Archive for the ‘Microfinance’ Category

Microfinance is the provision of financial products and services to economically active poor people who, for a variety of cultural, social, gender-related, and other reasons, are excluded from the mainstream financial sector, especially in the developing world. The microfinance sector has grown significantly over the past few decades and, in 2006, Muhammad Yunus, considered by many to be the father of modern microfinance, was awarded the Nobel Peace Prize for his pioneering work in fostering access to finance as a path toward more peaceful relations.

At first glance, it may seem that microfinance and the sharing economy have little in common. Microfinance focuses on poor people in the developing world. Women represent the vast majority of microfinance clients, and many loans are for working capital assets such as livestock and small shop supplies. Ironically, many microfinance beneficiaries share out of necessity – as they have done for generations – though they wouldn’t necessarily think of building a business around it.

However, this first impression is incomplete. Further investigation reveals a multitude of similarities and – perhaps most importantly – key lessons that the sharing economy and collaborative consumption could learn from microfinance:

· Empowerment: At their core, both microfinance and collaborative consumption enable and promote empowerment of individuals. Responsible access to finance unleashes a positive chain of ripple effects: livelihood, income generation, and a brighter economic future for clients, their families, and communities.

Collaborative consumption achieves similar ends. As Rachel Botsman says, “…my core driver is how empowers people. It empowers people to tap into skills and talent that they have but haven’t found opportunities to make money from before. It empowers people to be in control of their jobs and their lives. It empowers people to make new kinds of connections that are often quite tricky to make.” Technology has democratized, economized, and facilitated the ways in which ever-increasing numbers of people can transact with one another and create new value.

· Trust, Reputation, & Social Collateral: Microfinance and sharing-based businesses depend on these essential characteristics for their very survival, in addition to their popularity. No rational person would make an uncollateralized loan to a poor person she doesn’t trust. In microfinance, your reputation substitutes for credit history (because the latter doesn’t exist). The group lending model of microfinance, in which each member of a group is responsible for ensuring that all members repay their loans, is premised on social collateral: You’re banking on an individual’s trustworthiness within society, rather than her material assets, as the best indicator of whether she can and will repay a loan. As a result, social standing among peers – especially within tight-knit communities – is built over time and reigns supreme.

Similarly, in the sharing economy this kind of social fabric and “trust barometer” can be created thanks to new technologies. Engaging in collaborative consumption – and getting used to it – lowers the trust barrier over time. Botsman summarizes it well: “The first few interactions people go through typically involve quite a few exchanges. Once they figure out that most people are trustworthy and that the idea works, the amount of trust features they use for future interactions declines.” (more…)

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My 2010 travels so far have been blessedly less frenetic than in 2009.  I’ve “only” been to India twice, Canada once, New York City and Washington DC each twice, and a handful of other fun locales a few times.

Each trip has been memorable in its own ways.  India has seen me get really sick, twice, including my first-ever adventure to Indian hospital in July.  (Side note: Total cost for 1 doctor’s visit to hotel + 1 day in hospital + 4 prescription medications = $25.  With no mention at any time of health insurance.)  Colorado meant awesome fun with my nieces Ella and Amelia, who are growing up beautifully but so fast.  A much-overdue road trip through the Midwest, from Minneapolis to Kansas City via Des Moines, turned into one big highlight: great friends, time to catch up, perfectly-fiery fall colors, open space and local flavors.  Returning to Cambridge, Massachusetts to join the Board of Directors of the World Wide Web Foundation — a real honor and source of much excitement as I can get more involved in the technology-for-development space.  And of course, no travel series for me would be complete without spending time upside-down: here’s a favorite handstand photo addition, snapped atop Camelback Mountain (in Arizona) at sunrise last month.

I have really enjoyed being closer to home more often.  Not that it’s been any less busy, rather just nice to water my local roots and hold more in drawers and on shelves than in a suitcase.  But that’s about to (temporarily) change soon because…

I’m going around the world!

