Personal connections: Kiva borrower, Muhammad, in Sierra Leone looking at the 38 global lenders who funded his loan (by Eric Rindal)

As the 14th class passes the baton to the 15th class, the Kiva fellows are sharing their final thoughts and first impressions. Be inspired by the personal connections Kiva creates between lenders and borrowers in Nepal and Sierra Leone. Find out how a phenomenal harvest can prevent farmers in Nicaragua from repaying their loans. Discover the creative ways of assessing credit worthiness used in Uganda and around the globe. Sample local customs and cuisine, while reading about the Day of the Child in Mexico and taking a culinary excursion in Liberia. Lastly, share the experiences of Kiva fellows across three continents in Colombia, Ghana and Ukraine.

Farewell from the Field
Country: Nepal / Fellow: Claudine Emeott (KF14)
Claudine shares a thank you note she wrote to lenders on behalf of BPV Patan borrowers in Nepal.

Kids Get Their Day
Country: Mexico / Fellow: John Farmer (KF14)
April 30th is the Day of the Child in Mexico. John takes this opportunity to shine some light on the many problems children face and how microfinance may help provide a better future for some of them.

Microlending Behind the Scenes: How MFIs Judge Credit Worthiness
Country: Uganda / Fellow: Nila Uthayakumar (KF14)
With their diverse customer base, microfinance institutions must be creative when assessing credit worthiness. Nila illustrates several methods used in individual and solidarity group lending.

Kiva Farmers: A Tale of Irony and Woe in Nicaragua
Country: Nicaragua / Fellow: Karen Gray (KF14)
How can a phenomenal harvest be detrimental to farmers? Karen explores how supply and demand affect market prices and the repayment ability of farmers.

Stretching a buck in Monrovia
Country: Liberia / Fellow: Carlos Cruz Montaño (KF14)
A dollar won’t buy you much in most developed countries, but in Liberia it gives you the chance to sample several delicious snacks. Carlos takes us on a culinary tour of Monrovia.

Along the road
Country: Ukraine / Fellow: Jacqueline Gunn (KF14)
You get out what you put in. Jacqueline shares a few of the things she has learned as a Kiva fellow in Ghana and Ukraine.

Faces: How We Connect.
Country: Sierra Leone / Fellow: Eric Rindal (KF15)
“To touch a person’s heart, you must see a person’s face.” Eric explores how pictures of borrowers and lenders make Kiva a very personal experience.

Video Blog: Interactuar – A Quite Amazing Organisation
Country: Colombia / Fellow: Nick Hamilton (KF14)
Can microloans alone be enough or are support services such as training and consultancy also needed? Nick lets his 2-part video do the talking.

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Updates from the past month:
Farewells, Mistaken Identities + Micro-Microfinance
Earth Day, Celebrations + Exceeding Expectations
Trash, Delicious Treats + Community Outreach
Cute Pigs, New Toilets + Everything is Relative
April Fools, Terrible Coffee + Getting Attached
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Plus more pictures from the past weeks:

Nepal (by Claudine Emeott)

Mexico (by John Farmer)

Uganda (by Nila Uthayakumar)

Nicaragua (by Karen Gray)

Liberia (by Carlos Cruz Montaño)

Ghana (by Jacqueline Gunn)

For the past 7 months I have been roaming the world as a Kiva fellow. I began in the lovely town of Cape Coast in the Central Region of Ghana where I spent my days in the office and my evenings and weekends on the beach. When I applied for a second fellowship, my only request was that it provided contrast to Ghana. Working in an industrial factory city in Eastern Ukraine has certainly delivered that. I arrived in Winter and it was -20 degrees Celsius outside and not much warmer inside.

A vast change

Before I started on this adventure, I had expectations about what I would learn- microfinance in action, the inner workings of Kiva. I have had so many great opportunities to learn about microfinance, but for me this experience has been so much more as well.

Here are just a few of the things I have learned as a fellow.

To say yes
I suppose being a Kiva Fellow already makes you a ‘yes’ kind of person, but being away has really made me aware of the importance of ‘yes’. I consciously made the decision to say yes a lot whilst in Ghana and the Ukraine, and doing so has led me to all sorts of interesting and fantastic places; a traditional festival where chiefs were carried through villages; hiding eggs for an Easter hunt at a Ukrainian orphanage; hitching lifts in the back of a pick up truck in the sunshine. Saying yes has taken me outside of my comfort zone but there’s something exciting about trusting your instincts and taking a leap of faith, whether that be within or outside of work.

Easter Egg hunt at Orphanage #3

Patience
I think most fellows would agree with me that moving from the working environment in London or New York into an office in West Africa or Eastern Europe is a bit of a change. It can be frustrating- it can feel like nothing is getting done and that you are peddling against a strong tide. Then I decided to start going with the flow- I slowed down my pace of life; took the time to greet each of my colleagues with a handshake every morning, talk with them for longer about how their day has been; started to walk slower rather than using the “London march” at 100mph. It has been surprisingly refreshing and things do get done, but in a different way- you just need to look from a different perspective.

English language is a great commodity
Before coming to the Ukraine, I hadn’t really thought about how valuable being able to speak English is. I have never been to a place where so little English is spoken which was a bit of a shock at first. Having being here for a while now, I have seen so many examples of people placing a lot of value on a skill which is so a part of me that I hadn’t even considered it a skill. I have had the pleasure of being able to share my Englishness with 3 local language clubs each week and although I feel a bit like a subject of a ‘show and tell’, it’s great to see people so excited about learning.

You get out what you put in
I probably knew this one before becoming a fellow, but I wanted it on my list as it is so true. Over the past 7 months I have had ebbs and flows of motivation (not many ebbs, but there have been some). I made a decision to increase my productivity on something, or say yes to something- and lo and behold I was soon back on track and having a fabulous Fellows experience. Making an effort makes a difference.

No food for lazy man- Abura, Ghana

People are generally great
I feel like I could write a whole post on this one. Since becoming a fellow I have relied on so many people for help and support and I have only been met with generosity and kind-heartedness. It started when meeting my KF13 class of fellows in training at Kiva HQ who I have relied on throughout my placements, to all the people who I have met along the way. Some people even changing their whole plans for the day to help out people in a foreign land- it has been quite humbling. When I am back in London I am going to actively seek out lost travelers to try and help them along their way.

Russian
When I was heading to Ghana in November I would never have guessed that part of my Kiva experience would be learning some Russian. Although I am very much still a beginner, every time I successfully communicate with someone I get a little buzz inside. I can now proudly say I can read the signs in the street, and with any luck I will never accidently buy cheese infused sausages again.

Drumming
I wanted to pick up some new skills on my fellowships and so when I was offered drumming lessons in Ghana, I enthusiastically said yes. I’ll be honest, I have never been a great musician, but there was something magical about learning some African rhythms and beats each week on the beach. For anyone travelling, I would recommend trying to learn something local. You might make a bit of a fool of yourself when you can’t drum in time with your teacher, but you learn a whole lot more than just one skill. Who knew that in Cape Coast drumming is banned on Wednesdays because in their not so distant history a bloody battle took place and they believe drumming raises the spirits of their ancestors?

Drummers in Cape Coast

Superstition
Talking of superstitions, it seems that both Ghana and the Ukraine have some interesting beliefs in the world of folklore. Whilst sitting with my host family one evening in Ghana, I whistled along to a TV advert- the youngest son promptly ran over and stopped me. If I continued, the spirits of the dead would surely be raised…whereas if I whistle indoors in the Ukraine, no money will come into that household. I have to be careful not to sit on the corner of a table in the Ukraine as I will never get married if I do so, and if I give someone an even number of flowers on their birthday it is bad luck (even numbers reserved only for funerals). In Ghana, I must not hit anyone with a broom as I may end up giving birth to a broom if I do so (the real purpose behind this one is to stop people using an easily accessible household object to cause harm to others).

These are just a few examples of the things I have learned as a fellow. Being a Kiva fellow is an experience that will stay with me forever. If anyone reading this blog is considering applying to become a Kiva fellow, I have one response; “Just say yes!”

Kiva Fellows love to learn about the intersection of food and business (Colombia pictured)

Let’s take a moment to vicariously consume baked goods in Colombia, coffee in Nicaragua, tomatoes in Ukraine, and a traditional meal in Nepal. Once you’re sated, you can read about the dismal state of trash collection in Guatemala, the lives of borrowers in Bolivia, what “mobile” savings really means in Indonesia, and how Kiva’s partner MFIs all around the world are providing life-enhancing services and engaging with the community in meaningful ways.

Nicaraguan Coffee Odyssey – Lend To Growers Now!
Country: Nicaragua / Fellow: Karen Gray (KF14)
Karen’s commitment to food in Nicaragua continues with updates on the coffee industry. She visits a local coffee grower, a coffee cooperative, and a coffee fair, where she enjoys a chilled banana, chocolate, and espresso rum concoction. Yum!

What women want in Bolivia
Country: Bolivia / Fellow: Clara Vreeken (KF14)
Clara introduces us to four borrowers in La Paz: Francisca with her macramé-embellished blankets, Rosa with her beautiful hand-made shoes, Carlos the cab driver, and Wilma who is struggling to pay back her loan.

Conflict Generated Displacement and Microfinance: Helping People Build a New Life
Country: Colombia / Fellow: John Gwillim (KF14)
John profiles Merys, a local Kiva client who, like many Colombians, was displaced by violence and had to rebuild her life from scratch. With the support of John’s partner MFI and others, Merys now runs a successful bakery and plans to expand her business.

[Video blog] Glory to the tomato!
Country: Ukraine / Fellow: Jacqueline Gunn (KF14)
Jacqueline visits a hub of Ukrainian agriculture and learns about the benefits of greenhouses, the challenges of fluctuating prices, and the impact of agricultural loans offered by her partner MFI to entrepreneurs in the region.

