I know! We can’t believe it either! Our Kiva Fellowships, as the 16th class, have come to an end.  So what’s in store for us once we return to our homes? Or perhaps, stay in the field for another fellowship?  Read on for the next chapter in the lives of some of the 16th Class of Kiva Fellows Alumni.

I am returning to San Francisco after working around Latin America for the past year. Apparently,  it’s time to go home and get ‘a real job’. I will be looking for work  in social enterprise or impact investing. I will miss the ‘tranquilo’ pace of life here in Nicaragua. Its not often you get the privilege of calculating an operational cost analysis from the comfort of a hammock. I will also miss catching my coworkers at AFODENIC singing along to Spanish versions of classics like ‘Dust in the Wind’ and ‘Total Eclipse of The Heart’ on Radio Amor. I am really glad I participated in the Kiva Fellows program. It was a  real good time.

Do: A Kiva Fellowship. It'll change your life. (Eric Rindal, KF15 Sierra Leone, KF16 Bolivia)

The sixteenth class of Kiva Fellows has all but left the field- but we’re by no means done talking about our experiences. We’ve collectively spent 422 weeks in the field (just over 8 years!) and worked an estimated 16,650 hours at Kiva field partners around the world.  Needless to say, we’ve got a lot of opinions about how to use this time wisely.

Now, we’re no experts in living or working abroad (though we sure do like it), but we have some nuggets of wisdom to offer up for those of you transitioning into a life abroad or beginning your next Kiva Fellowship. Stick by these tips, and you can’t go wrong. (And for more hints and tips, check out 33 Tips from Kiva Fellows (written November 2009) or 45 More Tips from Kiva Fellows in South America.) Enjoy!

Best Way to a Kiva Fellow’s Heart is through…

1. People love to share food in El Salvador. If you’re having lunch with someone or with co-workers, offer up some of what you have for them to try. (Andrea Ramirez, KF16 Costa Rica & El Salvador)

2. Though most of the USA fast food places are here, don’t bother with them, Turkish food is wonderful. (Kim Strathearn, KF16 Turkey)

3. If you take a trip(s) during your fellowship, remember that in some cultures it’s customary to bring back (small) gifts to friends and coworkers from your travels! I found that a box of chocolates to share in the office of my MFI was always much appreciated and disappeared within hours. (Laurie Young, KF16 Indonesia)

They may not look good. They may not taste that good, either. But do it: eat the fried cow intestines.

4. Make sure you try the different casados(rice and black beans paired with some sort of salad, and meat). It’s delicious, affordable, and the closest thing to home-made. (Andrea Ramirez, KF16 Costa Rica & El Salvador)

5. Try everything. Ok, yes, you could get sick, but worse, you could live the rest of your life without knowing what guinea pig, cow tongue, fermented maize, cow heart, llama, friend random thing with more random things in it, magical juice in a bag, etc., etc., tastes like. If these things don’t seem appealing, remember: even worse, you could miss out on a big chance to share in a local cultural experience that will stay stayed with you forever. (Mariela Cedeno, KF16 Bolivia)

6. Befriending office mates is easy as pie, especially if you bake one. Any baked treat will do the trick: cookies, cupcakes, 7-layer bars – anything tasty and homemade will suffice. Walk around and offer your treats during the afternoon coffee break. (Sandra Pina, KF16, Honduras)

How do you say…

7. No amount of “city” Spanish will prepare you for the linguistic richness and diversity of Spanish spoken in rural Costa Rica. That said, bring a notebook for ALL field visits, and let the loan officers be your best professors and guides. Even Costa Rican urbanites find themselves lost among the colloquialisms of Tico country Spanish. (Julie Kerr, KF16 Costa Rica)

8. Learning common words and phrases in an indigenous language is the quickest way to break the ice. Guaraní is Paraguay’s other official language and is spoken by the majority of the population. Purete means cool, haso means not cool, kaigue is lazy, nde ha’e kuña guapa means “You are a hard working woman!,” chevare’a means “I am hungry,” and amokose means “I want a drink!” (Alba Castillo, KF15 Paraguay)

9. Get rid of “uhm” in your vocabulary- it mean a female private part in Turkish. (Kim Strathearn, KF16, Turkey)

10. When a farmer says he brings his harvest to market using his “salchichón” (commonly known as “sausage”), blush not my friends, he means “horse”. (Julie Kerr, KF16 Costa Rica)

11. If you lose the thread of a conversation don’t just say ‘sí‘ or intermittently laugh. Get them to repeat things and when that get boring pick out a word or phrase that you Do know and make a comment or nonsequitor. They might be saying “fijate, las olas son bravas en la playa” and your response might be an unrelated, “¿Te gusta la playa?”  This gets the conversation back on your own terms. Think about how often you respond like this in English! (Jim Burke, KF16 Nicaragua)

12. Because they will ask: Kiva means “unity” or “agreement” in Swahili. (Kate Bennett, KF15 Ecuador & KF16)

What to Bring

Do: bring a tuperwear container. Sporks can also come in handy, for that mid-morning mountain climb.

13. My three smartest investments for my fellowships? A SteriPen, a tuperwear container, and a pocket knife with a corkscrew. (Kate Bennett, KF15 Ecuador & KF16 Peru)

14. Always carry a small, sturdy umbrella. It will get you through unexpected showers; as well as hot, sunny days. (Alba Castillo, KF16 Paraguay)

15. Rain is as plentiful is the air we breathe. Bring an umbrella if you prefer to shower before getting dressed. (Julie Kerr, KF16 Costa Rica)

16. Bug spray, bug spray and MORE bug spray!! For those of you who like more natural alternatives, anything with menthol or eucalyptus helps repel the mightiest of mammoth mosquitoes, sand flies, ticks and chiggers. Slather it on THICK! (Julie Kerr, KF16 Costa Rica)

17. Bring clothes or shoes that need to be fixed, mended, or altered. It is cheap and the work is top quality. The sasterías and zapateros are EVERYWHERE. (Jim Burke, KF16 Nicaragua)

There’s no place like home (in a new country!)

18. If you can, try to find accommodation near the central market building: there’s nothing like eating shrimp ceviche with avocado at 7 o’clock in the morning. Besides, this may be your only chance for the entire day to get your hands on food that’s neither triple-fried nor made out of pure pork fat. (Emmanuel von Arx, KF16 Ecuador)

19. If it’s possible, go with a homestay! Local food, local language, and a solid support group in-country are just a few of the obvious perks of living with a family. (Kate Bennett, KF15 Ecuador and KF16 Peru)

20. For Kiva Fellows in the former Soviet republics: If you’re looking for apartments in older Soviet buildings, check to make sure that the utilities actually work. Gas outages can be frequent (sometimes in the dead of winter), and running water tends to be spotty on higher floors. As a rule of thumb, try not to live above the fifth floor – after all, the elevator might also not work! (Chris Paci, KF16 Tajikistan & Azerbaijan)

Getting from point A to B

21. When moving around by taxi in Cuzco, do everything possible to seem local to get cheaper prices (there are lots of local gringos, so you can pull it off). How to go about it?

• Say hi to your taxista like this “Buenas, maestro.” Saying hola is touristy, saying chofer is touristy, and asking anything about anything is touristy. You don’t care. You are local.
• Tell him where you are going by saying “I will get off at such and such location”. If you are going to a restaurant, know its name, what street it is on, the nearest cross street, and a reference point nearby BEFORE you get in. Otherwise you won’t be able to pull off the “trabajo aquí.”(Miss any of those four, you are officially a tourist.) (Rob Gradoville, KF16 Peru)

If you're feeling the need for speed, do: hop on your loan officer's motorcycle.

22. If you’re taking the bus and you don’t know where you need to get off, just ask the bus diver. Costa Rica has the nicest bus drivers around! (Andrea Ramirez, KF16 Costa Rica & El Salvador)

23. Note the taxi number (on side of doors when you get in) can help you retrieve forgotten item. Also can help if the taxi driver sees you note the number, he might be less likely to take the long way. It is common for taxis to stop and ask other for directions if they don’t know the place your going. Always make sure they turn the meter on. In the tourist area, always flag down a moving taxi–the ones that are just waiting around are just waiting to rip you off. Beware of the money switcheroo (ie you give them a 50 lira note that is the same color as a 5 lira note and they do the switcheroo and try to convince you that you only gave them the 5. Females always sit in the back and not in the front. I have have some excellent taxi driver and some dinks as well. Rider beware (Kim Strathearn, KF16 Turkey)

Get to work!

24. If you have any freedom to do borrower visits, have no shame in visiting anyone who owns a panatería, heladería, or pisco vineyard. Peruvian hospitality and pride in their business translate to homemade treats for you. Microtenterprise never tasted so good. (Kate Bennett, KF15 Ecuador & KF16)

25. Make people laugh, even when it’s awkward. Visiting clients who are on a spectrum from extreme introvert, to slightly less extreme introvert, can be daunting, but like everything else in life, there is nothing better than a laugh. You’d be amazed how many times my laughing at people and saying “por favor, sonria porque se me va a romper la camera si sigue asi,” actually made them smile. Don’t rush, don’t pull out your pen and BV template, and don’t start dangerously pointing your camera right way. Chill out, smile, shake hands, take in the scenery, interact! (Mariela Cedeno, KF16 Bolivia)

Do: hang out with coworkers after work. Don't: let them win.

