Posts filed under 'Tajikistan'
When the Local Currency Falls, Microfinance Suffers
It has to be a devastating feeling to wake up one morning to find that 20% of your savings have vanished into thin air through no fault of your own. Unfortunately, that’s the reality that developing countries often have to deal with when their country’s financial systems are unable to keep the control over the value of their currency.
When I completed my Kiva Fellows placement in Tajikistan in early April, the local currency there was at around 3.80 Somoni to 1 USD. But something odd started to happen in the weeks to come. Somoni suddenly started to slide down and accelerated in May, until it hit its bottom on May 29th at 4.44 Somoni to 1 Dollar.
In other words, dollars suddenly became 17% more expensive compared to just 2 months earlier. Or 29% more expensive since the beginning of the year – just six months earlier.
Who’s Feeling the Impact?
4 comments 28 July 2009
Six Months Later: 10 Lessons Learned About Life, Microfinance and the Universe
Going full circle. Ferris Wheel in Bosteri, Issyk-Kul Lake Region, Kyrgyzstan
It was exactly half a year ago, on January 23rd, that I packed all of my belongings in one 30-pound backpack and left New York City for a 7 month trip to Central Asia and India. I only had a slightest idea of what the trip would wind being like and what exactly I’d be doing during all that time. I just knew that it was something that I had to try for myself, even if I couldn’t quite find and explain the reasons to others.
Low and behold, it’s now six months later and and I’m in the midst of doing my 2nd Kiva placement in Kyrgyzstan (after doing doing a Kiva Fellowship in Tajikistan and then a another job assignment in India). So, I figured that it would be a good time to stop and reflect on the experience and the lessons learned. With just four weeks left before heading back to the good, old U.S. of A, you definitely wonder about what this meant for you.
10 Lessons Learned About Life, Microfinance and the Universe (in no particular order):
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On Patience: Things take time to work. Over the last 6 months, I started work in 3 different organizations (2 for Kiva and 1 was for an independent, non-Kiva placement but also in microfinance). The first few weeks in every place can feel slow and sometimes awkward, as you struggle to find your place within the organization and figure out what you can contribute. Patience really is a virtue. (more…)
7 comments 23 July 2009
The Stories of 5 Micro-Finance Borrowers
At 7:15am in the morning, I got into a car with my MFI’s boss and three other employees. They were headed to Kurgan-Tube, a town about 150km from the border of Afghanistan, to check out a few things at their local branch and offered me to come along. Since this would be a good opportunity to meet with a few micro-finance borrowers in that area, I jumped at the opportunity.
When I got to the branch office, one of their loan officers offered to take me to a handful of his clients that were coming to an end of paying back their loans. These are typical micro-finance customers and the following are their stories:
Matluba Holboeva – Bazaar Vendor
Before the Civil War started in Tajikistan in 1992 and went on until 1997, while taking over 50,000 lives, Matluba Holboeva was a school teacher. When the war started, her salary stopped coming – the school administration simply withheld the payments from her and other teachers. Left with little choice and having to do something, anything, to put the food on the table, she started a little stall at a local market in Kurgan-Tube where she sold fine fabrics.
Instead of paying a monthly rent of 200 Somoni (~$52 at current rates), she purchased it outright for a hefty fee of 1,100 Somoni per square meter (around $300 per square meter). For over 14 years, she’s been selling fabrics at her stall now. She buys them in bulk in Dushanbe (capital city) for about 3 Somoni a piece ($.80) and then resells them at her stall for about 3.5 Somoni a piece ($.92) – making a small profit of just ~0.12 USD on each piece she sells (although there are more expensive items).
She took out her first loan from HUMO last year for about $1,000 for 6 months in order to purchase a bigger selection of inventory. She will be done with repayments next month. Using the increased profits that she realized from this loan, she was able to pay for the wedding of her child – something that every parent has an obligation to do for their kids in Tajikistan.
