Technology and Communications Team
Log # 3
By Cynthia Shivamber
Muhammad Yunus believes that it does not matter where in the
world a borrower lives, the problems and consequences of poverty
are the same everywhere. However, Yunes believes that access to
microcredit provides borrowers with the opportunity to change their
own lives. This week’s reading from Banker to the Poor by Muhammad
Yunus made me realize that credit gives borrowers much more than
just opportunity. Borrowers attitudes change dramatically from when
they just discover microfinance to when they actually start their
own businesses and first repay a loan.
Initially, when potential borrowers are introduced to the notion
of microfinance they seem to have the same response. They are
scared. It sounds too good to be true for a complete stranger to
approach you, and be willing to lend money to help you start a
business. While this could be seen as passing up an opportunity, in
the mind of a potential borrower, they are avoiding trouble. As
time goes by and they become comfortable with the concept of
microfinance, fear and uncertainty still may prevent them from
taking out their first loan. They may be afraid of upsetting their
husband or afraid of being unable to repay their loan. Many times
potential borrowers need to speak with locals who have previously
borrowed loans form microfinance institutions and need to be
approached multiple times before they are convinced microfinance is
a viable option. The borrower now acknowledges that there is an
organization functioning to eliminate poverty, has already achieved
success with the local community, and believes in her ability to
repay the loan.
Now the question becomes if the borrower believes in herself to
start up a business to repay the loan. Once a borrower takes that
risk and starts making payments there is a character change.
Microfinance gives borrowers hope for a brighter future. The
borrower becomes confident not only in the organization but, more
significantly in herself. Microfinance is not only providing a
means of escaping poverty but, is simultaneously empowering women.
In addition, women participating in a microfinance program may have
the chance to co-sign together with other women in the community
encourage friendship.
As a member of the Technology and Communications team, I would like
to find or develop effective methods to reach potential borrowers
everywhere to inform them of the benefits of microfinance and a way
to provide them with testimonials of those who have taken advantage
of microfinance in the past. Since some borrowers do not know how
to read or write, touch screen kiosks that would show informative
videos of microfinance, actual videos of current borrowers, and
could even display healthcare information would be good ideas for
the future of the microfinance industry. I want potential borrowers
to feel confident and to feel safe if they decide to take out a
loan. This can be done by teaching them how to avoid being taken
advantage of by microfinance organizations who function primarily
to make a profit.
Marketing and Fundraising Team
Log # 3
By Katherine Cartagena
I would love to share an anecdote about a significant experience
that I had in Colombia when I was younger. I was sixteen years old
when my vacation in Colombia turned out to be an extraordinary
experience helping out the poor along with two fathers from the
Jesuit congregation in Colombia. My plans in Colombia were to
travel to three different cities just to sightsee and tour around.
The third day I was in Manizales, Colombia I went to church with my
grandmother. To my surprise she was friends with all of the Fathers
from the church. After mass was over, we met up with Father Alberto
who wanted to meet me. When I met him, he told me that he was
starting a mission in two days in the poorest neighborhoods of
Manizales. Father Alberto was talking about the great charity
activities that they were going to have in these neighborhoods and
asked me to join him in his mission. I went back to my
grandmother’s house and thought about whether to stay in Manizales
and work with Father Alberto or travel to three other cities to
sightsee. After pondering for a while, I realized that I wanted to
do something different and not just have a typical vacation. I
decided to work with Father Alberto and help the poor.
The charity mission that Father Alberto and Father Carlos were
sponsoring was five days long. I witnessed poverty like I never
imagined it to be. I was sensitive and emotional the first two days
because I couldn’t believe what my eyes were seeing. My job
consisted of going door-to-door and interviewing the families, and
then giving them a huge bag of groceries. When interviewing the
families, it was very touching and sad to hear about all of the
problems that they’ve confronted. I was so blessed to be able to
listen to these families and be able to share my opinion and give
them advice. At the end of this mission, I realized how lucky I was
to have so many opportunities at my disposal. I learned to
appreciate my parents more, and to appreciate the food I ate, the
house I live in and the friends I have. After everything was over I
asked myself many questions like “How can I end poverty?” and “How
can I help to reduce the pain these families suffer everyday from
hunger, and lack of education?
To my surprise, I was not the only person that had also been
asking themselves these types of questions. Reading Muhammed Yunus’
book, I realized how brilliant the man was and saw that all of the
questions I’d asked myself as a sixteen year old were being
answered gradually as I was reading “Creating a World Without
Poverty”. Yunus wanted to use social entrepreneurship and business
towards helping to eliminate and alleviate poverty. He talked about
Grameen Danone Group, a social business that makes high- nutrition,
low-cost yogurt in Bangladesh. Danone was exempt from taxes and
founded a social mutual fund that did not guarantee to maximize
returns at first. I believe that all businesses in developing
countries should adopt this social aspect when starting because it
helps a lot of people in many ways as Yunus stated. Poverty can be
reduced little by little and Yunus’ goal of eliminating poverty
will become more of a reality. Yunus’ goal is to develop market
capitalism by means of making the unconventional conventional,
running an initiative for a Social Dow Jones Index, Social MBAs and
other ideas for increasing the visibility and feasibility these
businesses.
