What Do I Think of Education and Bridge International Academies? Pt. 4

The following is part four of a five-part post about education in development and Bridge International Academies.

The first and most obvious criticism of the Bridge model of education is that a scripted curriculum creates a non-dynamic learning environment for children.  The western model of education is presmised on the idea that critical thinking is essential to success.  The very idea of a liberal arts education is a distinctly Western concept.   So, naturally, when people here that our teachers are high school graduates who are taught to teach by reading to children from a script, they automatically assume that the quality of the education is poor.

It is true that the standard of education at a Bridge school is going to be far below that of more expensive schools.  But when compared with the alternatives – which include government schools staffed by unmotivated teachers and other non-formal schools offering little in-house teacher training – Bridge offers an education that is subject to rigorous testing and review.  For example, our curriculum is written by a team of Kenyan education professionals and managed by Teach for America alumni, all of whom have Masters Degrees in education.  It has a video team that films lessons to be reviewed by the curriculum writers.  They look for level of engagement among the students and adjust the approach to maximize comprehension and retention.  Student exams are digitized and reviewed both to identify weaknesses in the curriculum, but also review teacher performance.  Lastly, the school managers audit the teachers on a regular basis to ensuring that they are performing adequately.

Lastly, and most importantly, Bridge undertakes a rigorous longitudinal testing study of 5,000 students every six months to monitor improvements in reading and math.  Using a test developed by the Research Triangle Institute and USAID called the Early Grade Reading Assessment and Early Grade Math Assessment (EGRA / EGMA), Bridge compares the performance of 3,000 of its own students with that of 1,000 students at government and other non-formal schools.  The results, which are shown on the website, show strong performance gains in basic reading skills, compared with its peers and less strong, but still measurable, gains in math.  I know this because I was responsible for leading this student testing and performing the analysis.  Using this data we can then tailor our curriculum to address our problem areas and improve the curriculum.

This level of analytical rigor is simply not possible at other non-formal schools.  Why?  Because Bridge is able to leverage economies of scale.  It can invest huge amounts of resources into improving its model because it knows that all changes can easily be rolled out across every single school in a day.  When I first met Jay in January 2011, Bridge had just broken 10 schools and opened its first school outside Nairobi.  By the time I left, the company had 73 schools across Kenya.

This level of growth means two things.  First, since the unit economics are such that each individual school is profitable at a relatively small size, more schools mean additional revenue that can be poured back into the company.  And second, any major policy changes can be backed with incredibly rich data sets.  As the company’s business analyst, I was working with datasets with sample sizes in the tens of thousands.  For someone trying to use data to better understand how our parents think, pay, and act, and understand what makes a good school, I was in heaven.

In the next post, I will give some concrete examples of how Bridge uses data to perfect the model.  If you have questions, feel free to email me at josh@developeconomies.com.

Develop Economies’ Music Recommendation

Post to Twitter

Posted in Education | Tagged , , , , | Leave a comment

What Do I Think of Education and Bridge International Academies? Pt. 3

The following is part three of a five-part post about education in development and Bridge International Academies

The Bridge model is a fundamentally libertarian idea.  It is premised on the belief that school choice is a good thing.  Many organizations, including development titans like UNICEF, believe that education should be a public good, provided free by the government.  This may be true in theory, but, like most development theories, it is rarely true in practice.

For example, Kenya already technically has a free primary education system, where all students, regardless of socioeconomic status, are guaranteed the right to an education at no cost.  Yet, in the slums, where the houses built illegally, few government schools exist to serve the communities.  And even in areas where public schools do exist, additional fees payable to the head teacher and others mean that parents are paying almost as much for school as they do at Bridge.  Outside of Nairobi, many of the government schools are as close to free as a school can get in Kenya, but they are often overcrowded, far away, and staffed by complacent teachers who are either overburdened with too many students or complacent when it comes to teaching.

Much of the free primary education system in Kenya was subsidized by foreign donors.  But these donors eventually decided to scale back funding after massive corruption scandals were exposed.  In the main Kenyan daily newspaper, the Daily Nation, every day exposes a new corruption scandal.  Needless to say, the state of the government education system is underwhelming at best.

Because of the failures of the government system, thousands of non-formal schools have sprung up throughout the slums to serve these communities.  Education entrepreneurs, churches, NGOs, and other groups build and operate schools to fill the void left by poor state-run education.  While UNICEF and others would like to believe that these schools do not exist, they are everywhere.