On November 12, 2010 I will board the first of ten flights (eight of which are international long-hauls) that will take me over the Pacific, Indian, and Atlantic Oceans; across the Mediterranean and Red Seas; touching down in seven countries, from Thailand to Egypt; and bookend a variety of personal and professional dream-come-true adventures.  All in five weeks, but who’s counting? (I fully admit I’m in denial of how much I’ll miss some very special people back home, but hey — let’s focus on the fun stuff.)

I’d like to hold on to at least a few surprises, so check back here (or more quickly, my Twitter stream) for updates on my whereabouts and goings-on.  Trekking in the Himalaya, drinking yak butter tea, exploring temples and hill towns, holding in-depth meetings with microfinance institutions (MFIs), visiting water and sanitation systems in urban slums, figuring out how women and youth and marginalized communities are tapping into mobile and internet technologies for the greatest good…

Let’s go!

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It’s hard to believe my time in India has already come and gone.  It was a good trip, as always – full of hectic meetings + early morning flights + learning + sensory overload + wonderful people – but far from my best.  Though I was there 2 weeks, it felt more like one since the other was a blur spent in bed and doctor’s offices.  But I’m getting ahead of myself.

The key highlights of this trip were definitely World Water Day (March 22) and our inaugural WaterCredit Forum (March 26).  Each year one of Water.org’s partners, Gramalaya, organizes what we believe is the largest World Water Day gathering in the world.  More than 21,000 people – probably 99% of whom are women – come from over 400 villages throughout Tamil Nadu to celebrate their access to clean water and safe sanitation, and to advocate on behalf of those who don’t.

A sea of bright saris flooded my eyes, all sitting underneath a giant bamboo-lattice roof to protect from the searing heat.  WaterCredit loan group members had matching saris; that was a totally unexpected, absolutely thrilling sight to behold.  There were dances.  Children dressed up as animals and did pantomimes about good hygiene (“I’m a bunny. I like to play in the dirt. When I’m done playing, I must wash my hands before eating my carrots.”) and water quality (“I’m a tiger.  I roam around all day, looking for something to eat.  This makes me thirsty.  Sometimes I find water in a pond.  But I shouldn’t drink it if it’s dirty, because it will make me sick.”).

I sat on the dais as a guest of honor, a garland of freesia around me, and was overwhelmed by joy and pride.  Unfortunately I was too wobbly to do much more than smile (keep reading), but hopefully that was enough for my first time.  I plan to celebrate many more World Water Days in a similar setting.  It was incredible.  A few pictures here, and a fabulous Water.org video clip here.

The WaterCredit Forum was more staid in comparison, but still served its purpose and was a big success (if I may say so myself!).  We attracted a great range of microfinance, water/sanitation, banking, venture capital and development organizations.  Most participants came from India, though Africa, North America and Europe were represented.  The morning saw plenary sessions and excellent presentations by our MFI partners BASIX and Guardian.  In the afternoon, we split into groups for interactive discussions about opportunities, challenges and other innovations for WaterCredit moving forward.  The entire day felt like one big highlight.  Microfinance Insights has written an article about the Forum already; Microfinance Focus will publish a full report next month.

The one — but big — downer of the trip was a bad case of Bombay belly I got, which was double-whammied with a virus that left me woozy,  in pain, with a 104F fever and wishing I were not on the road.  Poor timing and then some.  Even so, it was an opportunity to learn about the kindness of strangers (and colleagues!) and gave some insights into Indian medical care.

The day after I started feeling nauseous and lost my appetite, I woke up barely able to move.  Nearly in tears, I wobbled downstairs to the hotel lobby, where my colleagues were preparing to go on a site visit.  They took one look at me and said, “to the doctor you must go – now!”

Next thing I knew, I was whisked away to a tiny, bird-chirpy corner of a residential neighborhood and plopped into a chair at the home of some Dr. G. Ganapathy.  I was told he was “one of the top physicians in all Trichy – studied in the US, very famous man.”  Sounded good to me.

