Posts tagged ‘microloans’
Video Blog: Interactuar – A Quite Amazing Organisation
By Nick Hamilton, KF14
I have just come to the end of a 3-month Kiva Fellowship with Interactuar, Kiva’s Field Partner in the state of Antioquia, Colombia. I was blown away by this organisation. ‘The Google of Microfinance Institutions,’ I kept thinking to myself.
Continue Reading 19 May 2011 at 08:05 nickhamiltonkiva 1 comment
The New Poor
Chapultepec Park in Mexico City on a Sunday afternoon
By John Farmer, KF 14, Mexico
I recently suggested to some friends that we go for a walk in Chapultepec Park on a Sunday afternoon. They didn’t like the idea, because that’s where the poor people go on the weekends.
“The poor?” I responded. I’ve spent quite a bit of time in parts of Latin America where you can identify the poor easily. The children are malnourished and grubby and the parents have an appearance of desperation. The “poor” in Chapultepec don’t look desperate.
You can find the desperately poor in and around Mexico City, but not so much in the city’s center, which looks more like Europe than Latin America. Still, here amid the colonial buildings and modern high-rise structures, the fabric of the economy is rapidly changing. Traditionally the male head of household worked while the woman raised the children. Anymore, with falling salaries and a growing cost of living, most families find that both partners must work to make ends meet.
A new cathedral replaces an older one in Ixtapapa
The percentage of middle class families in Mexico has dropped sharply in recent years, from over 50% in 2006 to below 40% in 2008, while the number of those living below the poverty line has grown sharply. The situation of the New Poor in Mexico is a frequent topic of discussion here.
Mexico was hit hard by the recent recession, with a decline in GDP roughly equal to that in Greece. Though official statistics peg unemployment at around 5%, common knowledge is that severe underemployment is more like 25%. One nice thing about the economy here — if you lose your job, you can always hawk cheap items on the street or in the subway. You might earn one tenth of your former salary, but you won’t exactly be unemployed.
My friend Lucia says her family belongs to The New Poor. They were much better off two decades ago when she was a little girl. In the mid 1990s, the peso underwent a sharp devaluation and all of a sudden families found that their incomes didn’t go nearly as far as before. Her father has owned his own plumbing business as long as Lucia can remember, and had to economize creatively to keep the business afloat and continue to employ his most faithful workers. Her mother became much more involved in administering the business, freeing up her father to do much of the work that he formerly administered. Soon after that her grandfather died, and one family member took advantage of the situation and cheated the others out of their inheritance, leaving Lucia’s family in the financial situation of living day-to-day with no cushion.
Just about everyone I meet has stories like this, of how the combination of economic shake-ups and rip-offs have left their family in dire straights.
But their middle class habits have helped them manage: all four children attended university despite having to work, compete for scholarships and take out loans. They all have jobs, though none earn particularly well, and even the 35 year-old still lives at home. Lucia told me her story a few days before I saw her home for the first time. What I saw was not quite what I expected — her brother the veterinarian had just purchased a new 46-inch TV, they have several cars, the latest cell phones and there are four bedrooms. They work harder and worry more than before, but where are the distended bellies and looks of desperation? Poverty is relative…
John Farmer is a Kiva Fellow at CrediComún in Mexico City. He is quite poor by some standards, but still makes loans through Kiva.
What was your last business trip like?
By Noreen Giga, KF 14, Peru
Mine entailed traveling around Central Peru for a week and a half. Part of a fellow’s duty is to complete a Borrower Verification. Kiva selects a random sample of ten clients that represents an organization’s portfolio and sends it to us fellows. We, in turn, visit each and every client on the list to verify that they are who they say they are, that they indeed received a loan for the amount posted on Kiva’s website, and to talk to them about their business and loan use. You can think of it as a mini-audit process.
I am serving as a fellow with Microfinanzas Prisma, a large micro-finance organization that is based in Lima, Peru, but has branch offices throughout the country. Before I received my list I was told I would get to do some traveling for work, I had no idea what that meant until now.
