Kiva Chronicles

What's the point of Kiva?

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By Adam Kemmis Betty, Kiva Fellow in Bolivia

CGAP’s annual Microfinance Funder Survey shows us that Kiva’s impact in financial terms upon the microfinance industry is - to put it politely - tiny. In fact, the combined total of institutional and individual investors, including pension funds, commercial banks and online lending platforms such as Kiva, only amounted to 7% of total funding for the microfinance industry in 2008. The big players are still development banks (such as the World Bank) and development agencies (such as USAID). As a Kiva lender, I found this rather disheartening.

So what’s the point? One view is that every dollar still counts. Particularly since the global financial crisis has restricted the flow of credit to microfinance institutions around the world, another dollar of available financing means another dollar lent (this argument was less valid in 2007 and earlier, when cheap credit was readily available). What’s more, although still relatively small, Kiva is growing fast (see chart), even relative to the industry: it’s not inconceivable that ten years down the line online lending will make up a significant slice of the microfinance pie.

: Kiva's growth since 2006

But there are also a couple of reasons why Kiva punches above its weight. On the borrowing side, Kiva can have a substantial impact on individual microfinance institutions (MFIs). The 0% interest rate at which Kiva lends can help an MFI manage its costs, perhaps enabling it to reach borrower segments (such as rural borrowers) that it was previously unable to cover. Kiva is more risk tolerant than larger international financing agencies, and can serve as a stepping stone for an MFI seeking broader access to funds: a risk review from Kiva may give confidence to a larger investor. Kiva can also serve to publicise the work that the MFI does, which in turn might help them find additional financing.

On the lending side, Kiva raises awareness of microfinance around the world (but most notably in the US and Canada). Kiva estimated in 2008 that 36% of lenders had not heard of microfinance prior to using the site, and that the majority of other lenders had little prior knowledge of the sector. Through Kiva, lenders learn not only about microfinance but also about the poverty that it seeks to tackle and the countries where it’s at work. Building a constituency in North America educated in microfinance and international development issues could have big – although rather to measure – knock-on effects, particularly in terms of public policy.

So, we can all breathe a deep sigh of relief, safe in the knowledge that we’re changing the world after all. Well, discuss.

In the meantime, make a loan.

Reading the Economic Chicken Bones: a Kiva Fellow in Senegal

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By Ilmari Soininen, Kiva Fellows 9th Class in Thies, Senegal

Christmas kicks off a serious week of celebration for Senegal's Christian minority. Dispersed families unite, meaning a series of sept-place, clando and bus rides from the capital. Like in many parts of the world, roasted chicken (or turkey) is an important part of the Christmas menu here. The bird is carefully prepared, and cooked to tender perfection. Chicken is not an everyday treat for most of Senegal. Indeed, it is quite a luxury item. But why is this so? And can this tell us something about the country's future?

: A Holiday luxury - but hopefully not forever

Chicken is expensive in Senegal. In fact, it's really expensive: the average market price for a fresh chicken is almost $7, roughly twice what an American consumer pays. A back-of-the envelope calculation shows the average Senegalese must work a day and a half to be able to afford one, where as the average American needs to work only about 15 minutes. Indeed, chicken is one of the cheapest meats available to American consumers, where as in Senegal it is the most expensive.

Out of interest, I had conducted an informal poll among my colleagues and friends on the best invest opportunities available in Senegal. It was refreshing to hear investments which involved tangible and very real activities – not some esoteric derivative or CDO. Indeed, raising chickens was the most consistent answer. Again very different from the U.S. where chicken farmers will tell you it's a tough business to make money in (excellent documentary Food Inc.). Indeed, the regional director of my MFI told me he would easily make triple his salary if he went full-time into the chicken business. Crunching the numbers reveals quite an amazing opportunity: starting out with 250,000 FCFA (about $500) in capital and a spare room or enclosure, one could invest in 200 chicks. The numbers:

Each chick costs 450 FCFA, or 90,000 FCFA for 200.
The feed for the six-week period is the most expensive part of the operation, costing around 150,000 FCFA.
Additional costs, such as water, electricity and vaccinations are quite small, a maximum of 10,000 FCFA.
After six weeks, one can expect to have about 190 chickens ready for market (calculating in a 5% mortality rate). One then has the option of selling directly to the customer, or selling to an intermediary at a lower price.
If we sell directly to the customer, we can reasonably expect a price between 2,500 and 3,000 FCFA per head (or up to 3,500 FCFA in Dakar). With one's 190 chickens, one can therefore expect a revenue between 475,000 and 570,000 FCFA, or a net income between 225,000 FCFA and 320,000 FCFA.
Selling to an intermediary is easier and less time-consuming, but will reduce one's income. Perhaps one will fetch only 1,800 FCFA per head, for a profit of 92,000 FCFA.

Of course, there are risks to consider: disease, hungry cats and theft are real concerns. An amateur can easily have his whole flock wiped out by bacteria he carries in on the sole of his shoe. However, managing a flock in the low hundreds is not rocket science, and the risks are by no means astronomical. Even as a secondary activity (selling to an intermediary) and keeping production at 200 chickens, one can have an annual profit margin of 200% with a minimal amount of time invested.

Economics 101 (aka common sense for the ostentatious) would suggest that such a profitable activity would soon be flooded with aspiring poultry entrepeneurs, causing the market price of chicken to drop dramatically. In economic jargon, with an increase in supply, the equilibrium price would adjust downward, along with the returns to the chicken farmer and vendor. However, the market price seems to stick around 2500 FCFA. Indeed, my colleagues told me demand is almost always greater than the supply.

So why aren't people rushing into the poultry business if clearly there are large profits to be had? Is it that the average Senegalese simply doesn't know about the profitability? Tough to believe, as everyone I talked with, from the day laborers to the senior bank management, knew it was very profitable. Is the barrier the inadequate access to investment capital? The chicken business (as the numbers show) doesn't require a great deal of cash upfront and, thanks in large part to micro-finance, credit is available. I think the more critical barrier is a strong aversion to perceived risk. As one of my colleagues explained, a Senegalese graduate prefers a desk-job with a monthly salary to being in business for himself.

Whatever the reason, the worrying point is that these elephantine margins exists, especially given that this is by no means a secret. If the market does not adjust to clear signals, such as a profit margin of 200% - 500% in a sector which requires little capital investment, there is a critical economic dynamism missing. The global economy is ten fold fiercer with margins one hundred times smaller. In the global markets, economic opportunities aren't served on a silver platter.

Fortunately, there are some who are responding to the tea leaves (or chicken bones). My colleague, Omar, a guard with my host MFI, was financed yesterday for a 50,000 FCFA loan to buy a few dozen chicks.

: Omar - the man with the (poultry) plan

My Blue Sweater Moment and Yours: A Kiva Fellow in Tanzania

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by Jennifer Gong, KF9 Tanzania

The Blue Sweater is a book that recounts the experiences of Jacqueline Novogratz, social venturer and founder of the Acumen Fund. The book contains a string of stories, but the most poignant is the tale behind the title of the book. When she was young, her uncle gave her a blue sweater, which she eventually outgrew and donated away. It would turn out that the journeys of Novogratz and the blue sweater would eventually cross paths a decade later in Rwanda - She, jogging along the dusty roads of Rwanda and it, covering the small frame of an African boy.

A few weeks ago, I had my own “blue sweater” moment.I was in the Mbagala community collecting journal updates when I spotted Salehe sitting nondescriptly behind 30 other people. He would have been no different than any of the otherYOSEFO clients there, except for the fact that he was sporting a dark blue cap with a large “V” in front. Instinctively I rushed over and, as I had suspected, two swords crossed over it, creating the symbol for the University of Virginia. I went to UVa, and I could not help think of the fellow student who discarded his old cap and whether if he ever thought it was going to end up as a prized possession of a Tanzanian boy. Unlike Jacquline’s blue sweater, the cap was not mine. Nevertheless, it did not fail to create a sense of wonder that in a world so vast, such a connection could be made.

A rare few will have a story like Jacqueline’s. But for those who do not have the opportunity to travel far and wide, there is Kiva. I love this organization because it allows anyone to experience a connection, a small “blue sweater” moment. In fact, it does one better. The incident revealed to Jacqueline how “our actions – and inaction – touch people we may never know and never meet across the globe”. But through Kiva, we can see who we are impacting halfway around the world. And though we may never physically meet our borrowers, the amazing journals posted by Kiva Fellows open the doors into the lives of microfinance clients all over the world.

I hope during this season, all lenders can experience and celebrate moments of connection. Happy holidays!

A Kiva Fellow Signing off from the Philippines

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By Adam Preston, KF9, Philippines

: ASKI client performs beachside karaoke before annual client meeting

I was perusing through my IPhoto gallery when it occurred to me, I am almost done here. Since October, I have been working at the head office of Alalay sa Kaumlarun or ASKI. I have been on two week long field visits, a day trip to deliver relief goods to typhoons victims, 4 ASKI client annual meetings, and even day of team building through sports and exercise, where I participated in a cheer competition. Needless to say, it has been a very full three months.

