emotion I can think of. While my first idea for this post was to tell you how I felt meeting these people I decided that each one of these experiences could mean something totally different to every person. I am going to try to introduce you to three of the individuals I visited with via a brief intro and a short video so you can meet them with as little filtering and subjectivity as possible.
In almost every video I ask them if they have any hopes or dreams for the their family’s future. Most of the answers are fairly ordinary; increase my sales, change business, fix or build a new home, but even these answers represent a desire to overcome significant obstacles to better the lives of them and their children.
Meet Ny Sokythea:
Ny Sokuthea and her husband expanded their fish selling business with their Kiva loan. With the money from the loan Ny Sokuthea went to several local fishermen and gave them money up front in return for the promise that they would sell exclusively to her and at a price they determined in advance. This brilliant piece of negotiating has helped her stabilize her costs while ensuring that she has a product to take to the market everyday. After only a few weeks she was able to earn about $5 in extra profit per day. They also farm a small plot of rice for about 6 months out of the year for extra income. Ny and her husband have three children, all daughters, ages five, thirteen and fifteen. They all attend school and Ny says that they all study both Khmer and English.
In the video you can see she is a very funny and playful person, when I asked her about how she would want to grow her business she told me that she wanted a car so she could fill it with fish to take to the market, a joke, maybe. When I asked her about her dreams about her future she told me with a mischievous smile on her face that she wanted to be a “Ms. Excellency” or a high official in the national government.
Meet Lia Lun:
When I went to visit Lia Lun I was greeted with extreme hospitality despite very difficult circumstances for her. The night before I came to her house her 40-year-old next-door neighbor had passed away in his sleep and she was busy making preparations for his funeral. When I offered to come back another day she flatly refused and pulled up a chair and table for us to sit at. While what I was there for was of much less importance than what was going on around me I felt it would be rude to not accept her hospitality and so we sat and spoke for a few minutes.
Both Lia and her husband have been creating decorative Khmer wood pieces since the early eighties (see video for example of their work). They have three children, two sons and one daughter. They have two grandchildren as well with three more on the way as their daughter in law is expecting triplets next month.
As I sat and spoke with Lia, her husband and other men from the neighborhood were building the coffin only a few yards away while her neighbor lay on a table under a tree just beyond them. The banging you hear in the background of the video was all of this going on.
Meet Rom Chhoeuy:
Rom Chhoeuy has been selling fish and traditional fish paste for about seven years. Her normal routine is to go to the local fishermen every morning and buy some of their catch and take her purchase to the local market to resell. She makes a good living of $7 a day and is very happy with how things are going.
Her husband has been repairing machinery for two years and makes about $5 a day. Before he had his current job he was a moto taxi driver for six years. They have two children, one son aged 6 and one daughter aged 8. Both of her children attend the local school.
The entire time I was completing the interview her kids were waving and smiling at me. See the video of my final question to see what I mean.
Meeting each one of these women and hearing about how they were using their loans was an amazing experience and I hope I was able to share that in some small way.
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Drew Loizeaux is currently serving as a Kiva Fellow with Hattha Kaksekar Limited (HKL) in Phnom Penh, Cambodia.
A week in Siem Reap
HKL, the MFI that I am at for my first Kiva Fellowship, has Kiva loans all over Cambodia, which means if I want to visit with a decent number of Kiva borrowers I have to do a fair amount to traveling. Last week I did my first of several week long excursions to a branch office, this time in Siem Reap. Some of you may have heard of this town before as it is the home to Angkor Wat:
Angkor Wat!!!
Needless to say I did not complain when it was decided that this would be going there and decided to make it into a 7 day adventure. Of those 7 I spent 4 days on the back of motos and meeting with as many Kiva borrowers as possible. The last 3 were spent exploring the surrounding temples with fellow Fellow Katie Davis, who came out for the weekend. While my work as a Kiva Fellow and my time as a tourist were about as different experiences as you can get there was one thing that I was struck by every single day: there is a history and depth to Khmer society and culture that I am afraid I will never truly be able to grasp in the time I have here.
The Khmer Empire dates back to 802 AD and the culture to this day is steeped in respect and tradition. There were signs of this at every visit, around every bend in the red dirt roads and in each temple I visited. At one point we had been on a series of dirt roads and paths for about an hour going to meet a borrower when we turned a corner and I was face to face with an enormous temple, under construction and covered in hand made scaffolding. While I have no idea how old it was one thing I did know was it was built without any big modern equipment, they simply could not have gotten it there. When I asked the credit officer I was with about how this construction was paid for he said that there was probably some money being sent in but many of the local boys and young men were most likely completing most of the work. Surrounded by a village of mostly subsistence rice farmers this temple is a cornerstone of the culture and deemed important enough to renovate.