26. Make sure to hang out with MFI staff outside of work. Don’t worry so much about about keeping it strictly ‘professional.’ I built trust, learned office hierarchy, gossip, and got a lot of technical questions answered after a few beers with loan officers. (Jim Burke, KF16 Nicaragua)

27. Fake it ’til you make it. You will be considered an expert in all things Kiva, even if you’re not. Embrace the challenge. You will have multiple resources at your disposal: use them. Learn along the way and don’t be afraid to tell your field partner, “Can I get back to you on that? I want to confirm with Kiva.” (Sandra Pina, KF16, Honduras)

28. Invest in your coworkers. From the service staff to the reception staff to the MIS, they not only help you with your job but they can be great friends and connectors to your life in a new country. (Jill Hall, KF16 Philippines)

29. They tell you this at training, but really, do it: spend your first week only asking questions. Lots and lots of questions (and start on your Loan Product Survey or Social Impact Assessment first- asking pointed questions while completing items on your workplan is a double whammy!). Being extremely informed about every aspect of your MFI will only make your work easier moving forward. (And teach you more about microfinance, which is the whole point of the Fellowship, right?) (Kate Bennett, KF15 Ecuador & KF16)

30. If it should take a day or two, it’ll take three or four. If it’s your Borrower Verification, it’ll take a month. (Kate Bennett, KF15 Ecuador & KF16)

31. Figure out how your MFI communicates. They are probably using chat or skype. Get your coworkers chat/skype info early on. Sometimes you can formulate better questions, get better responses and be less annoying chatting rather than visiting their office for every little thing. (Jim Burke, KF16 Nicaragua)

32. Email coworkers when you leave! – Even if they weren’t helpful with that one thing you were working on…they still care and want to hear from you when you’re gone. (Eric Rindal, KF15 Sierra Leone, KF16 Bolivia)

33. Participate! Don’t be shy (or obnoxious) and get involved with after work sports or after work drinks. This is your new community. (Eric Rindal, KF15 Sierra Leone, KF16 Bolivia)

Gringo Pricing

34. Don’t be afraid to bargain for transportation and goods! In many developing countries, it’s expected of everyone. You’ll probably be quoted a much higher price at the start than you should be paying, and it’s not because the vendor’s trying to “cheat” you as a foreigner. It just makes economic sense – it would be foolish for the entrepreneur not to sell for as high a price as he/she can get. (Chris Paci, KF16 Tajikistan & Azerbaijan)

35. Never take the first price- haggling is expected. On the other side of the coin (jaja), though, don’t haggle some old woman trying to sell you a scarf in the Sunday market into oblivion- that extra dollar probably means an awful lot more than her than it does to you. Lay aside your hubris and indignation from time to time and accept the gringo tax. (Kate Bennett, KF15 Ecuador & KF16)

Safety

36. Should you ever attract negative attention from the police in the former Soviet world, an effective tactic is to pretend (or demonstrate) that you speak barely any Russian – enough to understand their questions, but not enough to maintain a conversation. As long as your documents are in order, they will likely decide you’re too awkward to be worth it and let you leave. Hurray! Oh, and always carry your passport and registration with you. Always always always always always. (Chris Paci, KF16 Tajikistan & Azerbaijan)

37. Remember, guys: It’s better to appear like a total sissy than to get robbed or killed. If you feel that you are getting into a dangerous situation or a dead-end street in a bad neighborhood, don’t hesitate: simply turn around and run! Don’t worry: nobody will ever know about this – your reputation as a fearless globetrotter stays alive, and so will you… (Emmanuel von Arx, KF16 Ecuador)

38. It’s natural to burn with curiosity about your host country. But if you’re not living in a democracy, be cautious about the sorts of political questions you ask, unless you know your conversational partners well. For instance, my first placement was in Khujand, Tajikistan, in a region surrounded on three sides by the hostile country of Uzbekistan, and the authorities were always wary of Uzbek spies. My current placement of Azerbaijan is a country that considers itself at war and has suffered terrorist attacks in the past, so as the police see it, there’s a lot to be suspicious about. Be hyper-aware of these sorts of issues. And if you feel tempted to criticize the political system there and/or extol the virtues of your own, stop and reconsider. It’s not why Kiva sent you there, and in the worst-case scenario, you might get both yourself and your conversational partners in genuine trouble. (Chris Paci, KF16 Tajikistan & Azerbaijan)

39. Never carry your credit card unless you are making a withdrawal. I prefer to carry large sums of money in my shoe rather than bringing my card out of hiding. (Jim Burke, KF16 Nicaragua)

40. Make and carry a photocopy of your passport. Carrying it around for real is a real bad idea, and having no record makes it hard to check into hostels/hotels. (Jim Burke, KF16 Nicaragua)

41. If you’re in a country with a heavy police presence, be careful what you photograph! Sometimes the most unexpected subjects – bridges, factories, metro stations, gorgeous government buildings – can be deemed security risks, and photographing them can attract negative attention from the police. (Chris Paci, KF16 Tajikistan & Azerbaijan)

Hugs and Handshakes

42. If you are an unmarried woman and living in a country where the locals aren’t used to seeing women wandering around alone and are often inquisitive of where you are going and why you aren’t married, bring and wear a fake wedding band. Also, make sure you figure out which hand is the hand that the locals wear it on! It’ll do wonders for (sometimes) avoiding uncomfortable conversations if you don’t want to have them. (Laurie Young, KF16 Indonesia)

43. Outside of San Salvador the people are pretty conservative. Men won’t shake a woman’s hand unless she extends her hand first. (Andrea Ramirez, KF16 Costa Rica & El Salvador)

44. In Paraguay, you greet and say goodbye to friends with not one, but two kisses – one on each cheek. (Alba Castillo, KF16 Paraguay)

45. In Turkey, among friends the greeting is a kiss on both checks (Kim Strathearn, KF16 Turkey)

Living and Looking Local:

Do: try to dance like the locals. Don't: fool yourself into thinking you're really, really good at it.

46. Although Turkey is fairly well connected, don’t rely on google. (Kim Strathearn, KF16 Turkey)

47. If you want to look like a local, wear jeans. Even if it’s 100 degrees outside. Tourists are associated with shorts. (Andrea Ramirez, KF16 Costa Rica & El Salvador)

48. One of the best ways to learn about a culture is to people watch– what are they doing and not doing in public. (Kim Strathearn, KF16 Turkey)

49. When in Rome…always pour some out for Pachamama. If you find yourself sitting around a big bucket of Chicha with nothing but a full gourd in hand, don’t be stingy, pour some out for Mother Earth, she’s thirsty too. (Mariela Cedeno, KF16 Bolivia)

50. Walk, walk everywhere, all the time. Yes you need to be at the office at 8 a.m. and you get up at 7:40, but maybe during your two hour lunch break and on weekends you can make sure to take the time to pace yourself. Remember to absorb everything around you: the sounds, the streets, the people, the street vendors, the conversations, the protests, the smells. For some reason, those were also my most peaceful times. (Mariela Cedeno, KF16 Bolivia)

51. Getting haircuts is cheap and always a great experience. Getting a straight razor shave sounds bad ass but is just bad and hurts a lot. (Jim Burke, KF16 Nicaragua)

52. Get into the rhythm of your location. If the locals take time to smell the roses or take a tea break –you should too. This is a great video (in English) on what a glass of tea means (Kim Strathearn, KF16 Turkey)

53. Sit in a park/plaza by yourself…someone will sit next to you. (Eric Rindal, KF15 Sierra Leone, KF16 Bolivia)

54. Be a guest (and a friend) – allow people in your host country to take you around…you don’t always have to pretend like you’re not a tourist…let’s be real, this is not your native country (if it is, still go on some trips!). (Eric Rindal, KF15 Sierra Leone, KF16 Bolivia)

55. Get off the internet! Your friends at home really don’t need to hear from you every day (although your mother/father probably does). It’s way cooler to say, “I was out of internet range…” (Eric Rindal, KF15 Sierra Leone, KF16 Bolivia)

Mind your manners:

56. You are going to be thoroughly stared at. Get used to it, as it is not rude here. (Kim Strathearn, KF16 Turkey)

57. Don’t be offended when asked how much money you make, how much is your apartment, are you married, have kids, no to either question is followed by why not? Good way to deflect is nicely reply why do you want to know? Turks are very curious and have a different sense of what is private information. (Kim Strathearn, KF16 Turkey)

58. Turkish people are very hospitable and gracious to guests–learn what it means to be a good guest. (Kim Strathearn, KF16 Turkey)

59. Most people in the former Soviet republics love to be photographed! Once you do, though, they might surprise you by asking when they can expect to receive a printed copy of their photo. There are plenty of little shops here where you can get a picture printed, so always take down the person’s address and try to bring or mail them a copy. With an inexpensive little gesture like this, you can absolutely make someone’s day. (Chris Paci, KF16 Tajikistan & Azerbaijan)

60. Follow through on promises (or obligations)– go to dinner with coworker’s families, take a day trip with coworkers or friends, etc. (Eric Rindal, KF15 Sierra Leone, KF16 Bolivia)

Kate Bennett (KF16) is thrilled to be working in Ica, Peru with Kiva Field Partner Caja Rural Señor de Luren. For more on Kate’s experiences with Caja Rural Señor de Luren or life in Peru or Ecuador, follow her work here.