Continue Reading 30 March 2011 at 08:40 Noreen Giga 6 comments
Death By Fire
By John Farmer, KF 14, Mexico
Friday, near Jojutla, in the Mexican state of Morelos, I had the pleasure of visiting Doña Mari. “Buenas tardes! Adelante!” she coughed in welcome. My visit was a routine Kiva borrower visit, a chance for me to learn more about our borrowers and further their understanding of Kiva.
Her credit history started ten years ago when her son was sick. Though her town has a free clinic, only a fraction of those who seek attention are tended to, so she took her son to private doctors. The medical bills piled up, and she borrowed from private lenders (a.k.a. loansharks) to pay her debts. She and her husband did what they could to pay off what they owed, but after several years they weren’t getting their heads above water. Fortunately, four years ago, through a government poverty eradication program, she received a mill to grind corn. That would give her a better income. The downside: she had a 220-volt electric mill sitting in her yard and nowhere to hook it up. To get it set up, she needed over a hundred dollars.
Continue Reading 14 March 2011 at 18:00 john.beckwith.farmer 3 comments
Video Blog – The Life Of A Kiva Fellow
by Nick Hamilton, KF14
When it comes to blogging, a new pastime of mine, I often go a bit heavy on the word count. Not this time. This is a video blog and so I’ll let the video do the talking.
Continue Reading 21 February 2011 at 10:51 nickhamiltonkiva 7 comments
Mangoes and Motos: Visits to the field in Cambodia
By Stephanie Sibal, KF14, Cambodia
My first couple of weeks serving as a Kiva Fellow in Cambodia were in many ways, a true shock to my system. The country’s capital, Phnom Penh, is a dizzy blur of lights, motorbikes, colonial-inspired architecture, and savory street food aromas that take some getting used to. However, nothing snaps a Kiva Fellow out of homesickness faster than a visit (or two) to the field. While working with CREDIT, one of Kiva’s oldest partners in Cambodia, I had the pleasure of leaving the busy city life two visit two borrowers in rural provinces.
The View from the Ground
Sam the loan officer counting loan repayments
By Nila Uthayakumar, KF 14, Uganda
Tuesday morning. It was just my second day at Micro Credit for Development and Transformation (MCDT), a Kiva partner microfinance bank based in Kampala, Uganda. I sat at the helm of a grouping of desks in an airy room within an office building perched at the very tip-top of a hill in Kampala. What a view. Of the city, but also of the four loan officers preparing to go into the field and meet with their borrowers. I looked out of the window, and then back at the people in the room. How did I get here again?
I needed to remind myself, lest I forgot. It had been the most intense month and a half of my life. In the beginning of December I was still living in Zanzibar, Tanzania. More specifically, I was painfully packing away six months into my backpack and getting ready to visit the States. I would be home for a month and a half, (although home for me is relative at this point), and I had an expanding to-do list to address. Most importantly, I was to attend Kiva Fellows training in San Francisco in January. I, along with a group of nineteen others, was going to be taught how to be Kiva’s eyes and ears on the ground. What exactly that meant, I could not have possibly known until I got to “the ground.”
Giant bunny rabbits, small loans
By Tara Capsuto, KF13, Kenya
This blog really is about giant bunnies. It’s also about asset financing and how loan groups are working together, with the help of Juhudi Kilimo (one of Kiva’s field partners) to raise rabbits and boost their incomes. Juhudi provides an innovative, agriculture-based, micro-asset financing loan product to assist smallholder farmers in acquiring productive assets such as dairy cows, chickens, irrigation equipment, and most recently, giant Flemish rabbits.
Loans In The Time Of Cholera, In Haiti
Haiti is an intriguing country, probably very misunderstood, and full of loud, lovely, wonderful people with an admirable sense of joie de vivre.
Continue Reading 24 January 2011 at 08:20 nickhamiltonkiva 7 comments
The Making Of A Kiva Christmas Song
A couple of weeks ago I found myself without internet for three days. Determined not to let this beat me (internet is often pretty essential for a Kiva Fellow) I tried to think of ways to stay productive. Naturally, the first idea that came into my head was to write a Kiva Christmas song.