Did you know? Under the current environment, a teacher’s salary in Tajikistan is about $150 per month ($5 per day). Considering that it costs at least $500 per month to raise a family in the city – in terms of food, housing, transportation, etc. – it’s not surprising that many teachers are leaving the field or supplementing their income by selling goods at local markets.
Mashhura Hidirova – Bazaar Vendor
Ten years ago, Mashhura Hidirova had an opportunity to start her own business. She was living with her parents, as a new market was opening up in her town. She was able to get a good location for about 5 Somoni per day rent (around $1.25/day) – which is a typical price to pay at these markets.
She currently specializes in selling men’s pants – particularly jeans – out of her stall. She makes regular trips to Dushanbe (the capital of Tajikistan) where she buys her inventory – starting at about 25 Somoni for the lowest-cost jeans (around ~$6.50). When she resells them at her stall, she adds a markup of about 20-30% (e.g. same pair of jeans would sell for about $8). However, you won’t find any price tags on her products – or for that matter, any other vendor on the market. The prices in these markets are, in large, dependent on the buyer – their bargaining ability, their buying capacity, and so on.
Her biggest group of clients are students. Interestingly enough, she mentioned, the students these days are becoming more interested in formal pants, rather than jeans. This is mainly driven by the fact that many colleges and universities have a strict dress code – where students may be required to dress formally or they won’t be allowed in the class.
Mashhura is currently on her 2nd loan from HUMO – with just two months of repayments left. Using the profit she made after using the loans, she was able to fix her house and buy a washing machine.
Did you know? If you have good bargaining skills, you can get pretty good deals at the markets these days, as many vendors are forced to offer steep discounts to compensate for the decrease in sales and customers. The ripple effect of the world’s economic crisis touches upon developing countries, as much as the developed ones.
Mahmadi Alihanov – Taxi Driver
We’ve (myself – Kiva Fellow and HUMO’s loan officer) met Mahmadi as he was waiting in a taxi line at the bazaar to pick up new clients. That’s one of the most popular locations in Kurgan-Tube, Tajikistan, as people come out from the markets and need a ride home with their newly acquired goods. The ride in a taxi costs just 1 Somoni (about $0.25), but you’ll have to share the taxi with 3 other passengers – as it won’t leave until it’s filled to capacity.
Mahmadi invited us to sit in the taxi, as he didn’t want to lose his place in line, while he shared some details about himself and his business before and after the loan.
Before becoming a taxi driver, he worked in Russia in the construction sector for 6 years – as over a million Tajiks do. However, 5 years ago, he had to come back to Tajikistan for family reasons and wound up starting in this line of work. The job is very stressful, he said, as the traffic is difficult to navigate and you have to be always on your toes. Plus, working for 7 days a week for 12 hours a day, has its toll and can be tiring.
Each day, he carries about 80 to 100 passengers, which earns him about $20-25 per day (minus expenses). Using the loan from HUMO, he was able to convert his taxi to run on both gasoline and natural gas – which can be significantly cheaper, more efficient, and cleaner. Although this was certainly an expensive investment upfront, it will yield him significant savings on his fuel consumption in the long run.
Did you know? It costs about $350 to convert a vehicle to run on liquid (zhizhenij) gas or about $1,000 to make it run on natural gas. As Tajikistan has rich deposits of both, it is a much more economical form of fuel than gasoline – not to mention cleaner for the environment.
Karima Kahorova – Baker
The fragrance of baked bread permeates every corner on Karima Kahorova’s apartment. It’s no wonder, as she – along with the rest of her family – produce between 2,000 – 3,000 little bread buns per day.
Karima has a culinary degree from a local university that she received years ago. However, as opportunities to use it at a regular job are scarce in Tajikistan, she’s been working for herself for years. She works directly out of her apartment in order to save money that she’d have to pay on rent elsewhere. But it hasn’t been much of a problem in terms of finding clients, as she sells her finished goods in bulk to retailers that then resell it at a local bazaar. A bun from her costs just 20 diram ($0.05) – which is then resold at a market for about 25 diram ($0.06-0.07). A comparable product at a store would be about twice that cost.