Awhile ago I attended a Kiva loan disbursement for VisionFund Indonesia with my Kiva Coordinator, Valentine.  She and I were both intrigued by a product called Mr. Cool that Layla, the leader of the group, has a business turning into ice cream pops.  Often times the borrowers we met during field visits were quiet and reserved.  However, Layla was extremely excited to have us in her home and show us all about her business making Mr. Cool pops.  She was the most outgoing and charismatic borrower I met during my time in Jakarta and, because of this, I wanted to share our visit with you.

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Laurie Young recently completed her Kiva Fellowship (KF16) working with VisionFund Indonesia in Jakarta.  If you would like to learn more about VisionFund Indonesia, please visit their partner page.  You can also support them by joining the lending team for VisionFund Indonesia. Former posts written by Laurie about her experiences in Jakarta and with VisionFund Indonesia can be found at:

New City, New Field Partner: Settling into the “Big Durian” (Part 1 of 2)
New City, New Field Partner: Getting to know VisionFund Indonesia (Part 2 of 2)
Meeting Karsinah: Maximizing my Social Return on Investment
Remembering Rizky: VisionFund Indonesia Loses One of Their Own
Microinsurance in Indonesia: What are the Options for Kiva Borrowers?
Microinsurance in Indonesia: Current Challenges and Innovations

A Warm Welcome! Manana offers the best from her garden. By DJ Forza, Georgia

This week’s Fellows Blog focuses on adaptability: Adapting microinsurance to poor households in Indonesia, an MFI in Turkey adapts to the needs of women entrepreneurs, a multifaceted borrower in Nepal adapts to market pressures, and a Kiva Fellow adapts to changing expectations. In a continuation of The Stuff Kiva Fellows Like series we hear how different fellows have adapted to their lives abroad by ‘crashing parties’ and ‘going to the Bazaar’. We hear about how practitioners are adapting finance and microinsurance products to their borrowers. Equally nimble we hear from a few borrowers and how they have expertly adapted to market pressures and changing circumstance. Microfinance is a dynamic industry by nature and like DJ or Binu or Maya Enterprise for Micro Finance, ensuring success means staying flexible and welcoming new opportunities born out of challenges.

Microinsurance in Indonesia: Current Challenges and Innovations.
Country: Indonesia / Fellow: Laurie Young, KF16

Laurie takes us to a microinsurance conference and explains the challenges of getting appropriate insurance products to poor households in Indonesia.

If It Is Tuesday It Must Be Izmit+ more of my favorite borrowers+ “buyurun agabeyi”…
Country: Turkey/ Fellow: Kim Strathearn, KF16

Kim explains the history of Maya Enterprise for Micro Finance and gives a profile on the women micro-entrepreneurs served by the organization in Turkey.

Multi-faceted Borrowers Part 2
Country: Nepal / Fellow: Abhinab Basnyat, KF16

Abhinab continues his series on multifaceted borrowers by introducing Binu, a Kiva borrower, and explaining her many business ideas.

Second Chances (Part 1)
Country: Georgia/ Fellow: DJ Forza, KF16

In this heartfelt and honest post DJ explains how she adapted her expectations and settled into her Kiva Fellowship in Georgia.

Stuff Kiva Fellows Like #10-17
Country: Nicaragua / Fellow: Jim Burke, KF16

The ‘Stuff Kiva Fellows Like’ series continues. Fellows discuss the stuff they like and how they have adapted to living abroad and working in microfinance.

* * *

Questions from the Field: Why Do We Lend, What’s a Kiva Fellowship + How does Microfinance Support Green& Agricultural Development?
Update from the Field: New Products in Microfinance, Over-Indebtedness+ Transparency
Update from the Field: Earthquakes, 5Ks+ The Pain of Sickness and Loss
Update from the Field: Expanding the Reach of Microfinance, Downsizing Development+ Why We Kiva

* * *

Plus more on-the-ground photos from the past week:

Vice Minister of Finance giving the Keynote Speech on the second day of the event. By Laurie Young, Indonesia

Binu infront of her canteen. By Abhinab Basnyat, Nepal

Spectacular Sighnaghi! By DJ Forza, Georgia

Jill in a Poofy Pink 'Filipiniana'. By Jill Hall, Philippines

Vice Minister of Finance giving the Keynote Speech on the second day of the event

I was fortunate enough to be invited to accompany the Director of VisionFund Indonesia to attend the ‘First Microinsurance Marketplace in Indonesia’ coined ‘MIMPI.’  The event was a joint effort by the Indonesian Insurance Council, World Bank and the IFC with the three main goals being:

• “To provide an opportunity to showcase innovations in microinsurance across various aspects (including. new products, innovations in distribution and service delivery, use of technology incl. cell phones) and emerge as a platform for bringing together the innovators and the agencies interested in innovations. Thus the event will lead to the creation of Partnerships.
• To identify & recognize grassroots level innovations.
• Overall to create an enabling environment for new approaches to be tried out in the area of microinsurance particularly in the challenging socio economic contexts.”

There were speakers, panels, and exhibitions over the course of the two days aiming to create a marketplace environment rather than that of a traditional conference. Below, I hope to provide you with the current challenges facing the industry based on presentations and discussions during the two-day event.  Additionally, I will present some of the product innovations and ideas that have been recently, or are going to be, introduced in Indonesia in an attempt to increase access to insurance for the poor.

Challenges:

Distribution/Scale:
Indonesia is an archipelago spreading across 17,000 islands with greater than 50% of residents living in rural areas.  Creating products that can grow to scale is challenging from a distribution standpoint.  At MIMPI, there was an underlying theme that in order for products to be not only successful but also sustainable in Indonesia, they have to go beyond just being part of ‘corporate social responsibility.’  Turning microinsurance into a lucrative business isn’t the goal, but, rather, responsibly developing products and finding effective distribution strategies that a business can sustainably incorporate into its product line.  Organizations interested in developing insurance products for the poor should start thinking long-term even if the upfront costs of development and implementation seem daunting.  Of the estimated 77 million people being targeted for ‘microinsurance’, fewer than 5 million are active MFI borrowers.  This proves the limitation of using microfinance organizations as a prominent distribution method.

Developing appropriate products:
Regularly when companies enter a new market, they try to leverage off of products or ideas that worked well in other locations in which they operate.  As I mentioned previously, Indonesia is a diverse country spread across 17,000 islands and a “one size fits all” strategy could prove to be problematic.  It’s especially important to listen to the consumers and ask what they want in addition to providing what insurance companies think they need.  Because Indonesia is a wide-open market, more research and development needs to be done to ensure suitable products are being designed for the poor.   Many speakers reiterated the importance of pilots before rolling out any product.

Easy to understand:
In order for insurance to be successful in a developing world where financial literacy is limited, developing simple, transparent and easy to understand products is critical.   It’s also crucial to ensure consumers have a solid understanding of the product while not burying them in paperwork.  Policy information and the amount of required paperwork to be completed the consumer shouldn’t be more than one page.  Some companies are trying to consolidate information onto the size of a business card and small booklet.   In general, ensuring clients have a clear understanding of their responsibility in terms of premiums, filing claims, and benefits are extremely important.

Government & Regulation:
Currently, microinsurance in Indonesia is governed by the same laws and rules as traditional insurance because there are no current provisions to distinguish ‘micro’ from traditional.  The trend for Indonesia, similar to many emerging economies, is that they wait for the demand first before developing and establishing regulations.  As more companies have begun to enter the microinsurance stage, regulators have started to work with organizations to develop an effective framework for regulation.   Protecting consumers and developing trust are the first priorities.  The challenge associated with this is striking a balance between promoting access to insurance products while protecting the client.  In order for microinsurance to grow, regulators need to help promote rather than hinder progress with too many constraints, all the while ensuring companies are being responsible with their practices.

Claims Settlement:
Developing an efficient and effective way to settle claims, especially in a rural environment with an already low profit margin product, is challenging.  Ongoing due diligence or claims verification audits can also be both extremely expensive and inefficient in this environment.   The claims processing and settlement is the end service provided to the customer; more often than not, the client needs the payment to be settled quickly in order to reduce the impact in their lives of whatever the event may be.  Additionally, one of the best ways to market a product will be through word of mouth by customers who have had a positive experience during the settlement process.  Speakers from both the Philippines and India, representing their organizations that have been providing microinsurance for some time, have different claims settlement strategies with the same end goal. One organization has an initial payment within a few hours after the claim has been filed, with final settlement within 30 days.  The other has a 5-day commitment to settle all claims with an exception if documentation is missing from the client.  Use of mobile phones and the internet have helped facilitate these rapid transaction settlements.