A Different Spin on “Mobile Savings”
Country: Indonesia / Fellow: Lisa Skowron (KF14)
Lisa was thrilled when she learned her partner MFI was launching a mobile savings program but soon realized that the process involved vans not cell phones. At the end of the day, though, impact is not about cutting-edge technology, it’s about execution, and her MFI has big plans for “mobile” banking.

Guatemala’s Trash Problem and One Pueblo’s Response
Country: Guatemala / Fellow: Gustavo Visalli (KF14)
Most places in Guatemala lack a formal system for trash collection and it shows. Fortunately, Gustavo’s partner MFI has taken matters into its own hands, establishing a community collection service without government assistance.

Giving Women a Voice: Local Governance in BPW Patan
Country: Nepal / Fellow: Claudine Emeott (KF14)
Despite a backdrop of political upheaval in Nepal, Claudine’s partner MFI has demonstrated a commitment to local governance, encouraging borrowers and center chiefs to provide candid feedback about services, pricing, and improving relationships.

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Updates from the past month:
Cute Pigs, New Toilets + Everything is Relative
April Fools, Terrible Coffee + Getting Attached
Social Quirks, Justin Bieber + Lots of Carbs
Fun Facts, Field Visits + Back to Basics
Carnival, Collaboration + Cheese-Making
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Plus more pictures from the past week:

Colombia (by John Gwillim)

Ukraine (by Jacqueline Gunn)

Guatemala (by Gustavo Visalli)

Indonesia (by Lisa Skowron)

Bolivia (by Clara Vreeken)

Nepal (by Claudine Emeott)

Nicaragua (by Karen Gray)

Kamenka

This town is also where many of HOPE Ukraine’s clients live, taking loans to build greenhouses, buy seeds, develop heating systems and ultimately make a profit to look after their family.

Kamenka-Dneprovskaya is a rural town which sits on the bank of the Dniper river in Eastern Ukraine. This area has been inhabited for thousands of years. Today, Kamenka is a hub of Ukrainian agriculture- with the Dniper river providing natural irrigation and the town built on low ground with fertile land, it is no wonder that hundreds of Ukrainians have started their farming businesses here.

Agriculture makes up nearly 16% of the labour force in the Ukraine, with grain, sugar beets, sunflower seeds and vegetables forming the majority of agricultural production. Kameka is famous for tomatoes. So famous in fact, that people travel from as far afield as Moscow to visit the farmers here to buy their delicious crops.

Driving into Kamenka, I was blown away by the rows upon rows of huge greenhouses- giant domed structures some 60 metres long and 8 metres high, covered in thick plastic to protect the crops from the elements. Some of the more advanced greenhouses had inbuilt irrigation and heating systems to make the most out of the crops. These greenhouses are the essence of this town.

Kamenka's greenhouses from above

HOPE Ukraine identified an opportunity here 18 months ago when they started providing agricultural loans in the region. A client takes a loan at the beginning of the season in January to invest in materials to build their greenhouses, fertiliser, seeds; everything they need to get their farm up and running. One client we visited had invested his loan into building a structure to protect his huge wood burner which provides heat to all of his greenhouses. For the next few months, the client works on his business, planting the thousands of seeds to grow and nurture. Once he is able to make a significant yield (often some 5/6 months later), he then has the money to pay the loan back in bulk. These loans provide significant and vital support to these farmers at the beginning of what is often a difficult and extremely hardworking season.

Vitalyi and his greenhouse

The greenhouse system is quite magic. The farmers are able to start planting their crops long before the season should naturally be able to start- often whilst the Winter snow is still underfoot. The greenhouses are staged; the seeds are sown and seedlings grow for a month in the smaller preparatory greenhouse, before they are moved into the large greenhouse for another month before harvesting (whilst leaving space for another crop in the preparatory greenhouse).

Materials bought with a Kiva loan

One HOPE client, Vitaly, invited me into his house for coffee and homemade biscuits and we were able to talk about his business. With thousands of plants grown every year during this extended season, tomato farming is often a family affair. He told me how his wife worked during the day as a teacher, then helps out with the family business in the evenings. Although during our conversation Vitaly talked of the challenges he faces; 18 hour days, increased and variable prices and limited capital for the growth that he dreams of, it was very clear to me that he was extremely grateful for his loan, and that tomato farming is his passion. He simply exuded energy and enthusiasm every time he answered my questions.

It was a pleasure spending the day with these clients, and I’ll leave you with the only thing that seems appropriate; the monument in the centre of Kamenka which exclaims “Слава Помидору!” (Glory to the Tomato!).

Slavo Pomodoro!

I hope you enjoy the video of our trip.

Lend to an entrepreneur in the Ukraine here! Support HOPE Ukraine and join our lending team here.

by Jacqueline Gunn, KF14 Hope Ukraine

This week, take a trip to the field with Kiva Fellows (Mexico pictured)

For many Fellows, this week was about getting back to basics: the borrowers. In between fun facts about Kiva Fellowships, doing database detective work, and reflecting on the internal dynamics of Kiva’s partner microfinance institutions, Fellows found themselves in the field again and again, much to their delight and often to the delight of borrowers. From Latin America to Africa to the Caucasus to Southeast Asia to Eastern Europe, meet Kiva clients, learn about their businesses, and check out all of the great photos.

Kiva Fellows by the Numbers
Countries: Sierra Leone, Rwanda, Mexico, Ghana, Uganda, Mongolia, Ukraine, Nepal, Peru, Cambodia, Indonesia, Liberia, Guatemala, South Africa, Colombia, Bolivia, Armenia, Kyrgyzstan / Fellows: By David McNeill (KF14) & Adam Cohn (KF14) but featuring the entire 14th class
Ever wonder how far Fellows travel for their placements or how slow the Internet really is in Liberia? And did you know that you can buy Coca-Cola in a plastic bag for $.15 in Cambodia? Discover more fun facts about Kiva Fellowships in this post and the accompanying spreadsheet.

Death By Fire
Country: Mexico / Fellow: John Farmer (KF14)
John considers the tension between business and family after meeting a borrower who successfully used microloans to set up a tamale shop but hesitates to make an expensive investment even though it would improve her family’s health.

Database Detective: South Africa Edition
Country: South Africa / Fellow: Alexis Ditkowsky (KF14)
For those of you who like reading about databases and reporting, Alexis has you covered. For everyone else who wants to visit a borrower, learn about her business, and look at lots of pictures, you’re taken care of, too.

Get into the groove
Country: Ukraine / Fellow: Jacqueline Gunn (KF14)
Jacqueline finally finds a cure for the shock of moving from Ghana to Ukraine in the middle of winter: visiting borrowers! Get to know Sergei, Yana, and Irina and learn about the philosophies behind their businesses.

Piece by Piece: The Garment Worker’s Loan
Country: Cambodia / Fellow: Stephanie Sibal (KF14)
Stephanie introduces us to the challenges of working in the garment industry through Sok, a Kiva client. Thanks to a recent loan, Sok purchased a cow which she hopes will increase her family’s income stream so she can send her sons to university one day.

Realities Of Microfinance In Benin. (Part 1, The White Man)
Country: Benin / Fellow: Gareth Davies (KF14)
In case you thought that picking up and moving to another part of the world was easy, Gareth explains some of the new realities he’s encountered as a white man in Benin.

Women Working for Women: Staff + Client Collaboration in Nepal
Country: Nepal / Fellow: Claudine Emeott (KF14)
BPW Nepal not only serves women through its loan products and personable customer service, it also provides a warm and supportive environment for its staff, management, and board members, the vast majority of whom are female.

New Horizons- A Fellow’s First Field Visit
Country: Armenia / Fellow: Caree Edson (KF14)
Caree’s first trip into the field was definitely worth the wait. In addition to being welcomed with cake and chocolate at the New Horizons office, she learns more about their loan products and partnerships, meets several borrowers with very distinct businesses, and eats lunch at “indisputably the most beautiful place in Armenia”.

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Previous updates from the field:
Carnival, Collaboration + Cheese-Making
Man’s Day, Singing Fellows + Learning How to Count
Videos, Epic Commutes + Going Beyond Microfinance
“Christmas”, Trekking, Adversity + Good Company
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Plus more pictures from this past week:

Armenia (by Caree Edson)

Mexico (by John Farmer)

Ukraine (by Jacqueline Gunn)

Nepal (by Claudine Emeott)

South Africa (by Alexis Ditkowsky)

Cambodia (by Stephanie Sibal)

The Ukrainian Flag on the first sunny day in Zaporozhye

I have been in the Ukraine for a month now to work with HOPE Ukraine for my second Kiva fellowship. Whilst I was in Ghana for KF13 life felt very easy. I was really fortunate to be visiting clients on field trips most weeks, the sun was shining and life by the beach was very relaxing. In February I moved to the Ukraine for Kiva Fellowship number two and I’ll be honest, it was a bit of a challenge. I’m pretty good with changing environments but it was like life was flipped 180 degrees.

I moved from the beach to an industrial city called Zaporozhye in Eastern Ukraine. The temperature went from 35 degrees C in the shade to -20 degrees C overnight. I went from an Anglophone country to an ex-Soviet country where I couldn’t even read the characters, let alone speak the language. I spent the first month trying to find my feet. I was really fortunate to be connected with some other volunteers here and started to make some friends, but I felt like something was missing…

I’ve now realised what that was- Kiva clients! I’m sure that most of the fellows before and after me will agree that the best thing about being a Kiva Fellow is meeting borrowers. It is an absolute privilege to be able to gain an insight into their lives- to go on an adventure when you often have no idea how the day will pan out and spend the day meeting fantastic people.

Last Friday I finally had the opportunity to meet up with one of HOPE Ukraine’s loan officers, Andrey, and visit the market and his clients. I got onto a marshrutka bus in Zaporozhye (which I hoped was the right one), and a few hours and some interesting sights later (snow filled fields, ice fishing and sloped roofed Ukrainian houses) I jumped off at Novomoskosk.