She keeps the costs low by working long hours – sometimes, 24 hours a day if needed to fill the demand. The rest of her family helps out, as well – her husband and kids work in the business. But the conditions are difficult – the bulk of the production takes place in the living room, while two small stoves are in the bedroom. “It’s not ideal, but you have to do what you have to do,” she says.
She used her $500 loan from HUMO to stock up on supplies and raw materials, which cost cheaper in bulk. She’ll be done with her repayments shortly and is considering taking out another loan in the near future.
Did you know? When you go to any cafe or choihona in Tajikistan, you will always be served two things regardless of what else you order – a big, fresh pita bread and a pot of hot, sweet tea with lemon. If you are a guest, the host will always break the bread into smaller pieces and will pour the tea in your cup.
Sadbargul Faizova – Raises Livestock
Sadbargul, along with her husband, had one cow when she found out about HUMO’s micro-loans. She took out a 12-month loan for $800 in order to buy a 2nd cow, along with the feed for both of them for the winter.
When she took out the loan, a cow could be purchased for about 1,000 somoni ($260). However, due to the dollar getting stronger over the last half a year, the same cow could cost about 1,500 somoni today ($390). It also appears that they got a good return on investment, as one of the cows recently gave birth to a young, healthy calf.
Although Sadbargul has been doing this work her entire life, she has 3 young sons that she wants to provide an education to, so that they could have more opportunities when they grow up.
Did you know? Each of the Sadbargul’s cows can produce about 2 to 4 liters of milk per day, which can be sold for about 2 somoni per liter. This adds about $1-2 per day to the family’s income.
Parting Thoughts
Many of the borrowers are somewhat hesitant about answering questions and, oftentimes, the questions themselves seem to puzzle them.
Whenever I speak to a borrower, I always wonder about whether the loan helps them to grow the business – today, they have 1 cow, do they want to have 3 cows next year and 10 cows the year after?
The answer, surprisingly, is usually no. The profit from the increased business activity is usually used in consumer purposes – to fix up the house, pay for a wedding, etc. – and the business typically stays on the same level.
Then again, maybe the quality of life doesn’t depend on having 10 cows … and that’s just my Western mentality.
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* This post has been written by Boris Mordkovich, a Kiva Fellow working for 10 weeks in Tajikistan for MLF Humo and Partners. Check out currently fundraising loans by Humo and join Kiva Lending Team – Supporters of Tajikistan *
14 comments 26 March 2009
Show Me The Money – Where Do The Profits Go
Some of the borrowers I have met in the field
As I was visiting the MFI clients in the field, the borrower would often proudly annnounce that he or she was on their 5th loan… or their 7th loan… or even on the 9th one. Although this does show an impressive credit history, something about it was bothering me.
Before coming here, I had a few assumptions about what a business loan is all about. I pictured a budding entrepreneur who borrows money to purchase supplies or to expand inventory. They pay a relatively high interest rate (say, over 30%+ per year), but it’s worth it because it gives them a boost in their business. Without that loan, they’d either never have an opportunity to grow or it would simply take a very long time.
When the entrepreneur is done paying off the loan, he or she – hopefully – has a higher revenue stream, along with a bigger take-home profit. So far, so good – this is what I’ve been seeing among the borrowers.
But then, I imagined that they take the extra profit and plow it back into their business in order to take it to the next level. However, the reality on the ground was quite different than I expected.
Instead, many borrowers were using the increased profits they made as a result of a loan for personal purposes. One client fixed up their house. Another one used the money for a wedding. A third decided to put in a row of gold teeth. All valid uses. After all, the whole purpose of micro-finance is to help people increase their standard of living and all of these things do that.
But the thing that wasn’t adding up was that the entrepreneur was going right back to the MFI to take out an even larger loan and continue to pay the 30%+ annual interest on that money.
The big question that I’m struggling to answer is why aren’t the borrowers using the profits – that are interest-free – and putting it back into their business first? Granted, this would mean postponing the immediate benefit of using the money for consumption. But over the long haul, it would yield them a much better return and more opportunities to improve their standard of living, as they would avoid paying the interest. At 30% per year, that’s a significant amount in savings.
