Global Initiative to Advance Entrepreneurship

GIVE featured in Ode Magazine

2011-05-20T11:03:00.000-07:00

In October, 2010, GIVE founder Steven Van Yoder published a feature story, "Fixing the free market", in Ode Magazine about the role of cooperatives in addressing global poverty. Fixing the Free Market provides a comprehensive take on how co-ops in general, but also details how they are playing a growing role in poverty alleviation in the developing world by merging economic growth with social goals. The story was recently recommended by the Tucson Citizen as one of Ode's top stories in 2010.

The story showcases GIVE's work in Manila, Philippines, with field partner Inner City Development Cooperative (ICDC), a cooperative that is bringing fresh life to impoverished neighborhoods in Manila. Through the Urban Entrepreneurship Center co-founded with GIVE in 2010, ICDC is offering microcredit loans, training in business skills and financial literacy, healthcare support, emergency programs and other services to urban squatter communities .

Entrepreneurship in Siem Reap, Cambodia

2011-05-07T10:18:00.000-07:00

Steven Van Yoder just returned from an exploratory meeting in Siem Reap, Cambodia to discuss a possible project with several local Cambodian NGOs.

The meeting was organized by Michael Horton, founder of ConCERT (Connecting Communities, Environment & Responsible Tourism), an organization committed to reducing poverty by connecting people who want to help with local organizations. GIVE has been in discussion with Horton for the past few months, who agrees that GIVE's entrepreneurship model could be a beneficial supplement to the efforts of ConCERT and its member organizations.

Steven led a discussion about the challenges and opportunities in Siem Reap, a province that is home to the world famous Angkor Wat temple complex which attracts over 1 million visitors a year. Steven provided an overview of GIVE's work in the Philippines, including a summary of GIVE's proprietary Entrepreneurship Center concept already established in Manila.

Despite the thriving local tourism industry, poverty persists. A number of ConCERT member organizations are applying social entrepreneurship, earned income and vocational training programs to help the local population.

Stay tuned for a possible partnership project in Siem Reap that applies GIVE's poverty alleviation model through existing local NGOs.

Teaching Barefoot MBA to Microentrepreneurs

2010-07-20T10:51:00.000-07:00

Since February 2010, Inner City Development Cooperative (ICDC), GIVE’s field partner in the Philippines, has trained 1,700 microloan recipients in the Barefoot MBA. It was just last fall that their staff were trained in the program themselves, so they haven’t wasted any time passing it along to people who can benefit from the training.

Many of the Filipinos who receive microloans had to empty any savings they had in the wake of last winter’s typhoons. With huge sections of Manila damaged or destroyed, residents often had to spend everything they had to get food, water, and shelter for their families.

Because savings accounts looked so depleted, ICDC tailored the Barefoot MBA lessons toward helping loan recipients save money. One of the benefits of the program is that it is modular, so MFIs can tailor the training they offer to the specific needs of the community they’re in. This flexibility makes the Barefoot MBA ideal for a number of situations because it can be relevant to all of them.

In case you’re wondering, the program is working! 40% of the 1700 people trained this year have increased their savings. With this kind of response, ICDC and GIVE are excited about what could happen when they start teaching the other modules in the program, probably sometime this winter.

New Projects for 2010

2010-05-06T12:16:00.000-07:00

In our last post, we mentioned some problems with microfinance today. While difficult issues have arise in the industry, it's still one of the keys to poverty alleviation. In fact, GIVE is already working with MFIs and NGOs in Southeast Asia to combat some of the downsides of the microfinance industry so it can become even more effective at helping the poor and building stronger, more stable communities in the region.

Last month, we opened our first entrepreneurship center in Manila. In partnership with a local NGO, Inner City Development Cooperative (ICDC), we plan to offer education via the Barefoot MBA, an entrepreneurship course aimed at helping the poor start sustainable businesses, including other business training modules that are being developed. Additionally, we hope to integrate other business support services for the local community which we will announce when they become available.

We're working to develop a childcare co-op through the entrepreneurship center, too. Many women cannot utilize their microfinance loans to their utmost capacity because they have children at home and no one else to care for them. This co-op will help meet these childcare needs so the women have the time and energy to start businesses that will not only sustain their families, but also help their local communities.

