Posts filed under 'KF5 (Kiva Fellows 5th Class)'
Giving CREDIT where it’s due
CREDIT Microfinance Institution, Kiva’s oldest partner in Southeast Asia, and 7th oldest in its portfolio of partners celebrated its third year on Kiva May 3rd, 2009. As one of Kiva’s oldest partners, they have received over $3.1m in loans, making it the most invested MFI in Kiva’s portfolio of MFIs. Through the generosity of over 48,500 Kiva lenders, over 4150 of CREDIT’s clients have received loans ranging from $100 to $1200 helping them run businesses, fix homes, educate their children, supply daily needs, and ultimately enabling them to build a higher standard of living for themselves and their families.
To celebrate CREDIT’s third year, I have put together a retrospective video of my time with them on their work in the office and in the field.
Thank you to the tens of thousands of Kiva lenders for investing in CREDIT MFI’s clients and supporting CREDIT MFI over the years. The journey has just begun…
To invest in current Kiva CREDIT-MFI borrowers in need of loans, please click this link
Kiva Fundraising loans at Credit MFI
To learn more about CREDIT MFI please visit their website CREDIT Microfinance Institution
*Teresa Dunbar was a Kiva Fellow with CREDIT MFI from August 2008 – February 2009. During her time there she became increasingly interested in the daily struggles of Cambodia’s peoples. Her interests include; land rights, livelihood and environmental protection, government and business transparency, and the rule of law, and how each affects the viability of microfinance.
6 comments 18 May 2009
Contradictions, Complications, Juxtapositions, and Genocide
It’s easier to make sense of Rwanda if you erase the human element of the Genocide that happened here fifteen years ago. If we could just pretend it wasn’t actual people who perpetrated the one million unthinkable acts, it would simplify the dynamics of the country. Afterall, if we acknowledge that it was not only people but fellow Rwandese who held the machetes, we need to also see that they still exist—and not in an abstract way but in a day-to-day, walking down the street, drinking milk for breakfast, and sending children to school kind of way.
Many perpetrators of the 1994 Genocide, or genocidaires, are in prisons throughout the country. It is likely that many others are not. Either way, those who committed the Genocide still live amongst those who survived. Prisoners do manual labor all over the country, working on plots of land, building brick walls along roads, and doing various other public works projects in plain sight. Their blue, orange, and pink uniforms (each prisoner is in one color which signifies the gravity of their crimes or status in prison) dot roads and farms throughout the country as they serve their time while the rest of the country looks on. They pass through lives as they stand packed in the backs of trucks and taken between their projects and their cells. It is a testament to the discipline and ingenuity of President Kagame that he has those who ripped the country apart now manually putting it back together. As he drives to develop his country, he is making use of those who, through violence, instilled the urgent need.
I have told some people back home about this, about the uniforms, about the prisoners, about their constant presence and my inability to grasp even a fraction of what it must be like to be a survivor and see them every day, because I’m here fifteen years later and as an outsider and even I shudder at the sight. Those back home are always shocked. “You mean you see them!” Well, yes. This is recent history—very much within the memories of those still living. One of the most complex issues this country faces is how to go on, develop, heal, when the painful past remains present. After a horrific divisiveness, how is everyone supposed to come together again?
I cannot begin to answer that question—far more gifted people than I are still grappling with it—but I would like to try to convey a sense of the impossible complexity of the issue. In January I went to visit a client in a rural part of Rwanda. We spoke to a woman who proudly showed the many ways in which she has expanded her business since receiving the Kiva loan. Afterwards, I went to the Kiva website to post a journal update on this woman but couldn’t find her on the site. A few weeks later I went back to the branch and told them she must not be a Kiva client. “Oh,” they responded, “the loan is in her husband’s name, not hers. He was just away that day.”
A month after that I discovered that “away that day” was a euphemism for “serving time in prison for perpetrating the 1994 Tutsi Genocide.” This time, the husband who had been away was now back so we were going to go see him for a Journal update interview.
I generally don’t get anxiety before meeting with microfinance clients. In my experience, there is little to be anxious about, minus some possible awkward moments or silent staring at one another if the translator leaves the room. This time, I began to panic. I knew that if I saw him as a microfinance client, he would have to be human. Previously, I saw genocidaires at enough of a distance that I wasn’t forced to remember their humanity or look them in the eye. I’m not proud to admit: I preferred it that way. This would complicate what I had been trying to simplify. A question that comes up repeatedly here is how so many “normal” people, non-violent people, certainly not killers, could have been moved to pick up weapons and kill their neighbors. It makes no sense. I knew that meeting one of these complicated individuals whose motivation I would never understand would confuse the idea in my head even more.
I spent the car ride to his remote home trying to imagine what he would be like and bracing myself to be professional despite biases. My preparation was cut short as, along a dirt road, the staff told the driver to stop the car and exclaimed, “This is our client!” He was pushing a bike with a load attached to the back, headed towards town. It had just begun to rain so we ushered him into the car, squeezing four across in the back seat of our pick-up truck.