As I page through the photos and videos of borrower visits, I feel that I should have a resounding conclusion on microfinance or at least of P2P banking or at least of of Kiva. But I don’t. I have traveled throughout northern Luzon and meet with over 80 ASKI clients. I have found that the Filipinos are proud, hardworking people not looking for handouts, but rather for opportunity. There were the visits to people, like Jelly, who is not renewing her loan. She is taking a break from selling banana chips to focus on caring for her newborn baby. She has no plans to renew. Others, like Lourinda, a smart, strong center chief women, is a pillar in her community. She has renewed her loan multiple times and was recently recognized for her achievements as a business woman in the 2009 annual client meeting. Still others like, Jose who is not renewing his loan due to an farming accident earlier this year. Right now, he can’t work. He said that once he recovers, he might renew. While I have not made any startling discoveries, I have made a few observations:

Microfinance Requires a Team Effort
One thing I came into the Kiva Fellowship with is this idea that Kiva helps regular people make a direct impact in the life a poor person. In my mind I envisioned a women living in a grass hut only needing my $20 loan to start a business to finally lift herself out of poverty. After reading A Banker to the Poor, can you blame me? You as a lender are making a difference, but when you hit that lend now button you not acting alone to help this borrower out, you’re joining a team. What I have learned since being here is that it takes a finely tuned machine to lift communities out of poverty - and that finely tuned machine is the MFI. Just at ASKI, there are the loan officers (or project officers as they are called here), who routinely risk their safety to visit borrowers to collect the payments. There are the documentation officers, who reside in the branches and transfer and translate the loan applications to posted loans on Kiva. There are the communications officers who reside in the head office who oversee and coordinate documentation officer’s work. And this is just the tip of the iceberg of the MFI. There is a team of people working tireless behind the scenes to produce that one photo and the borrower profiles. And this isn’t even counting the Kiva staff responsible for keeping the Kiva platform humming. To achieve this this noble goal of alleviating poverty it requires a sustained, team effort.

It's the Percentages, Stupid
We hear a lot about how Kiva isn’t perfect or that microfinance isn’t perfect. You don’t have to go very far on the internet to findcriticism of microfinance in general or even Kiva in particular . One thing that I have learned since being here is that you can not judge the effectiveness of microfinance based on success of single MFI client (or even a single MFI for that matter) anymore than you can judge the effectiveness of baseball player by a single at bat. I do not have to go far to find examples where additional credit did not result in a prosperous business. But a simple fact remains; access to credit is essential for any business to function. As ASKI Executive Director Roland Victoria once said credit is the lifeblood of an economy. By supplying life to even the road side sari-sari store, gives the small business owner the best chance and climbing to that next rung. Over time, making credit more accessible will result in a higher percentage of stronger, healthier businesses.

Poverty Alleviation Requires More than Microcredit
One reoccurring message I have heard here is how ASKI is “Going beyond microfinance.” To truly lift an individual from poverty, credit is important, but so are other services such as insurance, savings programs, vocational training, community development, and disaster relief. Last week, along with the ASKI management team, I attended 4 ASKI client general assembly meetings. These meetings attended by up to 1500 ASKI clients are usually held around Christmas and serve as an opportunity to update the ASKI clients on the various ASKI programs. Local government officials are also there detailing government run social programs and also educating the audience on a variety of topics such consumer rights . These meetings require a considerable amount of work to plan and run, but are a great example of how ASKI is going beyond microfinance.

Mature Microfinance Institutions, such as ASKI, offer their clients an array of services that previously were not available to this segment of the population and these services are not purely financial in nature. I think mistakenly many of the academic studies are out to find a silver bullet. What I have learned in my short three month Kiva fellowship is that there is no silver bullet. However this should not dissuade us from participating. This is a very interesting time in our history where we finally have the technology to harness the collective power ordinary people for social good, and Kiva is leading the charge.

Adam Preston is a Kiva Fellow who proudly served at Alalay sa Kaunlaran, Inc (ASKI), Philippines.

My Rwandan Children (a happy ending)

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By Gavin Sword, KF9 Rwanda

Children are adaptable – this is what I have learned since my first post on our kids’ experience in Rwanda. Christian and Savilla are different people than when we arrived and they have become accustomed to life in Rwanda. Cold baths are met with resignation if not acceptance. They now get excited when they see bugs and like to pick them up and give them names. And the mosquito nets are cool now, like a special fort (for my son) or a princess’ veil (for my daughter). This was NOT how they were in our first few weeks here. It is time for them to fly home next week and they are genuinely sad to know this.

No longer are they seen as outsiders – they have been accepted as Rwandans who just don’t speak the language that well. It seems young children communicate mostly through playing, singing and pretending. To be sure, our children are not totally ‘locals’ – there are different socioeconomic levels here in Rwanda – more pronounced than in the West by far. But in their own milieu they are fitting in with ease. It is wonderful to see.

As for being adopted, they now both understand that this is where they came from. They love to visit the orphanage where we got them and each time we go they pick out things of theirs that they would like to give to the children there. Their generosity is heartwarming. Indeed, they keep asking if they can bring home a brother and sister and frankly don’t understand the hold up on our end. Questions like this are becoming quite common, which I suppose is normal for 4 year-olds. Additional siblings from the orphanage is not the only new topic with endless questions. Other, more metaphysical issues have arisen as well.

Rwanda is a decidedly Christian country and this has not been lost on them. They have started speaking more about Jesus and God and Heaven and “going down to the fire” and are asking some rather deep questions about who will be going where when they die and why. (Also, which specific infractions are to be avoided) This is new territory for me as a parent but we are rolling with it by answering questions with questions. It’s working for now…

For their part, they have endured church services that last longer than 2 hours with nary a complaint. They seem to really love the singing and general rejoicing of the whole scene. This, in bleacher-type seats with no “children’s time” to speak of – amazing, really. Yes, our Rwandan / Canadian / American children have adapted amazingly well and as a parent, I’m very proud of them.

I will relate this to microfinance and Kiva in this way – there is no way I would be here, knee-deep in Rwandan culture without this opportunity. So, I am grateful to Kiva and the good work that my MFI, Vision Finance Company is doing – it made it possible for us to be here with a larger purpose - beyond tourism. This experience has been life changing for my children and for us as a family and for that I am truly grateful. I highly recommend the Kiva Fellow Program to anyone interested in learning more about microfinance, experiencing different cultures and helping to alleviate poverty around the world.

To support Vision Finance Company and Rwandan entrepreneurs, join the VFC Lending Team.

"OK. Next question...": a Kiva Fellowship in the Philippines

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Laughing with Myrna Data, a Kiva Borrower

By Mary Riedel, KF9 Philippines

“...What do you think your biggest challenge will be if you become a Kiva Fellow?”

I heard this question twice during my interview process with Kiva. On both occasions I was sitting at my kitchen table in San Francisco, working from home (experiencing some cabin fever), and planing to meet up with friends later in the day. My answer was, “Feeling disconnected from friends and family.” And yes, some days staying connected has been a bit of challenge, looking at the clock wishing it was telling me a different story, jumping to Skype and hoping to to see little green dots. For the most part though, communication has been good, it just takes more planning and acceptance.

So that's not my biggest challenge...

Last week I had the pleasure of meeting Myrna Datu a woman with a warm smile and a boisterous laugh. She was the first person I noticed when we got to Parog Parog barangay (village) in Solana, Cagayan. She was standing in a group of women holding a sign that said "Welcome Kiva Fellows Adam and Mary". Myrna had a lot of energy, was wearing a bright orange shirt and a canvas hat (I love hats).

A Very Warm Welcome - Myrna Datu, left of sign

Myrna is the mother of girls (one in high school and one in college), she was widowed seven years ago, which means she does all of male and female duties in the household by herself. Myrna raises pigs, buys and sells vegetables, makes and sells small snacks, and works in the field growing rice (she walks a Karibou - Filipino Buffalo - to plow the fields because she's afraid of riding him.

Karibou (Filipino Buffalo)

A little while later after many group photos.... it was Myrna's turn to be interviewed. She sat down and looked away (she was really nervous) she started laughing...and then her expression changed - tears, a quivering face, but still a smile... “oh, no!” I thought... “she's crying,..like, a lot..but smiling, what's going on...” Could it be...really?... “tears of joy”.

Sitting in small a room full of about 20 women, the Documentation Officer from ASKI (a Kiva Microfinance Partner) asked, “Myrna why are you crying?”

You HAVE TO WATCH THIS VIDEO (the first 30 seconds at least) and hear Myrna...her voice and spirit are far more touching then I could ever put into words...Which is why I am humbling myself and posting this – despite the fact that my “journal interview” sort of turned into an Oprah episode and some of my comments sound pretty ho-key. I'm learning less is more when the camera is rolling. (My ego really wants me to spend a ton of time editing this on imovie to get my voice out of there, but to be honest it would take me far tooooo long and have a ton of journals to post).

(if you don't have access to video...in short Myrna tells us how happy she is that despite her difficulties she can still provide for her family. Myrna is very grateful that she is able to get a loan and make payments every week on her own. As she recognizes what she does everyday and her life situation it's as though she is recognizing herself for the first time, and she is proud of what she finds.

Now, back to the question...