Successful businesses are run by resilient business owners. Alongside these business-oriented opportunities, we're also pioneering a group-support program to help the recipients of microfinance loans combat learned helplessness. While learning business skills will give these microentrepreneurs the chance to improve their businesses by improving their minds, these group sessions will help them overcome culturally ingrained ideas that defeat them before they even get started.

We have three major MFIs in Cambodia on board with starting a similar entrepreneurship center there. We hope to have the details of this ironed out later this year so we can begin working with those entrepreneurs as soon as possible. This is a great opportunity for us to not only aid entrepreneurs, but to develop scales and metrics that will help us measure GIVE's success and grow an in-house set of tools aimed at giving microentrepreneurs the very best resources for success.

These are only the first of many ventures GIVE has in the works to support MFIs and the microentrepreneurs who receive their loans. Getting money into these communities is an important step, and GIVE plans to help take these loans even further by making them a more effective tool to combat poverty.

Reassessing the Microfinance Industry

2010-04-28T09:15:00.000-07:00

When microfinance was pioneered, those leading the way saw it as a chance to provide loans for people who could not otherwise get them. Part of the tacit agreement was that the loans would carry the lowest possible interest rates, so marginalized people could afford to pay them back. These loans were intended to improve lives, allowing their recipients to pull themselves, their families, and eventually their communities out of poverty. Without these social objectives at the forefront, it's hard to distinguish a microfinance institution from any other lender, except that they lend smaller amounts to high-risk people.

Today, many MFI experts are calling for a reassessment of the microfinance industry calling into question whether microfinance has strayed from its original mission.

Neil MaqFarquhar of the New York Times sums it up well for an interview posted Wednesday, April 14, 2010 on The Takeaway entitled Micro-Lending Better in Theory Than Reality. MaqFarquahr says, "Experts tend to oversell it [microfinance]. Yes, it helps alleviate some of the worst pitfalls of poverty, but not everyone is an entrepreneur waiting to be discovered."

Recently, some MFIs in India are taking this a step farther. They are looking to leap into the for-profit ranks by getting themselves listed on the stock exchange. If their bid for a listing is successful, they will no longer be working for the poor, who make up most of the recipients of their loans, but for their investors. This will encourage them to raise their interest rates in order to raise profits.

While loans from these MFIs will still be the best option for many of the people who receive them, this move towards lending to the poor in order to make a profit raises some red flags. It seems to leave behind the social objectives that have characterized microfinance institutions from the beginning.

Needless to say, this move is raising questions in the microfinance community. Is turning an MFI into a for-profit business simply taking advantage of poverty instead of helping turn it around? Should there be regulations on who can lend to the poor? Should the government set MFI interest rates?

Clearly, there's a need for more careful thought about what an MFI should be and how they can maximize their potential in such a way that as many people as possible receive as much help as they need. If microfinance loans are going to continue aiding and not harming marginalized families and their communities, these questions need to be answered as soon as possible.

David Roodman Discusses KIVA Controversy

2010-04-12T08:51:00.000-07:00

This article was originally posted in Get Slightly Famous Webzine, an online publication for professionals, growing businesses, and corporate marketers run by Steven Van Yoder.

Listen to the actual interview as published in the
Get Slightly Famous Podcast Series

David Roodman is an expert in microfinance and research fellow at the Center for Global Development. David is currently writing a book on microfinance as an “open book blog” project, where he shares sample chapters of his book in progress with his growing online community.

David’s blog has prompted an international discussion on poverty alleviation, generated national media coverage, including a story in the New York Times, and underscores a new publishing model where authors write books in real-time in partnership with their readers, forming a living dialogue between author and audience.

David shares his experiences and tips on how authors can now position themselves as thought leaders during the book writing process, building an audience for their books before they are published while shaping an national dialogue around their topics.

Can you tell us a bit about the Center for Global Development and the work you do there?

The Center for Global Development is a think tank based in Washington, DC. We do serious research that, we hope, leads to changes in how rich country governments help poor countries while going beyond foreign aid to include trade, migration and climate policies that affect poor people around the world.

Can you provide a short overview of microfinance?

The most popular type of microfinance is micro-credit, which involves making small loans of $50 to $100 to poor people. These loans are given to individuals who form into borrower groups of 5-40 people who are each responsible for each other’s loans, which is how you assure repayment.

