Posts filed under ‘KF7 (Kiva Fellows 7th Class)’
Blast from the Past: KF7 turned microfinance professor visits Colombia to do field research
What happens to Kiva Fellows once they finish their placement and get released back into the world? This is a question I have asked myself many times as I look ahead beyond my placement in Colombia–luckily I will be part of KF15 and won’t have to make those decisions for a few months! Many of the current fellows will be heading to grad school in the fall, going back to their old jobs, or looking for new jobs in international development. But how many of us get the chance to continue on in the world of microfinance?
Continue Reading 28 March 2011 at 21:35 JohnGwillim 4 comments
I quit my job for Kiva
It was the summer of 2008. As I sat and watched the stock markets crash around the world from my Cambodian apartment, I could not help but get nervous about my job prospects post fellowship. At that point, I felt like I’d made a mistake by leaving a great job in philanthropy to follow my heart by becoming a Kiva Fellow to learn how microfinance works on the ground. I remember when I told my family of my decision, they thought I was crazy. I was beginning to think they might be right. Watching US financial pillars crash and stock markets tumble each day, I worried and seriously asked myself, “What am I going to do once my time as a Kiva Fellow is done?”
Kiva Lenders Have Needs, Too
By Abby Gray, KF6 Togo and KF7 Senegal
Jacques, WAGES' Kiva Coordinator, and a colleague taking a boat to visit a Kiva client in a rural area.
Meet Jacques. He’s the Kiva Coordinator at WAGES, a microfinance institution (MFI) based in Togo, West Africa. Every day, a loan officer hand-delivers a stack of borrower information forms and a USB chip full of photos. Jacques has trained the officers how to fill out the forms, use digital cameras, and get borrowers to smile and display their merchandise proudly for pictures.
Jacques formats the pictures, writes the information into paragraphs, and uploads everything to Kiva’s website. Then, during the loan cycle, he reports repayments manually and visits borrowers to collect a progress update and take yet another picture.
The work is inefficient, tedious, and time-consuming.
But it’s worth it. (more…)
Power to the People
By Abby Gray, KF6 Togo and KF7 Senegal
How a Kiva Fellow Alumna’s non-profit organization, SunPower Afrique, is shedding light on MFIs in West Africa
“Beep,” complained my laptop, unhappy about its sudden switch to battery power. The fan above me whirred gently to a stop, no longer drying the beads of sweat incessantly forming on my forehead. “Page can not be displayed,” grumbled Firefox. My internet connection was gone, along with any hope I had of uploading my stack of borrower profiles to the Kiva website.
I walked out into the hallway and found the employees of my Senegalese microfinance institution slowly leaking out of their offices as well. We pulled up chairs in a circle, sat down, and prepared to sweatily twiddle our thumbs until the power gods had mercy on us, whether in ten minutes or ten hours.
An employee at FECECAV, a Togolese MFI, tracking loan repayments by hand. Many of FECECAV's branches operate without electicity.
Power cuts are a regular occurrence in West Africa, as in most parts of the developing world. Production and distribution of electricity are unable to meet demand, causing frequent rolling blackouts and interrupted service. For MFIs (and many other businesses), this means countless manpower hours lost, high overhead costs, low employee morale, a short shelf-life for office equipment and other low efficiencies in daily operations. These consequences are even more debilitating for MFIs who work with Kiva – the Kiva partnership depends on technology and internet connectivity to successfully fund loans for enterprising clients. Gasoline-powered generators, the obvious alternative, represent a significant up-front investment and are extremely costly to run and maintain.
So, what can be done to provide MFIs with a reliable source of power??
Enter Kira Costanza, the courageous Kiva Fellow Alumna, galloping in on her trusty steed named Solar Power!
Microfinance through New-York-Colored Glasses
By Abby Gray, KF6/7, Togo & Senegal (now in New York)
In Dakar, this ad provoked vandals to rebel against the culturally inappropriate image. In New York, it wouldn't get a second glance.
If you have to deal with culture shock after 8 months of living in West Africa, New York is one of the most dramatic places to do it. On one hand, the vibrancy and energy of pedestrian-filled, trafficky New York streets isn’t all that different from the dusty “rues” of Dakar. Colorful fruit carts still grace the sidewalks, and overhearing conversations in foreign languages is a daily occurrence. On the other hand, skyscrapers and giant billboards of half-naked models are everywhere, as are exorbitant price tags on everything from purses to sushi dinners.
