I think most of the other fellows will agree – the best (and the most rewarding, most inspiring and sometimes, the most awkward) part of this fellowship is going out into the field to meet the borrowers. Though each of my field experiences has been unique, there are a few things I have come to expect.

I’ve traveled up to the mountains, down to the valley and along the coast to meet borrowers. The scenery at each place has been drastically different: the northern Bekaa valley is flat and somewhat arid; Mount Lebanon – lush and green; and the Southern coast – flaxen and dotted with palms. Regardless of where I’m headed, the day always starts off with a near-death experience involving a scooter, car, truck or, when really lucky, a semi (nothing like having your life flashing before your eyes to give you that extra jolt of energy in the morning).

After surviving the car-ride to one of Al Majmoua’s branches (Al Majmoua has nine branches located all over the country), I meet the Loan Analyst (LA) I will be trailing for the day. The LA serves as my guide, translator (for when I struggle with the language) and general hero in life. Each LA has over one hundred clients and knows everything about them from how their businesses are going, to the number of kids they have, to what repairs they need done on their houses. From there, we start our rounds – visiting the borrowers.

The Lebanese people are known for their hospitality (and 4 pounds in one month later, I can vouch for it). Regardless of where I am meeting the borrowers (their homes, grocery stores, workshops..) I am always offered at least one strong cup of Arabic coffee. Declining is almost never an option. After accepting the cup (and I don’t drink coffee) the fun really starts. I ask my questions in Arabic: How long have you had your business? What hardships do you face? What are your dreams …and finally, the dreaded: How did the loan change your life? I dread this question because I always butcher this phrase at least twice while on the field. Loan is qard in Arabic; qird is monkey in Arabic- you can guess which word I tend to use. The general consensus is: Many clients have not seen the monkey funded by Kiva but they find the loan to be very helpful. This is where the Loan Analysts (my heroes!) jump in and explain to the confused clients what I was trying to say.

Despite all the awkwardness and confusion that my garbled Arabic generates, these field visits are what bring everything together: I meet the nineteen year old boy who single-handedly supports his family of five by giving little kids rides on the pier on a mini-train attached to his motorcycle (the only business of the like in the area), the store-owner who is working tirelessly to put his four kids through college, the woman selling clothes out of her war destroyed home that she one day hopes fix. I meet people who are determined despite set-backs and generous despite their financial situations. At the end of the day, I am a sweaty, jittery mess desperately seeking the bathroom courtesy of the 5th cup of coffee – and I love it.

Alia Rafeh is a Kiva Fellow who is working with Al Majmoua in Lebanon this summer. To lend to Al Majmoua’s clients on Kiva click here: Al Majmoua currently funding loans.

Over 7,000 miles away from San Francisco, I’ve finally arrived in Lebanon to start my fellowship with Al Majmoua , a microfinance institution based in Beirut but with mulitiple branches around the country. Flying from my last connection in Dubai to Beirut, we cross over an endless expanse of desert as we pass over Saudi Arabia and Jordan.  The desert starts to make way to rocky mountain peaks as we fly over Syria and finally I start to see specs of green -al-arz (the cedars) – I’ve arrived.

The noise from the screaming kids (in-flight entertainment system was broken-lovely) and exasperated parents dies down to a quiet murmur as we start to get our first glimpses of the Mediterranean and the Lebanese shoreline. The entire plane is silenced by this stunning view – sandy beaches, rocky coasts and plummeting cliffs.  All the last-minute nervousness and doubts I had when boarding my plane from the US (quitting my job given the current economic climate,  leaving my rent-controlled apartment, getting rid of my goldfish…) melt away as I watch the electric blue waters of the sea and recognize various Lebanese landmarks – this is why I came here.

This country is rich in history and culture , it’s capital –Beirut- was once known as the “Paris of the Middle-East”  .  Fifteen-years of civil war seriously damaged the country’s economic infrastructure. Lebanon started to recover but the war of 2006 set the economy back yet again. However, what I admire most about this country and its people is their ability to bounce-back- nothing phases them – they just pick-up where they left off and rebuild as necessary . I came here because I wanted to see the power of microfinance in improving these peoples’ lives and in aiding to restore this already-on-the-mend “Paris of the Middle-East” to its former glory – it’s time again for Lebanon to be recognized for its rich heritage,  its  peoples’ “joie de vivre”  and its breath-taking beauty.