Markets are the heart of the cities and towns here in the Ukraine- bustling centres of trade and community and Novomoskok’s market was no exception. I had a wonderful few hours visiting and interviewing clients. They were all fabulous people who were fascinating to meet; there was Sergei who runs several outlets of seeds for flowers and vegetables in the town (he sells books during Summer months, seeds in Spring), Yana who sells women’s clothing because it is close to her soul (she told me she likes to be surrounded by pretty clothes all day!) and Irina, one of HOPE Ukraine’s first clients in the region who sells men’s clothes because men make quick decisions to buy, rather than women who are emotionally attached to shopping! These really are brilliant people- spending all day standing in the freezing temperatures to make sure their businesses are a success. I only caught the end of Winter in the Ukraine but the hardiness of people here is quite humbling.

So I really just wanted to give Sergey, Yana, Irina and co. a shout out for getting me back into the fellows groove. I’m now really enjoying the new challenge and I’m looking forward to updating you all as my Kiva Fellowship continues.

I hope you enjoy the pictures I took on the day.

Lend to a Ukrainian entrepreneur here and learn more about market life in the Ukraine here.

by Jacqueline Gunn, currently working as a KF14 Kiva Fellow at HOPE Ukraine and very pleased that the sun is shining and the ice has started melting!

Fellows wrote about visiting with borrowers and so much more (South African clients pictured above)

Members of the 14th class of Kiva Fellows have officially hit their stride. While we never know where the next dispatch will come from or what interesting topics the Fellows will cover next, we always know we’ll be transported, entertained, and edified. This past week, topics included “Christmas”, trekking to a remote village (with video!), handling adversity (including a serious car accident and stolen electronics), and enjoying the company of loan officers, borrowers, and community members. Enjoy!
 
First Borrower Visit (Take 350+)
Country: South Africa / Fellow: Alexis Ditkowsky (KF14)
A Fellow’s “First Borrower Visit” is a rite of passage. Alexis lists a few highlights from her first time in the field.

In Defense of “High” MFI Interest Rates: Part II
Country: Uganda / Fellow: Nila Uthayakumar (KF14)
Nila demonstrates just how expensive it is to run a microfinance organization by sharing her partner MFI’s budget.

Hey, Soul Sisters!
Country: Ghana / Fellow: Mei-ing Cheok (KF14)
Mei-ing meets with her first group of borrowers in Ghana and shares their stories on the blog and on Kiva.org (click on the links at the end of her post).

Part 4: What is the industry doing to protect borrowers?
Country: Ghana, Ukraine / Fellow: Jacqueline Gunn (KF13, KF14)
Even though she’s in transit between Ghana and Ukraine, Jacqueline weighs in on borrower protection in this on-going series about the state of microfinance.

A Post about Nothing
Country: Mexico / Fellow: John Farmer (KF14)
John recounts a wonderful and rewarding day in the life of a Kiva Fellow that unfortunately ended on a disappointing note.

A Month in Armenia
Country: Armenia / Fellow: Caree Edson (KF14)
While Caree’s past week in Armenia has been shaped by a serious car accident, she writes beautifully about both the challenges and joys of her new home.

Video Blog: Trek to Kanaan Village
Country: Indonesia / Fellow: Lisa Skowron (KF14)
Lisa’s post is a perfect visual companion to Nila’s defense of “high” interest rates. Just wait for the part where a loan officer tries to drive a scooter through a river so he can (eventually) visit a client.

Next Steps for Kiva’s Partner in South Africa
Country: South Africa / Fellow: Alexis Ditkowsky (KF14)
In addition to a behind-the-scenes look at Kiva’s partner in South Africa, Alexis shares pictures from training loan officers and visiting new borrowers.

Lessons from my own Country – Lecciones de mi Tierra
Country: Mexico / Fellow: Lourdes Toussaint (KF13)
Lourdes reflects on the impact of poverty in her home country, the limitations and opportunities of microfinance, and the fantastic women she’s met in the past few months.

Christmas in Managua
Country: Nicaragua / Fellow: Karen Gray (KF14)
What does it feel like to turn down a struggling family for a microloan? Karen paints a dispiriting yet honest picture.

The Financial Donut Hole
Country: Sierra Leone / Fellow: David McNeill (KF14)
Where do entrepreneurs go for financing if microloans are too small and bank loans are unattainable? David’s conversation with a taxi driver in Freetown illustrates this conundrum perfectly.

Bolivian Kiva borrowers: buying a cow, selling food, acquiring sewing machines and constructing rooms
Country: Bolivia / Fellow: Clara Vreeken (KF14)
Clara introduces us to borrowers in Bolivia and shares the wide range of ways they’re using their loans.

Check out all the posts from this past week

Corruption is present and sometimes blatant in Ukraine, so there exists a general mistrust of the government and its policies. A regular deputat or two have been known to shine a Rolex, Viktor Yanukovych has criminal convictions, Yulia Tymoshenko is an oligarch, and “hostile” takeovers of companies are accomplished with guns – it is all a reality in Ukraine.  It is not a surprise then that the proposed new Tax Code is currently a hotly debated issue, especially among small business owners who see it as another attempt to smother their business.

Around ten thousand people actually took it to the streets on November 16^th to protest the proposed tax code as it was given its final reading in parliament in Kiev. There are quite a few issues around this tax code. First, Ukraine is in dire need of modernization as its tax legislation ranks third worst in the world according to World Bank’s “Doing Business” survey. Ukraine’s economy is largely in the shadows, with a lot of employers paying off the books to survive.  Second, the recent $15bn loan from MFI came with quite a few strings, one of which was to bring down the budget deficit. Some of it will be accomplished by the recent 50% price increase on gas, some by the new changes to the largely ineffective taxation system.

As the government tries to find wealth in modernization, the small business owner is feeling squeezed, argues that the burden is unfair given the tax breaks for large businesses. Are the big supermarket chains and shopping malls tired of competing with the street markets?  Who knows, but aside from the tax hikes, the proposed pension plan reform is also a significant change for many business owners I talked to at the market.  An involuntary monthly contribution will be required from small business owners into a state pension fund; it is not a huge amount but it all adds up very quickly when taxes and inflation are eroding profits.  The other major hurdle is the mentality. It is very hard to sell a new tax code when most of the population does not see the point of paying taxes to an already “corrupt” government.

While Ukraine sorts its internal affairs out, I personally feel that Kiva loans are valuable more than ever. The majority of HOPE Ukraine’s clients are women who sell clothes or food at the local markets around the country, so the organization and its clients will certainly be affected by the future changes. Plus, for a small entrepreneur it is still very hard to find a trustworthy bank and get a loan without collateral. While these loans are not necessarily life changing, they do help run a business in sometimes absurd conditions. Please consider supporting the following loans currently in the funding stage from HOPE Ukraine!
Margarita Salasyuk has finished her KF12 fellowship with HOPE Ukraine.  She will remember Ukraine for its warmth and its survival instinct. Meeting loan officers and clients all over Ukraine was an intense, challenging, informative, real and thought provoking experience that she is grateful for. Margarita is joining KF13 class from Israel and Palestine next.

The city celebrated last night with a huge concert and a very impressive fireworks show on Festival Square.  As your dedicated Kiva Fellow, I felt it was rather important to report on this rare and awesome occasion, and of course getting to know the popular singers on stage meant deeper cultural immersion.

Sadly, my fellowship in Ukraine will come to an end soon, but  I will always treasure the memories from this 3 month Kiva adventure. Last night was just one of the many warm and fun moments I’ve had here.

Ani Lorak (Ани Лорак) or did Bon Jovi know I was there too?

Potap and Nastya Kemeskih wish us a Happy Birthday (Потап и Настя Каменских):

Margarita Salasyuk is a Kiva Fellow with HOPE Ukraine in Zaporozhye, Ukraine. As she wraps up her work with HOPE Ukraine, she is cherishing her last two weeks in Zap.  She still has a few other things to write about and some final thoughts and observations on Ukraine, so please stay tuned!

It is designated by the United Nations to take place on the first Monday of each October, and this year’s theme “Better City, Better Life” focuses on the vision of sustainable urban development and creation of a home for people everywhere in the world.

The official message from the Secretary General Ban Ki-Moon and this year’s theme highlight challenges of urban poverty and the means by which local governments and the private sector can combat issues such as lack of fresh water, poor educational facilities, public safety concerns, corruption and environmental degradation.

In related news, Habitat for Humanity International has recently announced that it will be establishing a MicroBuild Fund to provide capital to microfinance institutions around the world that offer small loans for housing improvements. Habitat’s goal is to raise $100 million for MicroBuild, and the first $25 million was pledged by its CEO Jonathan Reckford at the Clinton Global Initiative in late September.  According to the press release on Habitat’s website:

“There is a staggering need for basic and decent housing in developing countries where families may only live on a dollar or two a day,” said Jonathan Reckford, chief executive officer of Habitat for Humanity International. “By developing the MicroBuild Fund, we will be able to serve even more families by making financing available for housing improvements on affordable terms.”

Here in Western Ukraine, Habitat for Humanity has already been partnering with HOPE Ukraine for the past few years providing housing loans at very favorable rates. These loans are primarily targeted at low-income individuals, require proof of income, and are from 12 -18 months in duration. In Vinogradovo, Habitat loans have been very popular and account for about 30% of the total portfolio.  Approved loan uses include apartment renovations, window and front door replacements, roof repairs of private houses, installation of heating systems and plumbing repairs.

A few pictures from my recent trip to Vinogradovo (Vynohradiv) – a wonderful city in western Ukraine, in Zakarpattia Oblast:

Click to view slideshow.

Margarita Salasyuk is a Fellow with HOPE Ukraine in Zaporozhye. She has been on the road for the past few weeks completing her borrower visits in Western Ukraine.  Zakarpattia Oblast is famous for its mushrooms and this lucky fellow got to go to the woods with a few kind loan officers!

A loan officer at HOPE Ukraine pointed out the two main questions that any loan officer seeks to answer:
• Will the client be able to pay back the loan?
• Will the client want to pay back the loan?