Pictured with VFI's Director and Martin Hintz, Head of Microinsurance at Allianz Life, Indonesia in front of the Allianz exhibtion

Innovations:

Index Insurance:
The Global Index Insurance Facility made a presentation promoting the potential use of Index Insurance as an innovative solution in Indonesia.  Index insurance requires a great deal of upfront research before an appropriate program can be designed.  Unlike traditional insurance, it works this way: once a defined threshold or trigger point is met, the policy holder receives a payout from the insurance company without the need for assessment of individual claims or trying to estimate actual damage from an event on a per person basis.   In Indonesia, certain weather or rainfall statistics could be linked to crop production.  To try to simplify it in terms of weather index insurance, an insurance policy could be developed in which a farmer could buy protection if there isn’t ‘X’ amount of rainfall over a certain period of time, therefore resulting in a drought that would probably kill most of his crops.  The insurance company would then be responsible to pay the defined compensation to the farmer as established in the upfront agreement based on the data of their feasibility study.  Because the insurance company can easily determine through weather statistics that the rainfall has only been ‘X’ amount of centimeters over the time period specified, they do not need to go out and assess the damage to each farmer’s crops in order to determine a payout.  The farmer receives the defined amount for the claim as soon as that trigger point has been reached and they file a claim.  As you can see, the insurance company’s policy can only be as good as the upfront research and trending data used to define the policy.  (note: there is an informative article here if I’ve thoroughly confused you in my attempts to give an over-simplified breakdown of how it could be used.)

Dengue fever insurance:
In many areas of Indonesia, especially once the rainy season begins, millions of people are at risk for contracting dengue fever.  In a country where health insurance is rare, ACA has created an innovative product that is affordable to practically everyone.  It was launched last year to help Indonesians receive benefits to pay for medical bills if diagnosed with dengue fever.  There are a couple of options ranging from premiums of 10,000Rp to 50,000Rp (around $1.10-$5.60USD) with benefits of 1,000,000Rp to 2,000,000Rp (around $110-$220USD). It can be purchased at an ACA branch or through agents including at the Post Office, supermarket chains and convenience stores.  The consumer purchases a credit-card sized policy and small information booklet, and then can activate it through their mobile phone.  ACA has designed the claims process to be as simple as possible; the client can call the ACA 24-hour Hotline or send SMS.  All they then need to do is send three documents: certificate from doctor stating the insurance participant was diagnosed with dengue fever, the lab results of blood test, and evidence of identity such as copy of ID card.

Mobile Phone Technology:
Mobile phone subscription has rapidly increased over the past five years and estimates indicate that there are around 120 million mobile phone customers (and rising) in Indonesia.  Leveraging the usage of mobile phones will be extremely useful in increasing efficiency of microinsurance processes.  There were two ways highlighted at MIMPI regarding its use.

1) Use of Mobile Phones for subscription & claims:
Similar with ACA’s Dengue Fever Insurance, Allianz is selling accidental death and dismemberment policies in Alfamart (Indonesian supermarket chain).  For 25,000Rp (around $2.80 USD), the buyer receives a one-year insurance policy that pays 25,000,000Rp (around $2,800 USD) in the event of death or a certain percentage for a body part dismemberment.  Allianz was providing examples at the event so I snagged one to test out.  I gave it to one of my coworkers at VisionFund Indonesia to try (see photo below).  All he had to do was send a text message including his name, Indonesian ID #, birthdate, and number on the Insurance card (scratch off).  Within 3 minutes, Allianz texted him confirming that his policy would be activated within 24 hours.  If he, or a family member, need to file a claim they call a 24-hour support number for assistance.

Activiating the accidental death and dismemberment policy

2) Use of Mobile Phones for distribution of insurance:
Allianz worked with mStars in the development of the ‘Vox Hati’, due to begin sales in the upcoming months.  The Vox Hati is targeted at pulsa (prepaid mobile phone minutes) sellers in rural areas.  With the purchase of the kit, the pulsa seller receives a smartphone, mobile banking service application, Allianz Tamadera Insurance application, tools for pulsa sales through the phone, and other features.  The mobile phone technology will help distribute the product and facilitate premium payments for the customers who want to sign up for Tamadera.

Leveraging already established RT-RW groups for distribution:
Anna Agus, a lecturer and researcher at University of Indonesia, suggested the potential use of the already established ‘RT-RW’ networks as distribution channels in Indonesia.  RTs are neighborhood group structures that are made up of half-a-dozen to forty or fifty houses.  Then an RW is comprised of multiple RTs.  As these groups are already established, often with monthly meetings, the leader could be trained then paid some incentive to distribute and sell microinsurance policies to the community.  At present the RT system is sometimes used for neighborhoods to pay for trash collection, security, and Indonesian Identification card registration at birth.  This would reduce the mistrust of the members in the insurance companies because they’d be working through an intermediary.

Hopefully I’ve been able to provide some insights into both the present and future of microinsurance in Indonesia.  Financial services such as microloans, insurance, or savings options are an important part of helping poor families rise above the poverty line or to help keep those hovering above it from dipping below. Though I probably won’t be around to attend next year’s microinsurance marketplace, I hope that there is evidence that progress has been made through innovative products and increased access to financial services to those who need them most.

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Laurie Young is a Kiva Fellow (KF16) working with VisionFund Indonesia in Jakarta.  If you would like to learn more about VisionFund Indonesia, please visit their partner page.  You can also support them by joining the lending team for VisionFund Indonesia. Former posts written by Laurie about her experiences in Jakarta and with VisionFund Indonesia can be found at:

New City, New Field Partner: Settling into the “Big Durian” (Part 1 of 2)
New City, New Field Partner: Getting to know VisionFund Indonesia (Part 2 of 2)
Meeting Karsinah: Maximizing my Social Return on Investment
Remembering Rizky: VisionFund Indonesia Loses One of Their Own
Microinsurance in Indonesia: What are the Options for Kiva Borrowers?

According to the World Bank of Indonesia, more than 50% of Indonesians live on less than $2 US per day/per person and more than 80% live on less than $4 US per day/per person.  In addition to this, they estimate that greater than one-third of households don’t have access to any formal financial services and microinsurance in the market is negligible.   To put this in perspective, the population of Indonesia is estimated at around 245 million and, “in Indonesia today, about one third of the population, or about 77 million people have no financial protection or savings cushion.”

Typical VisionFund Indonesia (VFI) borrowers on their first few loan cycles earn less than $2.50 US per day based on Social Performance Indicators tracked by VFI.  So what type of access do VFI Kiva borrowers have to microinsurance in Indonesia?  Additionally, what is being done to improve the marketplace as a whole in order to increase access to insurance for the poor?  I will try to answer these two questions in this two-part blog.  Below, I will focus on the present products being offered by VFI.  Next week, after having attended the First Microinsurance Marketplace in Indonesia, I hope to provide further insight into the current challenges facing providers as well as innovations and developments that are evolving in the microinsurance marketplace to help improve the supply of financial services products in Indonesia.

Presentation by Allianz to VFI at the Annual Evaluation Meeting in September

Payung Keluarga (Mandatory Life Insurance)

A VisionFund Indonesia borrower is required to obtain a basic life insurance policy, also known in the market as a ‘Credit Life’ policy.  VFI has partnered with Allianz Indonesia to provide this service for the cost to clients of .1% of the loan amount per month. The coverage includes 1) twice the loan disbursement value will be paid to the families of the deceased borrower and 2) the amount of the outstanding balance will be paid to VisionFund Indonesia to cover the remaining debt in the event of death.  To put it in monetary terms, if a borrower takes a 6 month loan of 1,000,000Rp (equivalent of around $115 USD) they receive this life insurance policy for the 6 months at a total premium of 6,000Rp, or the equivalent of about 70 cents. If, for example, halfway through the loan repayments the borrower tragically pass away; then their family would receive 2,000,000Rp and VFI would receive 500,000Rp, which is the remaining unpaid principal balance of the loan.  The premium is the same regardless of age for anyone between 17 and 60.

One of Allianz’s three goals for their microinsurance activities is to combine corporate social responsibility with a business opportunity.   Allianz partners with over 50 MFIs in Indonesia to offer this product, or variations of it.  They began offering microinsurance to low-income households in 2006 after a study they completed in cooperation with GTZ (German Technical Cooperation) and UNDP (United Nations Development Program) revealed that there was a huge market of Indonesians without both life insurance and access to obtaining life insurance.  At that time, the results of their study estimated that only about 25 million of 238 million Indonesians had life insurance coverage.  By partnering with MFIs like VisionFund Indonesia, Allianz can keep their administrative costs very low since the Loan Officers already meet with borrowers for loan paperwork and, at VFI, this insurance coverage has been incorporated into the normal routine.

Kiva borrowers filling out the Tamadera microinsurance paperwork

Tamadera (Optional Insurance)

The second microinsurance/savings hybrid option, “Tamadera”, has been offered to VFI clients since November of 2010.  Allianz is currently piloting this product with both VisionFund Indonesia and m-STARS.  m-STARS is a unique organization because it originally became “the first company to offer high security compliant mobile banking in Indonesia” in 1999. They are now working with Allianz “to jointly develop micro-insurance products that answer Indonesian rural community needs for micro finance access to increase their living standard and create an economic independent rural community” by allowing the clients to use their mobile phone technology to facilitate more convenient insurance premium payments.  More to come on this technology in my next blog.  VisionFund Indonesia uses the already-scheduled loan repayment collections as a means to facilitate easy premium payments for their borrowers who have joined the Tamadera program.  Rather than making clients pay premiums weekly, they can make payments at times when the loan officer is already visiting them for reasons related to their loan (as long as this schedule wouldn’t make their Tamadera payments more than two weeks delinquent because they could then lose their coverage).