When people speak and write about Bridge, they credit the company with a radical new approach to education, offering private education as a means of providing quality education.  But Bridge is hardly innovative in this respect.  Non-formal schools like Bridge have existed for decades.  It was not until the early 2000’s that a British academic named James Tooley began seriously researching education in the slums of India, Nigeria, Ghana, Kenya, and other countries, and finding bustling schools with hard-working teachers.  He published a book called The Beautiful Tree and several articles for the Cato Institute detailing his findings, which were influential in seeding the idea for Bridge.

Rather, the real innovation Bridge brings to this sector is its relentless pursuit of efficiency gains and systematization of the day-to-day running of a school.  Technology as a means of creating scalable payment and performance monitoring systems, a scripted curriculum written by subject-matter experts, modular school construction using low-cost materials – these are all key innovations that have the potential to revolutionize this sector.  But the concept of a low-cost private primary school for the poor is nothing new.

In the next post, I will address some of the criticisms of Bridge’s model of education.  If you have questions, feel free to email me at josh@developeconomies.com.

Develop Economies’ Music Recommendation

Post to Twitter

Posted in Education | Tagged , , , , | Leave a comment

What Do I Think of Education and Bridge International Academies? Pt. 2

I think that one of the reasons that Bridge has been so successful at innovating has been its willingness to bring in a multidisciplinary team to run the show.  People like me, who have no background in education, but a good deal of experience in other areas, bring fresh ideas to an industry that, apart from certain ed-tech companies and charter schools like KIPP, is not known for innovation.  Our head of operations was the former director of business development for Dominoes Pizza in Asia, responsible for introducing the retail chain to a completely new market.  The founders include one successful tech entrepreneur, a division lead at IDEO, the design firm, and an anthropology PhD.  It doesn’t get much more interdisciplinary than that.

Another reason I think it has seen success where others like it have seen failure is that it refuses to accept excuses for poor performance on the part of its employees and vendors, and sees itself first and foremost as service provider that puts its customer first.  As a generality, business in Africa moves more slowly and expectations are sometimes different.  The business culture – with many notable exceptions – is such that the customer is never at the top of the priority list.  The other day, a coworker told me that a vendor to whom we paid a lot of money to perform a service which he performed poorly – was upset that the management was too busy to see him.  “This is an outrage – I am a client,” he said.  The fact that we were, in fact, the client and he the service provider undoubtedly never crossed his mind.

Bridge demands quality from it suppliers, timeliness from its vendors, and results from its employees.  This mentality ensures that the best people for the job are in place, and they can perform their jobs efficiently.  In the NGO world (or at least the ones I have seen), this approach to doing business is hardly, if ever, the norm.   If a deadline is missed, people say “what can we do – it’s Africa time.” Or an NGO holds a conference that only attracts participants for the per diems and lunch provided.  Accountability is not part of the lexicon.  At Bridge, on the other hand, if a vendor screws up the logo on the 1,000 shirts it ordered, it refuses to pay until the mistake is corrected.  It’s only business.

That is because Bridge, above all else, is a business.  It happens to be building low-cost primary schools in slums, but it is first and foremost a profit-oriented enterprise.  If Bridge is going to reach 1,000 schools and one million children in countries around the world, it has to be laser-focused on the bottom-line to succeed.  Drawing from a talented pool of private sector veterans and a founder who started and sold a company in his twenties, Bridge understands this well.

This kind of truly business-minded approach to development is rare, even within the relatively new and trendy industry calling itself “social enterprise.” While many social enterprises – companies that try to turn a profit while doing good – struggle to balance the demands of a double bottom-line, Bridge has create a model where the profit motive is inseparable from the social mission – one cannot exist without the other.  If Bridge students perform poorly on the KCPE exam – the test culminating primary education in Kenya – parents will pull their kids from Bridge schools en masse.  On the other hand, if they perform better than students at other schools, Bridge schools will double in size in a day.

That is because poor parents, just like middle- and upper-income parents, are discerning consumers when it comes to education.  They look for quality and, more importantly, value for the little money they have.  This is generally true for most products and services, but particularly so for education, which parents see as a means of getting out of the slums.  For Bridge to grow, it must be educating its students better than the alternatives in the community – either government schools or other non-formal schools.  In this case, it means ensuring that we outperform other schools – both government and other non-formal schools.