As you can see keeping a boundary and acting as an objective reporter/fellow might be pretty challenging. It's proving to be the most challenging aspect of being a Kiva Fellow.... Here's what you don't see in the video... While I was sitting with Myrna, as she lovingly touched my hand over and over, crying and telling me her story– all of me wanted to jump up, hug this woman, and say, "You ROCK! You are doing an awesome job! Everything is going to be OK." I wanted to thank her for sharing her story with me and tell her how touched and honored I was. Then my mind got going... “Myrna works so hard. I hope she has some joy in her life....maybe I could take her to a movie, get her a facial." Then my mind really got going, "What about a different job, a vacation, a husband.... I wonder how widows find dates here? Do widows date here - maybe in Manila? I'll talk to Prem (the Kiva Fellow there), Do they use e-harmony here. Hmmm, this is sounding a little crazy.... but I bet she'd like the special soap I use, maybe I'll bring a little next time... I wonder what she wants for Christmas.”

So as you can see, from the inner chatter I actually held back in the video, but it was really uncomfortable, I was having a hard time finding the line...the boundary. Knowing how to respond to this intense display of human emotion?...This definitely would not have happened at Wells Fargo in California. Was I supposed to stay stoic like a real reporter, no feedback...nothing?

We left the barangay, time passed, my mind settled, I wrote a journal, and then another, because that is how I help. That is how I help everyone not just Myrna, by working towards Kiva Mission - connecting people through lending in order to alleviate poverty. There are many people like Myrna Datu out there.

All things considered I did a pretty good job (minus a few dorky sentences) but as I said, I'm learning. I'm getting more comfortable with silence and letting people have “their feelings” and experiences (independent of me) without interrupting the process...because it is a beautiful one.

Loan to ASKI Borrowers

Transparency: Not Just for Lenders

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By Maia Pelleg, KF9, Kenya Agency for the Development of Enterprise and Technology (KADET)

[youtube=http://www.youtube.com/watch?v=xUVl5Ppbx7w]

This video was filmed in response to the following interaction I had with a borrower group outside of Nairobi, Kenya...

“Habari. Nina itwa Maia,” I practice saying as I walk into my first group meeting of the day. A KADET credit officer named Gachi,and I are visiting Kiva borrowers living in Kamae, a slum-like area filled with tin huts and roads littered with garbage and roaming animals. Almost all Kiva borrowers here lack formal education and exposure to English, and I wanted to make sure that I could at least introduce myself in their language. I take my seat on a long sturdy bench and face a group of 12 borrowers sitting in four straight rows before me. With perfect posture, the borrowers stare earnestly at Gachi, waiting for an explanation as to why a mzungu (white person) is joining their meeting.

A round of introductions begins, translated by Gachi, and I learn that the group’s name is Kihatu, meaning broom. When they hear their group name announced to me, every single borrower’s face breaks into a proud grin. Until now, the groups I have met have names that translate to English words like lion, opportunity, and faith. Puzzled by this self-designated title, I ask for insight into this choice. A willowy woman with a strong, clear voice responds and Gachi translates, “This is the first loan cycle for all of us in this group,” she says, “and each of us is looking to sweep away the problems of our past and the problems of luck. We are no longer going to depend on luck, but on ourselves.”

The symbolism behind this word selection moves me, and I’m eager to learn more about this community. However, my excitement to engage with these individuals is met with wariness and even hostility as Gachi describes what Kiva is and why I’m here. Voices rise as rapid Swahili dialogue fires between group members and Gachi. I try to wait patiently for a pause in the conversation to ask Gachi to explain what is going on. Although I do not know most of the cultural norms here, I have learned that heated discussion is rare among Kenyans, and that this is an unusual scene playing out before me. Thinking that perhaps I can help Gachi explain Kiva’s role in a constructive way and emphasize that becoming a Kiva borrower is completely optional (while still being able to remain a KADET borrower), I finally interrupt.

I’m told that the group, led by a particular woman seated in the third row, objects to the idea of having their photos taken for Kiva borrower profiles. Historically, this community has been a target area for aid workers and NGOs. Unfortunately, despite posing for pictures in front of their homes and allowing their children to be photographed in their streets, the Kihatu group has not reaped any of the benefits promised by camera-toting journalists and aid workers. Instead, what money has trickled in has gone to squatters, those individuals who roam the streets and sleep on piles of dirt. The Kihatu borrowers have been considered above the need for these donations, even though they lack appropriate nutrition and their homes are unsound, one-room tin structures. There is a consensus in the group that somewhere, someone (even a reporter or newspaper) has profited from the photos of their families, and they are angry at what they see as a violation of their rights.

The woman in the third row, Lucy, also questions why Kiva works through KADET instead of just giving (not loaning) money directly to her.

Through Gachi, I join the conversation and tell them that Kiva lenders do not view them as vulnerable victims in need of hand outs. “Instead,” I say turning to Lucy, “lenders view you as a business partner, capable of engaging in a financial relationship based on respect and for the purpose of providing you with opportunity.”

I explain how Kiva works, but Lucy is so used to western aid workers parachuting in to “save” people in Kenya, that it is hard for her to grasp the concept of accepting a loan from people in the United States (or other western countries) that she must repay. She views all mzungus as rich, and therefore is angry that we would ask someone who is much poorer, like her, to pay it back. In Lucy’s experience, this is simply not the ruling precedent for how a relationship with the west functions.

My next approach is to explain to the group who are Kiva lenders. I’m grateful that I remembered to print out a few lender profiles from Kiva’s website. I hold them up, giving them three different faces to attach to the concept of lenders. “Lenders and borrowers are equal partners; this is not a benefactor relationship. These individuals that you see here are some of Kiva’s lenders. Your loans are not funded by just one of these individuals, but by a group of people who have banded together to invest in you. Contrary to your belief, they may not have much money to spare, but by grouping together they are able to support your business and empower you to improve your life.”

I wait while Gachi translates in his soft, calm voice. When he finishes, I add, “The purpose of taking your photograph and interviewing you for a borrower profile is to facilitate this connection and to create understanding. By providing a view into your life and work, lenders are likely to choose to invest in your business.”

I reach into my bag and extract a thin photo album covered in a plastic coating that depicts a map of the world. Passing it to Lucy, I say, “This shouldn’t be a one-sided mirror into your lives. In here you will find pictures of my family, friends, boyfriend and favorite places in my home town. This is what my life is like in the United States. And this is my job, working with KADET to create greater access to funding for micro-entrepreneurs.

Finally, I want to re-emphasize that being on Kiva’s website is your choice. If you do not feel comfortable signing the waiver, then please do not.”

When Gachi has completed the translation of my words, two women actually stand, walk to the front of the room and wrap their thin arms around me in a strong embrace. For Kenyans, people to whom formality and courtesy are extremely important, this is a big gesture. “Asanti sana kwa kazi njema,” they say. Thank you for your good work.

I’m proud that I was able to reach through to them, and extremely touched at the appreciation they’ve shown for a conversation that took less than 30 minutes. Insecurity can stem from ignorance, and these people have not had the education that would equip them with the ability to fully understand how their loans work. They are used to being taken advantage of, and I am so happy to have the chance to dispel their doubts by providing information. The power of transparency cannot be underestimated.

The murmurs settle and Gachi goes around the room, asking every individual how they feel, if there are any lingering questions, and if they are willing to become a Kiva borrower. Susan needs time to think about it. John says that my presence has given Kiva validity in his mind and is appreciative that Kiva will help him receive a loan; he agrees to be photographed and interviewed for Kiva’s website that afternoon. Turning to Susan and those that have not yet responded, John uses big hand gestures as he speaks, trying to convince them to become Kiva borrowers. “We are lucky to have the opportunity to receive a loan from KADET,” he says, “by becoming Kiva borrowers, we bring the possibility of loans to more people. The money KADET may have allocated to us can now be given to someone else. We help our neighbors by being on Kiva.”

This is a message they all seem to hear. Mary, Matthew, Naomi, Paul and five others, even Lucy, their fearless leader, agree to become Kiva borrowers. Susan changes her mind and asks if she can be photographed first.

I’m touched by John’s message of community and his desire to provide opportunity for others. This is the spirit of Kiva and why I am here working as a volunteer. To see this sentiment echoed in a place where access to electricity, running water and sanitation is minimal is extremely moving.

After we’ve visited our day’s worth of borrowers, Gachi and I catch three different matatus before arriving back at the KADET branch office. During our trip back, I’m able to reflect on the day and am thankful that our morning group challenged Kiva’s role in their lives, and with it, my assumptions. I naively expected all borrowers to be grateful to Kiva for providing access to capital. I didn’t take into account skepticism towards the west that has brewed from past experiences or the expectation of donations and an inability to immediately grasp the concept of a business partnership. It’s also given me a lot to think about on another level, in terms of what the mechanism should be for assisting less fortunate communities. In a country that lacks the infrastructure, or in which corrupt systems exist, how do we reach those like the Kihatu group in a constructive way?

Finally, the morning's discussion reinforced the responsibility I have as a Kiva fellow to portray these individuals with the dignity and respect they deserve. Photos that circulate of emaciated African children and downtrodden workers, what some at Kiva call “poverty pornography,” fuel the image of Africans as helpless, dependent victims rather than as diverse, capable people with unlimited potential. No one hears this message more than Africans themselves. I am working hard to combat established expectations of relationships with the West. I believe Kiva loans and partnerships are a big step in the right direction.

To learn more about KADET, Ltd and its borrowers, click here. To become a Friend of KADET (KADET's lending team), click here to join.