At HOPE Ukraine, the client usually comes into the office to meet the loan officer and discuss the need for a loan. Oftentimes the reason for a loan, the amount needed and type of business already tell the loan officer if there is an opportunity to extend a loan.  The client fills out an application, provides a copy of personal and financial documents and answers the loan officer’s initial questions regarding their business.   The loan officer’s analysis of the financial documents and his subsequent visit to the business itself (very often it is a stall or a small shop at the city’s market), coupled with his job experience and intimate knowledge of the market itself, help him determine if the client will be able to pay back the loan.

Then comes the harder part of the job – determining if the client will be honest and responsible.  In addition to visiting the place of business, the loan officer also meets the prospect at their home.  The loan officer pays attention to body language, the substance of their conversation, their mannerisms and general attitude, their openness and lifestyle.  The overall impression of the client weighs heavily in the final decision to bring the application to the loan committee for approval. If the loan officer doesn’t feel like he can trust the new client, then obviously extending credit to that person would be a risky decision for his loan portfolio.  These client assessments not only have a psychological aspect to them, but also involve a lot of intuition.

After years of work experience extending loans to hundreds of clients, loan officers rely on their gut feeling to ask the right questions and dig deeper.  Obviously, mistakes are made, it is human. Some loan officers regret extending loans in situations where all the financial indicators were perfect but their instinct was telling them something is off.  There are also situations where perfect clients find it difficult to deal with their debt in light of unusual events such as high inflation, theft, fire or sickness in the family.

From my own interactions with loan officers, I was happy to find out that they enjoy the personal nature of their job.  They spend quite a lot of time at the markets, know a lot of vendors there, and are easily accessible to their clients. They know their clients’ families, keep an eye on their inventories, and certainly hear things from everyone at the market.  They also actively advise their clients to only take loans they will really feel comfortable repaying; it is not unusual for them to decline the requested loans only to have the clients come back and thank them for extending a loan of a more manageable amount.

Last thing that loan officers may not know they want, but surely sometimes need is a fun visit from a Kiva Fellow!!  Please enjoy a little video I made of my recent borrower visit to Kakhovka:

Margarita Salasyuk is a Kiva Fellow with HOPE Ukraine in Zaporozhye. She is slowly but surely getting used to the “avto-vokzal” or the local bus terminal, though sometimes buses do leave right in front of her nose while she tries to match the departure time and the route name to reality!

Today is my last day as a Kiva Fellow. Kiva Fellows Class number 10 (or KF10) took me to Zaporozhye, Ukraine where I worked with Kiva’s field partner HOPE Ukraine; KF11 brought me here to Lomé, Togo, where I work with two different field partners, Microfund Togo and Women and Associations for Gain both Economic and Social, or WAGES. I can’t think of two countries more different, and I have loved and been challenged by both experiences equally.

Despite wide differences, a similar streak has run through both – that of getting to know some amazing and inspiring people through my work along the way. As a Kiva Fellow I’ve visited close to 100 clients and taken 100s of photos. Behind every photo and every face is a personal experience I shared with a borrower or the staff of an MFI. To me, that is the most important and special thing about being a Kiva Fellow. And so for my last blog, I’d like to present a scrapbook of my favorite photos from my 7 months as a Kiva Fellow in Ukraine and Togo. Thanks for your comments, support, and interest in Kiva. Without Kiva lenders, being a Kiva Fellow simply wouldn’t be possible.

Petro Manyak lives in Mukachevo, Western Ukraine. I took a 36 hour train from Eastern to Western Ukraine just to meet him! He has a very successful business selling chickens. In his community, he is the only one with a truck such as the one he is standing in front of in this photo. After visiting with him and his wife, they sent me home with a large bag of special Ukrainian spices (a secret family recipe, I’m told).

Akoélé Agbo is a farmer outside of Agbélouvé, Togo. When her loan officer and I came to visit her, she was working in her farm with her two small children. Her two beautiful daughters were very excited to have their picture taken. She has two older children who attend secondary school in the nearest city, Tsevie.

Irina Poleshchuk runs a small funeral parlor in Novomoskovsk. She does all the upholstery of the coffins and the flower arrangements herself. For dealing with death constantly, Irina was cheerful and made lots of jokes about her work. She started this business after a particularly difficult year when 8 people in her family died. She saw a need in her community for someone to offer a particular service for those in times of grief and great need. With the help of her family, Irina will pick up the body from the morgue, clean and dress the body, dig the burial hole, make the coffin and arrange the flowers.

Madame Attisso Kayivi was one of the first borrowers I met in Togo. I love this photo because it shows off how beautiful and colorful women's dress is here in Togo. They all wear something called a "pagne," a colorfully wax-printed cloth produced here in Togo. With the income Madame Kayivi recieves from selling fish and making palm oil, she has been able to ensure that her third child is now at university. Attisso was self conscious about having her photo taken, but I think she looks stunning.

Inna Savchina sells sausages in Kherson. My HOPE Ukraine colleague, interpreter for the weekend, and dear friend Masha Levchenko took this photo of Inna. Photography is her hobby and she took such beautiful photos of all the borrowers we met that day. This one is my favorite.

Korkiou Adjeretou has a restaurant in Kpeme, Togo. The Agency Chief and I waited for hours to interview her because the line outside her restaurant was so long. She brought me to her backyard where her husband, pictured, had just killed a goat (also pictured). I like this photo because it shows the husband is helping his wife with her business. Korkiou is the loan client; she’s the proprietor of her restaurant; her husband is the helper. It was clear they have an equal relationship when I spoke to them. I like that kind of turn around, especially here in West Africa where gender equality is usually not the norm.

Searching for a client in Ukraine looks like this...

Searching for a client in Togo looks like this...

Lunch with the staff of the Novomoskovsk office of HOPE Ukraine. I spent the day with this loan officer and his daughter, Anne (not pictured), whom he invited to join us to serve as a translator for me knowing I didn’t speak Russian. Althought I had brought my own translator, the four of us spent a great day walking around the market and talking to Kiva borrowers. I learned about Anne’s dream to open a Spanish Food restaurant; her father proved to be a converted Kiva enthusiast willing to implement all Kiva-related procedures. A day like that is a win in the Kiva Fellow’s book.

Lunch with the staff of the Agbélouvé office of Microfund Togo. Claude, center, invited us all to eat at his mother's house after a grueling day of field visits in the surrounding villages and farms. His mother served my favorite Togolese dish, called pino. As a team, the four of us (Roland and Patrice pictured as well) became close and had lots of fun working together.

Vladmir Alekyan and his family (pictured, with me at the far right) made for one of my favorite borrower visits of all time. Vladmir is Armenian and lives in a community full of Armenians who escaped to Ukraine following the war with Azerbaijan in the 1990s. Since then, Vladmir has become a successful greenhouse farmer in Kamenka, Ukraine. He and his family of 6 live in the same 2 room house, where I shared Armenian coffee with them after a tour through their impressive farm.

Madame Solange and her beautiful apprentices - taking this photograph was a hilarious feat, as each time the girls wanted to retake it to make sure it was perfect. I have at least four versions of this photo, I'm confident this is the best of them. Madame Solange has built an impressive business, from starting as an apprentice herself in her 20s to now employing 5 apprentices and helping put her only daughter through school.

To the left is the street where I lived when I arrived in Zaporozhye, Ukraine in February 2010. To the right, the street where I live in Lomé, Togo, beginning in May 2010.

And this is where it all began, in January 2010 at Kiva HQ in San Francisco.

Leah Gage is finishing her second of two Kiva Fellowships today. Over the past 7 months she has worked with Kiva’s field partners HOPE Ukraine, Microfund Togo, and WAGES. While she looks forward to returning home to her family and friends, there is no denying that being a Kiva Fellow in Ukraine and Togo have been the best jobs she’s ever had.

Beyond the physical discomfort, the situation is actually getting serious as the heat spell continues in August.  Ukrainian President Viktor Yanukovich just cut his 45-day vacation short and came back to Kiev to manage emergency response to the outburst of forest fires all over the country. As of August 5^th, there have been at least 64 fires reported and the number continues to rise. Though not officially confirmed, there are even fears that fires in the Bryansk region could release into the air radioactive substances associated with the Chernobyl nuclear accident.  As Ukraine has formed special task forces to deal with the current situation, it has even offered to help Russia in regions hit by intense fires. The smoke from wildfires has reached Moscow, covering it in smog for the past week and making it hard to breathe and work in the capital.

Administrative building of Zaporozhye Oblast, Festival Square

Sun setting over Festival Square, still 38C

For now, Zaporozhye is still safe and quiet, though a few fires broke out near Khortytsia Island, a national reserve that is home to many hectares of oaks. In our office, two air conditioners have been struggling to lower the temperature below 86F (30C) this week, so imagine the hardship of small businesses located in outdoor stalls in the city’s numerous markets. Of course, many thanks are due to HOPE Ukraine’s loan officers who continue to travel in this weather and service clients as well as our dedicated Kiva lenders!

Margarita Salasyuk is a Kiva Fellow reporting live from HOPE Ukraine in Zaporozhye, Ukraine. She is a week into her Ukrainian fellowship and is excited to bring you stories from the Eastern block for the next three months.

Please consider making a loan to an entrepreneur in Ukraine here!!!

By Leah Gage, Kiva Fellow in Togo

Less than a year ago, Kiva was taken to task by critics for not being as person-to-person (P2P) as it was claiming to be. But I think Kiva’s continued relevance in the field of grassroots development rests precisely on its continued ability to connect people through lending for the sake of alleviating poverty. There are lots of examples of this; here are three.

In its efforts to present the realities of microfinance on the ground, Kiva allows lenders to learn not just the personal story of their particular borrower, but also the stories of the field organizations with whom Kiva partners. Kiva wants you to know that its work would not be possible without the work of an MFI like WAGES in Togo that provided the loan in the first place and uploaded the borrower’s profile that you chose to fund. And, Kiva wants you to actively engage with that field partner by providing the partner’s contact information.