In the next post, I will explain the public education system and the origins of non-formal schools. If you have questions, feel free to email me at josh@developeconomies.com.

Develop Economies’ Music Recommendation

Post to Twitter

Posted in Education | Tagged , , , , | Leave a comment

What Do I Think of Education and Bridge International Academies? Pt. 1

A Bridge student with major swag

After six months learning about agriculture in West Africa and working on a project whose objective was to improve the private sector, I decided to return to the private sector, since the public sector was not very good at making it any better.  I had interviewed with the Acumen Fund for its global fellowship in Nairobi six months prior.  I knew a few folks through my Kiva connections, and began networking for jobs there.  I cold-emailed a few, hit up friends for introductions, and stumbled into an informational interview with Jay, the founder of Bridge International Academies, through a former Kiva Fellow in Benin.  When I told him I was trying to move to Kenya four months later, he said “let’s meet when you get here.”

So, when I got there – actually, 10 hours after I got there – I met with him to discuss the prospect of me working with the company.  The company, as a background, is a chain of low-cost private primary schools serving the slums and low-income communities in Kenya.  When I met him in January, they had just opened their 20th school.  When I met him again in May, they were at 25 schools.  When I left two weeks ago, Bridge had 75 schools throughout Kenya, and is planning on opening another 200 by the end of 2013.

The model is as simple as it is elegant.  Bridge is creating a “school in a box” – a highly standardized, systematized, and replicable model for an individual school, where everything, from the curriculum to the training to the school operations, is designed for scale.  The process begins with market due diligence, where a team of research associates interview 40 households in each community where we are considering opening a school.  We survey the parents to determine whether there is a market for one of our schools.  For the last four months, I worked with the research team, developing an algorithm to predict the size and profitability of each new school, allowing us to determine how much we need to pay for land, how many classrooms we need to build, etc.   I redesigned our research report and, using our enrollment figures from this year, created a rubric based on population density, market size, cost-competitiveness, and the number of competing schools, which gives us a fairly accurate projection of how a school in that community will do.

Once we have approved a community, we scout for suitable plots and negotiate for the land.  Our construction team builds the school, and our training department ensures that teachers are trained and ready to teach by the time our school opens.  The curriculum team – which consists of 40 Kenyan and American educators – script every minute of every lesson, from math to English to science to Kiswahili, which is then delivered to the students by the teachers.  The incentive structure for school managers is based on the number of students they attract to their school, while the teachers are given bonuses based on performance.  All problems at the school – from teacher complaints to requests for water or desks – are routed through an in-house call center, which also makes outgoing calls to schools and teachers to ensure that the ship is running smoothly.  Lastly, the IT department has designed a billing system that allows parents to pay with M-PESA, and a school-management Android smart-phone application that automates much of the payment and performance monitoring at the school level.  All in all, it is a remarkable model.

In the next post I will discuss why I think Bridge has been so successful.

Develop Economies’ Music Recommendation

Post to Twitter

Posted in Education | Tagged , , , , | Leave a comment

What Do I think of Nairobi?

The road to Kiserian town from Champagne Ridge in the Rift Valley

When you live abroad, you are, with certain key exceptions, surrounded by people with a similar zest for seeing things differently.  This is particularly true for places that are either particularly off the beaten path or destinations for people whose interests reflect your own.  Burma a couple of years ago fell into the former category, while Kenya this past year would be the latter.

People ask me all the time what I think of Nairobi.  I tell them that I actually don’t really like Nairobi as a city.  It is crowded and polluted and major infrastructure problems – terrible roads, horrible drainage – that make the traffic very, very bad.  For a good month during the rainy season my commute home from work was 2.5 hours – and that is one way.  The government is incredibly corrupt, so things don’t work because the money meant to fix them goes into the pockets of the politicians.  As a foreigner, you are often getting ripped off and scammed for this and that.  And, as a beach person, being seven hours from the nearest respectable body of water (Lake Victoria to the west, the Indian Ocean to the east) was a bit difficult.  Of course, these are incredibly shallow complaints, since Nairobi has everything you could ever want.  And it has many comforts that other cities, like Accra, don’t have.  But most non-Nairobi-ites (and maybe quite a few Kenyans who live there) tell you that, if they had to live in one place for the rest of their lives, Nairobi probably would not be it.