Five minutes later, in walks a delightful elderly man – who we’ve clearly woken up early – with a gentle step and sparkle in his eye.  He asks me where I’m from; it turns out he spent 2 years in Sacramento, which in Tamil Nadu was as close as next door.  (Later, having recovered, I would accompany him to his home so he could proudly show me photos of him, his wife and Alcatraz.)

For the next two hours, I was poked and prodded, slept on his home-office-bench, got 2 injections, was force-fed honey with fresh sweet lime juice, and continued to feel awful.  Not to worry, said Dr. Ganapathy, I was going to get better.  I wasn’t sure I believed him – but the one thing that definitely did make me feel better was realizing that we’d made an appointment at a moment’s notice, had never once been asked for insurance cards, and I was being treated almost as if I were family.  It was comforting beyond words.  (Why can’t a “developed” country like the US understand this?!?)

For the next several hours, my colleagues Nayakam, Aananth, Damodaran and Jose kept close watch over me.  We ventured out once, for a couple of hours to see some Water.org work.  I got sick again, nearly fainted, and decided not to do that again.  Bed was the best option of all – I slept 17 hours in one day.

That evening we returned to the doctor, keeping him up both early and late.  Once again he welcomed us with open arms.  My fever had risen, so he kindly spent another 2 hours poking and prodding, and asked if I wanted to go to hospital.  My colleagues flatly refused and insisted on taking me to their home instead.  I will forever be grateful to Damu’s wife Viji and daughters Priya and Preethi for welcoming me with open arms, feeding me sugar-salt solution and (delicious!) rice porridge, and nursing me back to a semi-normal state.  The following morning, after some tender coconut – the local palliative of choice – I was allowed back to the hotel and we moved on to Chennai.  It would still be several days until I was back to normal (to be honest, I’m still not there yet) but the worst was over – and I’d had lessons in the kindness of colleagues, humanity of the medical profession (especially when not constrained by worries like malpractice) and a stern reminder to be kind to my palate in India!

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The two months since my last post — and really, the past four months — have been intense, rewarding and at times I’d even have to say extraordinary.  Four continents, 12 countries (8 for work + 4 for layovers), 40+ flights (no comment on carbon footprints please — I’m trying to help the 2.6 billion people without water and sanitation) and more meetings with MFIs and watsan organizations than I can count.  Whew!

Here’s the big-picture overview — think maps, pins and where-in-the-world:

  • Trip 1 (July – August): Kenya – Uganda – Ethiopia – Sweden – Netherlands
  • Trip 2 (September): Singapore – Hong Kong – India (8 cities, north to south and east to west) – South Korea
  • Trip 3 (October): London, England – Frankfurt, Germany
  • Bonus Trips: Kansas City, Los Angeles and Washington DC
  • Trip 4 (now):  Italy (Rome, Bergamo, Cinque Terre)
  • Trip 5 (forthcoming at end November): Berlin, Germany

There are too many highlights to note here; hopefully my Twitterstream has done some justice to these over time.  In addition to my personal observations, I have a WaterCredit Twitterstream that’s focused specifically on water, sanitation and microfinance.  I talk a lot about toilets, poo and municipal water authorities these days… hmmm.  Well, given that we’ve got 2.6 billion people without appropriate WSH (that means Water, Sanitiation & Hygiene) today and — despite significant resources, time, money and efforts being expended globally — we’ll have 4 billion people like this by 2025, I’d say more people need to join these conversations.

But back to the travel theme…

Such awesome trips, all of them.  Professionally, MFI interest in WaterCredit is broad and sincere; I couldn’t be more pleased with how outreach meetings went.  The Water.org/WaterCredit team has a lot of follow-up work to do — hurray!