It’s difficult to put oneself in somebody else’s shoes and make a decision on what’s more important – a roof that doesn’t leak and a loaf of bread today or a two-story house and three loaves and a kilogram of beef next week. I don’t have the answer to that.
But there is even another caveat to the story that made me think. As I spoke to the borrowers, it turned out that most of them rarely kept any sort of a financial document where they’d record how much they made, how much they spent, and so on. All of this was kept in their heads.
While that may be sufficient for day-to-day operations, without a historical record, it becomes very difficult to project how much money one could make by funding the business using the profits rather than debt. As Bob Parsons, a self-made millionaire, once said – “everything that’s measured, grows.” Perhaps, the opposite is also true.
What do you think?
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* This post has been written by Boris Mordkovich, a Kiva Fellow working for 10 weeks in Tajikistan for MLF Humo and Partners. Check out currently fundraising loans by Humo and join Kiva Lending Team – Supporters of Tajikistan *
14 comments 13 March 2009
When The Collections Call Rings, How Do You Answer?
* image used for illustration purposes only; it is not an actual sign used by our MFI *
The end of the month is always a hectic period at my micro-finance institution. It’s considered to be a critical time to collect the late loan repayments, in order to reduce the amount of risk in the portfolio when the new month rolls around.
There are a number of meetings that take place among the loan officers and the management where the problem clients and groups – those that have not submitted their repayments on time – are discussed in detail. The mood is solemn at these meetings, as the situation is worrisome. Due to the economy affected by the worldwide crisis, more and more clients are becoming delinquent and are having trouble paying back their obligations.
The Collections Process
Typically, when a client is late, the loan officer personally delivers several written warnings to him or her to let them know about the late fees, which are relatively steep, and the consequences that may follow if the payment is not submitted promptly, such as the possibility of a lawsuit. Most of the clients react to these warnings and settle their debt, but not everybody. Thus, at the end of the month, there is an extra emphasis placed on collecting the repayments from these remaining “problem” clients.
Over the last few days, the loan officers have been paying daily visits to the delinquent borrowers. In fact, they even bring in an additional loan officer for reinforcement and effect. Oftentimes clients simply get used to their credit officer “pestering” them about the missed payment and not take it seriously any longer, so the extra support is meant to show how serious the situation really is.
Although today is Saturday, most of the staff has been working and making their rounds. The office stayed open as well, as the clients have been given a deadline to come in and submit their repayments by the end of the business day. As the day rolls to an end, many of the “delinquencies” have been resolved, so the staff starts to breathe easier.
It’s not the easiest part of the job for the loan officers, as that’s when they have to be a “bad guy” to a large degree. Many of their clients – even long-time reliable ones – are struggling to pay back their debts. For some, business has slowed due to the worldwide economic crisis. Others have relied on remittances coming in from Russia which has dried up recently. Although the MFI staff may sympathize, everybody has their job to do and the money needs to be paid back.
Conclusion
When you first learn about micro-finance, you learn about the impact that the loans have on the borrowers. You learn about the social value that the micro-finance organizations provide to their clients. And it’s all true – impact and social value are certainly there.
But because this is still a business and not a charity, things don’t always go so smoothly. As a micro-finance institution, you are caught between a rock and a hard place. Many MFIs, including the one that I’m working for, has a social mission to help the poor population and conducts its operations accordingly.
However, when the clients are struggling to pay back their loans, what should the MFI do? Do they attempt to accommodate the client, since – after all – their mission is to help the struggling population and not take their last money at the time of need? Or do they need to do whatever needs to be done in order to collect – as otherwise they can significantly jeapordaize their operations and the ability to serve more customers in the future?
What do you think?
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* This post has been written by Boris Mordkovich, a Kiva Fellow working for 10 weeks in Tajikistan for MLF Humo and Partners. Check out currently fundraising loans by Humo and join Kiva Lending Team – Supporters of Tajikistan *
7 comments 28 February 2009
How Risky Are MicroFinance Borrowers?