My immediate reaction was that he had such a kind face. I noticed his warm smile and friendly greetings to the staff. Then he shook my hand and it was just like so many greetings I’ve exchanged here before. I tried to eliminate (or at least delay) my judgment so that I could focus on the Journal interview. It was brief since I had previously met with his wife and learned about his enterprises. After a few laughs and a few more questions, we were shaking hands again and he was back in the rain, pushing his bike.
It was a jarring interview for how totally routine it was. It forced me to wonder how many other genocidaires I’d spoken to, worked with, passed on the street without even realizing it. He was not a man you would pin as a killer. He was free because he had confessed his crimes, his confession was accepted as true by the gacaca court (a court system that has been established to process trials for accused genocidaires on a local level), and he had completed the assigned community service. Now he was back at home with his family, dressed in civilian clothing, and working in his businesses.
This client was the closest I’ve come to the reality that ultimately all genocidaires will be free. He put a face to the abstract impossibility that this country is facing as it frees prisoners from overcrowded prisons and reintroduces them to society. Just down the road from his house is a church in which thousands took refuge as the Genocide began. More than 10,000 people were killed in and around the church between April 10th and April 16th 1994. It’s an eerie juxtaposition.
I have no neat conclusion for this blog entry. I’ve been trying to come up with one for 3 weeks. Instead, I keep adding paragraphs that turn into ramblings but in no way neatly tie up my thoughts. Now, during a week commemorating the fifteenth anniversary of the 1994 Tutsi Genocide I’ve decided that if I wait for a proper conclusion, it will be many many years before I post this. So I’ll end it here, no conclusion, no answers, no neat sum-up and no lesson learned. I end it with more questions than I started with.
Julie Ross is currently a Kiva Fellow at Vision Finance Company in Rwanda. In December she finished her first placement at BRAC Tanzania.
If you’d like to support Rwandese entrepreneurs and help the country on their push towards development, please see their currently fundraising loans or join the lending team.
24 comments 7 April 2009
How Do You Run a Shop in a Neighborhood with No Cash?
I’ve always been curious about what happens when microfinance clients open businesses in places where there is very little capital. Many operate small shops of household necessities but the placement of such stores is generally based more on proximity to home than a strategic evaluation of which part of town is most profitable. So how do they cope if their customers can’t afford to buy anything? Last week, I got my answer: credit.
Pen and Paper: How to issue credit, the old fashioned way
I was in the field with the Kiva Coordinator, John, collecting journals. We were meeting with a client who sells vegetables in a small neighborhood in Kigali, Rwanda. After a series of preliminary questions, I asked the client if he was having any difficulties with his business.
“Creditors,” was the translation I received for his answer.
I paused, trying to re-translate it into something that would make sense. I couldn’t quite guess what he meant, so I just asked. Without going back to the client for more of an explanation, John expanded upon the client’s assertion,
“His customers owe him money but they’re not paying.”
Ahh so he may mean “debtors,” in which case this microfinance client is both a credit-receiver and a credit-giver. Could it be? People always speak about Africa’s cash only economy and I have yet to meet a Rwandese with a credit card so it hadn’t occurred to me that there was a widespread grassroots credit system sans plastic. I shared my surprise with the Kiva Coordinator who gave me the dreaded answer:
“You didn’t know that! Everyone knows that!”
“No one ever told me!” I exclaimed in my defense.
“That’s because it’s so obvious!” John countered. Touché.
Apparently, small shopkeepers all over Rwanda accept credit in the form of an IOU from their customers. If I was going to be the last to know (did all of you already know this?) I wanted to at least fully understand it, so I dove in. What John and the client explained is that most of his customers are regulars. They live nearby and he knows them well. A lot of them don’t have cash in the middle of the month but they still need vegetables so he keeps a record of what they have purchased and at the end of the month he presents them with their tab. He keeps careful records to know exactly how much each customer owes him. When I asked to see the records, he produced three notebooks with pages and pages filled with customers’ bills.
Here, one page of his careful notes of what his customers owe
Lately, he says people aren’t paying. Unfortunately, he doesn’t feel that he can stop accepting credit. If he did, “he wouldn’t sell anything,” John explained. But how does he ensure repayment? How can he get the money if his neighbors insist there is none? He didn’t seem to have an answer. The difficulty with grassroots credit, I suppose, is that there are not systems to ensure that the creditor is ever paid. He could refuse to sell to his customers until they pay, but then they could go to another vendor. He could employ some sort of social pressure since he is based in a small community and try to make it a social taboo not to pay, but if many people in the community are in the same position, that won’t necessarily work.