Alia Rafeh is part of KF8 and will be working with Al Majmoua in Lebanon  for 11 weeks where she will attempt not to completely butcher the language. To fund borrowers from Al Majmoua  on Kiva, click here.

Courts and stock markets appear to have very little in common. The first are a revered part of most countries’ legal infrastructure; we cannot imagine life without them. The second, seem to bounce from loved to hated and back again in a matter of hours and are often far from respected; some countries even believe they can do without them altogether. But what do they have in common?

They both play important roles in checking the status quo. Both institutions are often the only places that can bring powerful people and institutions to account for their deeds. Courts, with their sacrosanct independence from politics and private interests, are able to bring down decisions punishing anyone that violates the law or does not honor a contract. Stock markets, for their part, can punish companies that are not fully dedicated to implementing the strategy they promised their shareholders they would adhere to and implement successfully.

Less dramatically, they both play a decentralized governing role, ensuring among other things that companies are well run, contracts are upheld, rights are not flaunted and corporate investments are allocated efficiently. They may not be perfect in doing this, but at least they give us some chance to make power accountable. Most importantly, their role is independent of the executives and management.

One cannot help but notice the relative absence of either of these two powerful institutions at work in the development aid community. The obvious questions is, how are aid institutions and decision made accountable? Who or what makes sure our aid dollars are not being spent inefficiently in helping third world countries develop or deal with a crisis? Who makes sure the allocation of aid dollars is done according to certain high level priorities? How do we make sure our aid dollars are not used to achieve unstated aims, such as distorting the political systems of supposed beneficiary countries or supporting unnecessary agencies and government bodies?

The short answer to that of course is politicians and our government bureaucracy; but they are far from independent. How are they accountable? Sure, if it gets bad enough elections can do the job, but that seems far from effective in most cases. When we give money for aid, the idea is to achieve certain developmental goals, and for temporary assistance. Are our politicians motivated to achieve those goals and makes sure that they do so in the interests of all stakeholders, including beneficiary communities?

Viewed from the field, it often seems like there is a lot of waste in the development aid industry. SUVs and large salaries support a lifestyle often at odds with the lives of those we are trying to help. Accountability and oversight are often shortchanged for control and expediency. Results may often look good on paper, but how do they look in reality and who is checking?

Though this impression was obtained during my time as a Kiva Fellow, it was not due to anything I saw directly in my work with Kiva or its field partners. Rather, it is something I gained from being exposed to people involved in development aid activity funded with official grants from governments. In this respect, Kiva is a refreshing antidote to this status quo, where individuals and a private NGO are facilitating development outside the realm of governments and official aid. Thumbs up to Kiva!

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Nemr is a KF7 spending 12 weeks at Ameen. You can also check out his personal blog. Check out some of Ameen’s borrowers and make a loan today by clicking here.

When any of us wants to borrow money from the bank, whether it is for a new car or a home, or even to start a business, we expect complete confidentiality from our bank. It’s a private matter between us and the bank staff.

Yet, when Kiva borrowers need a loan, we expect them to agree to have their information posted on the internet for all to see, along with a picture and sometimes even a video. Are we unnecessarily invading their privacy?

Clearly borrowers are not being forced. They have a choice. Indeed, I am told by the loan officers here at Ameen that some people often do object to the picture in particular and choose not to take a Kiva loan at all. They are then offered another loan product Ameen provides not funded through Kiva.

However, if Kiva provides people with an opportunity where there would not otherwise be one, we realize that we are urging borrowers to, in a sense, give up their privacy for a loan. Is it fair to put them in that situation?

Before I arrived at my host MFI and began to meet borrowers, I had not thought about the privacy of borrowers. I only thought that the information being provided was necessary to facilitate the connecting between lenders and borrowers and to make Kiva possible. The amazing power of the Kiva concept and the opportunity it was providing borrowers in poor communities was all I saw.

Kiva already does a lot to protect a borrower’s privacy, like giving MFIs the option of hiding a borrower’s last name, or not listing the actual address of their business. These are definitely great features. But I think we should be able to do more to protect their privacy. Here are some of the things I find disturbing at present:

1. Borrowers can be searched on Google by anyone.
2. Borrowers pictures are online for anyone to see along with their first names.
3. Personal information is listed, such as marital status and number of children and their business activity, making it possible for people to identify them with a little effort.