One of the reasons why so many people around the world are not eligible for traditional credit and financial services is because they don’t have any collateral to offer to the lender. However, ironically, collateral alone is often not enough anyway. If you look at traditional borrowers in the U.S., who take out mortgages while putting their house down as a collateral or other loans, the default rates are still quite high (even before the crisis).
So is physical collateral a necessity? Or can credit be given without it?
About 2 Percent
One of the big questions that people have when they first learn about microfinance is – what is the repayment rate? Oftentimes, people are sceptical that the poor actually repay their debt. In general, this can vary from organization to organization, but a 98% repayment rate or higher is typical. In other words, only 2% of the loans or less actually go into default.
So, how can it be that microfinance clients in Tajikistan seem to be more likely to repay their loans that typical borrowers in the U.S.? What measures do MFIs take to keep their portfolio-at-risk numbers low? What can be effective means of collateral when there is nothing physical a client can offer to the lender?
Solidarity Guarantee
One of the most common techniques used by many MFIs to secure their loans is to lend through groups, where every member of the group is responsible for the group’s repayments. In other words, if one borrower fails to repay, the others have to cover for him or her or the entire group suffers.
Why does that work? In part, because the groups do their own, internal analysis to determine who is trustworthy and who they will accept into the group. And secondly, when people have very little, the most important asset they hold is their reputation, so they have an additional interest in repaying their loan to maintain that.
Small, 3-person group. They can range from 3 to 10 people.
One of the credit officers told me a story about a client who was late on her payment. The loan officer went into her village a few times to tell the borrower about the consequences of a late payment. After a few visits, the borrower came into the office to pay up and asked him not to come to the village anymore because she was afraid of what people would think if they’d find out that she was late. Reputation matters.
One step at a time
Solidarity and reputation are important factors, but they are not the only motivators. Many new clients typically start off with small loans at first and need to prove their repayment ability before gaining access to larger amounts and better interest rates. At my MFI, it’s not uncommon to see clients on their 6th, 7th or even 9th loans – each one larger than the previous one.
One client that I’ve met (below), received her first loan for about 1,000 Somoni (300 USD), her 2nd one for 3,000 Somoni (900 USD) and was currently applying for her 5th loan for 5,500 Somoni. In a sense, this is a way for people to build a credit history in places where credit agencies, like Experian and TransUnion in the U.S., do not exist.
Lola Toshmatova, a bulk sunflower seeds saleswoman, is now on her 5th loan
Keeping your clients close
A very interesting risk-reducing technique that I observed at my MFI is the monitoring system that the credit officers have in place. For every new client that comes onboard, the loan officers visits them several times right after dispersing the loan to ensure that the loan was used correctly. But, moreover, they follow up with quarterly visits to evaluate the business and ensure that everything is going smoothly. This way, any problems are identified and dealt with early on.
I’d say that this level of attention is pretty unheard of in the United States. After all, when was the last time that the person at your bank visited you after you took out a mortgage or a student loan to see how you’re doing. Even though, the loan sizes here can be 100 smaller than in the West. Although this is a time intensive endeavor, this is one effective strategy to stay on top of your investment.
* This post has been written by Boris Mordkovich, a Kiva Fellow working for 10 weeks in Tajikistan for MLF Humo and Partners. Check out currently fundraising loans by Humo and join Kiva Lending Team – Supporters of Tajikistan *
4 comments 20 February 2009
Impact of the Economic Crisis in Tajikistan
The consequences and impact of the international economic crisis has spread into all corners of the world – and Tajikistan is no exception.
In some ways, the impact of the crisis has not been as felt here as in the West. Most of the people here did not have their life savings in the stock market nor were they taking out 50-year, 0% down, adjustable rate mortgages (in fact, 30 year mortgages are unheard of here).
However, the crisis is here too and the true aftermath may simply be delayed.
How does Tajikistan play a role in the world’s economy?