It was interesting and great fun to return to several places I’d visited in the past, but this time with additional work responsibilities and insights about “doing business” there.  My in-country Water.org colleagues were amazing hosts and enabled us to do, learn and experience things that I never could have done solo.  For example I will never forget the 11-course meal (including 4 rice dishes alone — with everything from coconut to cracked pepper, pomegranates and cardamom) warmly prepared by the Water.org India country director’s wife at their home in Tiruchirapalli, Tamil Nadu, and then playing shuttlecock (aka badminton) with his daughters afterwards.  And not least, the tumble I took in the street trying to return a volley.

Alongside familiar places were several new ones too.  Among them:  Uganda; Bahir Dar, northern Ethiopia; and Frankfurt, Germany.  Uganda was a trip — navigating through slums to MFI headquarters, roaming Kampala‘s first 24-hour Nakumatt superstore, and eating my first matoke (yes, it tastes like wet socks).  Visiting Bahir Dar was like a step back in time, to a bucolic verdant community removed from the frenzy of Addis.  I did have to remind myself however that we were there during the short wet season, when the land is eye-poppingly green; for most of the year it suffers from drought (hence Water.org’s program there).  By the way, if you’re curious about the kinds of water-works Water.org does in Ethiopia, here‘s one example.  And Frankfurt = what an unexpected treat!  I’d only been there in transit before; this time I attended a “Financing Sanitation” conference hosted by KfW.  Alongside that, we had opportunities to explore the delightful city center and ride in a bona fide Paternoster elevator.

Now checking in from Rome, it’s as lovely as ever — especially with the crisp autumn air and thinner tourist crowds — though also surprisingly expensive.  (Notwithstanding the awful $:euro rate, what’s happened to the local economy in the past 3 years?!?)  I made the delicious mistake of ordering gnocchi al tartufo bianco at a local trattoria (simple family-run locale) and got nailed $40. The cafe’ next to my hotel charges 9 euro ($13.50) for a double espresso (“only” 5 euro ($7.50) for a single). The metro is still a steal at 1 euro ($1.50) per ride, but trains are dear (80 euro ($120) for a 3-hour journey up north) and it’s better to walk around town and enjoy the sights anyway…

Which I’ve been doing whenever possible.  Piazza Navona, Pantheon, Forum, St. Peter’s, Campo dei Fiori, all my favorite places already ticked off.  Especially enjoyed wandering the backstreets of Trastevere (stumbling upon a hole-in-the-wall forno with steaming-hot fresh bread, gawking once more at the stunning mosaics of Santa Maria in Trastevere), quaffing my first in-country cappuccino at Caffe’ Sant’Eustachio, and doing a handstand in front of the Colosseum.  That makes handstands at 6 of the 8 Modern Wonders of the World (Great Wall of China, Pyramids of Giza, Petra, Macchu Picchu, Taj Mahal and Colosseum) — Chichen Itza and the Giant Jesus in Rio, here I come!  Flickr photos up shortly.

Of course the most important reason I’m here is the IDLO law-and-microfinance “grand finale” gathering.  It’s like a family reunion with participants from 30+ developing courses whom I’ve been fortunate to meet and teach over the past 3 years.  We’ve come together to discuss lessons learned and the way forward; it’s truly a humbling experience, and as usual (it feels like) I’m learning far more than contributing.  Simultaneous tracks in English, Spanish and French covering topics ranging from regulatory structures to consumer protection and branchless banking.  Wow… and makes me very excited for what could be next up for IDLO’s microfinance team.

On that note, back to microfinance credit ratings and (shortly) another espresso… Ciao for now, a presto!

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Namaste!  Hard to believe that since my last post, exactly one month ago, I’ve taken some 17 flights and been to 7 countries.  Quite the globetrotting, but not exactly sustainable travel statistics — at least not long-term if I value watering and tending to local roots too!