Having completed my official Kiva duties, I am now doing research at the Financial Access Initiative (FAI), a microfinance think-tank of sorts. It’s a consortium of researchers from NYU, Harvard, Yale, and Innovations for Poverty Action, focused on expanding access to quality financial services for low-income individuals. (more…)
Kiva Fellows’ Blog Quarter 2 in Review
By Kiva Fellows Program Team
Kiva’s launch in the United States on June 10th generated a huge amount of media attention for Kiva, and an equally-large number of hits for the Kiva Fellows Blog. Kudos goes to John Briggs KF8, currently on his second Kiva placement with KADET in Kenya, for his #1 in Q2 post in response to the “Pissed Off Kiva Lenders” lending team with 1,712 views to date.
The top 5 blogs in Q2 were:
1. Pissed Off Kiva Lenders, John Briggs KF8, Kenya
2. A Rose From Florence, Stephanie Koczela KF7, Uganda
3. M-Banking!, Brett Dobbs KF7, Kenya
4. I Am Living In Kisumu, Kenya, Milena Arciszewski KF7, Kenya
5. Welcome, Kiva, to West Timor!, Kieran Ball KF7, Indonesia
Quarter 2 has been a time of change for Kiva, both on a macro level, as people in Kenya and Cambodia make their first Kiva loans to entrepreneurs in northern California and New York City, and a micro level, as Kiva Fellows upload short videos to this very blog detailing the daily activities of borrowers and loan officers alike.
Emily Sweeney KF7, Peru, found the time to travel to Lake Titicaca, where she later found out that many of the artisans selling their crafts on the floating islands were borrowers of her MFI, Manuela Ramos. She was particularly struck by the way microfinance had merged with the unique island culture of Los Uros. Katie Davis KF7, Cambodia, got a crash course in rice accounting from staff at her MFI in Cambodia, vastly different from the sophisticated financial and analytic tools she used at her job in the United States, but which proved to be incredibly effective. Several new KF8 fellows have undergone changes since starting their placements in late May and June, including Alia Rafeh KF8, Lebanon, who traveled 7,000 miles to begin her placement with Al Majmoua, Cissy DeLuca KF8, Indonesia, who made the official change from Kiva intern to Kiva Fellow this past Sunday as she departed for her fellowship with TLM via Taipei and Tamara Sanderson KF8, Mongolia, whose role at Kiva changed from volunteer to fellow as she started her placement with XacBank, noting the important role connection plays in empowering a relatively new Kiva MFI.
Videos you should be sure to check out:
Zev travels home from work in Indonesia
Hanh attempts to cross Hanoi’s bustling/frenetic (depending on your point of view) streets shortly after arriving in Vietnam
Athan ate a traditional Umu meal in Samoa
Ashley King-Bischof posted a video of thank yous from borrowers in Cameroon
If you’re interested in learning more about the Kiva Fellows Program or other opportunities to get involved with Kiva, be sure to check out the Do More section on the Kiva website.
¡Adios, Arariwa!
In a desperate last-minute attempt to get my name off the top of the “least-blogging fellows” list and fulfill my grandma’s request for more blogs, I’d like to share some of my favorite photos from my 10-week placement at Asociacion Arariwa in Cusco, Peru.
Arariwa is an amazing organization with an extremely dedicated group of loan officers. I was consistently impressed with loan officers’ dedication to their clients—not just putting in long hours for little pay and running risks by carrying cash, but in some cases even relocating to remote villages in order to serve clients without previous access to financial services. For example, Tula Barazorda and Armando Cabrera live and work in Pilcopata, a remote jungle town that’s 8+ hours from Cusco on rough, narrow dirt roads. Pilcopata is a sleepy little town where there’s little to do but shoot the breeze and swat the mosquitoes. One morning – over breakfast, no less – Tula and Armando had a long, nonchalant conversation about all the different kinds of bugs that can burrow under your skin, how to tell the difference, and the pros and cons of each one (never before have I been so grateful to my parents for raising me in Minnesota, where all we have is ticks).