One of Tajikistan’s biggest exports is its low-cost labor. Although the numbers vary, it’s reported that almost 2 million Tajiks (in a country with a population of 7 million) currently work beyond the country’s borders – primarily in Russia, in the construction field. Most families out here have a brother or a husband or a father that went outside the country to seek employment, as opportunities here are scarce.
Last year, the official numbers showed over $2 billion was sent back to Tajikistan in remittances by migrant workers. That’s just the money transferred through official means – much more was passed through informally.
Thus, when Russia sneezes, Tajikistan catches a cold. As the crisis is beginning to severely impact Russia’s economy which subsequently results in a slowdown of construction projects, massive numbers of Tajik workers risk not being able to find work in the future. The true impact is not entirely clear right now, as workers typically head back home for the Winter anyway. But the question on everybody’s minds is – will they be able to find work again when the Spring rolls around? With the poor economy and Russia instituting lowering quotas on the number of foreign workers, this is questionable.
Strong Dollar & Micro-Finance
The other major issue that’s affecting the people is the currency fluctuation – particularly involving the strengthening dollar. On January 15th, 1 USD cost 3.4 Somoni. Today, on February 11th, you’ll have to pay 3.7 Somoni for the same Dollar – almost 10% more.
You'll find these currency exchanges on every block - sometimes, inside grocery or cell phone stores
Although the national currency is Somoni, most of the business dealings here are tied to the dollar in some way, shape or form. Many of the remittances are sent back in dollars. Whether you’re refilling your cell phone balance or taking out a loan from a bank, even if you’re paying in Somoni, the real price is in dollars. As the dollar has been costing more and more over the last few months, people ultimately have less money to spend.
As a result, this is spilling over into the micro-finance sector, as well. Particularly, there are several ways in how this manifests itself.
First of all, borrowers are now more hesitant about taking out loans. When they take out the money in Somoni, their debt is tied to the dollar. So, when the future exchange rate is uncertain, borrowers risk owing a lot more than they originally took out. Instead, they choose to wait it out and forego the loan for the time being.
Secondly, business is slower. It’s a fact that’s not exclusive to the micro-finance sector or Tajikistan, but even this small economy is feeling the impact. As a result, there is an increase in consumer loans, but a decrease in business-related ones. People need money to meet their needs, but are uncertain about investing into their businesses. It’s interesting to see how this will impact the activity on Kiva, as many lenders seem to prefer to fund business-related loans, rather than sponsor a wedding or home repairs.
Thirdly, on a larger scale, many MFIs, including the one that I work for, get the majority of their funding from the U.S. based sources, so they are also subject to the risk. They try to deal with it by passing on the risk to the clients or charging a slightly higher interest rate, but this results in a drop of clients. With fewer clients, the risk within their own portfolio increases.
The next few months will show just how bad the situation is and whether things will get worse.
* This post has been written by Boris Mordkovich, a Kiva Fellow working for 10 weeks in Tajikistan for MLF Humo and Partners. Check out currently fundraising loans by Humo and join Kiva Lending Team – Supporters of Tajikistan *
3 comments 10 February 2009
Why Doesn’t Lonely Planet Have a Guidebook on Tajikistan?
Pamir Mountains - Photo by Oytun Orguil
When I set out to research Tajikistan a few months ago, I figured that it would be challenging but didn’t realize exactly how difficult it would be to find accurate, up-to-date information on this small, land-locked country in Central Asia.
Aside from a single chapter in a Central Asia guidebook by Lonely Planet and a few websites, there is relatively little information available for those interested in traveling to Tajikistan.
As a whole, it’s not considered to be a big tourist destination (aside from the outdoor enthusiasts) – nor is there any real tourist infrastructure setup in the country. A few hotels in the capital, a couple of travel agencies organizing trips into the mountains, and that seems to be it.
Traveling to Tajikistan is relatively complex as well. It borders China, Kyrgyzstan, Uzbekistan and Afghanistan – and most of these countries don’t make it easy for you to get there.