Another related issue I find disturbing is that borrowers are being labeled as poor when they do not necessarily see themselves as such. Poverty means different things in different places. A person asking for a loan from a partner MFI for their economic activity works hard and provides for his or her family and may not see themselves as poor.

I must say that the team in charge of the Kiva Fellows Program and the training we went through as fellows, was careful to highlight the need to avoid “cultural imperialism” in implementing Kiva. I feel that the more concern for the privacy of borrowers falls within this.

Some suggestions for increasing privacy protection for borrowers could be:

1. Restrict access to the full information on borrowers to Kiva registered users or even active lenders on Kiva.
2. Provide borrowers some optionality to provide as much information as they feel comfortable providing.

I think that as Kiva grows and matures, the privacy of Kiva borrowers should be looked at more closely to see how we can better balance the interests of lenders and those of the borrowers. As users on the internet we are always reminded of the importance of protecting our privacy. Why shouldn’t Kiva borrowers also have the same level of protection? This should be especially important given that the bulk of these borrowers have no access to the internet.

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Nemr is a KF7 Kiva Fellow spending 12 weeks at Ameen. You can also check out his personal blog here. Check out some of Ameen’s borrowers and make a loan today by clicking here.

The other day, I walked around Saida’s old town in southern Lebanon and just soaked in the mood of the place. The old town is far removed from the modern part of the city where cars dominate. Here, people go about their business in the narrow streets and interact in a far more intimate space. Tourists are just beginning to discover the place, though they rarely go much deeper than the soap museum on its outskirts.

A number of NGOs have been involved in this part of town for years, where the level of poverty tends to be quite a bit higher than the national level. Also, the municipality of Saida as well as the Ministry of Tourism have made efforts to upgrade the infrastructure in the town in the last ten years.

I shot this short video during my visit.

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I am Nemr, a KF7. I am spending 12 weeks at Ameen in Lebanon. You can also check out my personal blog here.

Check out some of Ameen’s borrowers and make a loan today by clicking here.

Beirut was recently ranked on top of a New York Times list of places to visit in 2009. The reason, luxury hotels, the nightlife, and Lebanon’s vast historic heritage spanning centuries of civilization. That’s not the Lebanon I saw last week during my first field visit. Instead, I went to the southern suburbs of the city, also know as “the suburb” (in Arabic, El-Dahyeh).

My MFI, Ameen, was kind enough to arrange for me to be driven to one of two of its branches in Burj Barajneh where I met the loan officer. I was grateful to be driven here since as soon as we entered the area I realized that, left alone, I would surely get lost. Within minutes, I realized that the driver himself was lost.

Ameen has 10 branches in El-Dahyeh and approximately a quarter of its Kiva borrowers live or work here. Though technically not a part of the Beirut municipality, El-Dahyeh is very much a part of the city. Many people who live there work in other parts of Beirut. Also, many go to El-Dahyeh to do business, especially to shop at its bustling markets. Here you will find a whole variety of inexpensive things from furniture, clothes, and household items, to fresh produce and other food products.

One of the first things one notices in El-Dahyeh is the poor state of the infrastructure. Unpaved and poorly paved roads snake their way between buildings that seem to have no particular order to them. In places, the road narrows forcing cars to wait for oncoming traffic. In others, stores place their wares on the road, blocking traffic. Everywhere, pedestrians must compete for space with cars from all directions.

This state of affairs has to do with the history of the area. This part of town has developed into an urban jungle of sorts in a span of only thirty years. Before this lay quiet coastal towns surrounded by orange groves and fields producing various types of fruit and vegetables. These towns remain in name only, though an occasional old house squeezed between multistory apartment blocks reminds you of the time that was.

Burj Barajneh was once a small town, as was Hay Essillom or Haret Hraik. For 15 years starting in 1976 Lebanon experienced a brutal civil war. During this time, marked by a weak or nonexistent central government and several domestic and international wars, the area became a haven for the internally displaced and those looking for economic opportunity. Most came from the south of Lebanon.