A morning coffee at the Rangi Saba house, an hour outside Nairobi

That said, the people I met in Nairobi – Kenyan and expat – are among the most interesting I have come across in my three years on the road.  Everyone is at the top of their game, and completely into what they are doing.  For international development work, it is a mecca attracting the brightest minds from around the world.  All of the most interesting and game-changing social enterprises – Bridge International Academies, Sanergy, One Acre Fund, and Mobius Motors, to name a few – are there.  Some particularly innovative microfinance institutions, like Juhudi Kilimo, which does asset lending in the form of a pregnant dairy cow, are based in Nairobi.  Technology and ICT companies have set up shop to take advantage of the burgeoning mobile and smart-phone penetration and places like the iHub.  Journalists flock to Nairobi to make a name for themselves covering some of the worst places in the world, like Somalia and the DRC, which happen to be right next door.  All of the impact investors – Acumen Fund, Grassroots Business Fund, and others – are here.  International organizations, like the IFC, the UN, and all of the major international development organizations (IRC, CARE, etc.) are based in Kenya.  Everyone is there.

The fact that Nairobi is a hub for East and Central Africa creates opportunities, and opportunities attract people.  And those people are almost always interesting people.  And, usually, when they aren’t interesting people, at least the work that they do is fascinating.  That fact that you moved to Nairobi puts you in a self-selecting coterie of people who took a risk in moving to someplace new and foreign.  The people tend to have great stories and perspectives from their work and travels.  But if not, then at least they are working doing cool work in a field that you most likely know little about.  Conversations at parties in Nairobi are more likely to be about maternal health in rural areas or covering instability in the Kivu province of the Congo than about the weather.

A weekend trip to Diani Beach on the Indian Ocean.

Not only do you meet really interesting people who are involved in cool work, but you also meet some real superstars in a place like Nairobi.  People who have started companies and are subject-matter experts in everything from mobile money to ICT in agriculture to microfinance to whatever else.  I met more TED Fellows in Nairobi than I had in my entire life.  They are all here, and chances are, you will meet them around if you stay long enough.

In short, I had a love-hate relationship with Nairobi.  I think it is simultaneously mundane and exciting.  You become frustrated when you get ripped off on the matatu, and elated when you get to your destination overlooking the Rift Valley or Naivasha.  Outside the city, it is stunningly beautiful.  But the people are what make Nairobi worth the trip.

Develop Economies’ Music Recommendation

Post to Twitter

Posted in Development Economics, Travel and Culture | Leave a comment

What Do I Think of World Travel?

On the summit of Mt. Nyiragongo, a volcano in the DRC

Over the last three years, I’ve visited nearly two dozen countries on five of the seven continents.  I lived and worked in the Philippines for eight months, Ghana for another six, and Kenya for exactly one year.  In addition, I spent around six months backpacking through various a dozen far-flung places like Burma, Uganda, the DRC, and, most recently, Thailand.  In fact, as I write this, I am sitting at the beach bar at Ban’s Diving Resort in Koh Tao, where I will spend the next few days diving the reefs and wrecks around this tiny island in the Gulf of Thailand.  In a few days, I head to Koh Phangan, which chewed me up and spit me out when I went two years ago.  After crashing a motorbike, leaving me with the famous Koh Phangan tattoo on my left leg, I vowed never to return to that terrible place.  And yet here I am, a mere six days away from the legendary Full Moon Party, which, with an estimated 10,000 people packed on the beach, I expect to be the wildest party of my life.

Visited 25 states (11.1%)

About a year ago, the Economist published an article about expatriates – people who live abroad.  Using a bit of scientific research and the example of Ernest Hemingway, F. Scott Fitzgerald, Gertrude Stein, and others, they make the case that expats, as they are called, and former expats, tend to be more creative than their domestic counterparts.  As with most of these things, it is difficult to separate correlation from causality, but, either way, on tests measuring creativity, people who have spent considerable time immersed in another culture score higher these tests.

From what I have seen, I think that is, by and large, mostly true.  I am not sure whether living abroad makes you more creative or more creative people are more likely to live abroad.  But there are logical explanations why this would be the case.