Map of Tajikistan
More About Tajikistan
Tajikistan currently has a little over 7 million people living there with about 80% of them being Tajik, 15% Uzbek, 1% Russian and 4% of other nationalities. The amount of Russians has been declining steadily over the years due to emigration. Plus, a large number of Tajik men go abroad to find work and sent remittances back to their families – in fact, remittances is one of the 3 major drivers of its economy (cotton and aluminum being the other two).
It’s currently one of the poorest countries in Central Asia and has one of the lowest per capita GDP among the 15% former Soviet Union republics – ranging between $1,000 – $1,800 (depending on where you look). Compare that to over $15,000 per capita in Russia or $48,000 per capita in the United States.
Although the the government claims an unemployment rate of just 2.4%, I’d make a wild assumption about the number being inaccurate. About 70% of people live on around $2/day. When a liter of gasoline costs about $1 or a liter of bottle water goes for $0.40c (according to Lonely Planet – I’ll verify!), it makes things difficult to say the least.
Energy Crisis
On top of many financial and infrastructure issues affecting the citizens, the country has also been dealing with a severe energy crisises over the last few years. Although it has a lot of potential capacity through its hydroelectric plant, it winds up relying on importing electricity from its neighbors – as the water freezes in the Winter, at a time when the demand is the greatest.
Last winter, the situation got particularly difficult with temperatures reaching -20c and Uzbekistan and Turkmenistan limiting electricity supplies due to their own shortages. In the mountains, rivers froze, leaving hydropower stations without water needed to run their turbines. Electricity was rationed to about 9 hours/day in the capital and other major cities and only 3 hours/day everywhere else. In ‘09, the situation seems less dire – but we’ll see what it’s like over the next few weeks.
Kiva Lenders and Central Asia
Going back to the microfinance aspect of things, one particularly interesting thing that I picked up at Kiva’s training this week is the overall trend towards Tajikistan and the whole region among its lenders. When a new loan goes up on Kiva, it has 30 days to get funded before it expires. Most of them get funded within 24-48 hours.
However, what’s interesting is that loans from Central Asia typically take longer to fund then, say, loans for Africa. Although generally all of them wind up getting the money anyway, lenders seem to prefer to lend to certain regions vs. others. I wonder if that’s because they are less familiar with Central Asia (it does get a lot less attention than other regions) or perhaps that poverty is viewed differently somehow in one place versus the other. The numbers are interesting.
Hopefully, I’ll get some insight into that over the next few months.
Signing off from United States! 
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* This post has been written by Boris Mordkovich, a Kiva Fellow working for 10 weeks in Tajikistan for MLF Humo and Partners. Check out currently fundraising loans by Humo and join Kiva Lending Team – Supporters of Tajikistan *
1 comment 1 February 2009
Kiva Fellows Training – the jigsaw puzzle of 1,000 pieces
Training: After a long day at the office, the last session is held at a park.
Hi there!
My name is Boris Mordkovich and I’m one of the 28 Kiva Fellows [in training] in the KF7 class. In just a few short days, I’ll be finishing up the training, getting my last-minute supplies and headed to the cold, cold winter climate of Tajikistan.
As we come to a close of our 3rd day of training, there is finally a small window of opportunity to take a breath and reflect on this week thus far. And let me tell you – there aren’t a lot of opportunities like this during the week!
The training is designed to prepare a new group of fellows for field work at their respective Micro-Finance Institutions (MFIs) all over the world. But this preparation is unlike any other – it’s training on steroids.
Kiva has a pretty difficult task of “training” 28 people for something like a Kiva fellowship – as everybody’s experience will be unique in many ways. The needs of the organizations we will all be working for will vary. The countries and cultures that we’ll all be visiting are different. And our skill sets also range tremendously which impacts the type of contributions we can do.
During the week, we all certainly get a chance to learn the inner workings of Kiva, its business model and how it interacts with its partners, lenders and borrowers. The training program provides a ton of information on all things Kiva. However, since we only have a week, each day winds up to be very intense. And then, the deeper you dig, the more you understand how complex and and unique Kiva’s platform is and the more questions you wind up having.