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Some of the Kihatu group borrowers with their businesses:

Naomi Wambui with one of her three cows

Though Naomi is unsure of how to sign her name, opting for three small dots on the paper, she is excited to be a Kiva borrower. Her loan is for 10,000 KSh (~$130) with which she will diversify her income by opening a fruit stand. Naomi used to borrow with another MFI, but switched to KADET after a loan officer disappeared with the group’s money, including their savings. Encouraged by others in the Kihatu group, Naomi decided to give micro-credit another try. She doesn’t know her age and can’t remember the name of where she comes from, but she does know how to keep a passbook and make her repayments. Naomi says she is proud to provide food for her children.

We find Lucy standing in front of her used clothing business, 12 or 13 blouses carefully laid out on a piece of worn, woven straw. As Gachi interviews her in Swahili, Lucy takes hold of my hand and squeezes several times. Lucy announces to Gachi that I am hard-working, just like her daughter, and therefore she wants to hug me. She insists on taking eight different photos together, and giggles when she sees herself in playback mode on my digital camera.

In one of Lucy's embraces

Lucy’s loan is for KSh15,000 (~$200) and with it she will purchase more stock to sell. Although this is Lucy’s first loan with KADET, we learn that she had previously borrowed from another MFI but that her group was crippled by the hospital bills of two members and their inability to repay.

Julius Mwaugi with his taxi

Julius’ taxi is a red motorbike with peeling paint and cracked seats. Julius has a big grin on his face during the entire Kiva interview. His loan is for KSh20,000 (~$265), which he will use to purchase merchandise for a secondary business and pay for limited insurance. With his profits, Julius says he will purchase comprehensive insurance, which will cover his vehicle and all parties in the incident of a crash.

Mary mostly sells charcoal, and once in a while vegetables if she can afford to stock them. Mary’s kiosk is made from wood and tin, with burlap walls. A large jug labeled “sulfuric acid” sits next to the charcoal. When I ask why she has sulfuric acid, Gachi laughs and tells me it’s a container for water. It has never been cleaned. Mary’s loan is for KSh10,000 (~$130), which she will use to purchase potatoes and additional charcoal to meet customer demand.

Mary Wambui, in front of her charcoal kiosk

Peter Mashariah, inside his butchery shop

Across town, we find Peter’s butchery. The thick, pungent smell of blood and fresh meat hit my nostrils the moment we walk through the narrow door. A partial carcass hangs from a hook in the window. On the counter sits a scale and a glass aquarium, which holds three small pieces of raw meat. The instant we step inside, it starts pouring rain outside. The noise is amplified by the tin roof over our heads, making it difficult to hear what Peter is saying (not that I understand anyway). Peter’s loan is for KSh15,000 (~$200), which he will use to renovate the butchery. His top priorities are improving the broken tiled floor and installing an appropriate enclosure for where the meat hangs. One day, Peter says, he hopes to buy live animals to slaughter and sell to retailers. By the time we leave Peter’s shop, the rain has completely stopped falling.

With John in front of his stew and sausage pot.

A five-minute walk down the main dirt road and we come to John’s butchery. A slightly muted version of the thick odor present in Peter’s shop lingers. Flies swarm, landing on my head, notebook, jacket and hands. This space is larger than I expected, and three men sit inside chatting. John wears an orange and white mesh jersey and sucks on a toothpick during the interview.

With warm eyes and a bright smile, John is charming–even in a language I don’t understand. This is John’s 11^th year in business; he buys cattle and sells the individual pieces to retail butchers (like Peter’s). John takes the parts of the cow that he is unable to sell (intestines, heart, lungs, feet, etc) and creates a stew and sausages, selling lunch and dinner on the street. The loan he seeks is for KSh40,000 (~$535), with which he will expand his meat supply coverage. When it is time to photograph John in front of his business, he is giddy. He runs across the street to find a butcher’s coat, slicks his hair back and poses.

I might be falling for microfinance

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By Alana Solimeo, KF9, Costa Rica

I realized after letting the excitement of Kiva, Costa Rica, and research topics (exhibited in previous post Rice, Beans and an Inspired Hypothesis) settle that I might want to take a step back. The thing is I hit the ground running here, thanks to the great work of my predecessor Kiva Fellow, the fact that EDESA really is on top of their game, and the enthusiastic charge with which I like to begin things that earned me my nickname Eager Beaver.

As ready as I think I am to lay it down as to why I think EDESA’s model is so successful it will be prudent to spend a blog post proving that it is indeed, successful. So here I give myself one shot to make you a believer, and then maybe we can jump on Kiva Fellow Suzy's "What if microfinance really does work?" bandwagon!

While visiting SACRIN, the Community Credit Enterprise in San Cristobal Norte, Costa Rica, I got a chance to sit down for coffee and cake with two members of their board (who are also members/shareholders/borrowers), Luis Cordero and Olman Ceciliano Nuñez, who have served eight of its thirteen years of existence. What did I learn?

Trust is reciprocal between the lender and borrower. Borrowers trust the ECC because they are involved in its operations. 60 hours of technical training with FINCA Costa Rica go into just forming the ECC! The relationship then benefits the loan recipients when the ECC can lend without traditional collateral requirements because of the trust and communal knowledge that exists in such relationships.
Borrowers understand paying interest because it comes back to them in dividends. SACRIN has had returns over 80% for its members this year. Jealous? ;)
In 13 years, SACRIN has never seen a loan default. There might be a few reasons for this and they can each be attributed to the small neighborly populations served by Community Credit Enterprises. First, SACRIN starts out providing small loans and only increases loan amounts according to increased debt capacity of members and success with their businesses. Second, they have a real economic interest in seeing their clients succeed because they are members of the same community. As such they are tolerant to work with borrowers on restructuring loan terms if something gets in the way of a borrower successfully completing loan terms as they were originally established. Third, social collateral plays into repayment when the borrowers are interested in establishing themselves as credit worthy and responsible among peers, neighbors, and their own business partners and customers.
SACRIN began lending with a capital base established by selling one share of 5000 colones each, roughly $8.50 in today’s currency exchange rate, to 20 members. They outgrew themselves and sought outside funding from the National Bank and EDESA and now they have a loan portfolio of 103,921,736 colones, or $180,420 which shows a little over 100,000% growth over 13 years.
SACRIN has seen its lenders/members/shareholders/neighbors/friends transform their businesses into lucrative enterprises selling goods on the wholesale market and providing services all over the country. Having started out small, with say, one screen printing, sewing, or knitting machine, these business owners now have many machines, many employees, and strong efficient enterprises. See recent journal updates for some of SACRIN’s borrowers:

Laura Segura Brenes

Mary Ceciliano Nuñez

Andres Vinicio Romero Romero

Jose Mauricio Padilla Romero

Luis and Olman spoke to me passionately about the history and future of SACRIN and its impressive financial performance and institution/borrower relationship. They were tossing around numbers, percentages, converting them to dollars making it relevant. They spoke of success metrics, Christian faith’s role in repayment, perceptions of poverty, but of all the various ways to measure a financial institution’s success, we ended the meeting focused on one:

“The most meaningful growth we’ve seen is personal growth.”

They explained to me that the people involved in the Community Credit Enterprise, including themselves, haven’t received more than a 6th grade education. In that there’s an immeasurable component of this microfinance model. These men and women are now part of a national network of financial institutions. They attend international microfinance conferences. They get together with peers and neighbors and make finance professionals out of one another. They gather with the same group and make successful entrepreneurs out of themselves, and more impressive is how they reached out 13 years ago to form the ECC, to help themselves as individuals, with the financial risk and emotional burden that it might not work out. But they believed it could and worked towards it together.

When 80% returns and 100% repayment rates pale in comparison to an unquantifiable personal growth they achieve while establishing themselves as ingenious members of the productive world...I'll go ahead and call it a success. Would you?

Check out the different ways the world applies microfinance by perusing the borrower profiles on Kiva.org and support EDESA by joining our lending team!

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To read more of these Kiva stories from the field, please visit fellowsblog.kiva.org. For information about becoming a Kiva Fellow, please visit www.kiva.org/fellows/.

Microfinance for Beginners~

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By Anne Hector, KF9 Kenya

When last I posted, I was preparing to plunge into Nairobi traffic with the redoubtable intern, Mary Chege, to visit the Kitengela branch to gather up loans and work with the lending officers on Kiva postings.

Kitengela is a small town of approximately 8000 located one hour southeast of Nairobi. Once Mary and I successfully navigated our way there, one of SMEP’s local loan officers, Winnie Mwiti, took us out for the day on her usual rounds. I had never been to a group borrower meeting and nor met a micro-finance client, so this was a big day.

Recording payments -- Kitengela

Our first stop was the Ondisore Group loan meeting in the market. It was blazingly hot and the meeting was held in a small corrugated tin hut. While I was concerned about stepping into an oven, it was surprisingly cool inside and a quiet business atmosphere prevailed. Borrowing groups, for those of you who don’t know, are the backbone of microfinance. A terrific innovation developed by Bangladesh's Grameen Bank and Bolivia's BancoSol., the group guarantees the loans of every member. What that really means is that if a member defaults on his/her loan for whatever reason, the group has to pay back the outstanding amount. As you might imagine, the group takes selection of its members very, very seriously, and in this way, the credit risk assessment normally performed by a bank is outsourced to the community.

Groups typically meet once a week, and everyone makes their payment in cash. Pictured above are Jael Ombange and Wanjiku Wangui (head of the Ondisore group) recording each and every payment by the 10 members attending. This is one serious meeting. Some joking around, but everyone is cognizant of the risks involved, and a no nonsense attitude prevails. The arrival of the Kiva mzungu (lily white me) created some stir and they all agreed to have their photos taken for the website, but then it was back to business.