At a wedding in Ghana

For one thing, living abroad, by definition, broadens your perspective.  It forces you outside of your comfort zone and makes you look at your own world from afar.  You are exposed to a different way of thinking about life and an approach to living.  What is important to you and the people you have been surrounded by your entire life may not matter to people raised in a different culture, and vice versa.  Family and religion are paramount in the Philippines, while ethnicity is a critical, if sometimes destructive, element of African culture.  But even differences between African cultures can be as stark as those between countries on different continents.  In Ghana, the sense of what it means to be Ghanaian is clear, manifested in the traditional music, clothing, and food, while the Kenyan national identity is more closely tied to tribal affiliation.  In each culture, the answer to the question “Who are my people?” is different.  It is shaped by tradition, culture, history, and factors that you might not normally expect would shape the way that people see themselves in relation to others.  And the more different ways you see this, the easier it becomes to understand how other cultures that you have not visited rationalize their own decisions.

Trekking in Burma

Through the people you live and work with, you learn first that there are different ways of looking at the world.  And the more places you live and work, the more ways of looking at the world you come to understand.   With greater exposure to different perspectives, you become more empathetic and understanding of differing viewpoints.  Your views don’t necessarily change – they can become stronger as you see things from the other side.  Having your perspective challenged is a goodthing.

Living abroad also leads you to try new things.  You eat food you might not normally eat, and drink perhaps more or less than you are accustomed to.  More often than not, you are introduced to something you like, which reinforces the notion that openness is a virtue.  And when the essence of creativity is a willingness to break from the old way of doing things and try something different, the experience you get from living in a place where you are forced to do it every day is undoubtedly good practice.

Tomorrow, I will give a few more reasons why I think traveling makes you a more creative person.

Eating balut, a duck fetus, on the streets of Manila

Develop Economies’ Music Recommendation

Post to Twitter

Posted in Travel and Culture | 1 Comment

What Do I Think of Microfinance? Pt. 2

This is part two of a two-part post on microfinance.  Part one can be read here

In the last post, I gave a rundown of the mechanics of microfinance and explained the criticism of high interest rates.  Another criticism came from development economists like Dean Karlan, founder of Innovations for Poverty Action and pioneer in the utilization of randomized controlled trials for determining the efficacy of development interventions, and Jonathan Morduch, who, in his seminal book, Portfolios of the Poor, found that microfinance had limited impact in increasing incomes for clients.  They found that, contrary to conventional wisdom, microfinance was actually most beneficial in “smoothing consumption.” Most people living $2 a day do not actually earn $2 every day.  Instead, they might earn $10 one day and nothing for the rest of the week.  So the consistent capital offered by a microfinance loan actually allowed them to feed their families and pay school fees when no money was coming in.

My opinion on the effect of microfinance has largely remained unchanged.  First, I understand and recognize the necessity of charging high interest rates.  In order to maximize their impact, MFIs must be profitable to some degree and operated largely unsubsidized if they are to be sustainable.  If this means charging higher interest rates, so be it.

Regarding the criticisms from the development economists, a randomized controlled trial conducted over a two-year time frame is hardly a sufficient time frame to determine whether microfinance is an effective tool of poverty alleviation.  The effects are generational.  If a microfinance loan allows someone to keep their child in school consistently and maybe even graduate high school when they otherwise would have pulled them out to work on the family business, the impact on the community will not be felt until that child is grown and is sending money back from his or her well-paying job in the city in the form of domestic remittances.  This is a 20-year time frame, at the minimum.  To my knowledge, no longitudinal study comparing communities served by microfinance with those that are not has yet to been done.

Secondly, there are some incredible success stories of clients bringing themselves out of poverty as a direct result of microfinance loans.  I know because I met some of them – the ones who started with a loan to build a small stall to sell vegetables, and expanded to purchase a small restaurant, a piggery, and a motorcycle repair shop.  These stories cannot be discounted and, even if they were all that microfinance had to show for its efforts, that to me is enough.

Thirdly, microfinance institutions offer benefits beyond simply credit.  I have documented on this blog many times the different products offered by NWTF and other institutions.  Mass weddings for those who could never afford it, life and health insurance for families who are constantly in danger of falling deeper into poverty with a single illness, and financial literacy trainings to help them better run their businesses.  MFIs also act as a distribution channel for products that might never reach the base of the pyramid market.  Clean cookstoves, solar products, and other products can be sold to the hundreds of thousands of microfinance clients who, at least once a week, convene with a potential salesperson.