The way Tamadera works is that the client should make weekly premium payments of 10,000Rp (about $1.17) for 50 weeks of the year for five consecutive years.  If at any point after they’ve begun Tamadera, they die or suffer from one of the following five critical illnesses, they receive a payment of 2,500,000Rp (around $290 USD).

1. Cancer
2. Stroke
3. Heart attack
4. Kidney failure
5. Major burns

If at the end of the five year insurance term, they have not died or incurred one of the illnesses noted above, clients receive all 2,500,000Rp that they have paid in. This tool is also useful to help educate the importance of savings to borrowers.   Any VFI client ages 17-50 can join and there are no administrative fees or medical checkups needed.  So, if you are doing the math in your head, you realize that there is no apparent income generated by Allianz to cover the costs from this because every rupiah paid in gets paid back to the client at the end of the five years.  Because there is no interest paid to the clients on the ‘savings’, Allianz is able to use this cash to generate some income.  You could look at it from the perspective that the clients are foregoing interest in return for insurance coverage.  Still, at such a small scale currently, this is not enough to cover Allianz’s costs and payments in case of payouts for illness or death.  Currently the Ford Foundation is supporting the Tamadera program with a development grant. The International Labour Organization also just signed on to also provide support by awarding the program a Microinsurance Innovation Grant.

In case you may be wondering why a client would either find this product beneficial or why they would choose not to join, the biggest issue that VFI has seen and heard from borrowers about Tamadera relates to the five-year term.  Five years is often too long for borrowers to be able to commit to.  Note that clients with Tamadera policies are not committed to maintaining loans for the next five years with VFI in order to stay with the program.  They can continue coverage regardless of if they continue to borrow.  If the client wants to withdraw their money early and terminate their contract, it is subject to a 15% penalty.  However, despite this drawback, some clients like having the option of the insurance/savings because it provides supplementary coverage for diseases in addition to death.  Additionally, Indonesian banks with which they may have accounts often charge a minimum 7,500Rp administration fee per month.

Business Development Officer (and Kiva Coordinator), Valentine, helping answer questions about the Tamadera program.

Until last week, none of the Kiva clients had opted in for the Tamadera program.  However, during a loan disbursement I attended along with Yoga Prasetyo, Head of Emerging Consumer Business at Allianz, members of two groups have begun the process by filling out the paperwork. If they choose to continue by making their first weekly payments, they could become the first Kiva borrowers with Tamadera. When I spoke with them, some were hesitant because of the five-year commitment while others appreciated having a way to be protected from illness and have an option for savings that was free of fees.  Only time will tell how effective this program will be, but years of research and work have already been invested in this product; hopefully it can be successful and help borrowers with tragic life events such as in the next story.

How Tamadera and Payung Kaluarga have already made a difference:

Microinsurance products can help decrease the risk that a death or illness in the family will perpetuate their poverty.  In February of 2011, one of VFI’s clients tragically passed away from a heart attack.  Sumaiti was a mother of five.  She originally had taken a loan for her business selling Bakmi (Indonesian soup with noodles and meatballs).  She was one of the first VFI clients who had chosen to join the Tamadera program.  Her family received the payment from Allianz for both the Tamedara and Payung Kaluarga. Because of this money, her children had funds to pay school fees and could continue with their education for the time being.  It’s programs like these and the work of Allianz and VisionFund that the life of this family was made a little bit easier in the wake of such a tragedy.

Tamadera check used in presentation to family of Sumiati

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Laurie Young is a Kiva Fellow (KF16) working with VisionFund Indonesia in Jakarta.  If you would like to learn more about VisionFund Indonesia, please visit their partner page.  You can also support them by joining the lending team for VisionFund Indonesia. Former posts written by Laurie about her experiences in Jakarta and VisionFund Indonesia can be found at:

New City, New Field Partner: Settling into the “Big Durian” (Part 1 of 2)
New City, New Field Partner: Getting to know VisionFund Indonesia (Part 2 of 2)
Meeting Karsinah: Maximizing my Social Return on Investment
Remembering Rizky: VisionFund Indonesia Loses One of Their Own

Students from Fundación Paraguaya's financially self-sufficient San Francisco Agricultural School sell their products in Asunción's weekly farmer's market

This week’s Fellows Blog is armed with stories from the field: stories of the uncertain world borrowers live in, and how they (and we) cope with it. We’ve learned that everyone gets tired running a 5K in Paraguay, but for a good enough cause, we can will our legs to power through it. That everyone gets scared during an afternoon earthquake in Peru, but even so, borrowers, coworkers, and Field Partners will lend a hand to anyone that needs it. That everyone gets hungry, but there are no shortage of Kiva borrowers in Peru who are ready and willing to whip up some lunch. That everyone gets sick, but there are openhanded Kiva Field Partners in Ecuador trying to extend financial support to those who might not get better anytime soon. And sadly, we’ve had to learn that for all of our strengths and fortitude, no one is impervious to the sting of death. It affects everyone that plays a part of Kiva’s story, but those left behind can honored these individuals by persevering all the more.

“Fundación Paraguaya al Mundo”: 5K to Tanzania
Country: Paraguay / Fellow: Alba Castillo, KF16

Run stride by stride with Alba in Fundación Paraguaya’s 5K through financially self-sufficient and award-winning San Francisco Agricultural School all the way (figuratively, at least) to FP’s sister institution Teach a Man to Fish’s 25 rural and semi-rural schools in Tanzania.

Earthquake! (and Disaster Mitigation through Microfinance)
Country: Peru/ Fellow: Kate Bennett, KF15 & KF16

Though the earth beneath Caja Señor de Luren’s feet may be shaky, Caja’s clients are solid footing due to the services that microfinance institutions can offer in times of uncertainty.

Visiting an HIV-Clinic in Guayaquil (Part I)
Country: Ecuador / Fellow: Emmanuel M. von Arx, KF16

Emmanuel visits an HIV+ clinic with Banco D-MIRO clients, who though facing an extremely difficult future, are using microloans to take a little more control over their prospects.

Remembering Rizky: VisionFund Indonesia Loses One of Their Own
Country: Indonesia/ Fellow: Laurie Young, KF16

In this poignant post from Kiva Fellow Laurie Young in Indonesia, VisionFund and Laurie remember Loan Officer Rizky, and we’re reminded of the sacrifices that  every loan officer make daily for their work and their clients.

If It Is Thursday, It Must Be Sakarya + What is Bohça?
Country: Turkey / Fellow: Kim Strathearn, KF16

For those of you unfamiliar with both of these terms, look no further. Though, in Sakayra, Turkey the Bohça trade is much more familiar, it is by no means less engrossing to its enthusiastic participants.

Ica’s Next Top Chef
Country: Peru / Fellow: Kate Bennett, KF15 & KF16

What do two Kiva clients, family matriarchs, and the name María Victoria have in common? A tendency to make delicious food, and to repay one’s loans on time.

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Expanding the Reach of Microfinance, Downsizing Development + Why We Kiva
Kiva-style Microfinance, Reggaeton + a Journey though the Commercial Jungle
Loan Use, Agriculture Loans + Stuff Kiva Fellows Like
Starting Capital, Development Levels + Adventurous Borrower Visits
Going Pilot to Active, Meeting Borrowers + Technology and Social Performance

*      *       *

Plus more on-the-ground photos from the past week:

By Kim Strathearn, KF16, Turkey

Rest in peace, Rizky. By Laurie Young, KF16, VisionFund Indonesia

By Kate Bennett, KF16, Peru

Monday, October 31^st marked the end of Rizky’s three-month probationary period as a loan officer in VisionFund Indonesia’s (VFI) Cilincing office.  This means on November 1st he would have become an employee of VFI with full benefits.  Sadly, he was not able to celebrate this milestone because on the evening of Friday, October 28^th, he tragically passed away in a traffic accident while riding home on his motorbike from a soccer game with friends.   He was 20 years old.

Rizky joking with his fellow coworkers in the Cilincing branch office. Photo courtesy of Branch Manager, Pak Jacko.

Coworkers and his family describe him as a caring young man whose joking and fun loving attitude made you realize that he had a passion for his faith, his community, and his family.  Rizky still lived at home with his parents and siblings, and he was the main provider for the family.  Every pay day he would buy sweets on the way home to give to the neighborhood children and then hand the remaining amount to his mother to pay for food and other daily needs of the family.  His mother has a small business baking cakes and cookies, but it was Rizky who used to help her sometimes with the baking and also help deliver the treats for sale.   His parents were surprised at Rizky’s devotion to his Christian faith when two separate church organizations took part in prayer for Rizky and his family on the night of the accident.  Apparently Rizky had decided to join two different parishes without either knowing.