The common perception perpetuated by microfinance charities is that the poor always invest these loans in their businesses by stocking items in corner stores or buying a new sewing machine. Sometimes that happens, but the reality is more complex and people use credit in all sorts of ways, and not necessarily in their small businesses.

You’re currently writing a book online. Why did you choose this approach as a way to build your book?

In 2008, after initial research, I realized that though I’d learned a lot about the history of microfinance, I didn’t know everything. Instead of writing my book from the seclusion of my office, I decided to share it online and get ideas from other people to improve the text.

My goal in writing the book was to get at the truth about microfinance and explain it to people. I wanted to explain the benefits, and even the harms, of microfinance and examine the implications of how to best support microfinance, or determine whether we even support it at all.

You recently wrote a blog post entitled, “KIVA is Not Quite What it Seems” which challenged the popular non-profit organization for posting inaccurate information on its website. Can you talk about that blog post and essentially what happened when it went live?

KIVA is a new player on the microfinanance scene. It started just four years ago and their big innovation, their big idea, was to bring the internet to micro-credit and make it sort of like Ebay so that someone like you or me could go on their website and choose exactly who we wanted to lend money to on the other side of the world.

Great idea, and they have been growing really fast. It’s been on Oprah and gotten lots of attention. However, after some basic research, I learned that Kiva doesn’t operate as most people believe. Here’s a summary of what I wrote on my blog post, Kiva Is Not Quite What It Seems:

Kiva is the path-breaking, fast-growing person-to-person microlending site. It works this way: Kiva posts pictures and stories of people needing loans. You give your money to Kiva. Kiva sends it to a microlender. The lender makes the loan to a person you choose. He or she ordinarily repays. You get your money back with no interest. It’s like eBay for microcredit.

You knew that, right? Well guess what: you’re wrong, and so is Kiva’s diagram. Less that 5% of Kiva loans are disbursed after they are listed and funded on Kiva’s site. Just today, for example, Kiva listed a loan for Phong Mut in Cambodia and at this writing only $25 of the needed $800 has been raised. But you needn’t worry about whether Phong Mut will get the loan because it was disbursed last month. And if she defaults, you might not hear about it: the intermediating microlender MAXIMA might cover for her in order to keep its Kiva-listed repayment rate high.

In short, the person-to-person donor-to-borrower connections created by Kiva are partly fictional. I suspect that most Kiva users do not realize this. Yet Kiva prides itself on transparency.

I started reading about the history. It turns out that they were inspired by child sponsorship, which comes from a previous generation where you sponsor a child in a developing country. And so, I wrote about everything that I learned and it was a very long blog post. And I think this is important to emphasize, I couldn’t quite justify what I was doing with my time. It just took a few days, but I felt passionate about it and I went with that passion.

I also tried to do it in a very gentle way, saying here’s a criticism I have but I’m not going to beat them over the head with it because I realize it’s easy for me to give it. It’s easy for me to Monday morning quarterback. They’re out there actually making a difference. So it was gentle but also passionate and thoughtful. And the other thing that made it of interest to a lot of people is that I was sort of tweaking a hot brand.

And so that combination, and I didn’t expect this to happen at all, just led to a huge amount of attention. It spread over a weekend after I posted it on Twitter. I got a couple hundred tweets. Then, a few days later, the bloggers started coming in and linking to it and it just swelled to this phenomenon and eventually led to an article on The New York Times.

Did you have any idea this would spark such a firestorm of conversation?

I had a mild idea, but I certainly didn’t anticipate the scale.

What does this controversy say not just about donors’ desires to feel a personal connection, but possibly even a distrust of NGOs and non-profits to the point that they can’t really be trusted by writing an anonymous check?

That’s a really good question. We need to recognize that helping is difficult and that we’re part of the problem. We shape how charities behave. I think it shows how we can sometimes be our own enemies when we want to give to a good cause. There’s a lot of skepticism of foreign aid that it doesn’t really work. That it just goes to the pockets of corrupt dictators.

Yes, even though donors know that helping is difficult, but when the right emotional pitch is made for charity, like look at the picture of this poor child that you can help, our emotions take over. We respond to pictures and simple stories that are not the whole truth, because that’s how we behave, we force charities to adapt to us. And so, in order to survive, they need to tell us simplistic messages.