So it was so cool last week when I went to visit a WAGES field office in Lomé, Togo and saw this email from a Kiva lender named Mark, tacked to the agency’s official bulletin board for all its clients, staff, and stakeholders to see. In his message, Mark thanked WAGES for all the organization did to help borrowers in Togo and further praised WAGES for providing business training programs to its clients. “I’m a stranger to you,” he writes, ”but I’m proud of you and I thank you for your service.”

The email Kiva Lender Mark sent to WAGES in April 2009

Stranger or not, one lender’s praise and thanks served as motivation enough to display this individual email on the official WAGES bulletin board for over a year!

The recipients of Kiva loans are often also personally touched by Kiva’s ability to make connections. I’ve met dozens and dozens of Kiva borrowers, the real people that exist behind those profiles and take the loans Kiva lenders fund. Each time I meet a borrower, I explain to them that thirty individuals around the world saw their photo, read their story, and chose to fund their loan. Usually what touches the borrower most is that someone in another country chose him. That choice was real and it was personal – both to the lender and to the borrower. And, after the fact, their choice to lend caused change in that borrower’s life that was personal too.

Take Vladimir Alekyan in Ukraine who, upon learning about the Kiva lenders who funded his loan, took me inside of his newly built greenhouse and exclaimed “This is your help!” (See the video below)

At the time it really moved me the way Vladimir expressed it, equating the greenhouse with the support of Kiva lenders. Of course, it was after a week of hard construction work that the lenders’ financing materialized into the greenhouse, but at the time thats not how Vladimir was thinking of it. The connection was personal, his greenhouse existed because of Kiva lenders, and for that he was grateful.

During a loan officer training I held for HOPE Ukraine a few months ago, I explained to 14 doubtful loan officers that Kiva lenders really don’t make money off their loans; in lieu of monetary profit, lenders profit from stories.

Kiva lenders get this information in primarily from journals – written accounts of a borrower’s progress during or after their repayment of the loan. Recently, Kiva made this personal exchange even more personal by introducing a tool by which Kiva Fellows can email lenders before visiting a borrower to ask if they have any questions for the client. I recently tried this out for the first time and within a day received responses from four Kiva lenders.

For example, Paula from Spokane, Washington in the US asked Félicité Ayawavi Hounsou from Lomé, Togo, “What is your hardest challenge as a working mother?” When I asked Félicité, she told me that her hardest challenge is being the sole provider for her daughter, ten years old, and her younger sister, both of whom live with her. This exchange is really remarkable because it’s a relevant question to a woman like Félicité from Lomé and a woman like Paula from Spokane. This new tool by which lenders can ask their borrowers questions levels the playing field and highlights the fact that on both ends of the Kiva lending process are real people who are probably not so different from one another as they might think.

Kiva is special and relevant precisely because it makes poverty alleviation personal. As people like Paula and Mark are personally touched by what they’ve learned, they’re going to continue to make small contributions that amount to large life changes for the thousands upon thousands of borrowers who have themselves been touched by Kiva. In turn, people like Félicité and Vladmir not only receive financial support from Kiva lenders, they are also personally empowered by the realization that someone is cheering them on! If thats not person to person, then what is?

Kiva lenders, what questions would you ask your borrowers? Hopefully as the tool becomes used more widely by Kiva Fellows, you’ll have the chance to ask. Be on the lookout for emails from Fellows! And special thanks to former Kiva Fellow Jeff Zira for developing the lender questions tool.

In a few days, my Kiva Fellowship with Kiva’s field partner HOPE Ukraine will come to a close. In three months I’ve visited 10 different towns and villages throughout Ukraine and met about 40 Kiva borrowers. Not only is this essential to my work as a Kiva Fellow, but borrower visits are my absolute favorite part of volunteering for Kiva! And none of them would have been possible without my favorite Ukrainian ladies, my interpreters Kate, Masha, Nastya, Oksana and Alina (pictured below).

Pictured clockwise from top left is me with Kate, Masha, Alina, and Nastya

Sometimes Kiva Fellows are sent to countries where they don’t speak the language and the borrowers and Loan Officers don’t speak theirs. Such was the case for me in Eastern Ukraine, where most people speak Russian and almost no one speaks English. With no prior training in the Russian language, I hired some of Ukraine’s coolest ladies to accompany me on long trips to remote towns and villages to interview HOPE Ukraine’s Kiva borrowers.

When I arrived in Ukraine, I’ll admit that I was terrified by my lack of language ability. I feared that I’d never get to meet any Kiva borrowers given my inability to speak the language! Zaporozhye doesn’t have an agency you can just call up and hire someone to translate for you. But in the first few weeks, I managed to make some friends, and usually I’d ask these friends – out of the blue – to help me out.

“Where are you going?? Why are you going to that village? I don’t understand…” these city gals would tell me over the phone, as I explained that my job requires me to travel to villages and interview small business owners…

As foreign as the Kiva concept sounds in my home country of the United States, imagine how strange it must sound to Ukrainians. They go to markets to do their shopping; why would we go to a market – let alone a market located 3 hours outside of Zaporozhye – to interview the business owners??

But they’d always oblige. They’d show up to “work” fashionably dressed, as most Ukrainian girls do, in high heels, tight jeans, ready to practice their English with this weirdo American girl they’d just met. After hours on a minibus, called a marshrutka, traversing dirt roads and arriving in remote villages throughout eastern Ukraine, these girls would then spend several more hours translating my endless questions to borrowers and explanations on Kiva to Loan Officers.

One day, my interpreter Alina and I visited Nataliya Minakova in Mikhailovka. Every time I end an interview with a borrower, I ask her, “What are you hopes and dreams for the future?” Normally, this question is answered confusedly or not at all. But this day, Nataliya told us, “I have dreams to be an artist…” and pulled out all of her drawings to show us. In the life of a Kiva Fellow, an experience like this is golden. I was beyond excited that Nataliya was able to link her Kiva loan to her dream by explaining that when her business is more sustainable, she’ll have more time to pursue her favorite pastime. When we left Nataliya’s store, Alina said to me, “Wow! That’s the first time we’ve ever gotten a response like that!” She felt my excitement too; she had felt the power of learning something so personal and dear to a Kiva borrower.

Nastya takes video of Nadezhda Burbelo alongside Loan Officer Volodya

Another day in Novomoskovsk, my interpreter Nastya and I were training a new Loan Officer on Kiva. Try translating Kiva’s mission statement, “Connecting people through lending for the sake of alleviating poverty.” It’s not easy, but Nastya did it many times over. At one point I explained in English that the Loan Officer should try to print out the borrower profile from Kiva’s website to show his clients, as this is an effective way to explain Kiva to a reluctant borrower. “I already told him that!” she said, having learned well enough by now the ins and outs of Kiva successes. She joked, “You should just sit back, drink coffee. I can do all the explaining from now on!”

Throughout this process, which I experienced with five different interpreters over the course of my fellowship, my interpreters became honorary Kiva Fellows. Through my work as a Fellow, Kiva touched their lives, gave them some work in a difficult economy, and taught us all something about how Kiva really can make the world a smaller place. If there’s one thing I’ve learned from my Kiva Fellowship, the miracle of Kiva is that it spreads globally by touching individuals. Behind every aspect of Kiva is an individual who understands the concept that making our world more connected through microfinance will make our world a better place. I’m actually grateful that I needed interpreters to be a Kiva Fellow because it connected me that much more.

Leah Gage is ending her Kiva Fellowship with HOPE Ukraine this week. In May she’ll join KF11 as a Kiva Fellow in Togo.

When you make a loan to a Kiva borrower all the way in Kenya or Cambodia or Ukraine, do you ever think to yourself, “I wonder who took her picture?” Do you ever wonder, “Did someone ask her if she was okay with going up on Kiva?” Have you ever asked the question, “How am I getting repaid on this loan, anyway?”

The answer to all these questions, point to the Loan Officer, whose job it is to collect all the data you see on the Kiva Borrower Profile, and all the money you get back when your loan is repaid bit by bit. It’s even the job of the Loan Officer to explain Kiva and gain signed consent from a Kiva borrower to have her photo and story published for thousands to see all over the world.

In a previous story from the field, I explained that most of the Loan Officers I met as a Kiva Fellow in Ukraine had no idea what Kiva was or how it worked. The Loan Officer didn’t even understand who you were, loyal lender, or why you lend!

Well, it made me wonder. If he didn’t know who you were, how could you know who he was?

So I asked Volodya, a young loan officer at HOPE Ukraine, Kiva’s Field partner in Ukraine, if he wouldn’t mind if I followed him around for a day and made a video about him to share with the thousands of loyal Kiva lenders. He sort of doubts that thousands of people would be interested in him or his job. But I assured him that in a way, he’s already connected to thousands of people every time one of his clients is posted on Kiva.

Give him some love, people, and learn about the guy that makes it all happen: sit back and meet a Loan Officer.

Leah Gage is a member of KF10 serving in Ukraine with Kiva’s field partner HOPE Ukraine. To make a loan to another HOPE Ukraine borrower, <a href= http://www.kiva.org/lend?partner_id=26&status=All&sortBy=New+to+Old>click here.</a>  To learn more about HOPE Ukraine and the work they do with Kiva, consider joining the < a href=http://www.kiva.org/team/fans_of_hope_ukrainenadiya>HOPE Ukraine Lending Team!</a>

A couple weeks ago HOPE Ukraine invited me to their bi-annual national conference to give a presentation about Kiva. This is the sort of thing Kiva Fellows dream about. Fourteen seated and listening loan officers, whose sole purpose is to sit and listen to you talk about Kiva?! Obviously I jumped at the chance to take my third night train trip to Kiev to generally explain the ever-confusing Kiva “concept” to these hard-working individuals.

My job was made more difficult by my utter lack of Russian language skills, and my teeny-tiny awkward stance in a room full of burly Ukrainian loan officer dudes. But I found that everyone was really engaged in the presentation. They had lots of questions. After going over topics like gaining consent to take a client’s photograph and post it on the internet and strategies for gathering compelling borrower profiles and journal updates, to my dismay I realized that these loan officers did not understand how or why Kiva works.

