Author Archives: Josh Weinstein

Microenterprise to SME: A Thought Exercise pt. I

This is the third post of a threepart 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. Continue reading

The Tradeoffs of Serving the Poorest

Groundhog's Day for a man of the torah.

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.

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What I Do: Borrower Interviews

As a Kiva Fellow, I go to the field to interview borrowers about the status of their loan and talk about the business, the family, and their dreams for the future.  Usually I do a short write-up to update the Kiva lenders, but sometimes I go overboard and write an essay.  This is not representative of most journal entries, but I found her to be such an interesting client that I wanted to share it.  I titled this journal update “Glenda’s Business and the Economics of a Half-Hectare Farm.”  It only went out to 13 people, so I’m hoping for a larger audience here*: Continue reading

Green Products and the Triple Bottom Line

The core philosophy of microfinance is the double bottom line.  It refers to the goals of the organization, which are a) to be profitable, and b) to be socially impactful.  But there is another philosophy known as the triple bottom line, which adds ecological impact.  Sometimes referred to as “people, planet, profit,” TBL promotes an environmentally-friendly approach to development.  To that end, there are a host of products that serve each of the three goals.  In this post, I will talk about one in particular: environmental cookstoves. Continue reading

Repost: Yunus v. Compartamos

In a shameless attempt to fill the gap left by me not having any material, I am reposting an old favorite.  Also, it is going up on the Kiva Fellows blog this morning, so it made sense to put it up here again.

Within the international development community, a debate for the heart of the movement came to the fore two years ago with the IPO of Compartamos, the largest microfinance institution in Mexico.  Divisive and controversial, Compartamos’ decision to sell shares and publicly list on an exchange is perhaps the clearest manifestation of where the two sides diverge.  One side, led by Muhammad Yunus, founder of the Grameen Bank and winner of the Nobel Peace Prize in 2005, contends that, at its core, the sole fundamental mission of microfinance is poverty alleviation.  The other side argues that the goal must be maximizing profit and, more specifically, ROE (return on equity) – extending services to a previously unbanked population and expanding via revenue growth.  Just about everyone has an opinion on the decision and, at the very least, it allows for a great philosophical and economic debate about the most effective way to assist the billions of people who live below the poverty line. Continue reading

Branch Rollout in Cebu

The ubiquitous “Principles of Dungganon” sign.

This weekend I went to Cebu, an island east of Negros, for the Kiva rollout in the NWTF branches. I figured the place would be ideal for my photography, especially since I’d gotten hold of the best dslr under $1000 that one could lay their hands on. I traveled as part of a five-person team, including Massah, the photography consultant, Raymond, the research manager, Jubert, the IT manager, and Presy, the Kiva coordinator.  Pocholo, a friend of Raymond’s, needed a lift to Cebu and caught a ride with us.  The six of us loaded the infamous red van and left at 7 AM on Thursday morning.  The road to the port in San Carlos normally takes 3.5 hours, but we chose to take a shortcut through the mountains on a winding two-lane road cut neatly into the side of a cliff.  Unfortunately, by the time we arrived at the port, the ferry was full.  The next ferry didn’t leave until 2:30 in the afternoon, so we drove three hours south along a coastal road to another port in Aclan, where the ferry leaves every hour and takes 30 minutes to cross.  Once on the other side, we had another three-hour trip back up north.  Twelve hours later, we arrived in Cebu City and checked into a hotel.

Our route, highlighted by the black arrows

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I’m Changing Photo Sites

The suits over at Yahoo have informed me that I’ve reached my 200-photo limit on my Flickr account.   For unlimited storage space, the capitalists are asking for $24.95 per year.  In protest, I am moving all my pictures to Picasa, Google’s free photo uploader.  I will continue to upload new photos to Flickr, with the link displayed in the sidebar.  But for the full collection of photos, check the Picasa site, which also has a link on the sidebar.  Click on the photo below to reach the new site:

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Helping Haiti: Microfinance and Natural Disasters

What is the role of microfinance in the immediate aftermath of a natural disaster?   The short answer is that, under the circumstances, microcredit is less effective.  A prerequisite for microcredit is a functioning economy.  Goods and services need to be worth money for capital infusions to make a difference.  For example, an MFI lends money to a woman for the purpose of opening a general store.  The woman uses the loan to buy soap from one retailer and soft drinks from another.  She hires a local contractor to build the addition on her home, or at least purchases the materials.  The money flows around community, and everyone becomes wealthier.  But in the immediate aftermath of a natural disaster, the communities served by microfinance are so devastated that the system doesn’t work.  There is no electricity, no fuel, no food, no water, and no shelter.  Homes have been destroyed and people are starving.  A sack of rice becomes invaluable – to a starving person, no amount of money would lead them to part with food.    So it becomes a barter economy, if there is anything to barter at all.  As with everything, these points are best illuminated by example.  The most obvious is the recent earthquake in Haiti.  In reality, Haiti needs aid money, and it needs aid workers to deliver services.  Microfinance – microcredit, in particular – cannot immediately help during the relief period because there is no economy to stimulate. Continue reading

Two Days in La Castellana

Last week, I spent two days in the town of La Castellana, visiting the NWTF branch here.  I went to speak with existing Kiva clients about their business to send an update to the lenders, and also interview new clients to post up on the site.  You can always tell the profiles and updates I’ve written because I try to employ the same literary techniques that make this blog so readable (or unreadable, depending on your perspective).  Of the six weeks I have been working here, I’ve spent two and a half in the field.  This is where I get to see microfinance implemented on the ground.  I get to see the how it is executed and talk to the loan officers and the clients – the people in the proverbial shit.  It is the part of the job I enjoy the most.

The day begins early.  I’m told I need to be ready to go by 5:45, so I set my alarm for 5:00.  At 5:30, I get a knock on the door.  It is Albert, one of the janitors, who is supposed to take me to the bus stop a kilometer away.  Fresh out of the shower, I asked for 5 minutes to gather my things before we left.  When we get to departure point for the van, the gate is closed.  Albert yells to the driver, who is sleeping in the rundown ticket office.  He rubs his eyes, with haunting blue lenses contacts, gets up and walks over to the van (inside the gate).  He says something to Albert in Ilonggo, climbs into the backseat of the van and falls asleep on the seat.  “The van doesn’t leave until 6:15,” Albert tells me.  I told him to go ahead, and that I can wait on my own. Continue reading