Although I didn’t get to know Rizky beyond brief encounters during my visits to the branch office, I felt his story should be shared with you.   Often times, as Kiva lenders, we feel such a connection to the borrowers we choose to lend to through the photos and stories that we neglect to think about all of the people who spend their days traveling by motorbike, foot, or public buses around places like Jakarta to make Kiva a reality.  Without the tireless work of the Loan Officers and Kiva Coordinators at our Field Partners, it’s hard to imagine how Kiva would have become such a successful and sustainable venture.    Based on the modest salary, loan officers don’t typically take this job just for the paycheck.  They become loan officers because they enjoy being in the field and helping others less fortunate.  Though Rizky didn’t pass away while traveling specifically for his job, his death highlights the risks that many Indonesians face each day because motorbikes are their only economical source of personal transportation.  According to a 2009 article in the Jakarta Post, traffic accidents are the third largest killer in Indonesia after heart attack and stroke.  It’s estimated that 1,000 people die each in year in Jakarta alone; another source cites that a majority of these are drivers of motorbikes.  All loan officers here spend a majority of their days riding motorbikes to visit clients.

Each hired VFI employee starts off with a probationary period which means they aren’t able to receive employment benefits and 100% salary until their first three months are completed.  Therefore, unless they purchase supplemental insurance, which is rare, they are in the category of around the 90% of Indonesians without any sort of insurance coverage.   With Rizky’s untimely death, his family won’t receive life insurance benefits to help cover funeral costs or provide additional financial support.  His story highlights the overall problem of a lack of access to financial service products in Indonesia for those who are not in the middle to upper-class, products such as insurance (this is something I’ve been researching and will be posting about in the upcoming weeks if you are interested).  In situations like this, where he was currently the breadwinner, the family will surely feel not only the emotional strain, but also a huge financial shock from this devastating event.

VisionFund Family and others at the funeral. Photo courtesy of Branch Manager, Pak Jacko.

Many members from VFI attended funeral services on Saturday to offer condolences to the family.  The head office is also providing financial assistance to help ease the burden for the family during this tragic time because they know the family will not be receiving any insurance payments.  I was invited to visit the family a few days after the accident with some of the staff from the head office and the branch manager to bring monetary support and to pay our respects.  Though my poor comprehension of Bahasa limited my understanding the words of the family, the image of Rizky’s father breaking down at one point and hugging his son’s batik shirt amidst short bursts of sobs needed no translation.  There sat a heartbroken family trying only to make it through the day.  Rizky’s mother appeared to be strong in the wake of this tragedy, trying to hold the family together.  Throughout our visit she was the first to share moments of laughter and tearful smiles as family members and the branch manager recounted stories about Rizky’s ability to bring joy to others’ lives.

As we sat in the main room of their home I couldn’t help but look around; it appeared that most of the construction had never been finished. The walls were merely cinder blocks cemented together and the floor was gravel left from the construction.  I peered towards the back of the house and saw that there seemed to be one or two bedrooms that had solid flooring and smooth cement partially covering the cinder block walls.  Knowing that they also live in the northern part of Jakarta (which is built on a floodplain, parts of which are a few meters below sea level) made me concerned as the impending rainy season approaches. Already, on the walk through the narrow road to the house, I could see that the stagnant, open sewers lining both sides of the street were only a few centimeters from overflowing.  One heavy, long rain and the street, and most likely their house, would be flooded.

So what will become of the family?  Right now, the oldest brother who has a wife and children of his own will try to help contribute financially, but this will be difficult on his meager salary.  Rizky’s mother will continue baking to try and provide supplemental income to help as well.  They, like many in Jakarta’s outer neighborhoods, can only face one day at a time and pray that there is enough food for the table, fees to pay for schooling, and good health for all of their family.

Through your loans to VFI borrowers, you have supported an inspiring organization that has made the difference in the lives of countless borrowers; today that also includes a family that is still struggling with the question, “Why Rizky?”

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Laurie Young is a Kiva Fellow (KF16) working with VisionFund Indonesia in Jakarta.  If you would like to learn more about VisionFund Indonesia, please visit their partner page.  You can also support them by joining the lending team for VisionFund Indonesia. Former posts written by Laurie about her experiences in Jakarta and VisionFund Indonesia can be found at:

New City, New Field Partner: Settling into the “Big Durian” (Part 1 of 2)
New City, New Field Partner: Getting to know VisionFund Indonesia (Part 2 of 2)
Meeting Karsinah: Maximizing my Social Return on Investment

Karsinah

Social Return: 

In mid-July when I found out I was going to be working with VisionFund Indonesia (VFI), I began stalking kiva.org waiting for VFI borrowers to appear so I could show my support by lending.   I was really excited to start ‘investing’ in the people I’d be working with!  You’ll notice that because VFI is in Pilot phase with a low funding limit, they currently only have around 10 loans posting each month.

I looked carefully through the VFI groups that were available and tried to find businesses that interested me or personal stories that inspired me.  As a Kiva lender, I don’t actually receive monetary interest payments from the microloans that I make. Instead, I receive what is often referred to as a ‘social return.’  To me, this social return typically comes in 3 forms:

1)     Borrower Profiles- includes the stories and photo that inspire me to lend to a certain borrower.   It’s what gives me that ‘personal’ connection to the borrowers and enables me to imagine how the loan will make a difference in their lives.

2)     Journals- updates from the borrowers, typically towards the end of their loan, that lets me know how the loan has impacted their lives and their hopes for the future. I can use journals to compare the impact I had imagined the loan would make in their lives to the impact that actually transpired.

3)     Repayment Day- when I have enough money back in my account from repayments to re-lend to another Kiva borrower! This also reassures me that my borrowers’ businesses must be at least somewhat successful because they are making timely repayments.

The combination of these three comprise the social return of my portfolio and the reasons I (as well as many other Kiva lenders) keep coming back to make additional loans.  They are what make me feel good about helping someone across the globe have the opportunity to help lift themselves and their families out of poverty and/or improve their lives through microloans.  They are why I Kiva.   I hadn’t imagined that I would be able to experience  a 4^th component to my Social Return: actually meeting the borrowers to whom I had lent money.  I wondered how this 4^th component would impact my lending practices in the future.

For you mathematicians out there, what’s the probability that out of the 43 VFI borrowers that were on Kiva.org at the time a random sample of 10 borrowers was drawn for visits that I would need to make, one of the selections would be one of the three groups I had lent to?  Well, obviously good enough that it happened! Imagine my excitement when I received my Borrower Verification (BV) sample and saw one of the groups in my Kiva portfolio! (For more about what BV is, see a great post here).

From the back of a motor bike during the BV journey.

Meeting Karsinah:

It was my first day performing my BV and I was excited, after being in Indonesia for over 2 weeks with VFI, to finally get to meet with Kiva borrowers.  What I was mostly thrilled (and a little nervous) about was meeting the group I had lent to, Manggar Baru Group, and their group leader Karsinah.  I thought back to what went through my mind when I was deciding which VFI group to lend to.  What I loved about her story was that this was her first loan with VFI.  I liked knowing that I could be a part of her first experience in the world of microfinance.

Three of the five group members welcomed me into a modest home.  Often, the borrowers are embarrassed about their homes and borrow a nicer one from their neighbors when they have a group meeting or know the loan officer is coming to collect repayments.  They were a little apprehensive at first as to why the foreigner was here for a visit, but once the BV was explained by the loan officer they relaxed.  They showed signs of excitement when I showed them a screenshot of their profile that was on Kiva.org and all of the lenders from around the world that had contributed to their loan.  When I pointed out my picture they smiled, chuckled, and thanked me for my share in their loan.

Discussing the loan with group members.

Upon initially taking out the loan, Karsinah had specified that the loan would be used to start a business selling side-dishes.  Indonesian side-dishes include snacks such as krupuk (Indonesian chips), peanuts, fried bananas, fried tofu, fried tempeh, etc.   As part of the BV process, I spoke with Karsinah about what she had actually used her Kiva loan for.   She responded with that it was used to pay school fees and for uniforms for her children, and for inventory for her side-dish business.  As Chris discussed  in his post Loan Use: Not As Simple As You Might Think, these loans often aren’t used to solely pay for the business but, “all of the money [a] family receives, including Kiva funding, goes into a single pool from which they continually draw to improve their lives in myriad ways.”  Karsinah’s loan began at the time of year that school was beginning and the first month of school fees were due.  The family needed money for those and uniforms so their children could attend. For me, as long as the loan is being used to improve the borrower’s life in a sustainable way, it is less important if she spent 100% of the funds on her stated loan use in her borrower profile (as long as the repayments are honored).  With the help of this loan, two children are learning in the classroom as I write this.

However, there are risks relating to someone not using their entire loan to invest in their business such as not enough capital being invested in the business to generate sufficient operating profits to pay back the principal and interest of the loan.  In her case it helps that her husband is employed as a factory worker and her business isn’t the sole income producing venture.   And looking at my account on Kiva.org, her repayments are on time thus far so that isn’t something I’m staying awake at night worrying about. As one of her lenders, I’m not the least bit upset that all 1,000,000 Rupiahs (about $110 USD) weren’t invested in her side-dish business.    The fact that I can say I haven’t lost money in this ‘investment’ and reaped immense social benefits in the form of stories, smiles, and laughter is more than I have to say for my brokerage account these days…

The Result:

This visit was the ultimate social return on investment and I wish all Kiva lenders could share in the joy I felt hearing about the families and businesses of the women in this group! And the answer to my question earlier of how this would impact my lending in the future? It solidified my desire to continue making loans on Kiva indefinitely.