All in all, my time at Arariwa was an incredible experience, and I’m already itching to go back and visit. I’m also looking forward to reading much more frequent blogs from my Arariwa successor, Lee Bruner!
To see all currently fundraising loans from Asociación Arariwa, click here.
Cynthia McMurry is a fourth-time Kiva fellow working with brand new Kiva field partner Fundación Espoir in Quito, Ecuador. Previously she worked with Fundación AgroCapital in Bolivia and FINCA Peru and Asociación Arariwa in Peru.
A $62 Million Dollar Mistake
The cancellation of funds and an expanding economic crisis has left the majority of Nicaragua’s poor without a support system.
Continue Reading 17 June 2009 at 07:35 ashleyolivia 2 comments
The Cows of Cochabamba
By Nick Cain, KF7 Paraguay
In Cochabamba, Bolivia, milk is quite literally the ticket to financial services and economic growth. Kiva lenders, meet CIDRE, your newest Field Partner in Bolivia. Last week I traveled from Asunción, Paraguay to Cochabamba, Bolivia to train CIDRE’s staff members on the Kiva platform, help them learn a little about the Kiva community, and make sure they had everything they needed in order to start connecting their borrowers to Kiva lenders.
- A panoramic view of Cochabamba
The staff was enthusiastic to get to work and learn more about Kiva, so Day One of my visit was all training sessions and PowerPoints. But on Day Two, CIDRE’s new Kiva Coordinator, Diego Cardona, and I set off for the outskirts of Cochabamba to meet some borrowers. Most of CIDRE’s loan products are geared to serve the region’s dairy farmers, a community of micro-entrepreneurs who own anywhere from 5 – 25 cows and earn income by selling milk to Pil, the region’s lone dairy corporation. Cochabamba’s dairy farmers are concentrated in a large swath of land behind the city’s airport. About 10 minutes after leaving CIDRE’s offices in the city center, paved roads gave way to a lumpy, dusty web of cinder-block houses and muddy cow pastures. Eventually Diego and I came to a stop, eye-to-eye with a couple of rather hefty bovines.
In Defense of Kiva and Microfinance
Why is it that Kiva gets a bad rep for funding MFIs that give out loans to the people who otherwise would not receive them?! Recently, a blog was written on socialedge.org/blogs about a particular experience a “video journalist” had when she visited MFIs in Cambodia and Mozambique and spoke to “countless Kiva loan recipients” while there. The author’s article was based on the fact that “none of them had succeeded at pulling themselves out of poverty” because of these five reasons:
1) The High Interest Rates Being Charged
2) Inadequate Economic Opportunities
3) A Lack of Business Skills/Entrepreneurial Talent
4) Over-burdened Loan Officers
5) Lack of Sustainability
As most of you reading this are Kiva lenders, I want to refreshingly remind you of why the people she met (whom we do not learn much about in her article), were only a few of the 180,000 Kiva loan recipients to date, and do not necessarily represent the experiences of every Kiva loan. These few interviews can be seen in Episode 9 of her documentary series.
I want to use this blog post to layout, from a Kiva Fellow’s point-of-view, how challenging it is to lend to the poor, both fiscally and temporally. Let me share with you how Kiva (and microfinance) not only helps MFIs, and subsequently their borrowers/members, to stay afloat, but is also going to, overtime, help reduce poverty.
Welcome to “Kiva Country”!
“Kiva Country” is what ASKI-MFI (Alalay sa Kaunlaran, Inc.) staff like to call the Isabella Province, the region where their Kiva clients live and work. ASKI MFI is a new Kiva partner in the Philippines. Their headquarters are in Cabanatuan City, Nueva Ecija about 3 hours north of Manila, 10 hours if there is traffic and there is always traffic. They’ve been working hard these past months on their Kiva partnership, and are growing quickly. Beyond micro-finance, ASKI also offers many benefits and programs to their clients such as life and health insurance, educational scholarships, and business training. Their approach is holistic.
As a Kiva Fellow with a new partner, my job is to document everything, verify clients, and bring this information to the Kiva team and to Kiva lenders. I am so excited to be able to bring Kiva’s first field visit with ASKI-MFI to you.