In your opinion, what really points the way forward toward innovative, possibly or partially market inspired approaches to poverty alleviation?

What I would say is this: if you imagine your life without financial services, no credit cards, no mortgage, no bank account, nothing, no health insurance, no life insurance, it’d be pretty difficult. So, financial services are kind of invisible but they’re actually really important, and that goes for poor people too.

If you live on $2 a day, it doesn’t mean you get $2 everyday. It means you get $4 one day, $0 the next, $1 the next, and you’re constantly having to save on the good days and maybe even borrow on the bad days. So poor people actually need financial services more than middle class people in rich countries.

And so, from the perspective, it’s almost a no-brainer that appropriate financial services are good for poor people. That’s not to say that will lessen the amount of poverty and that’s not to say that there’s no danger in credit. We know that there are dangers in credit. But overall, it looks like it’s a useful thing.

Do you think microcredit helps poor people with no business experience just naturally grow their micro-enterprises?

There are lots of good uses of credit that don’t involve starting a business. More likely, it helps poor people with no business experience pay for their kids’ school fees or repay relatives for the money they had to borrow when their husband got sick and had to go in the hospital.

Your blog has gone beyond online buzz, and we talked about a story in The New York Times. What do you think this says about the future of ideas and how authors should gain influence in the future as they’re building their books?

The whole experience really helped me appreciate how the world has changed. It essentially has made journalism more democratic.

Roughly speaking, anybody can become a journalist--but that doesn’t mean people will listen to you! But if you do things right, and have something interesting to say, barriers to entry are far lower than they were fifteen years ago. It’s an amazing change in our society that I did not fully appreciated until I participated in this way.

The blogging experience has been terrific for my work, and again, it’s not that I planned it. I just sort of discovered this. It has slowed down the book writing. I’m trying to get this book done and I feel stressed about the fact that I’m not done yet.

But it has, in every other respect, advanced the purposes of my project. I’m learning more. I signal to the world that I have expertise and, of course, the blog does that. And I’m producing short pieces that are more likely to be read than the book itself.

And so it’s really been a boon for the project and I think this is the wave of the future.

You started the blog in February of 2009 and you already have quite a following. How did you go from publishing your first blog post to having thousands of people reading and passing your ideas around?

It’s not enough to just start putting up blog posts. You have to drive traffic to your blog and it’s a reinforcing process. The more people come to your blog, the more they tell other people who come to your blog, and so on.

So you do have to be your own agent, and there are a few ways to do that. One is finding email discussion groups on the topics you’re interested in. Find online forums where people who you want to reach are already congregating and submit occasional posts from your blog.

Don’t overwhelm them but submit a few and say, ‘Hey, I’m doing this blog. I’d welcome your comments.’ Do the same thing through Twitter. Find out who’s tweeting on your topics and re-tweet them and engage them in dialogues. Do it through all the various social media.

It’s a process that takes time. And it’s true I got a huge amount of traffic with the Kiva post. I don’t get that traffic on a daily basis. Nevertheless, some percentage of the people who first came to the website because of the Kiva story stuck. They became subscribers of the blog or what have you.

In summary, what would you tell potential authors about jumpstarting a respectable readership? What final words or what tips might you lead people with about making the move in this direction if they’re thinking about writing a book?

Well, if they’re thinking about writing a book, then presumably, they like writing and they care about it, because that’s an important requirement. If you don’t take to blogging per se, then you shouldn’t be doing it because your discomfort will come through. So that’s one.

I guess what I would say is everybody needs to find their own blogging voice and style and that will develop naturally as you do it over the months. And there’s some reward for being contrarian, as I was with the Kiva post.

But I think there’s also a reward for letting your passion and your personality show through up to a point. As time has gone on, I’ve revealed more about my personal life, my children and my activities outside of my work. I’ve become more comfortable stating my opinions with feeling.

At the same time, you need to apply all the disciplines that you need to apply in writing in general. You need to be aware of your audience, what jargon terms they won’t understand, how to write clearly, and so on, and how to keep things short when appropriate. I think that this is an area where we’re all inventing it as we go.

Cambodian-Expat Social Entrepreneur Becomes An Advisor

2010-03-08T09:56:00.000-08:00

I joined Debbie Watson, a long-time Cambodian expat, microfinance expert and social entrepreneur for a tour of her new venture, FunkyJunk, an innovative social enterprise that makes beautiful and functional products from discarded plastic bags reclaimed from the streets and fields of Cambodia.