HOPE Ukraine's loan officers stand to thank me after my presentation. Luckily, they thought I was kind of hilarious.

Most interactions between Kiva lenders and borrowers are relayed by the loan officer, an often invisible but hugely important player in Kiva’s operations. They’re inundated with Kiva-related requests – “turn in 4 borrower profiles by the end of the month;” “take better photos that clearly show your reluctant client’s face;” “try to get her to smile!” “ask more questions about your client’s personal life and tell us how the loan helped pull your client out of poverty!” The loan officer is the person who takes the photo you see, who gathers the information you read, who manages the borrower’s loan progress and makes sure you get paid back. Without the loan officer, Kiva simply would not function.

And yet, these guys did not know what Kiva was.

A slide from my powerpoint, depicting "You!" (BbI!) as the connection between HOPE Ukraine and Kiva

“Who are the Kiva lenders?” Well, anybody, I said. “What do you mean, anybody?” someone asked. Anyone can go on Kiva and make a loan. “Could I go on Kiva and make a loan?” Of course! “Is my client allowed to see her profile?” Yes! I encourage you to show it to her. “What’s the website again?” www.kiva.org “So how much do lenders make in interest?” They don’t make money off the loan. “Do they get paid back?” Yes, usually! “How?” Well, do you know what paypal is…?? (see “cycle of love,” above)

They were especially intrigued with the idea that Kiva lenders make loans for no profit whatsoever. I felt this was especially important to rephrase and explain to the loan officers. Kiva lenders do make a profit, I told them, but they don’t want money. Instead, they profit from the stories you tell and the photos you take. This helped explain to the loan officer just why I’m so curious about Nataliya’s dream to be an artist or whether Ludmila’s business helped put her son through university. These guys didn’t get what I meant when I kept asking them for “compelling stories.”

"Kiva lenders want to help people" - another slide from my powerpoint explaining why lenders lend

I’ll admit, the concept didn’t sink in for everyone. A lot of these guys think very much in numbers. It’s what makes them good loan officers with low rates of delinquency. Lending for stories is maybe not the most sound investment…

But several of the guys I talked to were so intrigued by this idea that anyone can make a loan to one of their clients on Kiva. At HOPE Ukraine, the loan officers take pride in getting to know each of their 100+ clients personally, so the fact that you, faithful Kiva lender, chose their client over any other made them feel pretty proud. And the “stickiness” of Kiva started to catch on – “connecting through lending” is not such a bad concept, after all.

Most loan officers’ incomes are not so far off from some of the clients they serve, so I can’t say for sure if any of the loan officers I met will be making a Kiva loan anytime soon. If and when it happens I promise to blog about it. If we had internet access in the presentation hall (which was a church classroom), I would have made one right then and there.

The next week when I went to Kamenka to visit greenhouse farmers, Yuryi the loan officer remembered me and knew the kinds of questions I was going to ask. He seemed to understand that I wanted to gain an understanding of the borrowers we went to meet and their businesses that went beyond loan repayment rates. He willingly spent hours with me and my interpreter while we were invited into house after house for Armenian coffee, Ukrainian Borsh, and Russian vodka. And he made sure to remind me when I forgot to ask certain questions of the borrowers that I had asked him like about certain farming methods or why Volodya and his family came to Ukraine from Armenia in the first place.

I’ve found interactions like these to be a great insight into just how remarkable Kiva is, and how reliant the process is on the Loan Officer. Remember the loan officer next time you make a loan on Kiva. As important as it was for the loan officers to understand Kiva lenders and why they lend, it’s perhaps equally important for Kiva lenders to understand how its possible for them to even make a loan to a borrower in the first place. It’s largely because of the loan officer.  Chances are he was on the other side of that camera, possibly coaxing the borrower to smile a bit bigger or spending another minute to ask just one more question to create a more “compelling” borrower profile.

Special thanks to Sam Kendall who took all the photos during the presentation and who coined the phrase “Kiva Circle of Love”

Make a HOPE Ukraine loan officer proud today! To learn more about HOPE Ukraine, consider joining the HOPE Ukraine lending team.

Tatyana and Yuryi Syomkin waved to me from their shop

As a Kiva Fellow, I’ve traveled to 5 different towns and met 18 Kiva borrowers throughout Ukraine. Not one has failed to mention the “crisis,” by which she is usually referring to the economic collapse that occurred in Ukraine nearly overnight in October 2008. A rare few have told me, 2008 was no crisis! Ukraine has been in a 20-year long crisis… by which they are referring to the collapse of the Soviet Union and subsequent economic woes and unemployment that continue to plague the largest nation within continental Europe.

Either way, crisis is the operative word.

An important indicator of Ukraine’s recent steep economic decline is the devaluation of its currency. Within months Ukraine’s hryvna went from 5:1 to 9:1 compared with the US Dollar. A year later the hryvna has currently stabilized at about 8:1 USD.

One of the hardest-hit populations hit hardest by this currency devaluation was small business owners. Small business owners don’t have huge margins of profit. They also rely on customers who generally don’t have huge expendable incomes. In an economic crisis, the small business owner is hit twofold, both by the rising price of inventories – which are generally valued in dollars but purchased in hryvnas. In addition, they’re dealing with the shrinking disposable incomes of their customers, also caused largely by currency devaluation. These factors create a simultaneous need to both raise and lower prices in order to stay competitive and in business.

A view from the Syomkin auto body shop

Ukraine’s small business owners have been squeezed on both sides. Providing small loans of their own is not an uncommon way for these businesses to stay afloat in such difficult circumstances. “We have lots of borrowers,” Tatyana Syomkin told me.

The Syomkins have also made loans to the village hospital. They call needing help with the ambulance and parts for the other vehicles, Tatyana says. We help, she told me, “but the money is still not in our hands… We all know each other, we have to help each other.”

Despite the strain this puts on Yuryi and Tatyana’s family business, you might say these folks are heroes. Where would the village be without a school bus and an ambulance? Sitting in their shop, looking around at well-stocked shelves run by Tatyana, Yuryi, their son, two daughters, and their son-in-law, I marveled at the Syomkin family’s strength. And the Syomkins aren’t the only ones making loans. A week later I traveled to Kherson and met Dina Avanesova, who told me that a large portion of her “sales” this season have been loans or lay-away deals to customers with dwindling disposable incomes.

I like to think of Kiva lenders as heroes in their own way, who with a small loan can change a life or even a community. It occurs to me that Kiva’s borrowers can have that same power – they are themselves experienced lenders who, like Yuryi and Tatyana, work in small communities where a loan is often more than a loan, it can be a helping hand to a friend or an act of heroism in a community.

Tatyana and Yuryi Syomkin with their two daughters

Leah Gage is a Kiva Fellow serving in Zaporozhye Ukraine with Kiva field partner HOPE Ukraine/Nadiya. To make a loan to borrower (and possibly fellow-lender) from Ukraine, click here. To learn more about the good work HOPE Ukraine does to support borrowers like Yuryi, Tatyana, and Dina, join the HOPE Ukraine lending team by clicking here!

Would you buy oranges while standing in the snow?

Today I dragged my glamorous young interpreter, Alina, and loan officer Sergei to the frozen mud of the outdoor markets of Melitopol, Ukraine. I was on a specific mission: to find out how cold weather affects HOPE Ukraine’s borrowers. It snowed in Melitopol today, and I admit that I thought my toes were going to freeze off during one of today’s visits with a borrower. According to weather.com there was a high of 29˚F.

HOPE Ukraine’s borrowers have become intimately familiar with such weather. Most of their businesses are located outdoors in a stall at one of the many outdoor markets or rynoks. Can you imagine standing outdoors in the freezing rain, snow, bitter wind, or sleet for 10 hours a day? Inna can. So can Ludmilia, Nadya, and the vast majority of HOPE Ukraine’s clientele.

Inna Gorshkova's seasonal transformation

So how does this affect the cold-weather-microborrower? For one thing, all my interviewees today expressed an explicit drought in business during the months of January, February, and March. This happens to be post-holidays, which can be less impactful given the potential height in sales during December. But this year, when holiday sales were not as good as in years past, it means a very difficult few months. It can also mean an explicit need for a loan to purchase end-of-winter and spring merchandise. The triumph of microfinance is manifest in borrowers like Ludmila Larina, who says she always takes out a loan in January or February to supplement what she expects will be lower levels of cash-flow from a decrease in sales. This is the point of microlending, after all, to help entrepreneurs and their businesses be more sustainable.

Another seasonal success story is Nadezhda Zinenko, who specifically used her $1,325 loan to replace her summery merchandise consisting of ball caps and football jerseys with winter hats and sweatpants.  Now she says she’s purchasing better quality merchandise and is able to repay her loan on time. Plus, spring is right around the corner (we hope!).

The other, unfortunate side of this cold-weather-coin is made apparent in HOPE Ukraine loan officer Sergei’s admission that his winter loan portfolio has decreased to 95 borrowers, where in the spring it will increase to 120 or 150. Lower levels of income mean that taking out a loan in January or February is just not feasible.

These outdoor markets are open year-round, and Ukrainian shoppers are expected to frequent the outdoor vendors in spite of poor weather. But sales go down in the winter, a fact that every single borrower I interviewed today mentioned. That said, the entrepreneurs I spoke to were unwilling to say that cold, crummy weather was the main deterrent for shoppers. Everything from holiday-shopping-season-recovery to simple, natural market fluctuations was offered as an excuse, but “cold weather” or “snow” was rarely brought up as the reason why sales always go down in January, February, and March.