Finance and Risk Assessment Team
Log # 3
By Marco Sementilli
It has been 2 weeks since the GLOBE class has met in the
classroom, but there has been A LOT going on during this time. To
start, the Finance Team has approved 6 loans from the Congo. It was
an interesting experience, with one horrific mistake, which I will
explain later.
It was exciting and difficult to go through these loan
applications to find the best candidates for funds. I wanted to
help every single applicant, I wanted to give everyone the chance
to live their lives outside of poverty; I simply could not. There
is no teaching a student who the best applicant is, or what kind of
applicants we should look for. You look at these pictures, and in
most of them you can see sadness in their eyes. And it hurts to
look at, because your first inclination is to accept it. But then
the next thing you know, out of the 34 loans you looked over, you
have 34 approvals. So there needs to be some sort of guideline. You
need to accept the fact that not everyone will get a loan, and it’s
a bitter realization. So I read through all of these loans and had
a list of 14 or so applicants that I felt would benefit from a
loan. After meeting with the rest of my team, we brought this list
down to our six loan acceptances (or so we thought).
We thought we had everything going as planned. We reviewed all
of our loans, we made our decisions and sent them away for
approval. Since I am the liaison for the Finance and Risk
Assessment Team, I will take full responsibility for our actions.
We made the mistake of approving two loans that have already been
accepted last semester. This embarrasses me. All I needed to do was
look at the portfolio for loans issued by GLOBE and I would have
seen that these two individuals have already been approved. For a
student-managed class, we often forget that everything is on the
student’s shoulders. This isn’t a normal class where the professor
tells you what needs to be done and you do it. This is a class
where the students tell fellow students what needs to be done, and
it is done. This was a mistake that could have been avoided
quickly, but instead we let it slip through. There needs to be a
huge attention to detail in a class like this, and we didn’t even
think to check. One thing is for sure, a mistake that was made this
week will most certainly not happen again for the rest of the
semester.
The most exciting part of the past 2 weeks was learning that I
was chosen as one of the GLOBE student fellows for the trip to
Vietnam in May. I was sitting in my car at a red light when I
grabbed my phone, saw that I had an email and reading
“Congratulations.” I started shaking in excitement, repeating “Oh
my God, Oh my God, Oh my God” over and over. Words cannot describe
what I was feeling when I read that email to find out that I was
chosen. I knew that I was a perfect candidate for this role, but it
was up to my peers to decide. I can’t wait to spread the word about
GLOBE and to meet potential loan applicants. It will surely be a
once in a lifetime experience. Traveling to the other side of the
world for such a good cause, to represent my country, my university
and my school program… the only word that comes to mind is
amazing!
Accounting, Program Audits and Enterprise
Development
Log # 3
By Oluwabukola Ayeni
“Some see microfinance as a source of major social
transformation. Others see it as the seed of a revolution in
banking access. True believers push for both.” – (Armendariz and
Morduch, 2010, p. 239)
As a business major in college, the school curriculum usually
educates students on the major goal of corporations, which is to
maximize shareholders’ wealth. Microfinance is not commonly taught
due to the fact that it is not the approach that most institutions
take when it comes to achieving these goals because truth be told,
it is not as profitable. Thankfully there are people whose goals
are to actually provide for the community and of course uplift
people living in poverty. Microfinance nowadays is seen as the
revolutionary turn of the business world but with every bright
idea, there are disadvantages.
Microfinance institutions statistically are not as profitable as
commercial banks which is one of the main reasons a lot of people
do not follow in that path. However, there are certainly those who
believe that all that can change, viewing microfinance as the new
world initiative for world peace and better living. Sadly,
microfinance is not for everyone. It may seem easy the way NGOs and
Grameen Bank are operating in Bangladesh, India, and Kenya, but
keep in mind that the amount of money given in loans in those
countries are fairly small. It would be great to establish a
microfinance institution here in the United States providing for
the poor but in my opinion, the same results will not be achieved.
The standard of living here in America is much higher compared to
countries in Africa and third world countries in South America.
Whereas a $150 loan can provide a strong foundation to start a
business that provides for the whole family in Nigeria, $150 is
just a week’s worth of groceries, not merely enough to rent a store
nor an apartment. It seems unfair but that is just the way life
is.
As microfinance continues to rise and flourish, there is a great
chance that developing countries will soon grow out of their title
of being poor countries. When the people are able to live decent
lives and there is little to no more people living in poverty, the
average income of countries will increase therefore resulting in an
increase of the standard of living and GDP. Ultimately, if
microfinance continues to grow, there may come a time where there
will be no need for microfinance institutions. Unfortunately we
have not reached that time. I am looking forward to the weeks ahead
as always. Although my group may not deal with loan applications or
informing people of GLOBE and what microfinance is about, we still
have a purpose and duty that affects our donors and borrowers.