After one of my days with borrowers and I met a PHD student who lives in the area, she speaks fluent Khmer and has been interviewing local Khmers for about a year. In other words, this was someone who had many experiences to share that could be helpful for me. When I told her that sometimes I became confused when I asked about how business was doing. Many times I would get the answer, good but there are problems, problems that are sometimes never were fully explained to me. She said that in many cases this could mean that the person believes that someone has put a curse on them or there are other supernatural powers at work. It was something that she said was not shared with her until she became fluent in the language and they felt comfortable speaking with her about it. While I can not infer that because I was not able to obtain an answer from a borrower that this was why it just drove home the fact that I am just skimming the surface of the place I am living in. This was both interesting and sad to know. While it did give me a new and useful perspective I had the feeling that my three to five months in Cambodia may not give me enough time to fully break the language and culture barrier that is so critical in the work I do.
After all the work was done for the week it was time to take off my Kiva hat and put on my wide brimmed hat, clip on my fanny pack, break out my 10 cameras and see some sights (mostly figuratively). I think it would be impossible to walk away from Angkor Wat and the countless temples around it and not be just completely bowled over by the sheer magnitude of what was constructed so long ago. The city in its prime was the largest pre-industrial city in the world, bigger than New York City!!!
I think the following description of a procession of the Khmer King in 1296 by Zhou Daguan, a Chinese diplomat is a powerful example of the strength the empire possessed in its hay day:
“When the king goes out, troops are at the head of the escort; then come flags, banners and music. Palace women, numbering from three to five hundred, wearing flowered cloth, with flowers in their hair, hold candles in their hands, and form a troupe. Even in broad daylight, the candles are lighted. Then come other palace women, carrying lances and shields, the king’s private guards, and carts drawn by goats and horses, all in gold, come next. Ministers and princes are mounted on elephants, and in front of them one can see, from afar, their innumerable red umbrellas. After them come the wives and concubines of the king, in palanquins, carriages, on horseback and on elephants. They have more than one hundred parasols, flecked with gold. Behind them comes the sovereign, standing on an elephant, holding his sacred sword in his hand. The elephant’s tusks are encased in gold.”
Anyway, it was a truly amazing week; I learned a lot, had a lot of fun and will never forget it. I have put together a little video, using the phrase of legendary New York Mets announcer Bob Murphy, as a little “happy recap” of my week there . Hope you enjoy.
A video – My first day in the field
On Monday I was able to meet with a few Kiva borrowers for the first time. I thought I had a good appreciation of both the huge physical barriers that Kiva is able to overcome and the strength that so many of the borrowers possess. I was wrong on both counts. Just going out and visiting 5 clients took all day and the individuals I was able to visit with were more inspiring than I ever could have imagined. I put together a short video in hopes to share some of that experience.
Coming to you from 37,000 ft.
After months of preparations and planning I am finally on my way. As I write this the map on the TV screen tells me I am currently over Pueblo, Colorado on the first leg of a three part trip from New York, USA to Phnom Penh, Cambodia. I will be in Phnom Penh for five months as a Kiva Fellow and will be working with Kiva’s partner agency HKL.
While I am very excited to listen and learn from both the staff members at my host MFI, HKL and the borrowers they serve I have a certain amount of trepidation concerning the affect the global recession will have on the local economy. During our Kiva Fellows training a few weeks ago the subject of how microcredit repayment rates would fair in the coming months and years was brought up. Since then, I have been thinking about what this in the context of how it will affect Kiva Borrowers in Cambodia. The first question I had was how are the lives of people selling fish, firewood or growing food connected to bankers in New York and London? While at first this boggled my mind, after thinking about it for a little while, the connection became very clear and very scary.
My train of thought went something like this: a bank in New York lays off a worker … that worker then buys fewer things, (clothes included)…the clothes store that particular banker used to buy from now has less business and has to close a few stores and orders fewer products from its suppliers … its suppliers in Cambodia are getting fewer orders in so they also have to lay off a person … that person’s spouse, who had previously used their small loan to sell fish as a second income is now the sole provider for the family … they can’t afford to payback the loan that they had previously had no problem repaying. Four quick steps and we go from skyscrapers to people like the borrows on Kiva’s website. This interconnectivity, both positive and negative, that our global economy has given each and every person in every country constantly amazes me.
While I am by no means a microcredit expert, I do know that one of the reasons that repayment rates are so high is that many of the loans are a once in a lifetime opportunity for people to lift themselves and their families to a better life. This means that if repayment rates start to slip in the microcredit industry it is not because people are out buying things they shouldn’t, it most likely means that their financial situation has become really bad and that they have no other choice. I think most of us have been in situations where we hit a time of financial trouble, weren’t able to pay all of our obligations on time and needed just a little help until we could make the needed adjustment and get to the light at the end of the tunnel. For many, this help could come in the form of a bank, family, or a second mortgage. Unfortunately, for those who have been borrows at microcredit agencies, this type of help usually is not an option. So in times like these, I want to keep lending on Kiva because the positive effects of $25 loan from New York can be just as easily felt in Cambodia and across the world as the negative effects of a bank in New York.
I look forward to sharing my experiences and all that I learn in the the coming five months!!!
Join HKL’s lender team here and show your love for my host MFI!!!