I don’t have a good solution as to how to get the client his money. We all talk a fair amount about the principle of credit and debt. We debate whether it is wise to purchase things if you don’t have the money to do so. As a shopper myself, I have attempted not to purchase goods on credit unless I knew I would have the money to pay for them at the end of the month. So are this client’s customers wrong to buy vegetables when they’re not sure if they can afford it? If he stopped accepting credit, sales would decrease because clients couldn’t afford the goods or because there would only be a few days each month that they could. The credit keeps his sales more constant which from a stocking perspective is wise in a perishable goods market. But if his customers are buying without knowing if or when they can pay, then credit isn’t being used properly. For me, a large credit card company would be the victim and they would ultimately sock it to me through large fees. Unfortunately, this client doesn’t have that kind of leverage. So what’s the solution? Is there a scenario in which he can keep his business profitable in a neighborhood where customers can’t pay?
If you’d like to see all of Vision Finance Company’s currently fundraising loans, click here. To join Kiva’s Vision Finance Company lending team and to support Kiva’s Rwandese entrepreneurs, click here.
Julie Ross is currently serving as a Kiva Fellow at Vision Finance Company in Rwanda. In December she completed her first placement with BRAC Tanzania.
5 comments 19 March 2009
Tarantula, Dog, or Duck Fetus, srey Teresa (sister Teresa in Cambodian)?
Being a Kiva Fellow in Southeast Asia you meet many small business owners. Some of these business owners sell what I like to call “culinary adventures”. So as not to offend people, you get a chance to try many of the dishes. Over the course of my seven months, I’ve discovered after a while to stop asking what it is, and just try it. Some have left their impressions on me though, and I thought I’d share them with you.
Let’s see, in Cambodia you have fried tarantula and various bugs such as beetle, cricket, and bee larva. The most delicious and famous ones come from the Kampong Cham region, northeast of Phnom Penh. You can get them on the side of the road as you motorbike by, or at any local street market.
"love, love, love me some good tarantula!"
You also have dog. This dish was bought for me by Rong, a Cambodian friend. He told me, “You have to try it since you don’t have it in the US, and after you try it, you must text me what you think.” I was told that dog is a meat that makes you warm. It is eaten mainly by men and coupled with beer. The best dog restaurant in Phnom Penh is just east of the Boung Keng Kong Market.
And I did have a beer or two with it. It just went down better with a beer. My stomach is still upset just thinking about it.
You also have boiled duck fetus eggs called “pong tea koun”. Fortunately, I only had one opportunity to eat it, and my Cambodian friends at CREDIT-MFI let me slide on that one as I watched them chow-down. As they pulled the fetus from its shell, I could see the partially formed baby duck complete with head, neck, beak, and wings. It was explained to me that you can buy “pong tea koun” at different fetus stages, a few days old to 2-weeks old. It all depends on your taste. It was the nastiest looking thing I had ever seen someone eat. It is said that they give you strength and energy.
Now, Khmer and Filipino cuisines do not have much in common, but they do seem to share the same love for boiled duck fetus eggs. In Tagalog, it is called “balut”, and unfortunately, this time my Filipino friends at ASKI-MFI would not take, “No” for an answer.
Now, if you eat “balut” like a lady, you don’t pull the embryo out of the shell, you eat it bit by bit with a little spoon so you don’t have to actually see what you are eating. Lucky for me, the ladies at ASKI-MFI eat “balut” like men which is what they required of me. To eat “balut” like a man, you pull the entire fetus out of its shell in order to see the almost formed fetus duck body . It usually takes about 2-3 bites to completely eat.
Balut, see the fetus duck head on the right?
Needless to say my “culinary adventures” continue. I will be in Cabanatuan City, Philippines with ASKI-MFI for the next three months bringing you Kiva client stories and blogs. Hope you enjoy them, I am off to lunch now.
Hmmmmm, should I have goat or more balut?
4 comments 15 March 2009
Kiva Fellows: My Virtual Family
Not every day as a Kiva Fellow is a good one. There are days when I wait for seven hours for a credit officer to be available to take me to the field to collect journal updates for only two clients. There are hours of intermittent internet in which I am able to load less than one page. There are the clients I meet about whom I would be inspired except that after doing the math I’m not convinced they’ve found a way to run their businesses with a net profit. Luckily, after more than 7 months of victories and setbacks, I think I’m in the black.
Small moments compensate for unpleasant hours. A coworker’s delight at a weak attempt at their local language can be contagious. The look of recognition on the faces of loan officers to whom I just presented a new template keeps me going for days. And the shy request by a client to have a picture taken with me makes me feel that my presence is appreciated.
On top of the ups and downs of the day-to-day, though, there is another secret to my contentment: the Kiva Fellows. In ways both tiny and massive, unexpected and enormously appreciated, having a virtual community of fellows makes my life infinitely better. During training in June, I left four days at Kiva HQ disappointed that after meeting so many fascinating and fun people I would ultimately embark on this fellowship solo. I only wished we could all be placed at the same MFI. Kiva said no—that would sort of defeat the purpose. Time and again, however, I’ve been able to turn to them for all manner of support despite great distances between us.