Continue Reading 19 December 2010 at 11:31 nickhamiltonkiva 3 comments
Solb! 21 Centers, 21 Meals, 1 Day in Antique
“Solb” or “solve” is Filipino slang for “problem solved,” and typically said upon finishing a big meal. My problem (hunger) is solved, and I am full.
Was I ever solb last Friday…
Rwanda: Where the women are kind, the men are generous and everyone is just so nice
By Michelle Curtis, KF13, Rwanda
“Someone told me she loves me, just then…she told me that she loves me and I am so happy.” When an overjoyed stranger took his mobile from his ear and turned to find the first person to share his wonderful news with…there I was. Someone loved him and he had to let it out to the world. I gave him my congratulations, shook his hand and landed an encouraging pat on his back. He was beaming. So was I.
Great Expectations, Unexpected Revelations
When Kiva asked whether I’d consider a Fellowship in the Dominican Republic, my first instinct was to head to Google. I’d never been to the Caribbean and knew very little about this small country. After my initial search, Google asked whether I’d like to view some images of the DR and lured me in with 4 or 5 thumbnails. Each contained something that doesn’t exist in my country (the UK): the sun. I don’t think I got past the first page of pictures. I sat there mesmerized by contiguous images of palm trees, white sand and idyllic emerald sea and sent my response to Kiva: “Yes!”
Okay, it wasn’t quite that simple…
By Nick Hamilton, KF13. Nick is serving as a Kiva Fellow with Esperanza International in the Dominican Republic and Haiti
Continue Reading 15 November 2010 at 16:17 nickhamiltonkiva 6 comments
How’s the weather?
By Charlie Wood, Kiva Fellow in Bishkek, Kyrgyzstan with Mol Bulak Finance (MCC)
Preparing to move to Kyrgyzstan for an undetermined amount of time caused some anxiety to my house. Not the least of our concerns was what mother nature might dish out during the winter in a place so close to Siberia. The day before I left the U.S., wracked with an LSAT induced cold, my mom made sure I was ferried to the local REI to stock up on long underwear. Yet like with many things in life, the reality has been a bit underwhelming so far. I haven’t even needed to wear the ushanka I bought on my second day here. That’s not to say that the weather hasn’t been unique.
Continue Reading 12 November 2010 at 14:00 kivacharlie 6 comments
A Promising Loan
By Nick Whalley, KF12, Philippines
As I noted in an earlier blog, the bulk of the Center for Community Transformation’s loans are made to small variety store owners for inventory restocking. While this capital is necessary to sustain these businesses, and at times allows owners to diversify their offerings, it is clear there are few opportunities for growth. Competition is rampant, and demand local and limited.
It was inspiring then to meet a “round rag” maker in Manila who had developed partnerships with two companies interested in purchasing her rags. The companies needed thousands, and the borrower was having difficulty satisfying the new orders. A single employee working with a single sewing machine was simply insufficient. The production process is quite simple: scrap fabric from a local t-shirt factory is sewn into two sunflower shaped pieces six inches in diameter. Smaller pieces of colorful fabric are placed in the middle of one of the sunflowers and the other is sewn on top creating a thick, ravioli-like rag (see below). The borrower mentioned she had spent the last week looking for an affordable new sewing machine (she would purchase it with a CCT loan) to help her expand production. She also intended to hire an additional employee.