The residents of El-Dahyeh suffered the most under the 2006 war with Israel. Whole blocks were leveled and people were forced to leave their homes and businesses. Many Ameen clients in this area lost their businesses and some even lost their homes. Now, almost three years later, the signs of the war are hardly visible, though when I mentioned this to someone, I realized it required a trained eye to actually see the damage and the rebuilding that took place.

Right now, one of the tasks I am working on is preparing a process manual for Ameen’s Kiva loans. So, during my first visit to El-Dahyeh I observed the work of the loan officer and documented the various tasks they perform and how they screen for potential clients. In a subsequent visit to El-Dahyeh a week later, I made visits to a list of Kiva borrowers and later wrote journals for them.

The borrowers I visited were Ali, Samir, Youssef, Najwa, and Haitham. To view the journals, click the link on each name and scroll to the bottom of the page. These are the first journals to be written for Ameen borrowers in Lebanon.
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I am Nemr, a KF7. I am spending 12 weeks at Ameen in Lebanon. You can also check out my personal blog here.

Check out some of Ameen’s borrowers and make a loan today by clicking here.

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Jail in Beirut wasn’t really a high-security sort of place. Most of the “prisoners” were being led around without handcuffs, and no one was carrying a weapon. People were actually fairly friendly. My holding cell had only a few people in it when I arrived: two women who had apparently had a longer day than myself, and two men who had clearly over-dressed for the occasion by my standards. Ahmad had seemingly called ahead for a reservation, because he arrived with pita bread and labneh cheese in a shopping bag. He offered me some, but I wasn’t really in the mood to eat. He was there for some sort of immigration issue. The other guy whose name I didn’t catch said he was there “for cocaine.” With me, I had my folder of useless paperwork, my handy planner, keys, wallet, cellphone. When I finished my cigarette, I fished around in my pocket for my used and gently abused cell that I had just acquired for ten dollars the day before and flipped through my planner for a helpful number. The first one I came upon was a colleague at work, who I managed to get through to. The warden saw me on the phone– I made no sincere efforts to hide my call– and decided it was time to process me. That meant saying goodbye to the phone, my belt, shoelaces, money and my pen. I had a real mammoth of a metal pen at the time and understandably they wanted to take it away– it was definitely passable as a weapon. Not certain how long I would be there, I protested enough to at least keep the ink cartridge so I could write to pass the time… I already had a grandiose plan in the works to record my memoirs by matchlight and sneak them out of jail with the guards inside hollowed out cigarettes. I also insisted that I get my phone call. For a good twenty minutes I had a yelling match with the warden, refusing to move an inch until I got my phone call. I don’t think the Lebanese typically get one, but I had a terrible feeling that if I didn’t get in touch with the embassy, it would be awfully easy to get lost for a while down there. Begging and pleading finally won out and I was allowed my call to the embassy. I had enough time for a quick “Here’s my name, I’m in jail, please get me out of here” before the phone was snatched away and I was led down a long corridor to meet my new cellmates.

I spoke to some of the prison guards (They weren’t exactly guards, more like custodians. They had no billyclubs or handcuffs and from what I could tell spent most of their time sweeping the place.) who showed me around and found out they were almost all from Sudan and here in Lebanon on working papers from the U.N.. Really nice guys. We walked by cell after cell, each one filled with maybe 30- 35 prisoners, each one maybe 10×20 meters in size. Some were more crowded than others, but there seemed to be enough space to at least sit comfortably. The cells were covered on the far wall inside with prisoner’s dirty plastic shopping bags filled with clothes and toothpaste. The hallway had fluorescent lights hanging down from the low ceiling which dimly lit the passage with a hazy yellow glow. Huge fans blew around hot, damp, salty air, and there was a shelf for shoes outside of each cell. By the time we reached my cell, number 12, the last one at the end of the hall, I had made friends with a jovial guard, Hadool, who was happy to learn that I was from New York. Hadool had a sister living in Queens and gave me a pack of cigarettes as a welcome present “If you need anything, let me know” he whispered to me through the bars as the door was shut anew.