Welcome to "Kiva Country"!
Check-out current Kiva ASKI borrowers to lend to.
Kiva Fundraising loans at ASKI MFI
To learn more about ASKI Microfinance Institution and their holistic approach to alleviating poverty, please visit their website. http://www.aski.com.ph/
Teresa Dunbar just finished her Kiva Fellowship with ASKI MFI, Cabanatuan, Philippines. She’s been a Kiva Fellow since August 2008 with MFI’s in Cambodia and the Philippines. She previously worked for The Christensen Fund, promoting bio-cultural diversity resilience. She holds a BA in Cultural Anthropology and Spanish.
I Thank Them (Kiva) Plenty
Almost finished with my four months at GHAPE, in Bamenda, Cameroon, I thought I would share with everyone all the “thank yous” I heard while interviewing GHAPE/Kiva borrowers.
To all the Kiva lenders, “I thank them plenty!”
More than micro CREDIT to the CO’s
By design, Microfinance is not sustainable without the dedication of hundreds of thousands of Credit Officers (CO’s) working for Microfinance Institutions (MFI’s) around the world. The Kiva online person-to -person (P2P) lending platform only works because CO’s employed by the 95 Kiva Field Partners in 44 countries are out visiting clients, taking pictures and writing business profiles for our website in addition to their regular loan disbursements and repayment collections. My job as a Kiva Fellow at AMK in Cambodia also relies heavily on the CO’s who bring me out to the field so that I can interview Kiva entrepreneurs and create journal updates that get sent to Kiva Lenders around the world.
AMK Credit Officer (CO) ready to ride
BRAC Tanzania Lending Team!
After reading my post about BRAC Tanzania a few days ago, I imagine that many of you are just chomping at the bit to get more involved with the organization.
Oh you absolutely are, you say?
Well, you’re in luck. There is a BRAC Tanzania Lending Team on Kiva.org that you can join and be surrounded by fellow BRAC Tanzania enthusiasts! We only have 8 members right now, so you should really go to the site, join the lending team and help our BRAC Tanzania Lending Team grow to be as massive as BRAC itself!
Thanks to those 8 people who have joined and together already made 6 loans toTanzanian women!
A BRAC Tanzania borrower makes a loan repayment in Zanzibar
Sarah Forbes was a KF6 in Kenya with K-MET and is now serving her KF7/8 placements with BRAC Tanzania. She is clearly very excited about the new BRAC Tanzania Lending Team. You should join, so she’ll stop harassing you about it.
What if Kiva had Green Microloans?
If Kiva had green microloans would you support one? Subsidizing initial costs allows borrowers to participate in projects that are beneficial for their business, health, and the environment.
Continue Reading 3 June 2009 at 07:42 ashleyolivia 34 comments
BRAC – like Risk, but without the risk
The concept of risk has been discussed by many, and often, over the past year, as citizens around the world voice their concerns about the global recession. Mortgage risk, loan risk, credit risk, bailout risk, risk assessment, risk of spending too much, risk of spending too little, and on and on. A lot of risky business (and not the underwear dance kind) has been going on and we are paying for it now in all too literal a way.
There is another kind of risk though; one that I think some of you may be familiar with. That’s right, it’s Risk, as in epic board game, world domination style Risk.
I have been thinking about this particular kind of Risk lately due to the fact that while working with the Kiva field partner BRAC, I cannot escape how much the organization makes me think of the game, with its trademark little army men taking control of continents and sweeping across the globe in the attempt to gain complete domination of the two dimensional board game-world.
Only in BRAC’s case, the army is not little plastic figures, but a human, benevolent BRAC army of Bangladeshis, Afghanis, Sri Lankans, Pakistanis, Southern Sudanese, Ugandans, and Tanzanians. And this is just the beginning – the army is growing, sweeping the globe, out to conquer the poverty of the world, one country at a time.
The figures in green represent BRAC, those in red...poverty.
Okay, my analogy may be getting out of hand at this point. “Out to conquer the poverty of the world” is definitely too melodramatic, but the quantity and quality of BRAC’s global work to improve the lives of those living in poverty is undeniably striking.