Three Fellows (Zack, Nabomita, and me) in Mombasa, Kenya--brainstorming about Kiva and how to save the world
Not sure how to shrink a photo? Wondering if anyone has an effective training Power Point presentation? Curious about coping mechanisms for language barriers? For all manner of information—from the recreational to the professional—fellows have proven to be an essential resource.
And as it turns out, Kiva has good judgment. As my Fellows class, KF5, has gradually finished up in the field, I despaired that I’d be left alone without my network of compatriots. I was entirely wrong. When I risked deportation from Tanzania, I was able to call on a KF6 and stay with her in Kenya for a week—all arranged having never met. From there I went on to intrude on another Kiva Fellow whose acquaintance I had never made but who quickly became an indispensable friend. The prospect of Christmas and New Years alone in Africa was depressing so three KF6ers and I ignored the fact that we did not know each other and made plans to travel Africa together to be in the company of people whom we knew would soon be friends.
On the job in Kisumu, Kenya--I met and stayed with Sarah
New Year's in Kigali, Rwanda--in the good company of Fellows Ankush and Sarah
Whether it’s crossing African borders to see one another or participating in email chains that gain momentum and garner nearly 50 responses from fellows in the same boat, I couldn’t live without the other fellows. It’s possible that I’ll never actually be in the same room as some of the fellows with whom I’ve been in frequent correspondence. Others I’m quite sure will persuade me to cross one or more countries just to see them again. Whether in Cameroon or Cambodia, Bolivia or Tanzania the fellows play a significant role both in helping me to get through the day and in helping me to add the most possible value to Kiva and my microfinance institution placement. There’s nothing like a real, live human resource to advise, commiserate, support, and amuse. Thanks for keeping me sane, fellows!
Jara and I did a joint staff training when we were both placed in Tanzania
Fellows recovering from a hard day's work in Dar es Salaam
To see all of Vision Finance Company’s currently fundraising loans, click here or join the Vision Finance Company lending team.
Julie Ross is currently serving as a Kiva Fellow at Vision Finance Company in Rwanda. In December she completed her first placement with BRAC Tanzania.
14 comments 5 March 2009
What Do You Mean By “Profit”?
The word “profit” does not translate easily into foreign languages. I’ve now tried to convey the idea both in Swahili and in Kinyarwanda and I often come up with nothing more than blank stares or long pauses. The difficulty lies in what “profit” includes (or doesn’t). A client may answer my question as to what their monthly profit is with a confident declaration of “30,000 Francs”, but when I ask what she uses the profit for, she answers that she pays the rent and pays off her loan. If that is the case, then her profit is not in fact 30,000 Francs but rather is 30,000 Francs minus rent, loan repayment, and other expenses. Unfortunately language barriers consistently stop me from explaining this coherently.
I understand the confusion. It serves as a reminder that many of these business-owners do not have any formal training in accounting or personal finance. Afterall, for much of their lives there was probably no need for this knowledge. They began businesses with survival and advancement of their families in mind, not as a result of thorough market research or financial backgrounds. Yet despite confusion on what, precisely, I’m asking, after some quick calculations every client is able to give me some number. The only problem with the figure is that I really am not sure what it represents. I have often included these numbers in Business Profiles and Journal Updates that I post on Kiva, but I recently realized that they may be misleading so I am beginning to hold off unless I am sure that the question was properly understood.
This is not to say that clients are oblivious to their earnings. On the contrary, they are very much aware of how much is coming in and how much is going out. They price their goods extremely carefully and perfectly in line with market rate. This is particularly essential since many shops sell the same goods, and a shop that tries to sell for more than market rate will quickly lose its customers. My point is merely that a balance sheet is not something that many shop owners have learned to rely upon. Training at many microfinance institutions is improving upon this as they teach their clients basic bookkeeping before disbursing loans, but it’s not yet ubiquitous. This is why I was particularly surprised when I met Aimable, one of Vision Finance Company’s clients.
Upon first glance, Aimable’s ease with numbers was noticeably absent. There was a significant pause when I asked the size of his loan. This is particularly unusual, as this number tends to live on the tips of the tongues of microfinance clients. As Aimable produced a notebook with detailed accounts of all costs, purchases, and sales, I understood how he was able to allow these numbers to slip from the front of his mind. He kept them on paper instead. In the U.S., we might view such paper bookkeeping as archaic. What’s paper? But here, even microfinance institutions often lack computer technology and do most, if not all, of their paperwork by hand. Therefore Aimable’s meticulous calculations make him ahead of the curve, not behind.