Metal fabricator_group president_Kitengela

We next moved on to the Kilume Wealth Creation Self Help group meeting. Vice Chairman of the group, Francis Ndungu, cordially invited us to come see his workshop. Somehow I had the impression that micro-borrowers lived at far more precarious economic levels than is the case of the SMEP clients we visited. While their lives certainly have challenges, many are established small business people and very proud of their enterprises. When asked if they minded having their pictures on the internet, they tend to look surprised, pleased and then check to see how they looked for their upcoming 15 minutes. Our Vice Chair, Francis, is a metal fabricator and upholster, and he shown here in his shop with a metal grill he created. You have got to admire that blue blazer with gold buttons and white shirt… the man looked sharp and he knew it.

Proud Tuk Tuk operator -- Kitengela

Final stop was a loan interview with a tuk tuk operator from the same group. The matatus, buses, taxis and tuk tuks all gather at a depot in the center of town, and the tuk tuks tend to flock together. The three-wheel vehicles, lend themselves well to customization to attract passengers and express the true soul of the operator. Pictured left is one particularly outstanding vehicle owned by John Kimani.

All in all, a great day in the field. It turns out that Kitengela’s biggest problem posting Kiva loans is emailing the photos to headquarters. Internet connection is at dial-up speed and this has caused a complete breakdown. It all sounds so easy back in the Bay Area… but getting loans posted in remote parts of the world takes enormous dedication by the staff. We determined that flash drives send back and forth by the Wells Fargo courier will solve the issue.

For Mary and I, it is on to Thika, a colonial town NE of Nairobi. In the meantime, please consider joining Kiva if you are not already a member (http://tiny.cc/aD7N2) and funding a loan (http://tiny.cc/ZjeZQ).

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To read more of these Kiva stories from the field, please visit fellowsblog.kiva.org. For information about becoming a Kiva Fellow, please visit www.kiva.org/fellows/.

It's a Kiva birthday party!

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This year, Kiva’s 4th Birthday falls near a major milestone — the organization is close to facilitating over 100 million dollars in microloans to small business entrepreneurs around the globe! We'll be celebrating this event on November 3rd by co-hosting a party at the Brower Center in Berkeley, CA, with The Hub Bay Area and GOOD Magazine. It will be a chance for us to get together with members of the Kiva community - and the cool cats of GOOD and The Hub - to celebrate what Kiva has become over four years of work.

And we would love for you to join us!

Two floors of music and beats from around the globe, including Baba Ken and the Afrobeat Connexion, Shovelman, Gaucho Gypsey Jazz Band, and Erin Brazil. Food from the Slanted Door, Café Gratitude, Neighborhood Fruit, FeelGood Grilled Cheese, and other local favorites. Drinks generously provided by Drake’s Brewing Company, Barefoot Winery, and SKYY Vodka.

All four organizations are innovative models that have sprung from this same desire - that through collaboration we can create radical change! Together, we will share the underlying story of Kiva's milestone and the global inspiration it has created through pioneering community building for social change. We hope to see you on November 3rd!

See the link for more party details. Your RSVP is required and we will cap it at 500 guests, so register now!
http://kivaatthehub.eventbrite.com/%20%0A

Premières impressions à Santo Domingo

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By Thomas Gold, KF9 Dominican Republic

[Please scroll down for the English version]

Santo Domingo is moving forward

« La République Dominicaine est un pays aux couleurs vives, musiques et danses irrésistiblement entraînantes et climat tropical».Voici la seule image que j’étais capable de me figurer, en attendant mon avion à l’aéroport de San Francisco, du lieu où j’allais passer les prochains mois de ma vie.

Une semaine après mon arrivée dans le pays, cette vague représentation s’est précisée et matérialisée, en fonction des premières impressions que j’ai pu ressentir, et dont voici quelques exemples.

Tout d’abord le contact avec les habitants :

Lorsqu’un lien direct existe avec une personne, le contact sera tout de suite chaleureux et personnel. J’ai été impressionné de voir comment mes collègues ont rapidement enregistré mon nom, dont la sonorité ne leur est pourtant pas familière. Si le lien est plus commercial (hôtel, petit commerce), le premier contact peut vous laisser une impression de froid, mais en général, il suffira de faire l’effort d’échanger quelques mots avant d’échanger la monnaie pour créer une relation plus amicale, et passer du tarif « gringo » au tarif normal. Beaucoup de personnes viennent naturellement vers vous, et si certaines vous voient comme un touriste à qui soutirer de l’argent, d’autres sont tout simplement curieuses et prêtes à rendre un service

Les routes et les voitures

Si je me suis senti jusque maintenant en sécurité dans n’importe quelle situation, le danger vient sans aucun doute de la route. C’est la loi du klaxon le plus fort (seul équipement dont on est sûr que tous les véhicules sont munis) et les piétons n’ont qu’à bien se tenir.

Les quartiers plus anciens et zone piétonnes ne manquent pas de charme mais en ville, les trottoirs servent souvent de décharge à ciel ouvert. Sur les routes, on est toujours frappé de voir fonctionner ces voitures d’un autre âge, à la carrosserie défoncée et rouillée, aux roues déformées, aux portières manquantes et pourtant presque tout le temps bondées. Il s’agit en fait de véhicules publics tout à fait officiels qui servent de transport collectif plûtot efficace d'ailleurs. Même ce qui apparaît sur GoogleMap comme des axes principaux de la ville sont souvent des rues étroites où la circulation est chaotique.

photo blog1

Dans ce décor caribéen où couleurs, musiques, nourritures font écho à la chaleur du climat tropical, des personnes de toutes sortes de classes sociales se mélangent. Si certains ont des standards de vie élevés (et sont équipés de gadgets technologiques bien plus modernes que les miens), beaucoup, bien plus modestes font preuve de beaucoup d’ingéniosité et de persévérance pour se générer un revenu : mini-boutiques coincées entre deux murs d’immeubles, vendeurs ambulants, services de toutes sortes, les exemples foisonnent dans les rues de Santo Domingo. C’est dans ce contexte, et avec l’objectif de servir les populations marginalisées pour qu’elles puissent par leurs propres efforts et grâce à un accès équitable au capital, que les organismes de microfinance interviennent en République Dominicaine et partout dans le monde.

Durant les mois qui viennent, je vais avoir la chance de partager avec la cinquantaine d’autres Kiva Fellows répartis au quatre coins du monde des anecdotes sur les chocs culturels et surtout les histoires passionnantes des entrepreneurs présentés sur le site Internet de Kiva

Dans un prochain post, je vous parlerai plus précisément d’Esperanza Internacional, le partenaire de Kiva avec qui je commence à travailler. En atendant, cliquez ici pour consulter les profils de leurs clients.

English version

« The Dominican Republic is a country with bright colors, irresistible music, dancing and tropical climate.” While I was waiting for my flight at San Francisco’s airport, this is the picture I had in my mind of the place I was going to spend the next few months of my life.

One week after my arrival, this vague impression has become more accurate and concrete based on my first experiences. Here are some examples.

First of all, getting in touch with the locals:

When a direct connection exists with a person, interactions will instantly be warm and personal. I was impressed at how quickly my colleagues at work remembered my name, even though it is unfamiliar to them.

If people have a connection through business (like hotel, little shops,…) the first contact often seems colder, but generally, you just need to share a few words before exchanging money and you will fare. Seeing you as a foreigner, many people approach you, and although some just hope to swindle you, many are just curious and ready to lend a hand.

Roads and cars

So far, I have felt safe in pretty much any situation, but the roads are definitely dangerous. Drivers blast their horns (the only reliable piece of equipment on every car), and pedestrians had better watch out!

Historic districts and pedestrian areas are charming but in town, sidewalks are often used as an open dump. On the roads, it is always amazing to see vehicles from an age passed actually working, with rusty and dented bodies, distorted wheels and missing doors; nevertheless these cars are always packed. These vehicles are in fact, part of the official public transit system and are pretty efficient, by the way. Even the roads that seem like main thoroughfares are often narrow streets congested with chaotic traffic.

In this Caribbean setting, colors, music, and food echo the tropical heat; all kinds of people from different social classes mingle together. Some of them enjoy a high standard of living (and own electronic devices much fancier than mine), many of them come from much more modest backgrounds and show a lot of ingenuity, drive and perseverance to earn a little income from: mini-shops stuck between the walls of two buildings, food stands and businesses services of all kinds; examples abound in Santo Domingo’s streets.

In this context, microfinance institutions are working in the Dominican Republic and elsewhere around the world with the aim to serve poor and marginalized people so that they can make a living by their own efforts and by having fair access to capital.

For the next few months, I am proud to share, along with 50 other new Kiva Fellows scattered allover the world, anecdotes and impressions on cultural shocks and overall captivating stories of micro-entrepreneurs who appear on Kiva’s website.

In another entry, I will write about Esperanza Internacional, Kiva’s partner with which I’m working. Until then, click here to browse their borrowers’ profiles.

Lots of thanks to Gemma North, KF9 Cambodia, for helping with the translation!

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To read more of these Kiva stories from the field, please visit fellowsblog.kiva.org. For information about becoming a Kiva Fellow, please visit www.kiva.org/fellows/.