Lastly, and most importantly, I believe in the free market and the right for people to choose what they think is best for them.  Most recently, I worked for a company whose mission – to provide an affordable, low-cost alternative to public education – is fundamentally libertarian (namely, school choice is a good thing).  Criticizing microfinance institutions for misleading clients and offering a service that is flawed is, to my mind, patronizing to the clients who subscribe to the model.  If the women taking loans from microfinance institutions felt they were being exploited, they would cease to take them, just as parents would pull their kids from Bridge schools if they felt their child was not being educated.

People in the development world too often underestimate the ability of the people they purport to serve to make rational decisions.  I don’t, and, if I did, I might have the same criticisms.  But I do, and have stated my reasons for doing so many times on this blog.

To try to document all of the benefits I see to microfinance would take far more time than I would like to allot in this segment of my re-cap of the last three years.  In future posts, I will elaborate on other issues in microfinance.  But I am comfortable saying that, to this day, I feel the same way about microfinance as I did two years ago, when I extolled its praises all over this blog.

In my next few posts, I will talk about my thoughts on agriculture development.

Develop Economies’ Music Recommendation

Post to Twitter

Posted in Microfinance | Tagged , , , , | Leave a comment

What Do I Think of Microfinance? Pt. 1

This is part one of a two-part post on microfinance.

Through Kiva and Negros Women for Tomorrow Foundation, microfinance became my entrée into this world.  I knew very little about microfinance prior to finding Kiva, other than what I had seen on an episode of Frontline highlighting the company’s early days.  Over the subsequent nine months on the ground in the Philippines, I learned as much as I could, and became a bit of a microfinance apologist, believing it could do no wrong.  I will do my best to step back with the benefit of hindsight and look at it objectively.

Microfinance is an umbrella term describing the provision of financial services to the unbanked.  That includes, but is not limited to, credit, insurance, and savings products.  The first one – micro-credit – is the most widely known, popularized by Muhammad Yunus and his Grameen Bank, founded in Bangladesh.  According to the apocryphal tale, Yunus lent money to a group of furniture makers whose margins were tiny due to high upfront cost of buying materials.  With a loan of only $40, Yunus was able to increase their profits by orders of magnitude and still get a return on his investment.  The poor, it seemed, could be worth of credit after all.

Yunus formed the Grameen Bank, which, while not the first, became one of the largest microfinance institutions (herein referred to as MFIs).  The group-lending methodology utilized by Grameen and other large microfinance organizations, like Accion and FINCA, came to be replicated by other MFIs around the world.  A while back, I wrote about the replication of the Grameen model, specifically.

The group-lending model was created to guarantee payment in lieu of collateral.  Typically, women self-organize into groups of four or five, and, in the case of the MFI I worked with, Negros Women for Tomorrow Foundation (NWTF) in the Philippines, up to eight of these groups come together and work with a single loan officer.  The money is distributed to each woman at the same time and none can receive another loan until each has paid back their own.  The threat of hurting the entire group, which implicitly agrees to guarantee the loans of each member, creates pressure on individuals to pay back.  Clients are predominantly women, since women are more likely to invest the money into the business or, at the very least, spend the money on the family rather than leisure activities.  As keepers of the house, women are also less mobile and, therefore, less likely to run off with the money.  Using this system, Grameen Bank and others consistently have repayment rates of 95-98% .

Because of the small loan sizes (generally less than $500 per loan), the cost of servicing the loan is high, necessitating what some might consider exorbitant rates.  NWTF, for example, charges ~30% interest on a 6-month loan based on a non-declining balance, which adds up to more than70% annually.  This seems high, except when compared with the alternative, which is commonly referred to as a “6-5” – receive $5 in the morning and pay $6 in the evening.  This equates to a 20% daily interest rate.  Annualized, it is several hundred percent.

This is just the cost of doing business in microfinance.  Back in 2008 and 2009, a schism developed between two camps in microfinance.  Some, led by Muhammad Yunus, saw microfinance as a mechanism for bringing financial services to the poorest members of society, and felt that making significant profit ran counter to the underlying philosophy.  Others, led by Compartamos, a publicly-traded MFI in Mexico, and SKS, the largest MFI in India which also IPOed, saw a huge untapped market that could only be served if MFIs had the capital to invest in expansion.  These MFIs charged even higher interest rates and expanded rapidly to reach the 90% of the poor that still lacked access to finance.