Continue Reading 24 October 2010 at 00:44 nwhalley 2 comments
Behind the Scenes: Kiva in South America
by Carlos Cruz Montaño
Within the Americas Region, spanning from Chile in South America passing through the Caribbean and all the way to the United States, Kiva currently has 39 partner MFIs in 15 countries and about one third of all Kiva loans funded so far. Last Tuesday the Kiva Summit of the Americas took place, the Kiva team in charge of managing all these partnerships met with a group of representatives from some of these institutions for the third time in Montevideo, Uruguay. As a Kiva Fellow, this was a great opportunity to participate in the discussion of the challenges and opportunities that lie ahead on Kiva’s path. The topics that stirred the most discussion were…
KIVA EN SUDAMERICA
Dentro del continente americano, desde Chile en Sudamérica pasando por el Caribe hasta Estados Unidos, Kiva trabaja con 39 instituciones de microfinanzas (IMFs) en 15 paises, además esta area ha recibido la tercera parte de todos los créditos financiados en la historia de Kiva. El martes pasado se llevó a cabo la Cumbre de las Americas; el equipo de Kiva para esta región se reunió con representantes de varios socios por tercera vez en Montevideo, Uruguay. Como Kiva Fellow esta fue una gran oportunidad para participar en la discusión de los retos y oportunidades a los que Kiva se enfrenta. Los temas que tuvieron mas discusión fueron…
Non-Financial Costs and Benefits of a Kiva Partnership to an MFI
By Zerrin Cetin, KF12 Ghana
Like any business partnership, a partnership with Kiva brings both financial and non-financial benefits and costs to a Microfinance Institution (MFI). I believe that partnerships, whether personal or business, need partners’ values to align in order to succeed. So I will analyze this topic within the context of Kiva’s values – dignity, accountability, and transparency. The question I’d like to discuss is “What are the non-financial costs and benefits to an MFI in aligning with Kiva’s values of dignity, accountability, and transparency?” Since this blog represents my observations of one MFI partner (Christian Rural Aid Network – CRAN, in Ghana where I’m currently serving), I’d like to invite others to share their observations and enrich the discussion on this topic.
Continue Reading 10 September 2010 at 04:00 zerrincetin 8 comments
Ikatú… Si se puede! Yes We Can!
Fundación Paraguaya (FP) ha sido socio de Kiva desde mediados del 2007 y ahora recauda alrededor de 200,000 dólares por mes en prestamos. Además de las microfinanzas, la Fundación tiene otras actividades y programas, uno de ellos es Ikatú que se enfoca en disminuir la pobreza. Este sábado pasado fue un dia especial ya que por primera vez se realizó un evento para reunir a los cuatro grupos de mujeres que participan en este programa con el objetivo de compartir experiencias y conocimientos, ampliar las redes de contactos y motivarse unas a otras. El evento fue un éxito y un paso adelante en un camino largo hacia su meta.
Fundación Paraguaya has been a Kiva Partner since mid 2007, and is now raising around $200,000 in loans from Kiva every month. In addition to microfinance, FP has many activities and programs; Ikatú is one of those other programs and focuses on alleviating poverty. Last Saturday was a very special day, for the first time, the four groups of women participating in Ikatú got together to share knowledge and good practices, grow their network and motivate each other. The event was a success and a step forward on a long road to achieve its goal.
Continue Reading 7 September 2010 at 11:16 Carlos 7 comments
When Large Banks Compete with Microfinance Institutes
Austin Harris, KF11 Rwanda
Microfinance institutes (MFI’s) and large, commercial banks have traditionally offered different loan products and catered to a different clientele. Most notably, MFI’s offer loans that are too small for large, commercial banks to consider. Recently, however, large banks have been venturing into the microfinance realm, offering small loans that compete with the loans of MFI’s. Rwandan MFI’s, like many other MFI’s in developing countries, are now being faced with competition from a large, commercial bank. This new development may have potentially large impact on Rwandan MFI’s and for the industry in general. It remains to be seen the extent of the impact from this competition, who will survive and succeed, and what adjustments will need to be made for continued existence.
Continue Reading 6 September 2010 at 05:34 austinharris 7 comments
I want your autograph… here and here, and here and here and here
By Sally Bolton, KF11, Mexico
A strange thing happens when the time comes to take a photo of a Kiva borrower or group. Women who moments before were smiling and laughing suddenly put on their solemn photo face. My colleague Marta is great at coaxing a smile from even the most serious photo subjects. “Lend me a smile, please,” she says. “I’m going to make you a star! Next stop, Hollywood!” The women break into smiles, and with a quick click of the camera she captures the moment.
The women have another thing in common with Hollywood stars, aside from having their photo taken. They have extensive experience in signing their names. Over and over and over again. Only they’re not signing autographs for their adoring fans, they’re signing all of the documents required to disburse a loan.