A Sunday outing in Kyrgyzstan

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By Rob Packer, KF9 (Kyrgyzstan)

I feel it’s almost become a cliché to write about the inspiring professionalism and overwhelming dedication of MFI staff on these pages. I’ve now been at my Kyrgyz MFI, Mol Bulak Finance, for a week and have now seen where the clichés come from: reality. As if to drive the point home, MBG’s indefatigable Credit Manager, Renat was waiting outside my apartment at 9am on a sunny, but cold October morning to visit borrowers in and around Kara-Balta, Kyrgyzstan.

: The view from Bishkek

The road out of Bishkek was my first trip outside of the capital within Kyrgyzstan after my night-time journey from the airport into town. Our route out took us past Osh Bazaar, one of Bishkek’s largest, and Kyrgyzstan’s largest used car market, which is a phenomenon I hope to write about in a later blog. Along our route thousands of kilometres of flat Kazakh Steppe and West Siberian Plain crashed spectacularly into the snow-capped Toblerone blocks of the Alatau Mountains, the advance guard of the Himalayas, which rise 3500 metres within the space of 50 km. Mesmerized by the mountains, by the time I looked back at the road, the second- and third-hand Mercedes of Bishkek had thinned out and we were

: Lepyoshki (Kyrgyz loafs of bread) in a Lada

surrounded by a time warp of Soviet Ladas and horse carts. At the same time, silver mosques and deep-blue Orthodox churches began appearing by the side of the road, strangely alongside unremoved statues of Lenin, the Soviet street names: Sovietskaya, Proletarskaya and Lenina, or a strangely named village called Krasny (Red) Metallist. And I thought at one point I saw the street signs still pointing towards Frunze (Bishkek’s Soviet era name). Things came back to earth when we arrived in Kara-Balta’s market and were greeted by Mayrambek, a loan officer from the local branch.

As we started visiting Kiva and Mol Bulak borrowers in the market and filmed their loan updates on the loan and their hopes for the future, I kept thinking “Isn’t this a bit weird?” I’ll give it a bit of perspective: you live in a small town two hours from the big city and have taken out a loan to increase the inventory of your shop, had your photo taken and had it put up on a veb-sayt; and then someone arrives from Chicago, London or Sydney and wants you to describe all of this on camera! The more we spoke with the borrowers about their hopes for the future, the more I became obsessed by another question: Don’t these people deserve a voice? Another Kiva Fellow’s cliché is to say that you are truly inspired by the stories you were told: with no hint of irony, these women really are inspirational.

: One of our clients shows us some of the things she bought with her loan.

Their stories are going to be posted as journals on Kiva and I don’t want to repeat what they can say best in their own words. There was the woman who worked as an accountant until things fell apart in the collapse that followed the fall of the Soviet Union and now has a stall in the market. There was the woman who started her own market stall from nothing with the help of a Kiva loan, and who now wants to get her own shop. We saw a woman in a remote village who’s renovating a house to use it as a barn for her cows so she can use the increased milk profits to pay for her daughter to have music lessons. We saw a woman who works long hours at a gas station and spends her two free days a week getting Turkish clothes from Bishkek and selling them in her apartment “because the markets aren’t open if you work late”. Without exception, we met women who want their children to have an education and a start in life. In short, we met eight incredible women.

: Getting the right shot

As we left Kara-Balta on our way back to Bishkek, Renat turned to me and asked me if I could now see why microfinance is such a low-margin, high-cost business. It suddenly seemed obvious: in around 10 hours of driving, we’d only managed to see eight borrowers and spent no more than 20 minutes with each one. We’d crossed every part of the narrow strip between the mountains and the Kazakhstan border, even joking at one point that we’d hit the border before we found the borrower, and probably covered 100km of road, pothole and track. The amount of time it takes them to reach some borrowers is incredible, but then again that is one of the roles of microfinance: to help people that banks can’t reach. I’m not sure if anyone’s can ever judge what that makes it worth it; but for me right now, sitting in my apartment in Bishkek, it does, especially if these are the type of people you’re helping to get started in life. And Renat summed them up excellently: Molodtsy nashi klienty! Well done, our clients!

Rob Packer is a Kiva Fellow currently working with Mol Bulak Finance in Bishkek, Kyrgyzstan. Check out and lend to their entrepreneurs on Kiva.org, or join the Kyrgyzstan lending team.

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To read more of these Kiva stories from the field, please visit fellowsblog.kiva.org. For information about becoming a Kiva Fellow, please visit www.kiva.org/fellows/.

Kiva in Samoa: Fa’a Samoa

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By Agnes Chu, KF9 Samoa

My placement in Samoa was supposed to be a quiet one. A tiny country smaller than Rhode Island, Samoa is part of the group of Polynesian islands that are usually associated with the words “dream vacation” or “exotic getaway.” Samoa is located in the “calm zone” of the Pacific and the demeanor of its inhabitants follows suit; there is actually a term—fa’a Samoa—for the laid-back attitude Samoans have towards life. Although the UN has categorized Samoa as a “least developing country,” it is well-known that Samoans are always smiling. I thought I was placed on a beach—none of this catching-malaria and getting-chased-by-men-with-machetes business that other Kiva Fellows had to worry about.

The earthquake and subsequent tsunami hit Samoa the day of my flight from San Francisco to Apia, Samoa. Although I wasn’t aware of it at the time, the tsunami had spared Apia, the capital of Samoa and headquarters of South Pacific Business Development microfinance organization, and it was the eastern coastal region and America Samoa that suffered the brunt of the damage. The airline, showing us grimy pictures of the damage, advised all tourists to turn back, but nobody did. I arrived at 5:30 a.m. the day after the tsunami hit and found SBPD’s driver waiting for me at the airport, on schedule. The government had declared the day a national holiday, but at SPBD’s office, almost all of the staff showed up and continued operations as usual, working doubly hard to make up for the lost day.

Approximately 15-20% of SPBD’s borrowers live in eastern region of Samoa that was affected. We still do not know the status of all of them. When the tsunami came, bearing waves 10 feet high, many people fled inland to the plantations uphill and remain there with their families and villages. The entire village of one of SPBD’s borrowers is crammed into one home, the only one situated on higher ground. Of the borrowers we were able to locate, their damage, thankfully, is mostly material. However, the extent of material damage is overwhelming. Samoans build their houses oceanfront, literally 5-10 feet away from the Pacific (The beach is very small and sometimes non-existent in most spots of Samoa.) The houses, called fales, are giant rectangular patios, with wooden poles holding up a singular roof made of sheet metal. It’s the perfect way to enjoy the seabreeze. When the water came, their belongings were swept away. Fales, not meant to be sturdy, crumbled and some have only the concrete foundation remaining. Most people lost everything they owned. Tourist fales are gone. A wharf costing millions and newly opened months prior is damaged. Samoans are shocked that such a disaster could happen—this is the first tsunami to hit Samoa.

Samoan Fale destroyed by the tsunami

The response to the tsunami has been a huge outpouring of love. Although the disaster is contained to a small part of the island, Samoans are a tight-knit community and somebody always knows somebody on the other side of the island. Many Samoans have packed boxes of clothes to donate through their church, a large facet of Samoan life. Four different international relief agencies, as well as local businesses, have been dropping off supplies, including ice cream and popsicles for children. SPBD donated 3,000 Talas to the relief effort during the telethon today. The borrowers that I have met are fine for the moment and have shown extraordinary resilience. They are calm. Children laugh and giggle while cramped inside a temporary shelter. I will never forget the first remark one Samoan made when I asked her how she was doing: “We have lost everything, but I am happy because we still have our lives.”

Samoan families use schools as temporary shelter. Children are receiving popsicles from Red Cross.

That sentence amazes me, because I have never seen poverty before and can't imagine having little and then losing it again. I get mad when I lose my iPod! I grew up in a middle-class family in a big city and just a few days ago, poverty was only a concept discussed in the New York Times. I joined Kiva because I wanted to see it firsthand and help. The tsunami was more than I bargained for. The impact is devastating. My mind is numbed by wondering how these families will cope. But they are. I have been in Samoa for only a few days and I can see already how strong families are here. The past 60 hours have been a whirlwind. I have lost a lot of sleep, gotten bit by mosquitoes and cockroaches, and ate marmite for breakfast instead of bacon and eggs. But I am inspired by the Samoan woman's remarks and I am happy.

SPBD will be doing further assessment on the aftermath of the tsunami and I will provide more updates on the Kiva borrowers affected in the following weeks, as more information comes. Please support SPBD by lending to its other borrowers here.

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To read more of these Kiva stories from the field, please visit fellowsblog.kiva.org. For information about becoming a Kiva Fellow, please visit www.kiva.org/fellows/.

Kiva In Freetown

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By Jenny Kim, KF8 Sierra Leone

When I told people I was headed to Sierra Leone to work with a local NGO the universal response was “have you thought this through” and “be careful”. More than 4 years after UN Peacekeeping forces pulled out of Sierra Leone following a brutal and devastating 11 year civil war, people continue to associate Sierra Leone with violence or with the Hollywood blockbuster film Blood Diamonds. I can't say I was that much more enlightened when I chose to live and work in Freetown, the capital city. After grabbing several books, a couple of documentaries, and hours on the internet, my cursory research painted a picture full of machete-wielding and AK47-toting child soldiers alternately terrorizing villages and mining for diamonds. Not good and dated info. Contacts urged me to find accommodations in a gated and well-guarded compound. Advice I took. And others told me to NEVER go out after dark. Advice I ignored. People tried to warn me about getting to town from Lungi Airport which purportedly was a gamble with my life given the three transport options-- a “treacherous” ferry whose schedule can sometimes be a mystery, a hovercraft that has “exploded and ran out of fuel mid-trip in the past”, or a helicopter that has crashed several times. Stellar options. And only half true it turns out. With these thoughts swirling around in my head, I arrived in Sierra Leone last week. Since then I’ve been trying to wrap my head around this fascinating country, making a go of untangling some of the myths, tall tales, half truths, and sobering realities as best I can during my 2 month stay.