This schism reached a breaking point last year, when the Indian government placed new regulations on MFIs in response to a spate of suicides among microfinance clients who had become over-indebted to multiple MFIs.  Aggressive tactics on the part of loan officers was blamed, and the entire microfinance industry in Andra Pradesh – a state in India – and the rest of country suffered significantly.  Muhammad Yunus was then forced out as the head of Grameen Bank in what some people saw as punishment for his starting a political party in Bangladesh.  All in all, 2011 was not a good year for microfinance in South Asia.

In my next post, I will talk about other criticisms and sum up my thoughts on microfinance.

Post to Twitter

Posted in Microfinance | Tagged , , , , | 1 Comment

How to Break Into Development, pt. 2

Meeting cool people is important

This is part one of a two-part post on getting involved in international development work.  Read part one here.

Trying to answer these questions – at first in vain, and, a few years later, more successfully – helped me so much that I have dispensed this same advice a dozen times since.  But I would add a fourth question is to these questions as philosophy is to math.  Ask yourself, “What do I want out of this experience?” Because figuring out that question will provide clarity in answering the other three.  In retrospect, I wanted an interesting cross-cultural experience that would drive me outside of my comfort zone and give me the opportunity to give back.  Choosing multiple, shorter-term gigs (defined here as less than a year) allowed me to go broad, but not deep.

I like being exposed to new things, and I wanted to learn as much as I could about as much as I could.  This explains why I had three jobs in as many years – something that would otherwise be a question mark in the eyes of someone reading my resume.  In the span of 30 months – roughly the same amount of time I spent at my previous job as a consultant – I lived in three countries (Philippines, Ghana, and Kenya) and worked in three different industries (microfinance, agriculture, and education).   This stands in contrast to many people I know out here, who chose to specialize very early on and have no interest in deviating from that path.  There are benefits to both, and you have to decide which is best.

I would also be lying if I said the opportunity to travel to exotic locales did not factor into the equation for me.  In West Africa, there are fewer opportunities for independent travel.  In Ghana, where you are surrounded by post-conflict, conflict, and sometimes pre-conflict countries, backpacking is not for the faint of heart.  In contrast, in the Philippines, which as many people living below the poverty line as Ghana has people, you can easily fly to Thailand for a weekend for less than $100 roundtrip.

Once you have figured out what you want, the key is to network.  This industry, more than just about any other, is about connections.  That is because the organizations you want to work with are often located many thousands of miles away across large oceans that you may or may not have crossed.  And the quality that people are looking for more than just about any other in a candidate is a local address.  You really need to create a list of each organization you would like to work with and being combing your network for introductions.  It is possible to find interesting opportunities on job boards and listservs, but, as a rule of thumb, the easier a job is to find, the more competition it will have.  Usually, the best ones and, more often than not, the easiest to get are the ones that are not advertised that you hear about from your friend.

Of course, the best way of all is to figure out where you want to be, book a flight, and just go.  On May 18th 2011, I remember sitting at a bar on the beach, drinking a beer, trying to mentally prepare myself for flying to Kenya in a few hours with a handful of job leads, a few former Kiva Fellows as my network, and a sublet in a city I’d visited once before.   I had given this piece of advice before, but felt a bit hypocritical for having never taken it myself.  So I decided to do it and see how it worked out.

I set up a few potential opportunities with companies that interested me – a solar lantern manufacturer, a BPO hybrid non-profit focused on the poor, and Bridge.  I met with the CEO of Bridge the first day I arrived and proposed doing a pro-bono project, analyzing all of their payment data and trying to draw some conclusions about how parents in the communities where we worked actually paid their school fees.  That work turned into a three-month consultancy, and continued for the next year.  My last day was last Friday, and the longevity of the role validated the decision to make that leap of faith.

S o now, I can speak from experience when saying that the most direct way to find the job you want is to show up.  And if it doesn’t work out, then find something else.  But simply by being there, you will have a leg up over other candidates.

In the next few posts, I will discuss my thoughts on what works in development and, more importantly, why.

Develop Economies’ Music Recommendation

Post to Twitter

Posted in Development Economics, Travel and Culture | Tagged , , , | 1 Comment

How to Break Into Development, Pt. 1

This is part one of a two-part post on getting involved in international development work.  Read part two here.