I don’t think I’m going out on a limb if I say that I stuck out a bit. My cellmates were all gathered in circles in their respective corners, many not wearing shirts, talking amongst themselves and sneaking glances over to the new guy. I quickly found out that these divisions were by homeland– the Sri Lankans in one corner, Indians in another, Palestinians, Iraqis, Thai; they all had their own enclave. I was welcomed by an Iraqi man wearing nice jeans who immediately started my inquisition. I got the impression he was the enforcer. He asked why I was there, and I said I really wasn’t sure, and he asked where I was from, and all I could manage was a feeble “Eh, far away.” Not content to leave it at that, his friends pressed on- “What, like from Australia?” Now I’ve never in all my travels misled people about where I’m from. Those who have traveled around a bit know that it’s tough sometimes, particularly recently, to say you’re American. Not just out of fear of a degree of embarrassment, but in some cases, out of fear for your safety. But I honestly think it’s kind of a responsibility of those who can travel to be totally honest and represent our country well. That said, in this situation, surrounded by imprisoned men from places where America isn’t exactly a nice word, and not knowing how long I would be spending with these guys, I admitted that yes, I was from Australia. The enforcer caught a knowing grin, “Welcome,” he said, “Welcome to Lebanon.” I felt a faint tinge of regret as I let out a sigh of relief and returned his greetings.

I struck up a conversation with a man sitting to my left on the sleeping pads who I learned was a doctor from Iraq who had been imprisoned for 54 days after being detained for immigration issues at a border crossing into Lebanon. At this, I swallowed hard, but he assured me that I would be out in a few days at worst. Countries that have embassies, he explained, always send people down to help. The guys from Thailand and Saudi Arabia got fresh clothes and food every morning. He was not so lucky.

I was only there for maybe half an hour when a military officer came to get me. I was hoping this was my ticket out, but my respite was brief. I handed him some documents and back I went. Another hour went by, and I was let out again. This time I was led past all the cells to an office where I sat counting the minutes as I watched the officers clock out one by one, grab their jackets and berets, and head out the door. My chances of leaving seemed increasingly grim as time passed, but at what seemed like the last possible moment, ‘le directeur’ emerged from his office. He came over to me, asked another officer who I was, tossed me a quick wink as if to say “Yella, let’s go” and we headed out the door. I don’t think I’ve ever be so happy to breath fresh air in my life.

In all, I was only in jail for the day. And to be honest, it wasn’t all bad. I was a bit concerned what spending the night would be like, but I met some interesting folks and learned an important lesson. I never really did find out why I was put in jail, but it doesn’t much matter, and I can assume it had a lot to do with the approach I took toward dealing with the military officers at General Security. I was quite sure based on my experience living here so far that assertiveness was the right tactic, but looking back, I was clearly mistaken. It was foolish to assume that I knew beyond doubt what I was doing, and I obviously should have shown some more deference to people who had a lot more power than I did.

Reaching into my pocket as I left the General Security compound, it occurred to me that after everything, at the very least, I had gotten a free pack of cigarettes out of the deal from my Sudanese friend. I think I’ll be saving those as a souvenir. Now how to explain this to my mother…

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(So the following actually took place a few weeks ago, but by request, I’ve written an exceedingly long account of everything that happened. Certainly not a typical Lebanese experience, but an unfortunate twist of living in a strange land…)

I think my first thought when they shut the cell door was something along the lines of “Oh. Okay. So that’s what happens when they put you in jail… Crap.” And I’m not a smoker. I don’t smoke cigarettes. But I clearly remember my second thought being “Man, I need a cigarette.” It had been a long day.

The story really begins the day before. I believe my last post actually referenced this marathon of bureaucracy and I think I gave some grand advice about never loosing your passport in Lebanon, which I stand by. I also made the connection between the folks I was dealing with at the Lebanese General Security office and the insufferable French commander from the movie The Battle of Algiers, Colonel Mathieu. Unfortunately, I didn’t know just how accurate that comparison was. The only difference may have been that for all his authoritarianism, at least Colonel Mathieu had a real solid sense of humor.