Created in 1972 as a small-scale relief and rehabilitation project that was designed as a response to the consequences of the liberation war in Bangladesh, BRAC has since evolved into the largest southern NGO in the world.
With its programs in Asia and Africa, BRAC provides services to more than 110 million people. These services include: microfinance, health, water and sanitation, education, adolescent education and life skills, agriculture, livestock, and other social development programs.
Poverty is a simple word for a complex beast – BRAC works to improve the quality of people’s lives using a holistic approach, with strategically linked programs that address the causes of poverty from multiple angles. This might mean that within a microfinance group, there will be a health worker providing medical supplies for her group members or that down the street from a microfinance meeting a client’s daughter will be learning about gender issues at an adolescent club.
What is your Dream?
What is your dream for your future? As a Kiva Fellow living in Puno, Peru, writing journals for Kiva and Manuela Ramos entrepreneurs, this is a question I have asked approximately 150 women. Over the last three and a half months, one of my main responsibilities as a fellow has been to meet the entrepreneurs of Manuela Ramos who have been funded through Kiva and to write journals about their lives, their businesses and the loans that help them succeed in these businesses. In order to gather the information needed to write these journals, I travel to bank meetings or to the entrepreneur’s homes and ask them a series of questions: How long have you been with Manuela Ramos? Do you think that the loans from Manuela Ramos have helped your business? What successes or problems have you recently faced? Because many of the women entrepreneurs conduct similar businesses, their answers to these questions are often the same. However, the question that provokes the same response more than any other is “What is your dream for the future”.
Growing a Business, Saving a Child
An estimated half of Kenyans with AIDS are receiving anti-retroviral treatment, only about a third of Kenyan children are. How can micro-loans help change this?
Continue Reading 29 May 2009 at 06:36 Brett Dobbs 3 comments
Finding Your Borrower Symphony No. 9
Three months ago, I came to Tarapoto, Peru armed with all sorts of tools to start my Kiva fellowship; cameras, powerpoint presentations about Kiva, books about microfinance, and a ton of information acquired during training at Kiva headquarters in San Francisco. While all these were useful, nothing could really prepare me for the most challenging part of my fellowship; finding the borrowers I had to interview to get journal updates for Kiva lenders. Just as my colleague Emily struggled to find Kiva borrowers in Puno, Peru, I had a similar set of challenges in the San Martin region, located further north in the Peruvian Amazon Basin.
As I finish my fellowship, it is time for a new cohort of fellows to take on the challenge. To the new KF8 class, I hope this video helps illustrate some of the challenges you will face. But before I sign off, one more word of advice: when you feel like pulling your hair out/crying/sighing loudly/giving up in frustration because you can’t find a borrower, just go to your happy place. And don’t pay attention to your wet socks.
Sending a shout out to the MFI staff who does this every day. From Tarapoto, Peru good bye and good luck!
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Hi, my name is Diana Rodriguez Wong reporting from Tarapoto, Peru.
To support Peruvian women entrepreneurs please visit the Manuela Ramos/CrediMUJER loan page or join the new Manuela Ramos lending team.
Signing Off from Senegal
My memories of the last eight months away from home are a jumbled mass of color, freedom, fear, patience, frustration, and energy – raw, shifting memories that have not yet arranged themselves into neat, packageable stories that I can pull from the shelf at parties when I get home.
Watching Obama's Inauguration Speech on the Togolese Roadside
I have tested my sense of self against new backgrounds, ripped away the familiar context of home to hold my idea of “Abby” up to bright new lights. I have sometimes been ashamed of my reactions to new stimuli, and sometimes proud. Catching myself swearing under my breath at street children who asked a little too aggressively for money was not my finest moment; insisting that the Kiva Coordinator not fudge the dates to make loans eligible for Kiva’s website redeemed me.
I have learned about how microfinance operates on a day-to-day basis and about the difficulty of managing work and relationships across distances and cultures. Telling an MFI employee she did not have the IT competency necessary to be the Kiva Coordinator and watching her eyes tear up was my first real introduction to the uncomfortable realities of managing people. These challenges of human nature, of judgment, failure and success, cross all cultural boundaries.