Observation #1

Sierra Leone needs better PR (more on this in the next blog). The country suffers from an undeserved and badly tattered public image—essentially a snapshot taken in perhaps the worst period of it’s history. Although the war is still very much woven into the fabric of this country and almost without exception every individual I have encountered has either witnessed atrocities or has suffered directly at the hands of warring factions, most Sierra Leoneans want to focus on rebuilding the country. Here in Freetown, perpetrators of murders, rapes, and mutilations live peaceably side by side with their victims. As my taxi driver put it to me, “What else can we do. We need to heal and move on.” The Truth and Reconciliation Trials continue to try the “big fish” a co-worker tells me. But “who can tell who was forced to kill and who can tell who was forced to take cocaine and drugs in order to cut off people’s wrists or legs? I don’t understand it. But we forgive and we have to live as brothers. It’s the past.”

Some context…

Ranked at the very bottom of the UN Human Development Index, Sierra Leone is one of the poorest countries in the world with a whole host of challenges in front of it. 1 in 6 mothers die here in childbirth making Sierra Leone the most dangerous place in the world to become a mother. Once born, 1 in 4 children will not survive past the age of 5. If you consider that Sierra Leone is a donor-driven nation which receives over a third of it's annual budget from other countries and abroad, one can begin to grasp the magnitude of the work ahead when the national agenda includes combating severe infrastructure deficiencies, a non-existent healthcare system, illiteracy, and corruption.

1 in 6 mothers die as a result of childbirth (more than anywhere else recorded in the world)
1 in 4 children will never turn five
70% of the population live below the poverty line
57% of the population do not make a dollar a day
Less than 10% of population has access to energy
1/3 of the Sierra Leonian government budget every year is donated
Life expectancy at birth is 42 years (2007)
Ranked 177 out of 177 countries in UN’s Human Development Index
Ranked 168 out of 175 countries by World Bank for ease of doing business
Average GDP per person is $209 (adjusting for purchasing power parity approximately $800)

Sources: UN, Unicef, World Bank, Sierra Leone by Bradt

The video below is of my first loan visit in Dove Court market located in Freetown.

http://www.youtube.com/watch?v=Ep_mqk1zUUQ

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To read more of these Kiva stories from the field, please visit fellowsblog.kiva.org. For information about becoming a Kiva Fellow, please visit www.kiva.org/fellows/.

Spreading the Kiva love...

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by Cissy DeLuca, KF8, Indonesia

This past week is my last week working at TLM in West Timor. TLM is also partnered with Opportunity International (OI) Australia, which is their primary source of funding. To promote this relationship, TLM often hosts “Insight Trips,” which allow supporters of OI to pay a fee to visit a partner MFI of their choice. These trips promote donor understanding and create the potential for them to further contribute to the work of the MFI.

: TLM staff members introducing the Australian guests to a client

Eight Australians arrived this past Monday to be toured around to visit clients, see the office, meet the staff and gain an insider perspective on microfinance and TLM. Upon hearing I was working on behalf of Kiva, an instant fan club materialized right before my eyes. They wanted to know everything they possibly could about Kiva and their partnership with TLM. Some had heard of it, while others had not. This resulted in me hosting an impromptu training session at my desk on how to use the Kiva website. One of the Australians had even googled “TLM” and “Microfinance” prior to the trip and stumbled upon the fellows blog and a video I had made! He had known of the existence of a “Cissy” at TLM before he even arrived… I am a minor celebrity!

After 11 weeks at TLM and with a minor case of the volunteer blues, this was a nice way to revive my enthusiasm for Kiva. It helped me remember why I came here and why I love Kiva so much. The enthusiasm people feel when they are first exposed to Kiva makes me proud to be a part of it all. Working within the contexts of a foreign culture where things sometimes move slower than you hope can leave you slightly jaded and forgetful of the big picture. As I transition from Kiva Fellow to freelance ambassador of Kiva, I look forward to appreciating Kiva as just a lender again. This contact with microfinance enthusiasts, and now Kiva enthusiasts, has been the perfect way to start my transition.

Shanty, me, Vience... Kiva girls!

On a completely unrelated note, I met the coolest entrepreneur EVER today. Unfortunately, this man was not posted on Kiva, but he is a TLM client. This man has started a business fashioning chairs, tables, pots and bowls out of old tires!

Tire chairs.. resourceful and comfortable!

Showing us his handiwork with tires!

Cissy DeLuca is just finishing up her time with Tanaoba Lais Manekat (TLM) in Kupang, West Timor. Please join their lending team to receive monthly updates from the Kiva Coordinator about fund-raising loans and happenings at TLM. You can also follow TLM on twitter!

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To read more Kiva Stories from the Field, please visit fellowsblog.kiva.org. For information about becoming a Kiva Fellow, please visit www.kiva.org/fellows/.

Last Thoughts from Ghana

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By Nancy Tuller, Kiva Fellows 8th Class, Ghana

I came to Ghana as a Kiva Fellow at a time when the entire country had been experiencing an economic turndown. Since the beginning of this year, the Ghanaian currency has been losing value, prices have been creeping steadily upward, and the fishing and farming industries have been experiencing low outputs.

CRAN Elmina Loan clients, July 16 037

Ghanaians, even the relatively few who would be considered “well-to-do”, are feeling the pinch. For the poor, who are the vast majority in the country, it has been more like a gut punch. I have spent a lot of my time talking with loan clients about their lives and the businesses they operate which Kiva lenders have supported. The majority of these clients had taken out loans to “expand their business”, which means that their businesses were under-capitalized. In most cases, their productivity was extremely low, and their capacity to increase productivity was limited by a lack of sufficient inventory, inputs or productive assets that all demanded a cash injection. Repeatedly, clients told me how rising prices had eaten into their profits and decreased their ability to sufficiently re-stock their merchandise, or purchase fish to smoke, or make enough from farming to last until the next harvest season. Even those who had taken out several loans already, and had managed to improve their quality of life in various ways during previous loan cycles did not make substantial profits in the first half of this year. It has been a tougher-than-usual year for poor Ghanaians, and there is no sugar-coating that fact.

That being said, I often found myself wondering what many of these loan clients would have done without the loans that kept them afloat this year. Their situations are dire. Clients are often living so close to the edge that when they lose income, they have to immediately take their children out of school because they can’t afford the school fees due that week.

Take for example, Felicia, who with her husband, has six children between the ages of eight and 18 year old. Two of those children have completed senior high school, and the rest are still in school. Felicia has just a primary education herself, yet she realizes the importance of education, and has tried hard to ensure that her own children stay in school.

Felicia

It has been very difficult over the years to keep all of her children in school on a consistent basis. Her husband’s income is small, and most of the financial responsibility for the family falls upon Felicia. For example, right before Felicia received her first microloan funded by Kiva lenders, three of her children in primary school were staying home instead of going to school because Felicia did not have the money to pay the fees. Since then, her two oldest children graduated from senior high school, and so the money that was spent on their fees has allowed the younger children to resume their school attendance. I asked Felicia how she makes the decision about which ones to keep in school and which ones to pull out for lack of fees. She told me that she keeps the youngest ones out if need be, because it is easier for them to catch up on their studies than it is for the older ones to close such a gap.

There is no cushion for the poor. If a woman can’t sell enough homemade soap in the market one day, her children may not eat the next day. If a woman has a choice between seeing her children go hungry or borrowing from the local moneylender at 20% per month (not per annum!), of course she will borrow the money and feed her children. Case in point: Ellizabeth, a single parent of three, who makes and sells “cooco” (a porridge made from millet, ginger and pepper) for a living.

Elizabeth

Making ends meet is difficult for Elizabeth, who is solely responsible for rent and all living expenses for her family, including school fees. However, Elizabeth found her finances even more difficult to manage before she received a loan from Kiva lenders. Back then, she had to buy the ingredients for her porridge on credit. When I asked her how much interest she paid on those loans, she told me she was paying 30% PER MONTH (not per annum, as most financial institutions charge). This interest ate heavily into her profits.

Now, with the help of Kiva lenders, Elizabeth has quadrupled her income from 10 cedis per week to 40 cedis per week. Though she has made a profit that has allowed her to more easily manage her expenses and greatly reduce her debt, the profit has not been what Elizabeth had hoped for, and she tells me that she isn’t seeing a significant change in her living circumstances. She blames this on the rain, and on the slow market. It is harder to sell in the rain, because people are in a hurry to get to work, and don’t want to stop to buy her porridge. It is also true that in Elizabeth’s coastal fishing community, the local economy is experiencing a slump due to the fact that a low catch of fish pumps very little money into the community, so that people have less to spend. One way people have of cutting back expenses (which in this world economy many of us are familiar with), is to eat at home instead of buying ready-made food on the streets.