Continue Reading 24 June 2010 at 08:58 Sally Bolton 4 comments
Meeting Kiva Borrowers in Kitengela, Kenya (3.5 minute video)
By Steve Grey, KF11, Kenya
[youtube=http://www.youtube.com/watch?v=aGUTs8H-jEg]In this 3.5 minute video, see what it’s like to spend the day with a loan officer from one of Kiva’s lending partners. Hanifa Seme (Credit Officer with Small and Micro Enterprise Programme in Kenya) and Steve Grey (Kiva Fellow) walk “The Pipeline”, a densely populated urban area in Kitengela just outside Nairobi, Kenya. They meet with 9 potential Kiva borrowers to get the information for their Kiva website profiles.
Continue Reading 20 June 2010 at 18:22 stevensgrey 7 comments
Leaving behind Oscar Wao for real wondrous lives
By Magdalena Malinowska, KF11, Dominican Republic
After successfully (read: finally!) completing the first year of a PhD program a few weeks ago, I am pleased to (again: finally!) find myself in the role of a Kiva Fellow. With much joy I exchanged the ice-cold confines of the library for the warm embrace of the Caribbean climate in the birth-place of merengue and several all-star baseball players: the Dominican Republic. And it is with great excitement that I am leaving behind the pages of Junot Diaz’s comical rendition of the Dominican culture and embarking on the challenge of discovering the lives of real inhabitants of this island, through micro-finance. From Oscar Wao to real wondrous lives, from Hispanic Literature to Hispaniola, here I come!
Continue Reading 8 June 2010 at 18:21 Magdalena Malinowska 6 comments
Rwandan microfinance partner VFC goes mobile
Rwandan microfinance partner VFC goes mobile
Claude Mansell, KF10, Rwanda
Microfinance is rarely associated with high technology. Neither is Africa. Yet here is Rwandan Microfinance Institution Vision Finance Company about to launch its pilot in mobile payments, in two of its 9 branches.
In a partnership with World Vision and MTN, the leading phone company in Rwanda, Vision Finance Company (VFC) has started a 12 month project that will lead to 30% of its customers doing their monthly repayments via mobile phone. VFC will be the first microfinance institution (MFI) in Rwanda, a country that is making great progress in the application of ICT, to implement mobile payments in partnership with Triple Jump Advisory Services (a global capacity-building NGO for MFIs that operates under the umbrella of the Netherlands-based microfinance investment manager Triple Jump).
CEO of VFC, Shem Kakembo: “We are proud to be leading in this field, it gives us a competitive edge. It will greatly help our customers, and reduce our costs and business risks. Actually, it was Kiva who talked to us about the benefits of mobile payments and brought us in touch with Triple Jump”.
Significant benefits for the customers, for VFC, for the phone company and indirectly for Kiva and its lenders.
To understand the sources of benefits, let’s take a look at the current processes. Microfinance loans (which are around $1000 in size) are usually disbursed in cash to customers at one of the local branch offices of an MFI. Repayments plus payment of the interest are done on a monthly basis. In 60% of the cases, a customer has to go to the local branch office to make the monthly repayment and in the other 40% a credit officer goes to the customer to collect the cash.
Especially in the rural areas, travel time for customers and credit officers can be significant (one hour back and forth is no exception). At each branch, a cashier and an accountant deal with the physical cash and administration of the transactions. Currently, at VFC 60% of all repayments take place in the last 4 days of the month. This means that during those days much cash is in the hands of the credit officers and/or in the local branches.
View from VFC's branch in Byuma, Rwanda
Mobile payments will eliminate the monthly travel by customers and credit officers. At VFC one calculation of transportation costs (excluding the opportunity costs of a customer’s travel time) is Rfr 1000, or about $2 per month. This is about 8% of the interest charged to a customer. A mobile payment would cost only Rfr 200, or $0.40.
Focus group results show that customers respond enthusiastically to the new technology. Project Manager at VFC, Jean-Marie Musangwa: “Customers see the monthly travel time as a real burden. Also, they do not like to carry much cash with them each time. Credit officers will not only save travel time but also much time making reports on repayments. The time freed up by use of mobile payments can be used to reach more customers and provide better quality of service.”
