Microfinance

Microenterprise to SME: A Thought Exercise Pt. II

This is the third post of a three-part series on small- and medium enterprises.  It is the second of a two-part post.

[caption id="attachment_831" align="aligncenter" width="400" caption="Enterpreneurship training with Negros Women for Tomorrow"][/caption] The other day I discussed six actions or programs a microfinance institution (MFI) can take to help clients convert their business from a micro-enterprise to a small- to medium enterprise (SME).  Today, I will cover the final six. (more…)

Travel and Culture

Sleeping in the Bed You Make

“If you ask me to name the proudest distinction of Americans, I would choose- because it contains all the others- the fact that they were the people who created the phrase to make money. No other language or nation had ever used these words before; men had always thought of wealth as a static quantity- to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created.” – Ayn Rand
[caption id="attachment_822" align="alignright" width="300" caption="Wine on the beach tastes better when it's stolen."][/caption] I read this week that the victims of supervillains Bernie Madoff and R. Allen Stanford have joined forces to lobby congress to compensate them for their losses.  There are few people I have less sympathy for than the wealthy victims of a Ponzi scheme.  These are not people whose homes were destroyed in a flood.  They are not women whose husbands have died unexpectedly, leaving them widowed and poor.  Rather, they willingly gave their money to a crook who duped them into believing he could do what anyone with a basic understanding of the stock market knows is a mathematical impossibility.  With consistent annual returns of 10-12%, why bother with a savings?  Whether or not they were greedy, they participated in something called the market.  And as sure as day becomes night, the market rises and falls.  The victims knew this.  When it all came tumbling down, I’m sure it was a tough pill to swallow. (more…)

Microfinance

Microenterprise to SME: A Thought Exercise pt. I

This is the third post of a three-part series on small- and medium enterprises.  It is a two-part post. [youtube=http://www.youtube.com/watch?v=6Z66wVo7uNw] A month ago, I attended a conference in Manila sponsored by the Microfinance Council of the Philippine Islands.  I wrote briefly about the level of cooperation among the participants, but have yet to share what I learned.  The conference – titled “Operationalizing Social Performance Monitoring (SPM)” – brought together a dozen microfinance institutions (MFIs) and lenders from across the country to discuss best practices for focusing on the social mission.  In the microfinance world, theoretical solutions to problems, like how to focus on the poor and remain financially sustainable, are often incompatible with the nuanced realities on the ground.  This gathering offered a chance for MFIs to share what has worked and what has not, so that the microfinance community at large can be more effective at addressing poverty alleviation in the Philippines. The keynote speaker, Prof. Ron Chua, functioned more as a facilitator and moderator than a lecturer.  He asked the MFIs to present a specific social goal and discuss the measures each would take to achieve it.  One nameless participant set an organizational goal of transitioning 30% of existing clients from micro-enterprises to SME (small- to medium enterprise) within five years.  They presented a laundry list of programs designed to aid in this process.  The underlying assumption behind each of these measures is that financial services (microcredit) must be complemented by the provision of non-financial services, including business development and support services and integrated community development.  Provision of financial services alone is not enough to bring people out of poverty.  This exhaustive list addresses all of the key issues in moving a client out of poverty.  I will present the first six here, and the remained six in the next post. (more…)

Microfinance

The Tradeoffs of Serving the Poorest

[caption id="attachment_767" align="alignright" width="300" caption="Groundhog's Day for a man of the torah."][/caption] This past weekend I went with four coworkers and a lecturer at Ateneo University Business School to a province called Aklan.  I woke up at 5:00 AM Friday morning in order to catch the ferry to Iloilo at 8:00.  We drove five and a half hours north to Kalibo, where we stayed in Sampiguita Resort, “where it’s Christmas everyday.”  It is the vision of Sam Butcher, the American founder and creative genius behind the Precious Moments dolls – a collectible item so sweet it will make your teeth rot. (more…)

Development Economics

Hello, This is Manila. How Can I Help You?

Last week I tried to pay my credit card bill online.  Using a different computer, the site wanted to verify my identity with a security question – “what is the name of your elementary school?”  After three failed attempts, the system locked my account, forcing me to call to re-activate.  When I called Capital One, the girl on the other end of the line spoke perfect English, though she had a slight, almost unnoticeable accent that has become very familiar to me over the last three months.  I asked where she was located, and she said Manila. In order to get into the Philippines, you need a flight out of the country.  Back in November I booked a refundable ticket from Manila to San Francisco on United Airlines.  The other day I called up to cancel the flight and collect my cash.  The girl picked up the line and same song, second verse.  I asked if she was calling from Manila, and she confirmed – Makati, to be more specific.  “I was just in Makati for a conference,” I said.  “Yes, this is the business center of Manila, sir,” she responded.  I felt better knowing that I was dealing with a Filipino on the other end of the line. (more…)

Development Economics

Solar Energy in the Developing World

This is a journal about the practice and theory of microfinance, and, more broadly, international economic development and poverty alleviation globally.  If you'd like to get new posts sent to your inbox, please sign up, or subscribe to to my RSS feed.  Thanks. In an earlier post, I talked about green products and the concept of the triple bottom line.  Environmental cookstoves save money, save lives, and produce less carbon emissions.  Believe it or not, black carbon, or soot from cookstoves in developing countries, is the number-two contributor to global warming.  These more efficient stoves pay dividends.  But this is not the only green product serving the developing world.  Solar products – lanterns, cell-phone charging stations, DVD players, and even micro-utilities – offer a cheap, alternative means of energy delivery in the third world. [caption id="attachment_724" align="aligncenter" width="400" caption="Much of the Philippines - the areas in red - is less than 75% electrified."][/caption]

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Microfinance

Talisay to Bago: A Day’s Work

On Wednesday morning, I woke up at 7:00 to get ready for call I had with some head honchos at Kiva about how we can put solar energy loans up on the Kiva website.  After that, I had to talk to the Kiva microfinance partnerships manager for Asian MFIs about an Excel model he built that automatically generates profiles to be uploaded onto the Kiva website.  I am modifying it to fit the specific needs of NWTF, but the process of following his logic is complicated and tedious.  I needed to go straight to the source.  By 9:30, I was ready to officially start the day. [caption id="" align="aligncenter" width="350" caption="Awaiting the drill."][/caption] [caption id="" align="alignright" width="300" caption="The military dentists helped with the mission."][/caption] Last Saturday, a group of 26 Canadians came to Bacolod as part of a dental mission organized by the Rotary Club of Vancouver.  There are five dentists, a handful of hygienists, and others that are distributing eyeglasses or acting as gophers.  The mission is being held in a gymnasium in the city of Talisay, about 20 minutes north of Bacolod.  The group sees between 200 and 300 clients per day, performing mostly extractions with some fillings.  Clients hail from mostly the surrounding branches, which also happen to be first branches to post Kiva clients.  I had heard that the clients from Hinigaran branch would be at the mission on Wednesday.  I’d been meaning to get down to Hinigaran for a round of client interviews, but hadn’t had the chance.  Also, collecting information for Kiva journals usually means a loan officer or branch manager has to take you around to each client – a nuisance, to be sure.  So, armed with a list of Kiva clients in Hinigaran, I caught a ride in one of the vans heading that way. (more…)