Aimable's Balance Sheet--he meticulously tracks all expenses and income
Aimable in front of his shop, bursting into the street with his many goods for sale
As you can see from the photo, Aimable’s business is booming. In fact, he is bursting out of his small shop with his quantity of goods for sale. I can’t say that this is the result of his careful bookkeeping, but I don’t see it as a coincidence that he has both been very successful and keeps close track of his income and expenditures.
Across the board, microfinance clients are impressive in their ingenuity, drive, and ability to survive within the marketplace. With a little bit of training on bookkeeping, they could likely be even more successful. I am optimistic that in the future, such training will become the status quo. I look forward to the day when my excitement at Aimable’s papers fades as balance sheets crop up all over and eliminate the confusion over that pesky word: “profit”.
To see Vision Finance Company’s currently fundraising loans, click here. If there are none up now, please check back soon!
Julie Ross is currently serving as a Kiva Fellow at Vision Finance Company in Rwanda. She recently completed her first placement with BRAC Tanzania.
7 comments 20 February 2009
News Flash: Kiva Is Not Intuitive
Training microfinance institution (MFI) staff on Kiva never gets old no matter how many times I do it. The excitement lies in the great unknown of which questions they will ask once I’ve said my piece. Across the board, the staff I meet are professional and dedicated to their work. Most have been serving hundreds of clients for years before I dropped in to introduce Kiva, so it is not surprising that they are both slightly perplexed by this new element and also extremely invested in understanding it completely. Their questions illuminate for me how confusing Kiva is upon first (or even second or third) glance. My goal is to make Kiva as small a burden as possible so that the staff both collect the required information and do not have to take much extra time to do it. This is how the trainings tend to go:
Step 1: Introduce myself and make sure to mention Barack Obama in one way or another in order to get spirits high and interaction initiated.
Step 2: Explain Kiva and the MFI staff’s role within the Kiva framework. At Vision Finance Company in Rwanda, the previous fellow trained all staff on what Kiva is and my Kiva summary serves as a reminder of what she taught them several months ago. As such, I keep it brief. I emphasize how the credit officers are the most important piece of the Kiva puzzle. If they were to refuse to gather the information necessary to put loans on the website, Kiva could not exist. I also make sure they understand that information on Kiva-funded clients will be put on the internet. We want to make sure that they impart this to their clients and that their clients sign a waiver indicating that they do not object.
Step 3: Introduce business profile templates I created in order to ease the gathering of client information. Prior to the introduction of the form, they were writing up the stories by hand based on what they knew of their clients. Committed to their work, each would spend upwards of an hour trying to think of how to formulate their clients’ information into a story. This was both time-consuming and slightly confusing since some were not sure where the story went (answer: on to the Kiva website). We go over the form, written in English, with explanations in Kinyarwanda (the local language) of what each question is asking. The forms, much as you would expect, request basic personal information like age, marital status, and number of children. The staff are also to ask their clients business- and loan-specific information like what their business is, how long they have had the business, and what they will do with the loan and the profits that result from it. The form is simple because we don’t want the staff to be scared off from completing it. They already have so much work that the goal is not to create a large additional burden. Staff are visibly relieved at the sight of the form, knowing that this means they will no longer have to struggle with daunting blank sheets of paper as they think of what to say about their clients.
Step 4: Questions. One of the most amusing parts of question time, for me, is that the questions are all asked in Kinyarwanda and usually the Kiva Coordinator takes first stab at answering them. That means that for several minutes there may be heated debate, many players involved, volumes rising, and I will have no idea what is being said. When the Kiva Coordinator determines that I should be privy to the conversation, he’ll inform me of the source of confusion. There has been a great range of questions, all of them valid, since I conducted my first training with BRAC Tanzania until now, 23 trainings later. Some examples:
• How do we know when the loan has been funded on Kiva so that we may disburse the loan?
(Answer: you should disburse the loan according to your timetable at your MFI, not allowing Kiva to dictate the timing. If you disburse the loan before it has been funded by Kiva, the Kiva funds, when they arrive, will back-fill the MFI’s accounts.)
• What if Kiva wants to give the client a different amount than Vision Finance approved?
(Answer: Kiva has no role in determining the terms of the loan. Kiva is only a source of funding and will distribute only the amount approved by the MFI.)
• If it is a group loan, do we fill out one form for each member of the group?
(Answer: If it is a group loan, the group president should answer all of the questions and the rest of the group members should be included in the table where their name, loan amount, and type of business are requested. All group members must appear in the accompanying photograph.)
• By raising funds on Kiva, is Vision Finance exploiting its clients to get money for the MFI?
(Answer: By putting clients on Kiva, the MFI is not exploiting them but rather raising the funds necessary to distribute their loans. The money raised goes only towards that loan and not into the coffers of the MFI or into the pockets of MFI staff.)
• What if the client does not want to be put on the internet?