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Laurie Young is a Kiva Fellow (KF16) working with VisionFund Indonesia in Jakarta.  If you would like to learn more about VisionFund Indonesia, please visit their partner page.  You can also support them by joining the lending team for VisionFund Indonesia. Former posts written by Laurie about her experiences in Jakarta and VisionFund Indonesia can be found at:

New City, New Field Partner: Settling into the “Big Durian” (Part 1 of 2)

New City, New Field Partner: Getting to know VisionFund Indonesia (Part 2 of 2)

We are Kiva Fellows. This is the stuff we like. Here is an insider (often critical, or satirical but always true!) view of what it means to be a Kiva Fellow and promote access to financial services around the world. From alpaca fur to FSSs to ziplock bags, these are the things we like and thrive on.

#1 Being the first foreign person that somebody has ever seen in their life

Dave Weber, KF16, Cambodia

Few life experiences will measure up to the one where a Kiva Fellow is   told that he or she is ‘the first foreigner that somebody has ever seen  in their life’ (TFFPTSHESITL).  This experience often comes  with having ones hair and skin touched, which people in our home countries don’t find nearly as interesting.  KFs know that their image will forever be bored into the mind of the Latino/African/Asian/MidEastern borrower since we assume they ‘never forget their first one.’
A Kiva Fellow will react to being TFFPTSHESITL in several ways.  They will utilize social media  to get the word out to 500 people in their friend list and possibly even engage the Stories from the Field blog to get the message out to potentially hundreds of thousands.  It will also be the first story they tell supporters and people back home.  Kiva Fellows will also often use the phrase, “I’m pretty sure I was the first foreign person to ever go there” when referring to locations, even if they’re talking about Machu Picchu or Angkor Wat or the running of the bulls or the Washington Monument.

Now if you’ll excuse me, I’m off to spend my holiday evening at a Cambodian air conditioned movie theater which I’m certain no foreign person has been to before and I will be TFFPTSHESITL to at least half of the moviegoers there to engage in the revelry entitled Cowboys vs. Aliens.  

#2 Alpaca Fur Clothing

Eric Rindal, KF16, Bolivia

It is no secret amongst the vendors in the Andean regions of South America that Kiva Fellows are suckers for tightly knit alpaca fur scarves, gloves, sweaters, or caps. Maybe Fellows have this presumption that everyone is doing it…even the locals (I swear, dude). However, that is a bold conclusion and is a slippery slope to justifying the egregious “natural blue” alpaca fur sweater adorned with kitschy dancing alpacas circumnavigating the dangly tasseled periphery!

All that to be said, the Kiva Fellow living in La Paz (who is freezing!) finds it imperative to wear his alpaca fur scarf, cap, and fingerless gloves (which allow him to type his Borrower Verification notes) all the time. But, let it be known, this only occurs in the privacy of a locked MFI office or while home alone!

#3 Eating The Profits

Jim Burke, KF16, Nicaragua

Kiva Fellows love eating borrower’s profits. The Kiva Fellow will shamelessly track down the Kiva borrowers that sell tasty things like street food or pineapples. Undoubtedly the Fellow will return home with bags of (free) fruit or a belly full of street chicken. Understanding their clients is important to the fellow and clearly there is no better way to do this than eat the fruits of their labor. The fellow is culturally sensitive and understands that offering to pay is offensive to most borrowers. The extreme generosity is not something to be taken advantage of but the free nacatamale did MAKE the experience collecting a journal. If its fried crickets, boa, fresh bread, anticuchos, whatever we are trying it! If we can taste a loan we know its real.

#4 Our FSSs (Field Support Specialists):

Laurie Young, KF16, Indonesia

Let’s face it, Kiva Fellows secretly (well I guess it’s not a secret anymore) wish they could have the job of their FSS.  Honestly, who wouldn’t want to live abroad and travel to/work with microfinance organizations in the countries which Kiva operates? Sign me up!  What makes us ‘like’ them even more is that they are our ‘Yoda’ while in the field.  They are the one’s that setup our workplans (list of tasks we must complete as fellows) and provide guidance for helping us complete them.  We were fortunate to spend a week with them at KF16 training in San Francisco this summer and got to see both their fun and intellectual sides!  They are crucial in the success of Kiva and deserve immense amounts of credit and respect for the hard work they put in to maintain positive relationships with Kiva’s Field Partners!

#5 Responding more promptly to the local vocabulary for “white person” than his/her actual name

Allison Moomey, KF16, Burkina Faso

Whether it’s blanche (French), nassara (Moore), barang (Khmer), mzungu (Swahili), chelito (C. Am Spanish) or any other local dialect, it now takes just a single word to get our attention.

“Wait… you mean I don’t fit in?”

#6 Being Mistaken for a Local

Sandra Pina, KF16, Honduras

Kiva Fellows (“KFs”) work tirelessly to adapt to local culture. KFs are renown for their commitment and will go to extreme lengths to assimilate. Sure, under normal circumstances a KF would likely decline the glass of banana-flavored soda with breakfast, but when in the field, they embrace all character building moments. This extends to many facets of daily life including but not limited to, clothing, hair, cuisine, sports, slang, hygiene, leisure activities, driving and partying habits. The mission is a noble one so it rightly justifies spending a Saturday night at T.G.I. Friday’s, drinking instant coffee, wearing dress pants in 90 degree heat, or watching a nightly dating game-show in order to partake in the morning gab session with office-mates over a mug of instant coffee. Yes, the lengths can be somewhat extreme, but well worth the sacrifices. KFs  live for the surprise and confusion that color the faces of locales when they reply, “Nope, actually I’m not from here, I’m from X.” Oh yessss, chalk one up for Team Kiva!

But in all seriousness, there are some hurdles that simply can’t be jumped no matter a KF’s commitment  level or the duration in country. Dance and language ability, vegetarianism, and ancestry have been known to hinder efforts. But, as on would expect, KFs soldier on. Can you spot the fellow?

#7 Ziploc Bags

Tejal Desai, KF16, Sierra Leon

Freak 10-minute downpours and a broken umbrella. Dusty winds. Ants.Mud. These bad boys can sustain it all. In Sierra Leone, Ziploc bags have been essential in protecting KF necessities when in the office and out in the field: flash drives, cameras, usb modem, extra batteries, cell phone, notebooks, directions scribbled on scraps of paper. Not to mention, they are master guards at protecting biscuits and others snacks from the interests of Sierra Leone’s ant kingdoms and families of spiders. It’s clear that Ziploc is more than just your average sandwich bag.

If liking Ziploc bags is wrong, we don’t want to be right!

#8 Planes, Trains and Automobiles

DJ Forza, KF16, Georgia

Kiva Fellows love to talk about their adventures on new and interesting forms of transportation. We especially like it when, going on a borrower verification to a remote area, we get to take two or three various modes of transport in one day; walk 20 minutes to the microbus, ride a Poda-Poda for five hours, hop on the back of a moto for 30 minutes, take ferry for 45 minute crossing, cling for life to a motorcycle driver, chill in a 4×4…all those bumpy, dusty and crowded hours spent planning our next blog post to share the fun and exciting ways we get around our new country! Even hailing a taxi is opportunity for another amazing Kiva adventure! As for me, I’m off on a marshrutka for a six hour journey to Ninotsminda near the Armenian border…where, hopefully, I will need to ride in the back of a donkey cart the last mile or so.

#9 Finding an Upscale Cafe to Escape To

Claire Markham, KF16, Kenya

Kiva Fellows often fully adapt to the local cuisine and eat all of the traditional staple foods throughout the week. However, sometimes, it is necessary to escape to that happy place with North American foods to indulge in. For me, this upscale haven is Art Caffe in Nairobi where I can get reliable wifi while I enjoy a chai latte and chocolate molten lava cake. I recognize I am paying ten times as much as I would for a more traditional Kenyan experience, but once in a while, this luxurious escape is exactly what I need to treat myself after a productive week.

Be a part of loans that change lives. Apply to be a Kiva Fellow!

Jim Burke is a Kiva Fellow working with AFODENIC in Nicaragua. When not diligently working on his Kiva deliverables he kills time reading the blog SEAWL. To learn more about Kiva borrowers around the world please visit Kiva.org.

Indonesia (by Laurie Young)

This week on the Kiva fellows blog, start your journey in Indonesia and read about some early lessons of a Kiva fellow. Then continue on to the Americas to take part in El Salvador’s independence day celebrations, find out how to start a business with 26 cents in Honduras, learn about the different levels of development of Bolivia and Sierra Leone, and finally go on an adventurous borrower visit in Nicaragua.

New City, New Field Partner: Getting to know VisionFund Indonesia (Part 2 of 2)
Country: Indonesia / Fellow: Laurie Young (KF16)
Laurie shares some of the lessons she has learned at Vision Fund Indonesia.