You can find photos from my time in east Africa here, and Stockholm World Water Week here.  The Swedes have such a good thing going in summertime…

Today I embark on the next phase of WaterCredit travels: India.  Over the next 2+ weeks I will be in Delhi, Lucknow, Mumbai, Ahmedabad, Bangalore, Hyderabad, Chennai and Tiruchirapalli.  Hoping (and fingers crossed expecting) to find MFI feedback and interest in WaterCredit equally if not more encouraging than was the case in Africa, and very excited to see what may result.  As always you can find out more about what I’m up to on a daily basis — travel notes from the road, adventures and random observations — on Twitter.  Until the next post, off to experience life and the world to their fullest!

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No sooner than I returned from the Middle East, than it was time to dive deep into WaterCredit and prepare for initial strategy, business development and outreach trips.  In less than a month I was (am!) back on the road — this time in east Africa for MFI meetings, followed by Stockholm for World Water Week later this month.  (I’ve got at least one significant international trip every month for the rest of this year which keeps me busy, happy and my passport in good form.  Next: India in mid-September.)

My time in Africa is going extraordinarily well so far; we’ve worked our way through Kenya (Nairobi) and Uganda, with time in rural Nyanza province, western Kenya (where Water.org has its regional office for Africa) and Ethiopia still to come.  The response received from MFIs about WaterCredit is both very encouraging and exciting — there is no shortage of interest! I’ve also had opportunities to see water and sanitation (watsan) projects on the ground; a very eye-opening experience, not least given the oftentimes dire water circumstances to be reckoned with.  Being able to provide small-scale finance to individuals and groups to take ownership of, and accountability for, their own water needs through WaterCredit is tremendously rewarding; the amount of demand is astounding, however, every drop counts!

Other favorite trip experiences so far include flying over Lake Victoria, meeting up with dear IDLO friends in Kampala, receiving an amazing massage from a strong Congolese woman (hearing her tale from Goma was truly inspiring), eating ugali na sukumawiki and fresh mandaazi, and visiting hippo pools.  There’s not a lot of non-working time, but somehow each day brings adventures and explorations that could keep up with the best of my travelogues anyway…

As usual, the best way to follow my day-to-day observations, impressions and Notes From The Road is on Twitter.  I’ve been tweeting up a storm on this trip, so hope you will find it fun to track me there.  I’ll be sure to safari njema!

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June was full of wonderful changes:  new professional chapters and travel adventures.

On the former front, I’ve begun my new role as Director of WaterCredit for Water.org.  What is WaterCredit, you ask?  It’s an innovative initiative that applies microfinance tools — small loans, group-based lending models, etc. — to the water and sanitation (watsan) sector.  WaterCredit has been underway since 2003, though it’s now reaching an inflection point that demands greater outreach and strategic development; hence where I come in.  Expect to see more about water + microfinance issues (“H2O+MF” as I like to call it) in future posts, along with more travelogues.  The travel demands will be intense and fun — India, Bangladesh, east Africa, west Africa, Europe… I’m not complaining!

No sooner did I dive deep into WaterCredit for a few weeks, than it was time to hit the road for IDLO.  Destination: Jordan, for the MENA regional microfinance course.  Jerry and I packed up — still proud of the fact that the two of us can fit everything for 3 weeks into one bag together — and headed east.  En route we stopped over in England, for the wedding of a dear friend in the English countryside outside Malvern (Worcestershire).  Perfect weather, copious Pimm’s and fancy hats, and some day-after ambling through hillsides that would make Beatrix Potter and Leonardo Da Vinci both proud.  Stunning and memorable!  A few ramble pictures here.

The IDLO course was held smack on the Dead Sea, with the West Bank directy across; at night we could see the lights of Jerusalem twinkling in the distance.  As usual the IDLO participants were a lively, diverse group coming from 12 countries/territories including Yemen, Palestine, Iraq, Syria and Kuwait (yes, there is microfinance in Kuwait).  Days were spent talking about MFI investment, Islamic finance and the impact of the global financial crisis on microfinance (as the temperature soared above 115 degrees F outside), while evenings were spent staying cool in the multiple pools on hand.  And of course, a dip in the salty Dead Sea for good measure — so fun to just bob and flop around in the buoyancy!