(Answer: If the client is uncomfortable having his or her information and picture on the internet, then choose a different client to be Kiva-funded. We do not want anyone to be uncomfortable or feel forced to appear on the internet. Just because that client is not Kiva-funded, however, does not mean that he or she will not get his/her loan. It means only that the funds will come from elsewhere, not Kiva. Disburse the loan if it has been approved by the MFI and do not let the client’s choice not to appear on Kiva affect whether or not he/she receives a loan.)
• If Kiva’s funds are at 0% interest, does that mean that our Kiva clients don’t have to pay interest?
(Answer: Clients are still to pay the MFI’s standard interest rates. The 0% rate from Kiva is for the MFI so that they may have more money available to disburse more loans and to help them cover the costs associated with serving their clients. If Kiva clients did not pay interest, all MFI clients would soon hear that certain clients are not paying interest and mayhem would ensue. It is more equitable to have everyone pay interest and for the MFI to use the interest to increase their impact on the community.)
• Why does it matter that the loan amount on the form matches the amount that Vision Finance has approved and will distribute?
(Answer: Kiva values honesty and transparency. As such, all loans raised on Kiva must match precisely the amount that is actually disbursed to the client. Ifs more money is raised on Kiva than is distributed to a client (for example, if the requested loan amount is listed instead of the actual loan amount, and the two differ), the MFI will be responsible for reimbursing the loan to the lenders.)
What the trainings remind me is that if we want quality business profiles and journal entries posted to the Kiva website, then it is important that we fully explain to MFI staff why they are filling out this form in the first place. Though some have never used a camera before and many spend little or no time on the internet, all want to understand the concept of Kiva and where they fit into it. For me, working with the dedicated credit officers at both BRAC Tanzania and Vision Finance Company has been just as rewarding and informative as meeting with their clients.
Julie Ross is currently serving as a Kiva Fellow at Vision Finance Company in Rwanda. She recently completed her first placement with BRAC Tanzania.
7 comments 3 February 2009
It Costs $5000 To Marry Your Daughter?!?!
In Cambodia there is a popular song called Tov Dondung Kon Key by Khemarak Sereymon. The song is VERY catchy and we hear it EVERYWHERE. The best part of the song is the story. It’s about a guy who has this crush on a girl who he meets at the market. When he goes with his mother to meet the girl’s parents so that he can ask them to marry her, the girl’s family asks for $5000 as a dowry. Unfortunately, even if he sold his rice field and cows he would not have enough money, so he sings about his agony.
Here’s a question for you Kiva lenders, if he asked for a loan would you support him?
I used the song to make a video of our recent visit to Takeo Province:
This was my first overnight trip and it was amazing. We went into areas that were much more remote than I had ever been. On our second day, we had to walk a kilometer just to reach the Village Bank meeting. It’s also harvest time so we saw many farmers and farm workers harvesting the rice.
The best moment of the trip was when Kieran asked one of the borrowers what they would do if they couldn’t get a loan from AMK. We then asked the same question to the other clients we met. Many of them said they would turn to private lenders who charged 10-20% interest a month (compared to the 3% a month AMK charges). Cambodia has 18 microfinance institutions, but AMK goes into the most remote areas where other MFIs don’t go because of the costs involved to service these borrowers. For many borrowers, if AMK didn’t go out there they would either turn to loan sharks or they would not borrow the money necessary to improve their lives. AMK chooses to serve these clients because of their mission:
“To help large numbers of poor in Cambodia to improve their livelihood options through the sustainable delivery of appropriate and viable microfinance services”
If you think AMK is doing great things you should definetely check out their loans that are currently fundraising on Kiva. Also if you think AMK is awesome as much as Kieran and I do, you should join the AMK Fan Club!
5 comments 17 December 2008
The Benefits of PA2
As many of you Kiva lenders have noticed, Kiva recently upgraded the administration system that Field Partners use to post businesses and report repayments. The partner administration system, aka PA2, is where Field Partners post businesses onto Kiva and report on the status of each loan. This was a major redesign of the site and it has brought a bunch of great new features that benefit both lenders and Field Partners. For those of you who haven’t been reading all of my posts (shame on you!) I am a fellow at AMK and HKL, and I’ve also been working closely with the other two Cambodian MFIs, CREDIT and Maxima, to help them with the transition to PA2. Having been a fellow in a PA1 world and now getting to see PA2 for awhile firsthand, I wanted to give you lenders some perspective of PA2 from the field!