Other benefits for VFC are a less time spent on repayments by cashiers and accountants at the branches. In addition, the risk of holding cash money will be reduced, which is an important element in avoiding theft and fraud.
For Kiva and its lenders, the benefits are an improved management of the repayments, and possibly an increase in the repayment rate. Ben Elberger, Kiva’s Regional Director on Anglophone Africa, said: “since 2007, we have been excited to see the propagation of mobile payments by our MFI’s. Thus far, in Africa, 4 of our MFI’s are engaged in pre-studies or projects implementing mobile payments. Long term, mobile payments have the potential to bring down costs for MFIs and thereby benefit clients”.
Investments will be carried by MTN, VFC and the Customers (who buy the phones)
Investments in the infrastructure, equipment and the implementation program will be shared by MTN and VFC. The mobile phones will be sold to the customers for $6 each. The phones can be used for the payments as well as for normal voice communication via the MTN network.
Once operational, the customers and VFC will both pay for the transaction costs.
The downside of the new technology must be properly managed
The main downside to mobile payments is the reduced number of interactions between the credit officer and the customer, specifically in the 40% of the cases in which credit officers went to collect the repayments on a monthly basis. These interactions strengthen the ties between VFC and its customers, and are believed to be beneficial for the repayment rate. Jean-Marie Musangwa on how VFC will ensure its customer intimacy once mobile payments have been introduced: “The follow-up with the customer will be maintained. We will make sure that our credit officers stay in touch with the customers, both for the social and economic reasons. However, we can be more selective in doing so.”
VFC is innovating in line with Rwanda’s technological vision
While VFC may be the first MFI in Rwanda to engage in mobile payments, it definitely will not be the last one. Rwanda is making a massive move to implement mobile technologies and is heavily investing in its internet infrastructure. Watch Rwanda catch up and leap-frog into the next decade!
Does “a path always exist”?
In Fon, Alidé means “a path always exists (for the very poor).” This is a touching sentiment matched by the equally strong social mission of the Kiva field partner that bears its name. During my time as the Kiva Fellow placed with Alidé, I’ve been impressed with the institution’s passion and perseverance. When I meet borrowers, I consistently see illiterate women who are able to send their children to school and praise Alidé for their success. It’s easy to start thinking, “wow, there’s really something to this!”
But then there are also the times when I step back (more…)
Party for your bank
I like my bank in the US. The staff is nice, they have a lot of ATMs in New York City, they once gave me a fruit basket (long story)… But I would never think about getting together with other Wachovia customers to toast how much we like banking there. Yet that’s exactly what a number of Alidé (Kiva’s partner in Benin) clients do regularly. (more…)
Building Poverty Museums
Just over a week ago, several Kiva staff members and Kiva Fellows (myself included) joined the president of Kenya, the prime minister of Zambia, the queen of Spain, the princess of the Netherlands, the former president of Peru, “inventor of micro-credit” Muhammad Yunus, and over a thousand others at the Africa-Middle East Microfinance Conference in Nairobi.
Not surprisingly, Muhammad Yunus was consistently the most interesting speaker throughout the four-day event (more…)
The Alofa’aga Blowholes of Savaii
The western concept of “private property” does not exist in the communal village life of Samoa. In a traditional Samoan village, many generations of a family live together where food and material items are shared among everyone.
Fear vs. delight: The two sides to getting your picture taken for Kiva
There are two responses Alidé’s clients in Benin have when asked to have their picture taken for Kiva: fear and delight. Generally, both paths end with laughter and a lot of pictures of me, the Kiva Fellow assigned to Alidé.
Fear: They say that while Benin has about 50% Christians and 40% Muslins, 95% of the population simultaneously practices Voodoo. This means you can buy fétiches (magical objects like monkey skulls) at the market, and that you’ll encounter a number of clients who fear that having their picture taken might steal their soul. (more…)
Getting schooled at your bank
In addition to loans (and savings accounts, social work, and coming soon – insurance) Alidé, Kiva’s field partner in Benin, offers formations, or training sessions, to its clients. Some are optional but there are three that are actually mandatory for a loan.