I think the Ukrainian entrepreneurs I’ve spoken too are such tough-shelled, hard-working folk that they’ll never admit defeat in the face of cold wind. And as always, the borrowers I met today spoke to me with smiles on their faces and never once complained about lower sales or bad weather. There’s  a prevailing attitude here that life’s fortunes and misfortunes will always fluctuate unpredictably but consistently, and that if business is good enough that your family is healthy and happy, then one should be grateful. Here’s a short video of Nadezhda Zimenko, along side HOPE Ukraine loan officer Sergei, and her response when I asked her about her hopes and dreams for the future.

Leah Gage is a member of KF10 serving with HOPE Ukraine in Zaporozhye. Support HOPE Ukraine’s borrowers by joining the HOPE Ukraine lending team. And remember, those fur hats and big winter coats aren’t luxuries but absolute necessities when you work outdoors in below-freezing temperatures over 10 hours a week. Make an EECA loan today!

Meet Alla Slichko, a vendor at an outdoor market in Mukachevo, Western Ukraine. She's currently fundraising - consider lending her $25!

During Kiva Fellows training at Kiva HQ in San Francisco, I learned that Kiva borrowers located in Eastern Europe or Central Asia are often the least popular on the Kiva docket and the last to receive funding. One staffer even suggested that lending in Ukraine isn’t sexy. How could this be?! Perhaps it’s the well-stocked shelves, or maybe the often un-smiling, warmly dressed men and women, that do not illicit immediate sympathy or the thoughts of poverty that lenders often associate with Kiva borrowers?

One step toward understanding poverty and microlending in Ukraine is to understand where most borrowers come from – the outdoor market or Rynok (Рынок).

Just one section of Angolenko Rynok in Zaporozhye.

Rynoks are collections of hundreds, sometimes thousands of kiosks – the largest market in Zaporozhye, Angolenko Market, is home to over 2000! Generally, the kiosks are lined up next to one another with narrow paths in between where shoppers can walk. Rarely are these paths shielded from the elements.

You can buy anything you need at a Ukrainian Rynok. In fact, I challenge you, faithful reader of the Kiva Fellows blog, to visit Angolenko Market and not find everything you need: cell phones, household appliances, children’s toys and clothing, fresh produce and freshly butchered meat, furniture, books, school supplies…

The challenge, of course, is finding it.

When you arrive at the Rynok, you’ll likely see a map at the entrance instructing which section houses which items. This is useful not only for the consumer, but for the Loan Officer and his trusty Kiva Fellow sidekick seeking out specific borrowers to interview.

Volodya, a HOPE Ukraine loan officer, photographs the map of Osipenkovskyi Rynok to help him find his clients on future visits.

Weather is a major factor in the relative success of a small business owner in an outdoor market. And Ukraine is very cold, icy, and wet for over half the year. But like Olga – a vendor of used books and school supplies at Osipenkovskyi Rynok – told me, monthly rental fees for the cheapest indoor space at the local department store cost as much as she makes in profits each month. So Kiva’s borrowers in Ukraine usually opt for the cold, wet Rynok (thus the warmly dressed borrower), where they can rent more affordable spaces and sell their wares at cheaper, more competitive prices.

The wet and snowy reality of a Ukrainian Rynok in February

Having met several vendors in these outdoor markets already, I can tell you that they’re not only very kind, hard working individuals, but they need your support as much as do any borrowers on Kiva. They’re also generally happy people – it’s just more culturally common not to smile in photos here!

Kiva Fellow Leah enjoys long walks along the Dnieper River and lending in Ukraine.

Throughout this week and next, HOPE Ukraine (Kiva’s field partner in Ukraine) will be posting several new loans and I encourage you to warmly welcome them into the Kiva community and consider funding them first, especially if you don’t have any loans in the Eastern Europe/Central Asia region. I can’t speak for everyone, but this Kiva Fellow might just think it’s sexy.

Leah Gage is a Kiva Fellow serving with Kiva’s field partner HOPE Ukraine/Nadiya in Zaporozhye, Ukraine. Consider joining the Fans of HOPE Ukraine/Nadiya lending team!

The connection isn’t apparent yet. Here’s the breakdown of the election, if you’re interested: those who supported Yulia Tymoshenko live in Western Ukraine, speak mostly Ukrainian, and generally support increased ties with the West. Viktor Yanukovich’s supporters live in Eastern Ukraine, speak mostly Russian, and are generally supportive of stronger relations with Russia. If you look at this electoral map posted by the Ukrainian newspaper Pravda, you can see just how divided the election was.

Meanwhile, Ukraine’s econmy is struggling. I think this is the bottom line for most of Ukraine’s small business owners and beneficiaries of microfinance. To offer some perspective, a year ago it was leaked that Ukraine’s finance minister Viktor Pynzenyk was fearful of a Ukrainian economic collapse, and posited that Ukraine’s economic situation was “the worst in the world.”

The economic collapse here was not as gradual as it has been in the United States. A year and a half ago, Evie of KF6 blogged about the day in October when Ukraine’s economy literally crashed: ATMs shut down, banks closed, and Ukrainians in the east and west lost their jobs in droves. To cope, small business owners who already had microloans changed or diversified their businesses, like Mariya Roman who added porcelain dishes to her electrical goods business. I plan to meet Mariya when I visit Vinogradovo in April.

I don’t think I’ll have a clear picture of how Kiva borrowers have been affected by Ukraine’s election or the country’s economic instability until I meet the entrepreneurs in person, which starts next week.  I’ll be meeting Kiva borrowers at the enormous Angolenko Market (pictured below), the largest market in Zaporozhye that houses many of HOPE Ukraine’s clients.

A babushka descends the stairs at the enormous Angolenko Market, the largest market in Zaporozhye, Ukraine.

If you, faithful Kiva Fellows blog readers, have any insights, I encourage you to post comments below! I’ve only been here a week and would love to read your more informed viewpoints.

Leah Gage is a KF10 Kiva Fellow serving at HOPE Ukraine in Zaporozyhe, Ukraine. While in Ukraine she looks forward to traveling around this large country to meet the many borrowers who benefit from Kiva loans and learn about the impact the loans have on their personal and professional lives.

In the western world, “political tensions” essentially mean that 24-hour cable networks switch to all politics, all the time.  In Ukraine, due to “political tensions” between local officials, last week many districts of the capital city of Kiev lost heat and hot water.  These are government-controlled commodities – the local goverment can literally shut off your apartment building’s gas heating at a whim.  In sub-zero temperatures and bitter continental winter conditions, losing heat for a week is a hardship to pale at.  People couldn’t even wash dishes, because the water was literally freezing out of the tap.  Even now, three days after the heat was turned back on by these same officials, radiators are merely lukewarm, homes are still freezing, and people are sick with colds and flu.

In addition, the value of the UAH (or “grivna”) has fallen from 5.05gr to $1 on October 1 to 9.45 to $1 on December 17 – a loss of nearly 50% of its value in two and a half months.  This has a direct impact on many citizens, since half of all bank loans and most rents are denominated in either dollars or euro, but most people get paid in grivnas.  Imagine that your rent was 2,525 grivnas ($500) per month on October 1.  At current exchange rates, your rent due on January 1 is now 4,725 grivnas.

Banks are feeling the crunch most keenly, since most of their own debts are denominated in foreign currency as well.  Informal reports from Kiev state that it is nearly impossible for individuals or businesses to get dollars out of ATMs or money changers – banks are holding on to all foreign currency reserves and refusing to sell them.  One source attempted to find USD from over 20 different ATMs and exchange kiosks, with no luck.  

Add to the mix the near-collapse of Prominvest Bank, one of the largest in Ukraine, earlier this fall.  To prevent a bank run, they froze all depositor accounts until at least January.  People and companies can see their money sitting in their account, but cannot withdraw it, and cannot use the bank to transfer funds or make payments.  As of December 16 a Russian bank has been in negotiations to buy the troubled bank.  Many Ukrainians view this nervously as Russian attempt at economic, rather than military, takeover of their country.  Ukraine is in a vulnerable position, as its GDP is expected to decline by up to 10% in 2009.  Consider that the predicted 3.4% decline in the US is considered a deep recession, while a generally accepted definition of a “depression” is a GDP decline of more than 10%.

This is particularly hard on financial institutions – like Kiva’s field partners.  

Kiva’s business model is more complex than it appears at first glance.  When a lender sends $25 through Kiva to an entrepreneur, that money is received and disbursed by our field partner in that country – in this case, HOPE Ukraine.  The field partner is a microfinance bank which is authorized as a financial institution in that country.  They do the leg-work of finding clients, performing due diligence to ensure the borrower is solvent, writing profiles, and handling the transactions between Kiva’s lending community and the local entrepreneur.  Critically, they also handle foreign exchange risk.  

When Kiva sends $300 to an entrepreneur, it’s exactly that: $300.  So we’re expecting that same $300 back, regardless of the value of the local currency.  Imagine that HOPE Ukraine had raised $300 on Kiva on October 17 for an entrepreneur named Tanya.  They would have converted it into grivnas at 5.05, and given Tanya 1,515 grivnas on a 10-month term.  Her principle payments are 152 grivnas, which is what she gives to HOPE Ukraine each month, and HOPE Ukraine promises to convert it and send it back as $30.  However, when HOPE Ukraine converted Tanya’s monthly payment back into dollars on December 17, that 152 grivnas is no longer worth $30 – now it’s worth only $16.  HOPE Ukraine must then pay $14 out of its own pocket in order to send Kiva lenders a $30 repayment.

That sounds pretty grim for HOPE Ukraine, doesn’t it?  But we promised you a silver lining, and here it is:

Due to the crisis, none of the big traditional banks will give out loans anymore, so everyone is coming to HOPE Ukraine.  They have as much business as they can handle, and more.  And because the grivna is worth less, they can lend out in higher amounts.  Since Kiva has a $1200 per entrepreneur loan cap, back in October no Kiva clients could borrow more than 6,060 grivnas.  Today that $1200 loan cap is worth 11,340 grivnas – so they can service clients who have a greater range of financial need.  And they can use the extra income they’re generating on all these new loans to pay that $14 on Tanya’s loan.    