Post-IDLO we took some extra time to explore the rest of the country, easily falling in love with its uber-friendly people and marveling at its diverse and magical geography.  (No comment on the searing heat though.) The first leg was by public transport, a hot dusty 6-hour bus ride south to Petra (and the funky tourist town of Wadi Musa right beside it — it means “Valley of Moses” in Arabic).  Petra did not disappoint, and by all means earns its claim to fame as one of the Seven New Wonders of the World.  It’s especially magical at the crack of dawn, when you can have the Siq all to yourself, or late at night when the entire Milky Way opens itself up to you amidst thousands of candlelights and Arabian music wafting beyond.  What’s more, I’ve now done handstands at the majority of these destinations; Petra handstand is #4, and #5 (Colosseum of Rome) is slated for later this year.  Hurray!

In Petra we rented a car from a guy named Said — should we be worried about driving in the Middle East? — and headed down the King’s Highway towards the fabled Wadi Rum desert, aka Lawrence of Arabia’s backyard.  It was hot, hotter than I could have imagined, but apparently not as hot as it can get (we saw 117F, but “that’s nothing” compared to 135F in July I was told).  There were multiple camel traffic jams which were fun to photograph and partake of.  We nearly ran out of gas and that felt really scary.  The landscape is like nothing I’d ever seen — the best I can describe is a surreal combination of the moon, Grand Canyon, Moab (Utah) and the Sahara.  But even that’s not quite right; you’ve got to see it in person to understand its unique immensity.

We baked in Wadi Rum, saw an amazing sunset and feasted on spit-roasted meats grilled over a zerb (Bedouin pit fire). Ah yes, Bedouins — and ah yes again, food!  The Bedouin culture pervades much of Jordan, and their nomadic-tent lifestyle and extraordinary generosity are present at every turn. I found it difficult to determine what is uniquely Bedouin, but anyone from the tribe will promptly let you know.  The diet consists of staples like camel meat, dates and goat’s milk, none of which I got to try (even though I tried hard to find them).  Nevertheless Jordanian cuisine leaves little to be desired — delicious at every turn.  In addition to staples like baba ghanouj and shwarma, favorite dishes include fuul medames (fava beans with chillies and olive oil), shanklish (a cross between chevre and bleu cheese, doused generously with thyme and cracked pepper) and the divine fattoush (salad of tomatoes and cucumber with deep-fried pitta-like croutons and sumac spice).  It was also a cause of much amusement to ask for pitta and get a quizzical look in reply; there it’s not pitta, just khobz (bread).

From Wadi Rum we shot due north along the King’s Highway again (and beyond).  We visited the Crusader castles and ruins at Shobek and Karak, along with the Dana Nature Reserve (and dilapidated village of the same name, clinging precariously to the side of a cliff).  It truly felt like no-person’s land in the middle of the country — so windswept, even if you whistled it blew away — though at the same time close and connected to the entire history of humankind.

We rolled into Madaba late at night, and the next day explored the city’s renowned Roman mosaics (good enough to rival those of Sicily and France), souq and hidden alleyways.  This was followed by an excursion along the Dead Sea Parkway, taking in the Ma’in hot springs, Dead Sea Panorama, Bethany-beyond-the-Jordan (where Jesus was baptized) and Mount Nebo (where Moses saw the Promised Land) en route.  It also brought us full circle, back to where we had taught not long before.  The next morning we were homeward bound (almost — still had several days in NYC first).  What a great trip.

So if you’ve made it this far, thanks — and here’s the link to my full Flickr album from the trip.  Enjoy, and stay tuned for more H2O+MF plus travel adventures; for starters I’m headed back to east Africa  at the end of this month.

And yes, Twitter remains the best way to follow my whereabouts and goings-on more frequently…

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