Debbie is on a personal mission to tackle the scourge of discarded, non-biodegradable plastic bags that litter the Cambodian landscape, hoping to develop a model that can be expanded throughout SE Asia and other developing countries.

“People in many countries are now very aware of the need to stop using plastic bags in their own country,” she says. “But in poorer nations this is often not the case, and especially not in Cambodia. By purchasing FunkyJunk products, consumers can contribute to a cleaner environment in countries less fortunate than their own, as well as making their home or office look funky too!”

FunkyJunk operates in accordance with fair trade standards and each product is labeled with the number of bags that have been reclaimed. After success in the local marketplace, she’s looking to move into the export market, and is seeking GIVE’s assistance via our Marketers Without Borders program in opening up international markets for FunkyJunk products.

Debbie is currently working with Mercy Corps in Indonesia, consulting on a variety of microfinance projects. Drawing from her extensive knowledge on microfinance and poverty alleviation, Debbie is assisting GIVE in establishing operations in Cambodia, including a new Urban Entrepreneurship Center (UEC) that is slated to come online later this year.

Teaching the Barefoot MBA

2010-03-02T01:16:00.000-08:00

GIVE accompanied the first batch of Barefoot MBA trainers as they undertook their first round of trainings in ICDC-assisted communities.

ICDC is integrating business skills training along with their regular microloan activities, which involve going into borrower communities for weekly loan servicing, and have efficiently blended in 15-minute business skills classes.

The Barefoot MBA consists of 16 individual lessons that are being taught weekly based on suggested lesson pairs like Debt and Interest, Cost-Benefit Analysis and Incentives, Saving and Investing, Opportunity Costs and Spending, Price-Quantity and Planning and Records, etc. Each lesson is expressed through stories that illustrate how to apply the Barefoot MBA concepts in their businesses.

20 borrowers took part in the initial lesson. They were interested and engaged throughout the process. ICDC will be conducting the same lessons on a weekly basis in urban poor communities in Quezon City in the coming months, leading to a full, ongoing business skills training throughout ICDC’s entire microcredit operation.

GIVE Launches Urban Entrepreneurship Center in Manila

2010-03-01T20:43:00.000-08:00

On March 1st 2010, GIVE officially launched its first Urban Entrepreneurship Center™ (UEC) in Tatalon, Quezon City in partnership with Inner City Development Cooperative, Babyloan and Entrepreneurs Du Monde, a French nonprofit organization (NGO) that focuses on poverty alleviation through microfinance and other socio-economic programs in Asia (Philippines, Vietnam, Cambodia, India, Burma), Africa (Benin, Ghana, Burkina Faso) and Central America (Haiti).

The UEC model will serve as a centerpiece of GIVE’s work in Manila and other parts of SE Asia. The center will serve as a community resource that will support to our project partners and their communities through business skills training, computer workshops, technical and vocational training and other nonfinancial services that will assist our NGO and microfinance institution partners in better fulfilling their mission of poverty alleviation.

As part of the opening ceremonies, Steven Van Yoder spoke to the ICDC staff and trainers, and shared the stage with ICDC founder and director Zeny De Jesus who explained the new programs that will be offered through the entrepreneurship center. Also on hand was local city councilman Atty. Bong Suntay who offered to support ICDC’s programs for small and medium size entrepreneurs.

GIVE, along with ICDC, is developing new programs that will be offered through its first UEC, including childcare for single, working mothers and microsavings programs. We plan on using the center as a laboratory for new, innovative approaches to poverty alleviation that will ultimately become a transportable model for other countries.

Entrepreneurship Teachers in Manila Graduate Basic Skills Training

2010-02-28T09:49:00.000-08:00

Inner City Development Cooperative (ICDC), our partner in Manila, Philippines, has been busy preparing for the full rollout of the Barefoot MBA entrepreneurship curriculum set in motion in August 2009 in Bacolod, Philippines. They just completed their first internal training of trainers, which consisted of training 16 ICDC staff from each of their four Manila branches to become certified Barefoot MBA teachers.