Microfinance institutions in these circumstances begin to seem, if not recession-proof, at least recession resistant.  Even as the value of their loan portfolio declines on international markets, the volume of loans they service can increase, because traditional banks tighten their lending habits.  This is particularly true for loan-only microfinance banks like HOPE Ukraine.  Because they don’t take deposits, only give out loans, they did not have money sitting idly in their coffers to be used for foreign investments.  They stayed out of the mortgage-backed securities and the short selling, and were thus insulated from many of the shocks that traditional financial institutions suffered.    

Conditions on the ground, particularly for the poor, are still harsh and uncertain.  Unemployment is skyrocketing, inflation is at 25% and rising, and the government is deadlocked in political infighting.  Tanya, and everyone else in Ukraine, may or may not have hot water, or a job, or a savings account tomorrow.   But despite the gloom and instability, and in some cases because of it, Kiva’s field partners are standing strong.  

Ukraine has two major issues: the economy, and Russia.

Along with the rest of the world, starting in September 2008 the Ukrainian financial sector suffered major shocks. One of the largest banks was turned over to a rescue administration, and many deposit accounts were frozen or withdrawls capped. This resulted in many companies being unable to access their funds, including operational capital, payroll, and accounts receivables/payables.  Many individual depositors were similarly affected.  Many banks have followed suit and limited withdrawls, and some assets are still frozen until roughly February 2009; as there is no FDIC in Ukraine, this measure was intended to prevent rampant bank runs.

Consequently, the value of the grivna fell from 5.05 to $1 to a low of 7.02 to $1 – in less than a month.  After the IMF announced a $16.5 billion bailout, approved by Parliament last Friday, the currency stabilized around 6 to $1.  The country’s primary export, steel, has also been in a drastic decline since 2007, leading to increasing unemployment and unrest.  Repeatedly in international headlines for the past month, the countries shown as most dramatically affected by the crisis are Iceland, Hungary, and Ukraine.

Meanwhile, Russia has been encroaching on territories it lost in the collapse of the USSR.  The conflict over neighboring Georgia is watched closely by Ukrainians, as a bellwether of Russia’s goals for expansion.  The West-leaning Prime Minister, Yulia Tymoshenko, has openly pleaded with the EU to check Russia’s power.  “The West must seek to create counterweights to Russia’s expansionism and not place all its chips on Russian domestic reform,” she wrote last year.  As a neighbor to Russia, home to a sizeable Russian population, and possessor of tension-filled state of Crimea, Ukraine is in all too vulnerable a position.

There is an underlying sense of unease in this country.  I spoke to a humanitarian worker in Crimean Simferopol who lived through unannounced practice bombings and urban warfare taking place outside her apartment building last month.  Russia was reportedly issuing Russian passports to citizens there last week.  The Ukrainian economy is walking a tightrope between politics and solvency, and is dependent upon the US-funded IMF.

Today, as November 4th began here 7 hours ahead of Eastern Standard Time, many Ukrainians were informally polling their friends about the US election.  The news coverage was reporting and translating every political and polling story.  Despite Obama’s campaign slogan, there seems to be more fear than hope.

I spoke to a staff member at HOPE Ukraine, Kiva’s field partner in this region, about the information she’d gathered from friends, family, and coworkers that morning.  (HOPE Ukraine is an evangelical Christian organization, which uses the proceeds from its microfinance mission to fund Tomorrow Clubs children’s ministries.)

“Neither is a good candidate,” she said, summarizing the conversations.  “Obama supports abortion and gay marriage, which we oppose, so we would never vote for him if it was our country.  But John McCain’s policies on Russia are so militaristic and so dangerous.  He wants to try to isolate Russia, to kick it out of G8 and to take a hard line.  But Russia will not react well to that.  That is the spark that could start a war.”

A war that would play out right here in Ukraine.

A war that the West, busy with its own troubles and perhaps hoisted by its own petard in Georgia, might either ignore, or (diplomatic assertions aside) be too weak to fight.   And if that happens, what’s to become of Ukraine?

Economically, my Ukrainian friends have been tight-lipped. The US is the major backer and brain trust for the IMF. Ukraine is widely believed to be financially devastated if not for the IMF bailout, so Ukraine (like Iceland and Hungary) need the US to still be in enough of an economic and superpower position to keep funding and sinking brainpower into it.  But the candidates’ specific economic policies haven’t been discussed in any news that I can read, or talked about in any conversation I can access. When I ask I get almost no answer at all, perhaps because I am both an outsider and an American.

The fear of further economic, diplomatic, and even military strife has most Ukrainian news sources watching the American polls with a wary eye.  Their lives depend on a future most American voters won’t consider when they cast their ballots today.

This woman was confident, well educated, and witty.  She spoke of her business with pride and determination, and joked that she’d allow me to film because it gave her free marketing in the USA.  But when I asked Yelena about the hardships she’d had to overcome in order to make her business as successful as it is, she got serious.  “Economics.  It’s always economics and stability.”

Ukraine has called for an IMF bailout for their crisis.  Dominique Strauss-Kahn, Managing Director of the IMF, said Friday, “Many countries seem to be experiencing problems because of the repatriation of private capital by foreign investors or the reduction of credit lines from foreign banks.”  This is basically what caused the Asian Economic Crisis of ten years ago.  It is a very dry way to report the fear and hearteach of millions of entrepreneurs and private citizens.

A brief parable, to explain the economics jargon:

Imagine that you live in Ohio, and want to buy a little summer home on the beach in Crimea.  You give the current owner US Dollars, and she gives you the deed to the property.

During the winter, you rent out the little home to locals while you have family holidays back in Ohio.  The locals give you UAH (“grivnas” in local slang) and you give them a place to stay.

Now there’s a wad of US Dollars sitting in a bank in Ukraine, and a wad of UAH sitting in a bank in the US.  The Ukrainian bank can use these US Dollars until the dollars’ owner goes to the ATM and wants them back.  Likewise, the US bank gets to use the UAH until its owner wants them back.

Now, imagine a few million of these little retirement homes (or businesses, factories, apartment buildings, stocks, etc) have been purchased by people sitting in the US.  There’s now a great big wad of US Dollars sitting in Ukrainian banks.

Until two weeks ago, when one of the biggest and most established Ukrainian banks went under.

You won’t hear about this collapse on the news.  It’s been officially called a re-structuring, just as Washington Mutual went through this past summer.  The bank still exists, and the buildings are still there, but all of its activity has been shut down.  For the past two weeks, the ATMs have not worked.  Businesses who bank there have been unable to send out payroll checks; they can see the money sitting in their account, but cannot access it.  The bank’s customers have been told that they will have access to their money sometime in December.

There is no FDIC in Ukraine.  People who put their money into a bank here must trust that the bank is stable, because if it collapses, they lose everything.  That has happened here, not once but twice in a generation.

This is understandably scary, and it’s not widely reported in local news media.  People here learn the financial news around the water cooler, playing an intricate and country-wide game of Telephone to figure out what happened to the money and what might happen next.  There are major industrial cities in the country that have cut back to entirely part-time labor; factories have told their employees that they cannot afford to pay for more than 4 workdays per week.  Whispers up and down the chain of command seem to say that the extra money is being used for the 700 million UAH “emergency election“ fund, called for by the President apparently out of political spite.  “We don’t want another election,” I was told.  “We want the financial crisis averted and unemployment lowered.”

Now you sit in your chair in Ohio and watch the news about banking and political crisis in Ukraine, so you decide to sell your little vacation home and get out of Dodge.  You also don’t want anything to do with the grivnas you’ve got sitting in the bank, so you convert them back to US Dollars.  This is a perfectly rational thing to do, from your perspective.  You pull out and put your money at home.

So does every other person in the world, at the same time.

Suddenly, everyone in the world gives Ukraine back their grivnas, and takes out their dollars, pounds, euro, and yen.  Ukraine already has grivnas in its local money supply, and the addition of a such huge amount of it drives the value down overnight.  Inflation skyrockets, and keeps going up as the foreign investors keep pulling out.

And that big, shaky Ukrainian bank gets even shakier, so none of the other banks in the world want to do business with it; the bank cannot trade, get loans, or get a stable supply of foreign currency.  The other banks all take their football and go home.

And Yelena is watching the news and the stock tickers.  She goes to the ATM to get money to keep the lights on in her store, and the ATM doesn’t work.  Her employee may not get a paycheck, because it’s siting in limbo somewhere as useless 1s and 0s.  Her Kiva loan through HOPE Ukraine has already been used to purchase the inventory she’d specified, but Ukrainian banks have been known to call loans immediately when they get into trouble, and so she does not entirely trust HOPE’s reassurances.  She is very nervous.

“I am confident that God will see us through, and will take care of His people,” a HOPE staff member told me in a quiet and wistful voice, looking at the floor.  “But what will happen… I don’t know.”

We went to interview 3 of the 5 Kiva clients at this brand-new office.  They’ve been in business for 2 months and have gathered 11 clients total.  The loan officer, Vitalik, took us through a marketplace that looks just the same as cloth-covered market kiosks around the world.  You could see it at a farmer’s market in Seattle or the Chatachung Market in Bangkok.  (The knock-off Prada handbags were, I admit, more reminiscent of Thailand than of Washington.  None of the Kiva clients were selling such things.)   All three clients had opened two locations and had at least one employee, two were widows who had raised children by themselves, and all of them originally went into business because they lost their jobs during perestroika and had no way to feed their families.  All had been in business for more than 9 years.

The interviews were quick, painless, and eye-opening.  It really did give me a good sense of what kind of entrepreneurs microfinance works with, and what kind it doesn’t.

As a former Soviet state, home of the Orange Revolution, and under-journalized European backwater, Ukraine certainly has an image problem.  It brings to mind images of inscrutable bureaucracy, frozen winters, and monotonous apartment blocks.  Except to those of us who have visited the country or known citizens of Ukraine, it does not bring to mind the sorts of struggling poor that microfinance institutions typically serve.

HOPE Ukraine serves clients like Tatyana all over the country