Your loans are more important now than ever before. As the whole world feels the effects of a slow economy, poor people who can afford to lose the least are hit the hardest, and being forced to make decisions that might sound melodramatic or even like an exaggeration to some: having to say good bye to a child (and a child having to say good bye to his parents and siblings) before being sent to far-off relatives who are better off, pulling children out of school so they may begin pulling their financial weight by working, or leaving the baby on the orphanage steps. Unfortunately, these stories are true, and I have heard worse stories than all of these. All of them are induced by desperation. Your loans ease that desperation and give hope where it is most needed.

I recently read an article in Ghana’s leading newspaper that stated that approximately 80% of Ghanaians have no access to basic financial services. Kiva’s partner organizations in this country are working hard to create access to those services and extend them to the poor. Your loans directly expand the reach of those services to more families every month. As my fellowship ends this week, I celebrate this rich experience by thanking all of you who made it possible in so many ways, and I invite you to join me in increasing our overall impact upon the alleviation of poverty in Ghana by joining this team of Ghanaian MFI staff and international friends, and making a loan to a deserving entrepreneur of your choice at: http://www.kiva.org/team/sinapi_aba_trust_ama_anidaso%_tpg=fb

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To read more Kiva Stories from the Field, please visit fellowsblog.kiva.org. For information about becoming a Kiva Fellow, please visit www.kiva.org/fellows/.

Recession-proof

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By Shereef Zaki, KF9, Perú

As my first week working with EDPYME Alternativa, one of Kiva’s newest partners, draws to a close I can think of only one phrase to describe the world of micro-finance: recession-proof. Having just come out of the economic and political turmoil caused by the so-called, “Great Recession,” in the US, the vitality and celerity of micro-businesses is cast into even greater relief.

I want to begin by introducing you, the Kiva community, to EDPYME Alternativa. Born of an effort in the Peruvian Chamber of Commerce, EDPYME Alternativa is a highly effective and organized MFI whose mission is to improve the living condition of its clients by supporting their entrepreneurial activities, generating employment in the small and micro enterprise sectors, and strengthening the financing for sustainable and profitable businesses in the region.

In addition to issuing financial products like loans EDPYME Alternativa also provides the following services for its clients: bi-yearly medical checkups, agricultural capacitation workshops, technology training workshops, and sales workshops.

And to maintain their presence in the community EA also holds an annual “Chocolatá” where they give out chocolate and presents to the children of their least fortunate clients and clothing to the adults. Additionally, they collect clothing and supplies for clients who are the victims of natural disasters such as the cold snaps, heat waves and earthquakes common to this region.

In the Mercado Modelo, where many Kiva borrowers have setup stands, competition can be fierce but it stokes the fires of their ambition.

In spite of having been here only a brief amount of time, EDPYME Alternativa has already demonstrated to me the the recession-resistant nature of microfinance. They lend regardless of crisis and focus on the well being of their clients. This is a world that lacks Best Buy, Wal Mart, Staples and Barnes and Noble. Goldman Sachs, JP Morgan and the other institutions that line that gilded casino known as Wall Street have peripheral influence here.

In their place envision hundreds of small businesses and stalls that are owned by individuals so that if you walk ten steps in any direction you can always find exactly what you are looking for. For your food shopping and hardware you go to small informal vendors in the main market, El Mercado Modelo, or scattered around town. Welcome to the urban economic landscape of Northern Perú.

Teenage appetites are recession proof and provide secure business for Kiva Borrower Vanessa Lizeth

Businesses here have no shareholders and no stock options. Some people would call them undercapitalized, and yet the presence of institutions like EDPYME Alternativa gives them enough capital to turn a profit. When there is a recession in Northern Perú, people still need to eat bread, buy corn, recharge cell phones, repair their cars and buy schoolbooks. And because so many are self-employed a tangible series of economically interdependent links materializes.

And greasing the wheels of this sustainable micro-economy and the community it supports are lenders like you. One could make the argument this area is in a state of permanent recession, but the grit that coats the developing world belies the resilience of its entrepreneurs. Northern Peru’s communities rise slowly with dignity and intention, supported by responsible institutions and compassionate individuals who have shown themselves to be recession-proof; impervious to the fear caused by a worldwide economic crisis you still lend to those who need it most. And the gratitude I have witnessed for your contributions defies measurement.

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Shereef Zaki is serving as a Kiva Fellow with the new field partner EDPYME Alternativa in Chiclayo, Perú.

To view currently fundraising loans from EDPYME Alternativa, click here.

To become a member of the “Friends of EDPYME Alternativa" lending team click here.

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To read more of these Kiva stories from the field, please visit fellowsblog.kiva.org. For information about becoming a Kiva Fellow, please visit www.kiva.org/fellows/.

On Buoyancy

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On Buoyancy

As I enter the final week of my Kiva Fellowship here in Kisumu, Kenya, I find myself thinking about what my time here has taught me. Kenya is so different from any place that I’ve ever been. The smiles are brighter, the hand-shakes longer, and the hospitality warmer than just about anywhere.

I know that I’m doing microfinance, and that Kiva is about borrowing and lending. The terms, the accounts, the figures, and financials are so interesting to me, and that can sometimes seem like what it is all about. During my fellowship, I dove deep into microfinance, and it’s tempting to look at everything through an analytical lens. Even as a student of development, I always want to find the golden thread that leads you from problem to solution through the complicated fabric of global and local issues.

But, even more than borrowing and lending, Kiva is about connecting. It’s hard enough to connect to people of your own background, from your own hometown, and of your own color, tribe, or social status. How can we possibly connect to people so different from us? I don’t know if I can really answer that question, but I am inspired to tell of the ways in which I have connected to this place during my fellowship.

Kiva Borrowers

I haven’t even left yet, and I already miss the days I spend here walking through the poor neighborhoods of Kisumu visiting urban businesses close to main arterial roads and rural farms closer to where the river meets the endless lake. It’s tempting to analyze the poverty--say how horrible the sanitation is, to comment on debilitating disease, or tell stories of loss and tragedy. Those things need to be said, but for me to now harp on the sad lot of the people who are trying to make their way through life here would be to undermine the beauty of that very life. This is humanity, and in the middle of these times, which are about as tough as they come, there is beauty in the Kenyans I meet. I have learned from that beauty, envied it, and marveled over it.

A typical borrower for K-MET runs a simple business selling something: fish, vegetables, chips, beauty supplies. Chances are, their neighbor is doing the same thing or something similar. The profit margins are shrinking as food prices sky-rocket and the Kenyan economy lags. The home is full of children--the borrower’s own and those orphans who have been left behind by relatives or friends that have passed away. As I type these words, they seems so gray. And yet, the truth is that there are no human beings more colorful than these--they that work their hands ragged from dawn until well past dusk to see their children go to school, to support distant relatives, and to see their community through its struggles and growing pains. There are bright colors in their eyes, in their lives, and in the work of their hands. There is immense strength in their stature, and resilience in their optimism.

Barely a year and a half after the post-election violence that left hardly a businesses in tact, they look at me with tears in their eyes which seem to say, “Yes, at times we have nothing. Many times there is nothing for us; and yet we will continue to fight our way back to life. We will be the lasting testimony to decency, hard work, and humility that makes our nation great--and any nation with people as proud.”

All Kiva Borrower Photos1-2

Their lives have been built one step from the ledge of despair and crippling poverty, and forces beyond their control threaten always to push them over. And yet, they sing and dance and are thankful. The difficulties of life are found only in their eyes, never on their lips. Unsolicited shouts of “I am fine!” from across the street are so common! And the question follows: “How are you?”

I am thankful for the time I get to spend here. I am thankful that these hard-working, sincere, and humble individuals--these redoubtably bouyant people--are here to teach me (and us?) what it means to earn a living. I have been given so much. How can I take what I have and earn some type of sincere living of my own--not in a financial sense, but in a substantial sense? It’s a complicated question, and probably more than what we want to think about every day, but ask me again: “How are you?” After this experience? In light of what Kenya is? In light of that extraordinary grace only found in the ordinary?

I’m fine. How are you?

Joel Carlman is in his final (11th) week as a Kiva Fellow with Kisumu Medical & Education Trust in Kenya.

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To read more of these Kiva stories from the field, please visit fellowsblog.kiva.org. For information about becoming a Kiva Fellow, please visit our webpage [http://www.kiva.org/fellows].

Passing the Baton

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As I mentioned in my last post, I have spent the few months on Twitter and have decided to continue my experiment. I intend to pop in here from time to time, but while I'm away I'd like to offer you an alternative voice to tell the Kiva's unfolding story.

Kiva has been very fortunate to draw a diverse pool of volunteer Kiva Fellows who fulfill Kiva's mission in places around the globe. Whether a language student with extensive experience living in the developing world, a young professional in the financial or technology sector, or a career changer with more experience but hoping to add that rare on-the-ground international work experience, these Kiva Fellows are inspiring social entrepreneurs in their own right.

I look forward to sharing their stories with you. Each week my colleague JD Bergeron, who directs the program, will share the thoughts of a different fellow.

As a good first start, please welcome Joel Carlman, who has been working in Kisumu, Kenya, with one of Kiva's field partners there.

Blogging --> Tweeting

I blogged for 4 years, now I'm gonna try twitter. For the next six weeks, I'm going learn to live the life of a tweeter. If it goes well, maybe it will stick. Wish me luck and follow me here:

https://twitter.com/mattflannery

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