- Now, Field Partners, aka Microfinance Institutions (MFIs), report the exact repayment schedule for each Kiva loan – Previously it was just assumed that loans were on a monthly schedule. In the new system, MFIs can report the exact dates of when a loan payment is expected. This lets MFIs post loans on all types of schedules such as end-of-term, weekly, bi-weekly, etc. If the MFI wanted to set a schedule in which the borrower pays back the loan only on the days when Saturn and Uranus are in alignment, this can now be done on Kiva! Unfortunately, none of the members of the Astrological Microfinance Association have joined Kiva yet…
- MFIs now report the exact status of each loan every month – Every month each MFI uploads a list of the total principal paid for each Kiva loan. This is great for Kiva and Kiva lenders because it can help them get a better sense of what exactly is happening on the ground and identify any loans and/or MFIs that are having a hard time paying back loans. Even though you’re thousands of miles away, you’ll actually know how the borrower is handling the repayment process. If a borrower makes on time payments or an early payment, then you know everything is okay. If a borrower misses a payment, then you know that they might be having problems. The change has been great for MFIs as well. For example, at AMK we do a mix of monthly loans and end-of-term loans. We use to report the status our end-of-term loans manually, but that was a lot of work which took a lot of time. I made a Microsoft Access application for AMK called the Kiva Loan Tracker which can report the exact status of all the Kiva loans onto a CSV file. In PA2 we can just upload that CSV file and our work is all done in just a few minutes! Sweet.
- MFIs Repay Kiva Lenders When the Borrower Makes a Repayment - The MFI repays Kiva when the borrower makes a payment. This helps MFIs because now they do not have to repay Kiva lenders on a different schedule than the loan terms. This is important because it prevents creating liquidity/cash flow issues for MFIs, which is a serious problem for many of the smaller MFIs. This is also great for Kiva lenders because if a loan receives an early payment then the Kiva lender gets repaid early also. This happens quite often at AMK, especially with many of the end-of-term loans. I’ve noticed many AMK loans being repaid months early.
- The Actual Disbursement Date is Posted – In PA1, the MFI would post a disbursement date on Kiva, which was more of an acknowledgment that the loan has been disbursed and that its status will be reported to Kiva. In PA2 the actual date that the loan was disbursed is reported to Kiva. Many MFIs post loans on Kiva that have already been disbursed. They do this because for them it is the only way to incorporate Kiva into their operations. Many MFIs front the money for these loans, hoping that they will get funded on Kiva. At AMK a loan description is written by the client officer when a client applies for a loan and then the picture is taken at the loan disbursement by the Area Manager. This information is then sent to the head office in Phnom Penh by taxi. This prevents AMK staff from having do to an extra visit to the client, which would be a waste of resources. The last thing Kiva wants to do is to be a burden on the MFI, which could inadvertently increase interest rates.
- Google Gears – The Kiva engineers incorporated google gears into PA2. This is EXTREMELY helpful for MFIs, because many of them have VERY unreliable internet connections. When I arrived in Cambodia, the internet at my MFI was down for almost a week. This was a very painful experience if I was posting a business, because if the internet went out in the middle of a business posting, we would have to start all over once the internet came back on. In PA2, if the internet goes out, a draft is stored which you can then return to at a later time. As I’m writing this, the internet just went out and Chan Ry, the HKL Kiva coordinator, was in the middle of posting a business. Now he doesn’t have to start that post from scratch! Hurrah! Google Gears also stores part of PA2 on the computer of the MFI which lets the site load quicker. If you guys can remember the days of dial-up modems, then you’ll know how slowly webpages load at some of the MFIs (that’s if they load…)
- We Can See Your Comments – PA2 has a page where we can see all the comments from lenders. This is helpful because it makes it easier for Field Partners to respond to your comments.
- Separate Server – Occasionally Kiva lenders get really excited and bombard the Kiva website looking for loans that they can lend to. Once in a while, this causes the Kiva webservers to crash. In the past, when this would happen MFIs wouldn’t be able to post new loans. Now PA2 is stored on a separate server, so if Oprah decides to share her love for Kiva on national television again, MFIs can keep on posting.
- Increased Transparency – I’ve been helping all four Cambodian MFIs make the switch to PA2 and I’ve realized that PA2 has created a much greater sense of transparency. The four Cambodian MFIs are not committing any fraud. I can state this for a fact because each MFI gave me access to their data. The more real information Field Partners send Kiva, the easier it will become for Kiva to spot any signs of trouble or fraud. In PA2, Field Partners also report the exact account number for each loan, so when Kiva does an audit of a Field Partner it will be easier to spot any signs of trouble. My Loan Tracker makes sure that information is accurate by taking the exact data from their Management Information System, so when a business is posted the names and account numbers are exactly the same on Kiva as they are in the MIS of the MFI. In the past we had hard times finding information on some Kiva loans, because the names were translated slightly differently.
Some Kiva lenders have been asking Kiva why MFIs cannot send repayments on a weekly basis, so that they could get their repayments quicker. One lender even compared the new system to sports announcers from the 1930s who called away games on the radio using tickertape. The truth is microfinance, at least in Cambodia, works at a pace similar to tickertape. Here at AMK, the central office receives data from the branches at the end of the month. At HKL, the branches send data to the main office every two months. The reason is that these MFIs do not currently have the necessary infrastructure to receive real time data. At HKL the data is put on a CD and sent to the main office by taxi. Real-time Kiva updates would be great but it is not feasible (at least not yet). Kiva and the MFIs are the doing the best they can given the circumstances. Until the network infrastructures of these MFIs is improved (which will hopefully happen in the coming years) there will always be a lag between the date of transaction and when it is reported to the lender. But as the infrastructures of the countries that Field Partners operate in improves, Kiva can start asking for more information quicker.