On Tuesday I went back to one of the Lebanese General Security buildings as instructed at 9am, hoping to get the simple police report that my embassy hold told me I needed to show them and that a dozen Lebanese officials of various rank were unable to produce without signatures from the Prime Minister, Waldo (Where is he?), and Batman himself (Christian Bale would not suffice, I would have to find the Batcave). What I learned from the day before, and from my first two weeks in this country as a whole, was that generally speaking you can’t accomplish much unless you are assertive and refuse to let people step on you. This mantra served me well on Monday and when I came to the military wing of the GS Office on Tues, I was convinced of my tactics. I was sticking to my guns. Unfortunately- and there are a lot of unfortunately’s in this tale- I did not factor in the simple truth that military men are not civilians and do not take kindly to assertiveness. They had bigger guns than I did. After getting the run-around for a solid three hours, I was terrified that my application for a police report would get lost amidst the literally thousands of papers and carbon copies piled on desks throughout the building– not a single computer, photocopy machine, or even filing cabinet for that matter in sight. I told a few people that I wasn’t leaving until I got my police report and was pretty satisfied when I was brought to the office of an important-looking guy in new fatigues and shiny boots who was wearing his beret indoors. The man sat me down and told me, “I think… eh, you might have to pay 70,000 Lebanese pounds [just over $25] in order to get this processed immediately.” Given his hushed tone and seeming uncertainty with the truth of his statement, I was convinced this man was asking for a bribe. I would later be told by higher authorities that this was not a bribe at all, so in hindsight I clearly made a poor judgment. But at the time I was sure of my impression, and reacting as much to the insanity of the whole situation as to what was just told to me, I cracked an incredulous smile. The general’s face went blank and showed that he had no idea why I was smiling. “He really expects me to grease his palms for this,” I thought to myself. My smile broke into a chuckle, and for a few solid seconds the chuckle gave way to a deep, Santa Clause, belly rumbling guffaw. This time the general’s face was not skeptical nor inquisitive, it was flush with rage. I was directed to get out of his sight immediately, and I complied, only to realize that I didn’t know where to go next. Finding myself in another sticky situation, I returned a few minutes later to ask what I could do. I ran into even more angry words and curses, this time in English. After standing in the hall of the fourth floor of the General Security building for a good twenty minutes as a few military guys stared and others tried their hardest to ignore me, I took out my pen and started writing down the names on the doors of the various offices. I thought just in case I finally met someone who was helpful, I could explain where I’ve been. Or at the very least it would improve my Arabic handwriting. The bystanders were apparently not aware that I was a student of the language, and assumed I was getting ready to tattle on the aforementioned angry important-looking guy. It was about when he found out about this that my fate was sealed I think. There were more rooms and more generals and more signatures, and along the way I picked up one and then another escort with guns, but since they were carrying around an official-looking report I thought perhaps I was nearing the end of my journey. Unfortunately (there’s another one), that wasn’t my police report, it was my receipt. For jail.

Things started to feel wrong when I was sitting in one nondescript office next to my new entourage and a soldier came over and told me to put on some handcuffs. I had a brief moment of panic, but when I refused, everyone in the room had a good laugh, and I gathered they were just trying to lighten the mood a bit. They didn’t push the issue and although I thought the joke in poor taste, I let it slide. After this pit stop, we were off to a police jeep which was parked outside. I happily bounded into the back seat like a puppy on his first trip to the park. Thinking back, these guys must have never had an easier time transporting someone to prison. Of course I asked where the field trip was headed, but the only response from the driver and his accomplice up front was that we were headed to “Chez le directeur.” I thought perhaps this was finally it. I had figured out how to speak to the head honcho. I was going right to the top. The director. In a jeep. Fantastic. I would be on my way back to the embassy for my new passport in no time. Unfortunately, my dreams began to fall apart when the police jeep made a hard turn into what appeared to be a tremendous cement parking garage beneath an overpass. Led from the truck down a dark, wet stairway with several armed guards standing sentinel it seemed an inauspicious home for a directeur, and it was unlikely we had stopped there for coffee and donuts on the way. Still, when the clanking of doors became audible, then dozens of jail cells became visible, and then a man with a large manifesto before him demanded my name, I gave the boys the benefit of the doubt. Wasn’t it possible the prison warden was the one I needed to speak to? In a flash as the door of the holding cell slammed shut, however, I finally put the pieces together with all the excitement of a foreigner who has just found out he is going to jail. “Does anyone have a cigarette?”