Sunset Behind a Baobab, the National Symbol of Senegal
I have changed in many ways. After struggling for months with my pocket French dictionary, and then, this morning, listening to myself rattle off yet another training in French on sending journal updates to Kiva lenders, I felt like I had tangible proof of how I’ve grown since September. Other ways I’ve grown are less easy to put a finger on, and most will continue to be elusive for many months to come.
On legal courts and stock markets
Courts and stock markets appear to have very little in common. The first are a revered part of most countries’ legal infrastructure; we cannot imagine life without them. The second, seem to bounce from loved to hated and back again in a matter of hours and are often far from respected; some countries even believe they can do without them altogether. But what do they have in common?
They both play important roles in checking the status quo. Both institutions are often the only places that can bring powerful people and institutions to account for their deeds. Courts, with their sacrosanct independence from politics and private interests, are able to bring down decisions punishing anyone that violates the law or does not honor a contract. Stock markets, for their part, can punish companies that are not fully dedicated to implementing the strategy they promised their shareholders they would adhere to and implement successfully.
I Don’t Want to Stop Being a Kiva Fellows 7th Class (Welcome KF8!)
The members of the seventh Kiva Fellows class (KF7) recently received some rather startling news: Kiva is sending out reinforcements. The team in San Francisco rounded up a new bunch of smart, capable, passionate people (creatively referred to as KF8) to fan out across the globe where they will meet Kiva borrowers, write journal updates, post enriching and exciting material to this blog, raise awareness about the work of their respective host institutions, and take cold showers for two to four months.
Upon hearing the news, Brett Dobbs (KF7, Kenya) and I were overwhelmed with all sorts of emotions. What if everyone likes KF8 better? What if they write more journals than we did? What if they have stronger stomachs or figure out how to talk to a borrower without falling off a chair into the dirt? What are we, a group of rugged, field tested KF7’s, supposed to do when our Kiva-ness is threatened by some newly minted, probably-smarter-than-us KF8’s?
And…
Looks like even though I’m not taking the news well, Brett’s pretty confident that we’re the best ever. So I guess until KF8 starts out-journal posting, out-blogging, and out-awesome-ing us, I’ll hold off on finding a way to get rid of the KF7 Para Siempre tattoo I got last week.
Welcome, congratulations, and good luck KF8!
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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Facebook users – you can now follow Kiva Stories from the Field here!
The Value of the Community Bank
Some of you may be aware of the definition of the Community, or Village, Bank and the role it plays in many Microfinance Institutions (MFIs). For those of you who are not familiar with the concept, I’d like to offer a brief history of the Community Bank and it’s function in Manuela Ramos, an MFI and women’s movement in Peru. Although community banks operate differently in distinct countries and MFIs, the origin of the community bank and it’s general functions are usually the same regardless of the place of operation.
The idea of the Community Bank originated with the development of the first MFI, the Grameen Bank, in the early 1980s. Muhammad Yunus, and economists from Bangladesh, saw a great need for small loans to become available for the working poor in his country. Like any bank that provides loans, this bank needed a guarantee from the borrowers that the loans would be repaid. This guarantee could not come in the form of collateral, such as a house or automobile, because the borrowers, for the most part, had no collateral to offer. Therefore, in order to ensure the bankers that the loans would be repaid, Muhammad Yunus developed the concept of the Village, or Community, Bank, where groups of people from the same village would come together and take out a group loan to be used for individual businesses. In this way, the group members support each other in the development of their individual businesses and guarantee that each member will repay his or her loan. Over the last 30 years as MFIs have started in much of the developing world, the practice of Community Banking has spread and been adapted to fit the needs of the specific MFIs.
Microfinance and the Millennium Development Goals
Microfinance, while not the cure-all tool for development, is a very powerful tool for poverty reduction in the developing world. We’ve all heard the effect it has on poverty as portrayed in numerous academic studies and from sources like Muhammad Yunus. Because of my infatuation with microfinance I started wondering what other impact microfinance has had on development issues such as inequality. After a quick search on UC Berkeley’s academic journal search tool I only found one (one?!!) article which even mentioned inequality. This was evidence to me that microfinance is still in its infancy as an academic subject.