Because this new system is requiring MFIs to report information quicker than they normally do for Kiva and for their own operations, PA2 could become a burden for some MFIs. The last thing Kiva wants to do is hurt the efficiency of the operations of any of its Field Partners. This is why Kiva gives MFIs a 15-day grace period for when they upload the status of each loan at the end of each month. I’m currently working at two Field Partners, AMK and HKL (I just started at HKL). AMK has a network that allows me to connect to the servers at each of the branches and download the data for each loan. My Loan Tracker works very well there. At HKL they don’t have a network like that. We’re working around that by getting branches and sub-branches to send their data through Windows Messenger. Getting the data from the sub-branches with unstable internet connections has proved rather difficult and for those we may have to rely on receiving the data by CD, which can take weeks. This must be even harder for MFIs where the internet is worse.
PA2 has come a long way in the last few months. I’ve been testing it out since August and PA2 is much more stable now that it was a few months ago. The Kiva engineers should really be commended for their hard work in getting this up and running. Though there are still a few bugs, I’m sure the Kiva exterminators engineers will get rid of them in no time. Also, once MFIs get use to the new posting process many of the errors in the payment schedules will disappear.
If you still need some more info on PA2 you can read all about it here, here, and here.
8 comments 4 December 2008
Thankful.
When FINCA staff interview clients to write their Kiva profiles, the last question each client is asked is “What are your dreams for the future?” As I looked at the profile of FINCA client after FINCA client, I was struck that almost everyone had some variation of the same three dreams:
1) “For my children to graduate with professional degrees” or “For my children to get a good education.”
2) “To open my own store” (for ambulatory vendors), “To open another store,” “To expand my store,” or “To offer a wider variety of merchandise in my store.”
3) “To build my own home,” “To own my own home,” or “To improve my home.”
Something bothered me about seeing the same dreams repeated over and over, but for a week or so I couldn’t pinpoint exactly what it was that bothered me. In part, I think it challenged a mindset instilled in me from early on, reflecting a PC, middle-class American upbringing laden with positive reinforcement, self-esteem boosters and the notion that everyone is different in a good way. I can see the motivational posters on the walls of my second-grade classroom now: “Reach for the stars!” “I can do anything if I put my mind to it!” “The sky is the limit!” and so on. If you’d asked me then about my dreams, I would have told you that I wanted to be a professional ice cream taster and have my own calf for my backyard (my family lives in the middle of Minneapolis). My dreams today are the same size, though they’ve gotten less fattening and more socially oriented over the years (I don’t want to say what they are for fear of jinxing myself; I never did get that calf).
I think I expected clients to have similarly grandiose responses. To me, offering a wider variety of merchandise is a goal, not a dream. Winning the lottery is a dream, being a world-renowned artist is a dream, traveling to faraway places is a dream. Dreams are limitless and fantastic: if you’re really lucky you get close, but otherwise a dream is something to set your sights on and work towards as you go through life. Goals are concrete and attainable: if you plan ahead and work hard, you should be able to reach and even surpass your goals. I wanted clients to see that their dreams were in fact goals. What happens once you do start selling a wider variety of merchandise? Once your house has a second floor? Once you have two stores? Where do you go from there? It also bothered me that clients’ dreams didn’t involve working less or retiring. Most of the women I talk to work 50 or 60 hours per week and have large families to support; their kids usually work with them while not in school. But no one dreamed of not working. Many older clients told me they dreamed of continuing to work for as long as possible.
A couple of days ago, I came across a woman whose dream was “For my children to grow up to be better than me.” That made me cry, and I realized that this woman’s bluntly-put “dream” is in fact the common theme shared by everyone I’ve talked to. Any given combination of dreams #1, 2, and 3 is just a way of saying “I want a better future for my children.” I think this is probably the common dream shared by most mothers of the world, and I feel silly for not realizing this sooner. It doesn’t really matter if they’re dreams or goals; either way they represent small steps forward, and maybe it’s easier to go step by step than to look to a place miles away that you are trying to reach, since you might get discouraged once you realized how far away you currently are.
Being at FINCA for Thanksgiving has given the holiday a new meaning for me. I’ve always known that I have more material goods than most people in the world and that I’ve been blessed with a good education and a loving family, but I never thought about how much I’ve been empowered by those around me throughout my life. I was given a childhood of leisure time and had the luxury of dreaming about cows and ice cream; I didn’t see any doors closed to me. I never fully realized that my family has already achieved what most families only dream of.
5 comments 26 November 2008
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