I’ve had a pretty frustrating day here in Beirut. To those who plan on traveling, a bit of advice…don’t loose your passport. Especially not in Lebanon. I felt like I was trapped in that scene from Battle of Algiers where Colonel Mathieu is unceremoniously perched atop his desk answering the questions of reporters either with an endless moral treatise or a flippant plume of smoke from his Gauloises and a shake of his head. Afan in the background blowing thick air around around the office, a woman in the corner pecking at a typewriter from the 20’s… Except in my case there were several dozen Colonel Mathieu’s,at least 10 office buildings, and more “regulations, Habibe” than even the aforementioned military man could have stomached. 

So, I’ll let my thoughts cool, and as per my last promise and inresponse to some comments (thanks for those, I love the feedback), a bit more about al Majmoua and the role Kiva plays in this whole microfinance thing…

(Disclaimer: I was not a finance major, so I shall do my best to relate the financial info as I have interpreted it to those who are still new like me. For those better versed, feel free to correct me where I go astray…)

Majmoua began as a microcredit program in 1994 under the stewardship of Save the Children. Until about 1999 alMajmoua lent primarily to women and primarily to solidarity groups, not individual borrowers. This of course followed the Grameen model by using the “moral guarantee” of a lending group where there was a scarcity of fixed assets from which to draw. Just before the new millennium however, al Majmoua began expanding its reach and opened up its loans to men and to individual borrowers. Now, with a staff of nearly 90 and $8 million in outstanding loans, al Majmoua has broken its operations into various departments tailored to the needs of very different populations. Under the microcredit umbrella, the Poverty group lending division dispenses loans starting at $100 which are mainly geared toward rural women who have few marketable skills. There is also a non-Poverty group lending division which focuses on those who have established businesses but still lack the capital needed to take out individual loans or loans from an established bank. Al Majmouaalso provides individual loans to more established customers, vulnerable workers (who aren’t borrowing money for their own business, but cannot access formal credit markets), seasonalworkers (in agriculture or tourism, who experience periods of access to capital and periods of no access to capital), families who request home improvement loans, as well as a few Small and Medium Enterprises (SMEs). Alongside their credit services, al Majmouaalso provides their clients with financial education, business management assistance, and skills training. This last opportunity is unique in that al Majmoua tries to tailor their training to skills which will have an immediate and significant impact on their clients ability to work in their region. Many vocational schools here teach skills such as hairdressing, tailoring, or car repair that have already saturated the various markets. Training unskilled workers in these trades provides little benefit. 90% of these non-credit services are being given to women (about 4,000 people in total) and are largely subsidized by grants given to Majmoua from various international donors. That said, the credit side of al Majmoua has been self-sufficient since about 2004. Since then, a small profit has enabled the MFI to lower interest rates and expand their portfolio. Still, in order to sustain more growth, al Majmoua needs more money. 

Generally, in order to have enough capital to sustain growth, any MFIwhich is not grant-subsidized will need to borrow money from one of the huge international investors such as Deutche Bank, Merrill Lynch etc in order to provide loans to its developing entrepreneurs. When the MFI makes a profit (from interest on their loans), as Al Majmouadid in 2006, this money becomes available to increase the number of loans that can be given out, but often the demand for loans outstrips the amount of safely available capital. Thus the MFI must themselves borrow in order to lend. While they aren’t borrowing enormous sums by international banking standards, the MFI’s are still being charged 10% interest on these loans from the Big Banks. Let’s say Majmoua, for example, looks to borrow $1 million to replenish its stock of capital and keep expanding its reach within Lebanon. If that $1 million comes from a Big Bank, the MFI is passing on a $100,000 cost to its clients, who will see this in the form of higher interest rates for their micro-loans. If the MFI can obtain a Aaacredit rating from one of the few international credit rating agencies (basically the highest possible garunteethat the company has a stable portfolio of investments), then it can get its capitalfrom a local investment bank at a lower rate, say 6% interest. The Aaa rating is difficult to obtain however, involves its own costs in auditing etc, and is still a significant sum.

Enter Kiva. Kivaintroduces an entirely new concept by offering a source of investment capital for the micro-banks at 0% interest. Because Kiva is given free use of PayPal, there are no transaction costs either. That means that when an individual logs onto Kiva and donates $25, that $25 goes directly, in whole, to the MFI of choice, and is in turn lent out without any cost to the MFI. The money is shipped from the debit card of the donor in New York to the account of the MFI in Beirut to the hand of the dress seamstress on Abd al Wahabstreet. This is a truly revolutionary concept, because it gets rid of a whole lot of middle men. Yes, you say, but isn’t the MFI still making money off of poor people? In a way, yes. But the alternatives aren’t so great, the on-the-ground costs are still enormous, and as I mentioned they do much more than just lend money, i.e. job training. Wa’Allah, perhaps that’s a discussion for another time.