Prior to becoming a Kiva Fellow I decided that I wanted to go back to graduate school and study economic development with an emphasis in microfinance, if at all possible. Because I discovered the lack of scholarly attention towards microfinance and its impact towards other development issues I decided that I wanted to study what impact microfinance has on all aspects to the UN’s Millennium Development Goals besides just poverty reduction.
The Millennium Development Goals are eight international development goals that 192 United Nations member states have agreed to achieve by the year 2015. While it is very debatable that the goals can be achieved by that date, they are nonetheless goals worth fighting towards for a long time to come. The eight goals (which have more specifics than shown below) are as follows:
1) Eradicate extreme poverty and hunger. 2) Achieve universal primary education. 3) Promote gender equality and empower women. 4) Reduce child mortality. 5) Improve maternal health. 6) Combat HIV/Aids, malaria, and other diseases. 7) Ensure environmental sustainability. 8) Develop a global partnership for development.
My question for these goals is simple: does microfinance have a significant impact on any of these goals besides poverty reduction? My theory, as of now, is that yes it does impact at least five, maybe even seven of these goals; however I need to run statistical models to test the significance. In short I believe that since most clients are women, goal 3 has a major impact and since a goal of microfinance is increasing credit to hopefully increase family income, the other goals will be affected as well. Think about it like this: extra money means maybe another child will get to continue their education, or there is now money available to afford the medicines required to fight a child’s malaria bout to keep them alive past the age of five (goals 4 and 6), etc., etc…
As an anecdotal case, here in Vietnam with my MFI SEDA, I know that the vast majority of borrowers are female. According to the women I have interviewed, the majority have seen an increase in their standard of living and income (whether this is due to a real increase in income or income simply mirroring inflation is another topic that needs to be studied) and many who still have school age children use their extra income to pay for their kids tuition fees and hope that their children will be able to go to university and further increase their standards of living, especially for eldest sons (who take care of the parents when they get older!). Furthermore, many of the women now have extra income to also buy medicines if their children become sick. Just from my interactions with the borrowers here, I see a potential impact going beyond just poverty reduction…I see Millennium Goals 1-6 being affected. Thus there is reason for further study into this impact!
To learn more about the Millennium Development Goals, please check out the MDG Wikipedia page. If you’re interested in lending to SEDA borrowers to help them have an impact on the Millennium Development Goals, please check out SEDA’s fundraising page!
Luz y Esperanza (Light and Hope)
As a Kiva Fellow, one of my main duties is to bring you stories about entrepreneurs using microcredit to improve their lives. A few weeks ago, I met a remarkable entrepreneur called Neni.
Continue Reading 17 May 2009 at 07:02 Diana Rodriguez-Wong 4 comments
An Innovative & Effective Microfinance Model
Intro to EDESA and their network of Empresas de Crédito Comunal
Kiva’s field partner in Costa Rica, EDESA, provides credit services to a network of “Empresas de Crédito Comunal” (Community Credit Enterprises), or ECCs, established by FINCA Costa Rica. The ECCs are small, grassroots microfinance organizations formed by rural community members. The objective of each ECC is to provide financial services to individuals within the community for the development of economic activities that allow them to move out of poverty. FINCA Costa Rica works to establish ECCs to serve as the financial engines of the neediest communities across the country. To form the ECCs, FINCA provides comprehensive training to rural community members that includes financial and business elements and culminates in the formal establishment of the ECC as a legal autonomous business.
The capital of each ECC is generated by the investment of its members through the sale and purchase of shares in the organization. These purchases provide the loan capital that the ECCs then use to issue loans to their members and to invest in other community development projects. As shareholders, individuals in the community become owners of the ECC, earning dividends on the shares when the business is profitable and fully determining the rules, policies, and projects of the organization. Not only do ECCs provide financial benefits, but many of them also work with other organizations in sectors such as health, education, and sports and often provide other programs such as investment education for children and youth. While each ECC governs its own policies, the average price for a share across the network of ECCs is 2,000 Costa Rica Colones (approximately US$3.50) so becoming a partial owner of the business is fairly accessible, even in the poorest of communities.