One day back in May 2009, I was sitting at my desk at my office on Boylston Street in downtown Boston reading Next Billion.  I had decided the week before that I would quit my job in September and leave the U.S. for an adventure.  After a cursory review of the options, I decided backpacking and teaching English weren’t for me, and settled in development.  At the end of the article I was reading about micropayments for solar energy in Brazil, Mike MacHarg, then a graduating MBA student at my alma mater, wrote a comment asking the author to get in touch with him, leaving his email address.  I am not sure if that author ever did contact him, but I did, and the meeting we set up in a Starbucks in Boston set in motion a chain a series of small-world moments that culminated in someone coming up to me two weeks ago in Brew Bistro, a bar in Nairobi, and introducing himself as Erik Wurster, formerly of E+Co, otherwise known as the person Mike first put me in touch after our meeting three years ago.  He is living in rural Rwanda now, working on a solar energy startup called UpEnergy, and happened to be in town for a clean cookstove conference visiting a friend of mine.  It’s a small world indeed.

These stories aren’t unique – in the relatively small global international development community, everyone has a story extending six degrees on some direction before boomeranging back to them.  And these stories are, to me, essential for explaining out to break into this work.  From the beginning and right through until the end, guys like Erik and Mike have been connecting me to people from around the world, and through those connections, I have learned about different jobs, companies, roles, and honed in on what it is that I am trying to do.

But for people who are trying to break into this world and have no idea how to begin – in other words, myself three years ago – I will pass on some valuable advice given to me by my father’s partner’s son-in-law when I was a lost soul.  After college, he had moved to Zimbabwe back when it was still called Rhodesia and taught science in a school outside Harare.  When he asked what I wanted to do and I responded “work abroad in development”, he knew he would have to bring it back to square one with me.  So he gave me some advice I have since passed on to many people once in my shoes.

Entering the job search with “must work abroad in development” as the only criterion is both wrong and much more common than one would think.  So, the son-in-law gave me some parameters to help me narrow down my own hunt.  There are three questions to ask before starting to look:

  1. Where do you want to go?
  2. What do you want to do?
  3. What kind of organization do you want to work for?

The first question – where do you want to go – is a big one.  For some people, this is the easiest to answer.  Wanting to learn a language (like Spanish) or already knowing one (like Kiswahili) are good reasons to work in Peru or Tanzania, respectively.   For me, location did not matter.  I wanted to go to South America, but didn’t really care either way.  I was up for anything, and moving to a place I knew nothing about only added to the sense of adventure.

The second question – what do you want to do (more specifically, what sector interests you) – is more difficult to answer when you don’t know anything about the subject matter.  For people with prior knowledge and experience – academic, professional, or otherwise – it is possible to narrow down your options.  Broadly, there are a few key areas of international development work: public health, water and sanitation, education, economic / livelihood development, financial services, agriculture, and a few others.  You could further split each of these into emergency relief efforts and ongoing systemic programs.  It is admittedly difficult to narrow this one down when you barely know the difference between public health and clean energy in this specific context.  But, if you are not like me, then perhaps you can pick a couple that interest you and learn as much as you can before honing in on one or two.

The third question – what kind of organization do you want to work for – was actually the easiest for me to answer (actually, the only one I could answer).  With three years of practical experience under my belt, I felt strongly about working for a company that knew how to leverage my skills.   This last question helped me narrow my search down to a few organizations that had not only a reputation for innovation, but also a fellowship or consultancy program that provided immersion without long-term commitment.  Ultimately, the decision came down to the volunteer consultant program with TechnoServe and the Kiva fellowship.  Kiva got back to me first, so I signed up with them.  The following years, I decided to give TechnoServe a shot and moved to Ghana.

The reason it is so important to answer this question is because there are so many organizations out there are incredibly different.  I have personally run the gamut, from technology-based non-profit to USAID to what some people refer to as the “McDonald’s of education,” without any of the negative connotations.  Some non-profits and NGOs are poorly-run and unprofessional, with a questionable impact on the poor.  Others are led by visionaries with a wealth of experience, providing opportunities for mentorship.  Some, like Engineers Without Borders Canada, are based in the field, while others, like Planet Finance or Grameen Foundation, spend more time in the office.  Choosing the right organization can easily be the most important of the key variables.

In the next post, I will add a fourth question, and discuss other issues.

Develop Economies’ Music Recommendation

Post to Twitter

Posted in Development Economics | 1 Comment