This is a significant milestone for GIVE’s work in SE Asia. For several years, we’ve searched for an appropriate business skills training model that would assist us in fulfilling a core area of our mission: providing the tools for assisting microentrepreneurs in becoming more successful business owners.

To this end, GIVE is utilizing the Barefoot MBA, an open-source business training module developed by Scott Raymond and Katherine Boas. It’s been 6 months since GIVE organized a training of trainers workshop with Scott, Catherine and our partners from the Philippines and Cambodia.

Despite setbacks endured by ICDC in the aftermath of the tragic typhoon that resulted in severe flooding in Manila in September and October last year, which significantly impacted the communities in which we work, we are happy that our plans are now back on track and moving forward for 2010.

The completion of the ICDC training of trainers was accompanied by a graduation ceremony attended by Steven Van Yoder, founder and director of GIVE. It was rewarding to see the results of so many months of hard work, and the determination of our partners and their communities to carry on after such devastating challenges. But GIVE and our friends at ICDC are ready to put our programs into action!

Kiva and Beyond

2009-12-02T17:22:00.000-08:00

Over the last several weeks, Kiva is not the only microlending website that has come under fire. Other sites, like GlobalGiving, have been shown to suffer from the same problems as Kiva, with an especial focus on the fact that monies lent are usually not going to the entrepreneurs whose photos and stories lenders can see.

Because nobody is inherently knowledgeable about running a business–either in the US or abroad--sustainable approaches to entrepreneurship should focus on business training tailored to poor entrepreneurs enabling them to boost profits, scale their businesses, create jobs and help poor communities grow their local economies.

Microlending is not a panacea. While microlending has made a contribution to poverty alleviation, it should not replace or crowd out other approaches, including traditional charitable contributions, that establish schools, communitiy services, disaster relief, infrastructure, and other basic needs that can’t be met with loans to the poor.

According to an article The Limits of Microcredit: A Bangladesh Case, expecting microlending to be a cure all for poverty is wrong.

There is significant risk in microcredit’s often uncritical adoption. This risk is compounded by the systematic failure of many microfinance institutions (MFIs) to engage the communities where they work in the process of designing and evaluating microcredit programs...

While lack of credit is a critical issue in impoverished rural regions throughout the world, it is only one structural aspect of poverty. Food insecurity, lack of access to health and education, and gender inequality (not just in economic but also in social and cultural contexts) are realities for those living in rural poverty that microcredit may not be suited, in-and-of-itself, to address. Indeed, donor and practitioner enthusiasm for such market-based development strategies, at the expense of addressing these other critical issues, threatens to make conditions of poverty worse.

Entrepreneurs need more than money. The global microcredit movement prioritizes ‘access to capital’ while failing to deliver other components required for sustainable small business ownership. Microcredit’s primary metric focuses on ‘loan repayment rates,’ rather than whether the poor are lifting themselves, their families and communities out of poverty.

This one-dimensional fixation on loan repayment as the sole measure of success leads too many microcredit recipients to take loans they can’t afford or sacrifice basic necessities like medical care or fees for sending their kids to school in favor of making loan payments. Moreover, it assumes that lenders in wealthy countries know best about how a local, on the ground institution should allocate its resources.

A recent radio program Beware of charities' 'donor illusion' on NPR's Marketplace notes:

Donors to charities get satisfaction from thinking their money is going to a particular person or project with which they then have a special relationship. But those relationships sometimes aren't so special.

According to Tim Ogden of Philanthropy Action this 'donor illusion' is misleading because it promises "a direct connection between a donor and an individual recipient."

"And it's an illusion that's created by the marketing, and it's created because it's a powerful one for attracting donations. But the reality is if you really care about doing the most good then there shouldn't be that direct connection."

Because he says charities need the flexibility to respond to the situation on the ground. That could mean using a donor's money for flood relief instead of buying a family a goat...

"The people who are being helped, the help they're getting is dependent on the whim of the donor, not on what they really need."

Often, more than loans, the poor need financial literacy training, affordable health insurance, and business mentoring — just like their first world counterparts. They need a toolbox of business skills, including basic business planning, and training in marketing, management and product/service differentiation if the promise of poverty alleviation via microcredit is to reach its full potential.

In the end, everyone is not ‘meant’ to be an entrepreneur. Many poor people would rather have a steady, well-paying job but opt for microenterprise as a default choice. It’s important to keep a full spectrum perspective what poor communities truly need, seeing microcredit as one tool for poverty alleviation.