Over the years, as the ECCs grew and their members’ businesses expanded, some members began requesting loans that exceeded the ECCs’ lending capacity. The ECCs started looking for other sources of financing. EDESA was established by FINCA Costa Rica, the ECCs and some individual investors in February of 2005 in response to the ECCs’ growing need for external financing. EDESA serves as the ECCs’ national financing institution, with the mission of bringing credit services to the ECCs. EDESA is a firm operated just like an ECC, but on a national level. The ECCs are the shareholders and receive profits (dividends) if positive financial results are achieved.
This model of community members becoming partial owners of the ECCs and the ECCs being partial owners of EDESA has proven remarkably effective. Not only does the sale and purchase of shares at the grassroots level facilitate the capital needed to run these organizations, but the fact that the borrowers are receiving loans from an enterprise they partially own creates an additional vested interest in paying back the loans and ensuring future success of the organizations. As evidence of how effective this strategy is, EDESA maintained a zero percent (0%) delinquency rate in its first four years of lending! In addition to being effective in terms of loan repayment, this model is also extremely empowering to the individuals and the communities investing in the ECCs and EDESA. By being participants and owners of these organizations, the beneficiaries also educate themselves on financial and business issues and shape how the businesses grow and what they do within their own communities.
offices of one of the oldest and most developed ECCs, El Sauce
ECC El Sauce sign
ECC El Sauce even has internet and bike rental services
To lend to EDESA’s borrowers, please click here.
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Megan Tatman Montgomery is in her fourth and final placement as a Kiva Fellow. Prior to EDESA, she served at Friendship Bridge and FAPE in Guatemala and ADEPHCA in Nicaragua. Please feel free to contact her at megan.montgomery@fellows.kiva.org with any questions, comments, or requests for future blog posts.
A 25 pound sack of sugar.
Despite entrepreneurial skills, and dedicated work ethic many entrepreneurs are a single business mistake, illness, or natural disaster away from starting at square one.
Continue Reading 15 May 2009 at 10:21 ashleyolivia 3 comments
A Handsome Gentleman Came Calling
What do you get when you cross a woman named Matilde Tamon and an organization like Ahon Sa Hirap, Inc. (ASHI)? A love song.
Matilde, who is a spry 75 years of age, has been a member of ASHI for 13 years. She loves to sing, and also loves what ASHI has done for her and the women in her community. Faced with this fortunate predicament, she did what any Filipino would do: she sang about it.
Some years ago Matilde composed a song of gratitude for ASHI, one which she usually delivers a capella. ASHI, a Grameen-style, non-profit microcredit institution that provides financial and social services to its more than 22,000 Filipina members, has been operating in Antique Province, where Matilde lives, since 1996.
Matilde has charmed generations of ASHI personnel and members with her song and wit. Legend has it that she sings her song to any new visitors from ASHI when she first meets them, and legend didn’t disappoint on the day I met Matilde.
In late April, I visited her center hall in Malandog Barangay, Hamtic, along with members of ASHI’s board of trustees and other ASHI personnel. After everyone had eaten a particularly delicious meal prepared by ASHI members, Matilde stepped up and sang us her song.
Matilde sings in Kinaray-a, the language spoken by most people in Antique Province. The video is subtitled in English, thanks to ASHI staff from Antique who doubled as interpreters. Enjoy!
Some unfamiliar terms you may encounter in the video:
Field credit officers: ASHI development officers — personnel that visit ASHI members in the field.
Group: ASHI members form groups of five to build solidarity, and to guarantee each other’s loans.
Center: A number of groups — usually six — form a center. A centers is a small, freestanding structure built and maintained by the women who form its member groups. All business is transacted in weekly meetings at the center.
Sir Jesse: The first field credit officer assigned to Matilde’s center; Jesse is now in charge of Grameen operations for ASHI, and is based in Manila. Jesse is the handsome gentleman in Matilde’s song.
Ma’am Hermie: The ASHI first regional manager for Antique Province, who oversaw operations at the time Jesse was a field credit officer.
John Briggs is a Kiva Fellow serving with Ahon Sa Hirap, Inc. (ASHI) in the Philippines. This is his second of three placements. Before his post at ASHI, John worked with Maxima Mikroheranvatho in Phnom Penh, Cambodia. John’s third placement as a Kiva Fellow will be with the Kenya Agency for the Development of Enterprise and Technology (KADET), starting in June. If you haven’t already, consider becoming a Kiva Fellow, too!