Next time: who are the Majmoua clients? Until then, m’aa salaama, with peace,

JJ, fee Beirut

I couldn’t really decide how to start this blog. I’m a bit new to the business. I always assumed blogs were just a bit pretentious unless you had something terribly important to say, but now that I have to write one of these things for my Kiva fellowship, I think I’m growing into the idea. Maybe it’s because now I have something important to say. Was that a touch of prentention? Alas, let’s just hope that someone reads these… Ahlan wa sahlan! I’m JJ. I’m a Virgo, I like fitted hats, and I recently decided that the best way to put off making any major life decisions after graduating with my ever-helpful BA in International Relations was to save up some money, beg others for more, and fly to Beirut where I know nobody and have only a vague notion of what awaits me when I arrive. No, in all truth, I was extremely moved by the chance to get involved with Kiva in a part of the world that is very close to my heart and is so important for us all to better understand. I think I’ve been given a truly unique opportunity to get on board with Kiva– and the world of microfinance in general– at a time when the social entrepreneurship movement is really gathering strength. I hope that I can share some of what I learn along the way with those of you who are kind enough to read along with me.

I will be spending the next 10 weeks working with one of the leading Lebanese microfinance institutions, Al Majmoua, and soaking up as much of this incredible country as possible. I’ve been in Beirut now for about five days, and I’ve decided to decide nothing just yet. Beirut has been at various times terrifying, invigorating, frustrating, beautiful, mysterious, and hilarious.

Echoing a trend from the blogs of many of my fellow Kiva Fellows, my first exciting experience here was vehicular. Not vehicular homicide, nor even manslaughter but damn near close. You see, Road Rules don’t exist in Beirut per say: it’s more like, whoever is on the road, rules. At least that’s what every driver thinks. Taxiing from the airport, my cab driver proved his worth by skillfully weaving between oncoming mopeds and inter-city minivans who cared little for the appropriate direction of travel. Clearly my guy was from the mountains, because the ride was much more slalom skiing than it was driving. Most drivers here don’t hesitate to drive the wrong way down roads, drive backwards down roads, stop in the middle of highways to pick up passengers, blow through what few stoplights exist, or park in any direction or on every conceivable inch of open asphalt. And then, of course, there’s the incessant honking, which, roughly translated, could mean anything from: “Hey, good morning,” to “Do you need a taxi?” to “Are you SURE you don’t need a taxi?” to “You had better move because I’m probably not stopping.” There are of course variations in between, and its always an exciting part of any walk to find out who wins those epic showdowns between oncoming cars who meet on a one-way road.

I spent much of my first weekend in Beirut getting lost in order to get my bearings, as every good traveler knows to do when most streets don’t have names and addresses are described by the big buildings near which they are found. I ventured out looking for an apartment to rent and instead took a grand tour of the city. I walked down the sea hugging promenade of Corniche, through the center of Lebanese nightlife in Gemayzeh, around the luxury condos of Achrifiyeh, across the former Green Line into neighborhoods plastered with posters of Hassan Nasrallah, and eventually found myself standing in Place De Martyres, for many reasons the heart of Beirut, though nothing stands there now save a small iron statue and a tent-museum honoring Rafiq Hariri. The surrounding neighborhood of Solidere was left a wasteland after it had been the epicenter of the horrible violence of the nearly 30-year Lebanese Civil War. Now, it is an haute-culture heaven, paved with granite and infused with all sorts of chic cafes, alongside such traditional Lebanese shops as Salvatore Ferragamo, Porsche, and Dunkin Donuts.

This of course is the new Beirut. And though every block has its share of condemned buildings still bearing gaping wounds from decades of shelling, the center of this city is as far from the past as can be. It seems like that was the intention. As is the case in so many modern developing capitals, Beirut is full of contrast. This point was reinforced during my first field visits at Al Majmoua with Kiva clients, but I promise, I will get to that for the next post. I fear I’ve written too much already. Until the next time, m’aa salaama, with peace,

- JJ, fee Beirut