If there is one major thread that goes through every presentation and every session, its the need to be flexible and fluid. There is a lot of trust and responsibilities placed in the fellows – we are given a lot of freedom in how we are expected to do things. And that’s what, I think, will make this both very rewarding and challenging.
Micro-Finance sector and Kiva are still relatively new, so there are a lot of unknowns ahead – but as Leonardo da Vinci once said, “I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do.”
Till next time – direct from Tajikistan!
- Boris
6 comments 28 January 2009
АМЕРИКАНСКИ?
It’s 5am and the electricity has just come back on here in my Khujand apartment. I know because the sheet metal of the ‘70’s era space heater plugged into the wall has started to creak and crack as it warms. I’m not typically up at this hour but it’s D-day – my departure – and I’m anxious to get started on the 3 day, 5 country journey back home. Today Tajikistan to Uzbekistan, tomorrow Uzbekistan to Moscow to Amsterdam, and finally Amsterdam to… America.
I’ve grown accustomed now to calling my homeland, ‘America.’ Early on here I didn’t know what to make of the blank stares when I told someone I come from the US or the United States. I later learned that the term ‘United States’ connotes the former Soviet Union and its dozens of republics. Even before I arrived, I contemplated the reactions I would get considering Tajikistan is the northern neighbor and close cultural cousin of Afghanistan. “What do they think of Americans?” my aunt asked me before I left. I was stumped by the question but I knew I would soon find out.
I still remember from a decade ago the hordes of students in Europe with Canadian flags stitched into their packs. More than half were Americans in partial disguise, otherwise given away by the ballcaps and Tevas. You could always out them by trying to start a conversation about the Stanley Cup finals that year. I also remember resolving myself to avoid hiding who I was and where I was from and instead act as an informal ambassador to those I meet on my travels. Here in Tajikistan I was true to my pledge. Mostly.
The reaction I received as an American was absolutely 100% unwaveringly positive. In fact, it was so positive I had to wonder why. We hadn’t provided them any aid, hadn’t liberated them from an occupying power, hadn’t established close diplomatic ties, and they didn’t even have Coca Cola. Sure, they knew Chuck Norris and Michael Jackson but was that enough? After enough time here I finally figured it out.
Tajikistan is living proof of communism as a failed experiment. That conclusion isn’t based on any economic analysis or survey. It’s based on the overwhelmingly wasted talent of the population. The country has a 99% literacy rate but you don’t need to read to drive a cab. Doctors make the equivalent of $100 a month. Mothers of five sell gum and cigarettes on the street corner. It’s a long story, but the Soviet plan designated Tajikistan to produce cotton and the country was bred for just that purpose. The government here halfheartedly clings to the notion that there is such a thing as a cotton superpower, but deep down it realizes it has no viable industry or economy. Mostly what people want is the freedom to earn a living and pursue their talent.
Consider the fact that we ask our children, ‘what do you want to be when you grow up?’ (Some of us are still pondering that question well into adulthood.) We ask because it taps into what every child in America has; possibilities. When I talk with teenagers and young adults here about their future plans, inevitably they tell me it’s their dream to go to America. It’s not based on some infatuation with Levi’s and McDonald’s. It’s because in America they have possibilities.
As much as my ego would enjoy it, I realize it’s not me they love when their eyes light up upon hearing of my nationality. It’s that, in their mind, they instantly associate the word with every spark of ambition they’ve ever had in their short lives. Growing up I wanted to be a truck driver, a veterinarian, a metallurgist and a filmmaker. Instead I ended up a Kiva Fellow, but every one of those options was a real possibility for me. Some probably weren’t the most prudent career paths, but they were mine if I wanted them. Everyone else wants to be able to dream the impractical dream if they choose – and therein lies the appeal of America.
With sincere thanks to the good people at MicroInvest and all the friends I’ve made in Tajikistan, I’m signing off from Central Asia… for now. After the holidays I will be working with CEVI in the Philippines.
6 comments 22 December 2008