This is where Global Initiative To Advance Entrepreneurship (GIVE) plans to step in. With our business background, we want to offer these deserving business men and women the training and resources they need to not only pay off their micro-lending loans, but also to thrive and continue to grow their businesses beyond their wildest dreams.

Kiva: Truth in Lending?

2009-11-05T17:11:00.000-08:00

Micro-lending site Kiva.org has become an increasingly popular way for Americans to contribute to economic growth in developing nations. The fact that Kiva seems personal--those who donate can see a picture of a specific person and read their story--and that lenders don't have to invest a lot to make a difference has drawn all sorts of people into the world of micro-finance.

In recent weeks, though, Kiva's methods have been questioned.

A recent blog post by David Roodman provoked a firestorm when it became clear that lenders are not, in fact, giving their money directly to the person whose picture they see and story they read. In fact, the donated funds are put into a pool and lent to borrowers who, may or may not, be like the ones in the pictures. Many lenders balked at this, as it disrupts the personal connection they thought they had made.

Microcredit plays a constructive role in poverty alleviation. But, unfortunately, the feel-good model of microcredit advanced by KIVA has simplified the complex, multi-dimensional challenges surrounding poverty while preempting more complex discussions about breaking the cycle of poverty.

Kiva played an important role in bringing the idea of microfinance to the general public. However, the illusion they fostered led with a first world desire for global connections and feeling good over a critical approach of the complexities and solutions to global poverty.

There's been a lot of talk about how to solve this problem. Should lenders be connected directly with the recipient of their loan? Lenders certainly like that option, though the headaches of implementing it make it unlikely. Should lenders give directly to a particular microfinance institution? It's possible, though there isn't currently a site like Kiva for these institutions, making them harder to find as they're scattered across the web.

Maybe fixing Kiva isn't the answer. In fact, it seems that most micro-entrepreneurs around the world have access to money if they decide they need it. It's not the micro-finance idea isn't a good one, but that it has worked so well. Now, the bigger problem seems to be budding entrepreneurs who do not know how to make the most of the money they're lent.

Kiva did not invent microlending, but packaged an experience that was very appealing to the first world marketplace. While it is good to see people in America's consumerist culture offering money to micro-entrepreneurs in the developing world, there seem to be ways that their money could be better used to help those same people.

These entrepreneurs deserve to have the best chance of business success possible. To make that happen, someone needs to teach them basic business skills, help them set up simple websites, and introduce them to e-commerce. They also need access to small business centers where they can check email, make photocopies, even make phone calls.

What is the future of Kiva? Will lenders continue to donate, despite the lost personal connection? Right now, that seems up to the lenders, and they seem undecided, though definitely disgruntled.

Needs in the Philippines

2009-10-12T01:32:00.000-07:00

ICDC has been able to partner with several local NGOs to provide assistance to families devastated by Typhoons Ondoy and Pepeng (known as Ketsana and Parma in the international community). Currently, the needs for basic necessities outweigh anything else, with families searching for food, clean water, shelter, and clothing.

ICDC is currently accepting donations for 1 week's worth of food for about 10,000 families. In addition, they are facing a great medicine shortage. Because of conditions brought on by the flooding, medication for diarrhea, athlete's foot, colds, hypertension, and fevers are the most essential, followed by a need for vitamins to boost immune resistance to the rampant disease.

To best offer aid for these needs, ICDC is meeting with the Red Cross about a possible 2-week medical mission to the area.

Pollution is also becoming an issue, with garbage piling up, smelling, and providing a place for fungus and disease to grow. For the moment, the best solution available in most locations is to sequester trash and debris as much as possible.

Given the incredibly large number of people affected by this disaster, ICDC does not yet know how long relief efforts are going to be necessary. They are, however, dedicated to offering aid in as many ways as possible until the crisis is over.

Philippines Post-Typhoon Situation Summary

2009-10-05T00:45:00.000-07:00

Between September 26, 2009 and October 3, 2009, two typhoons hit the Philippines. The wind and rains have filled many roads waist-deep or higher, making them all but impassable. People have been stranded away from their families for hours or days needed rescue from rooftops and trees, and some even lost their lives.