I love saying ‘cachiporras’
Country: El Salvador / Fellow: Andrea Ramirez (KF16)
Andrea shares some impressions of El Salvador’s independence day.

WWYD with 5 Lempiras?
Country: Honduras / Fellow: Sandra Pina (KF16)
Sandra demonstrates that with 5 lempiras (26 cents), it is possible to start a business.

Same Rung of the Ladder?
Country: Bolivia / Fellow: Eric Rindal (KF16)
Eric compares the level of development in the two countries he has visited as a Kiva fellow: Sierra Leone and Bolivia.

Borrower Verification–Part 1 (Locked Out)
Country: Nicaragua / Fellow: Jason Jones (KF16)
Jason shares one of his more adventurous borrower visits, when he found the client “home” but not in the general sense of the word.

Borrower Verification–Part II (Mom, I Don’t Feel So Well)
Country: Nicaragua / Fellow: Jason Jones (KF16)
Jason’s adventure continues, when he returns to the same borrower for a second visit, but this time his troubles already start on the bus.

~
Updates from the past month:
Going Pilot to Active, Meeting Borrowers + Technology and Social Performance
Costs of Kiva, Donkey Shares + the Law of Diminishing Marginal Returns
Loan Sharks, Snapshots + “the Country with a Smile”
Motorcycles, Ramadan + A Dollar a Day
Working Animals, Green Microfinance + The Ends of the Earth
~

Plus more pictures from the past week:

Indonesia (by Laurie Young)

El Salvador (by Andrea Ramirez)

Honduras (by Sandra Pina)

Bolivia (by Eric Rindal)

Nicaragua (by Jason Jones)

When we last left off in this new adventure, I hadn’t yet stepped foot into the office of my Field Partner, VisionFund Indonesia (VFI).  It’s amazing what a difference two weeks makes!  Not only have I now spent time in the office with the staff at Headquarters (HQ) and met with loan officers at two branches, I was also invited to attend the Annual Meeting for VFI near Bandung, Indonesia!  What’s a better way to get to know an organization than by spending a week attending presentations about the past, present, and future of the MFI and participate in team building activities?  Thanks to the help of the Kiva Coordinator and others who probably regretted sitting next to me during the training (because they ended up having to translate pieces of presentations from Bahasa Indonesian to English), I’ll fill you in on some of the great things I’ve learned!  Also, if you manage to make it to the end of this post, I promise to provide you with a great surprise that we could call ‘Laurie’s Justin Bieber Indonesian Karaoke debut.’

View from the bus of terraced land during drive from Jakarta to Bandung

Beautiful view during drive from Bandung into the hills to the village where the Annual Meeting was held

Lessons:

1) Background-The relationship between VFI and World Vision and how it translates to VFI’s work:

VisionFund Indonesia was initially setup to support World Vision Indonesia with the stated mission: providing financial services to empower the enterprising poor to liberate their families from poverty in the communities where World Vision works.

Using the World Vision/VisionFund 5 category economic ladder (From World Vision presentation):

World Vision works in over 40 Indonesian districts including the islands of Aceh Sumatra, Java, West Kalimantan, Sulawesi, North Maluku, West Timor, and Papua, mainly focusing support of people in categories 1 and 2.  VFI supports World Vision’s work by providing microfinance products (including credit, savings, and microinsurance) to category 3 and 4 Indonesians in districts where World Vision operates (i.e. as World Vision operates only in North and East Jakarta, VFI will only have branch offices setup in those parts servicing clients).  Currently, VFI is operating in 7 districts on Java and the long term goal is to eventually operate in all districts in which World Vision works.  The staff of VFI is now at around 80 people located in 9 branches and the HQ office.  The organization currently provides general loans (i.e. no education, agriculture, etc.) but hope to begin to make agriculture loans during the next fiscal year.  Mostly the loans are to  solidarity groups of borrowers, and currently the borrowers are about 90% female.  They also partner with an external provider to offer several microinsurance/savings products (may be a topic of a future post as I’ve found it quite interesting the more I learn!).  VFI also collaborates with Habitat for Humanity International to help build/renovate houses for their borrowers.

Branch Office Susukan I

Staff at Susukan I in front of the scheduling board which tracks collections as well as other tasks that must be performed.

2) Day 1-VFI is more than just an employer:

I had just settled into my desk after a morning of introductions and a brief presentation about VFI and World Vision when Pak Hendrik (See #3 for more about him!) walked by and casually asked me if I wanted to go to the Hospital to visit the one-year old son of a Branch Manager.

Rumah Sakit Islam Jakarta Hospital

In the spirit of embracing any and all new experiences, I jumped in the van to join.  The child had been rushed to the hospital the prior evening because he began turning blue and it was determined that he had an abnormal white blood count (if you are a medical professional and this correlation makes absolutely no sense to you, then something could’ve been lost in translation).  We arrived to Rumah Sakit Islam Jakarta Hospital and brought fruit to the family and, as a Christian organization, said a prayer for the health of the child.  It was extremely touching to be a part of this support system on my first day and I immediately realized I was working with extraordinary people who consider this job not simply a 9-5 paycheck, but rather an extended family invested in all who work there.  I’m also happy to say the adorable little boy appeared to be recovering well and they thought he’d be just fine with the proper treatment.

3) “Expand with Quality”- Growth, Growth, Growth!

The VFI Team is headed by their fearless and consistently smiling leader, Pak Hendrik (Director).    He joined VFI about 2 years ago and explained to me that at first he wasn’t sure why he left is comfortable job at a large Indonesian bank but felt that it was his time to do something more meaningful by serving poor Indonesian people.

Pak Hendrik giving awards for best loan officer and branch manager during for FY 11

In the past year he’s been able to double the portfolio of loans and open 2 new branch offices.   His goal for the future is to again double the portfolio in both dollar value and loans outstanding each fiscal year.  He is optimistic that their model of expansion will succeed and do so with quality.  What’s his secret?  Before a new branch office can open, an existing one must meet certain measures (mainly the ability to cover costs/profitability) and then some loan officers or branch staff can move to a newly opened office to help it be successful.  Only time will tell if this growth strategy is sustainable, but by speaking with Pak Hendrik you don’t sense a hint of doubt in the organization’s ability to open 2 offices on the Island of Kalimantan and another 6 on the island of Java during fiscal year ‘12.

4) Loan Officers

Do you ever wonder about the people who meet with borrowers day in and day out and witness firsthand the successes and failures of microloans?  What about the people that collect information and take photos for the borrower profiles that you see on kiva.org? Well, in VFI’s case, those are the loan officers.  The typical age range of a loan officer here is 20-25 and most haven’t finished a 4-year college degree yet.  Six of the loan officers are also former children sponsored by World Vision Indonesia which paid for there schooling starting from Kindergarten through High School.  The enthusiasm and energy of the group of over 25 men and women that I met was inspiring!  Many of them enjoy the flexibilities of the position because it enables them to work as a loan officer during the day, providing an income that can be used to pay for their University classes in the evenings.  Only the 3 best performing loan officers (of 5) from each of the branch offices were invited to the annual meeting.  You could tell how excited and proud they were when each Branch Manager was giving a presentation about the performance of the individual branches and their statistics were highlighted on the big screen as being at the top of clients served and low portfolio at risk.

Pictured with many of the loan officers and other VisionFund Indonesia Staff at the Annual Meeting

I spoke to three separate loan officers to find out how they feel about Kiva clients and the extra work involved.  One loan officer, who is currently spending evenings studying cost management at a local University, said he enjoys working with Kiva and doesn’t mind the extra work that is involved for Kiva loans because he feels that by VFI partnering with an international organization, it differentiates them from other MFIs in the area. Another loan officer, also spending evenings in University but studying English, enjoys working specifically with Kiva clients, because of Kiva, the clients are easier to collect repayments from and work with because they know they are ‘on the internet’ and want to be ‘model’ borrowers.  The final loan officer had my favorite answer.  After he takes a photo of the borrowers for the Kiva website, he returns with a copy of the photo for the borrower/group leader and enjoys the excitement and pride that the borrowers get from receiving a copy of the photo.

I hope throughout my first two posts that I have been able to inform you of one of the outstanding organizations that Kiva Partners with, the city in which they are located, and the people that constantly work to make the relationship a success!

Now as I promised, a special surprise:

One of the annual meeting evening activities was a karaoke competition.  Each branch office had to sing Justin Bieber, ‘Baby’ and another song of their choice.  To my friends and family out there who already know this is my favorite karaoke song, I promise you the song selection had already been determined prior to my arrival in Jakarta!  I would’ve included a video montage of the event but fear that would violate some copyright laws so, alas, a few photos will have to suffice.  I was, however, chosen to sing lead for the HQ office and must say I did receive much applause….or was it laughter?!

Team HQ with me singing lead

Team Surabaya

Team Susukan I

__________________

Laurie Young is a Kiva Fellow (KF16) working with VisionFund Indonesia in Jakarta.  If you would like to learn more about VisionFund Indonesia, please visit its partner page and stay tuned for part two of this series!  Laurie also just created a lending team for VisionFund Indonesia so please join her if you would like to support them and their work throughout Jakarta and Surabaya!