In some places, the devastation was total. Buildings not destroyed are uninhabitable, and food supplies cut off indefinitely. ICDC and other local NGOs have been working day and night to reach people who need the basic necessities: food, clean water, and dry clothes. The city flooded so quickly in places that people were unable to save anything except the clothes on their backs and their lives, so the need for basic necessities is great.

Many of the families affected were participants in ICDC's microfinance program, and so are some of the micro-entrepreneurs GIVE has been hoping to aid. ICDC is assessing their situations and mustering what aid they can to help.

Needless to say, these disasters put a crimp in GIVE's plans to open the new micro-entrepreneurship center. While those plans are still in the works, ICDC and its affiliates have had to refocus on helping the communities around them survive and thrive in the face of this tragedy. We hope that this will be a short delay and our plans will be back on schedule shortly.

GIVE's New Project in the Philippines

2009-09-15T00:00:00.000-07:00

In our endeavors to help micro-entrepreneurs acquire business skills and their basic business needs, GIVE is proud to announce a new partnership. Together with the Inner City Development Cooperative (ICDC), an NGO on the ground in Manila, we will be putting together an urban entrepreneurship center in Manila, Philippines.

This center will offer basic entrepreneurship training, via the Barefoot MBA program, as well as additional business training and support services to help micro-entrepreneurs build a sturdy business from the ground up, providing poor communities everything from how to find their target market, community support services, developing computer and Internet skills for global business, and other services that will be based on community needs, challenges and opportunities.

Our hope is that the entrepreneurship center will help small entrepreneurs create a successful local business that will offer their family the support and stability they need to thrive. In addition, the center will offer entrepreneurs a sort of central administration office, where they can use computers, make photocopies and printouts, and have access to materials that they would not be able to purchase themselves.

With these resources, our entrepreneurs will be able to take their businesses far beyond the level they could reach without these resources.

We are currently looking for local sponsorship for the center. It is our goal to partner with one or more larger local or locally based international businesses in the area, both to fund the center but also to connect the micro-entrepreneurs we educate to the larger economic community.

We're especially excited about our partner for this center. ICDC has a solid background in seeing the needs of local families and entrepreneurs and finding creative, culturally specific ways of meeting them. As our first partner in this endeavor, they promise to bring savvy, open minds with the creativity and fortitude necessary for the center's success.

Our hope is that this is the first of many of these centers to be set up in the Philippines and around the globe. GIVE's goal is to aid as many micro-entrepreneurs as possible, through education, practical resources, and networking opportunities.

Barefoot MBA Training of Trainers Project in Bacolod City, Negros Occidental, Philippines

2009-09-01T22:57:00.000-07:00

GIVE recently organized and completed a workshop in Bacolod City, Philippines, on August 24-28, 2009 to provide teacher curriculum training for the Barefoot MBA, a business skills training program.

The workshop was hosted by Negros Women for Tomorrow Foundation and attended by 27 representatives from several Asian organizations in the Philippines and Cambodia. Scott Raymond and Katherine Boas, two Stanford Graduate School of Business students who developed the program, traveled to the Philippines to lead the workshop.

Barefoot MBA was adapted from a long running program developed by the Population and Community Development Association (PDA), a prominent Thai nongovernmental organization (NGO). According to the Stanford Graduate School of Business website:

Katherine Boa and Scott Raymond got the idea during a service-learning trip to Thailand early in 2007, organized through the School’s Public Management Program. Their host was Mechai Vivavaidya, the founder and chairman of Population and Community Development Association, which received a $1 million Gates Award for Global Health in 2007 from the Bill & Melinda Gates Foundation.

The Thai group’s founder told the Stanford students that rural business owners who received microloans could benefit from a basic curriculum designed to help them learn business fundamentals. “Scott and I sort of looked at each other and we said, ‘We could do that.’ We’ve learned this stuff,” Boas said.

Designed for teachers, the Barefoot MBA series of lessons explain complex topics to motivated, but often uneducated, people who may be unfamiliar with formal classroom environments and teaching tools.

The workshop serves as a launching point for GIVE’s work in Asia in the coming year. GIVE is supporting the rollout of the Barefoot MBA with our partners to help poor entrepreneurs master basic business concepts, develop an entrepreneurial mindset and make better business decisions. Stay tuned!