Technology and Communications
Team
Log # 6
By Binh Nguyen
This week readings go into detail about the important roles of
managing and keeping track of performance in Microfinance
Institutions. Performance indicators compare MFIs’ own performance
in different periods through six areas: portfolio quality,
productivity and efficiency, financial viability, profitability,
leverage and capital adequacy, and scale outreach and growth.
Meanwhile, performance management in general has to always make
sure that the organization’s performance is consistent with its
goal of reaching out to the needy effectively and its profits is
able to cover the incurred costs. This problem is a challenge since
more effective and closer management results in higher costs and
expenses.
Using GLOBE as an example, it is difficult and expensive to reach
the borrowers in Africa, and to visit them frequently without the
middle role of the Daughters of Charity. Aligning GLOBE’s goal with
the partner’s goal might not be a problem for GLOBE, but
geographical distance from clients is an issue that can lead to
principal-agent problems. However, a good information system and
communication system can minimize this disadvantage. On the other
hand, GLOBE is a small scale MFI with relatively small management,
so it is easier to control and keep it on track with the objectives
compared to other MFIs, which also helps to avoid principal–agent
problems. Since it is costly to get in touch with the borrowers
directly, a good partnership and communication with the Daughters
of Charity both play vital roles in GLOBE’s operation. Moreover,
because GLOBE’s financial sources are largely based on donors’
funds, once our performance is managed well, GLOBE’s credibility is
established with the donors as well as with the local authorities,
which in turn will help to secure funds in the future.
Our IT team’s performance so far can be seen in the GLOBE video,
which could not have been done without the cooperation of the
marketing team and other classmates. Going along with our team’s
goal of using technology to bring GLOBE to the St. John’s
community, we used different languages to convey the fact that
GLOBE is making its impact internationally. If we win the
Capture the Storm competition, it will be a big repayment for the
efforts of everyone in the class. However, I believe that even if
the video does not take first place, we still performed well as a
team and as a class to promote GLOBE among both the university’s
faculty and students.
Marketing and Fundraising Team
Log # 6
By Yvonne Lee
It just hit me that we have about just five more weeks before
the end of the semester. How fast time flies! I was assessing what
we have done thus far but, realized that we have so much more to
do. So far, we have finalized arrangements for the GLOBE fair, and
have a more solid plan for the three hours we will be in there. The
tote bags we ordered did not turn out the way we wanted, since the
material was flimsy and it was way too small to fit a notebook in.
We were planning to iron on our logo to save printing costs, but
due to our printer problem, we decided on bumper stickers instead.
Also, we are in the midst of designing our pamphlets, and have
finally finished the newsletter! However, we are grappling with the
fact that there is no one thing that stands out for our event. We
want something that will be the center of attention and attract
hoards of people to come. As of right now, we have many little
things like a video screening, a deejay, booths mended by each of
the teams, free mud cookies, and popcorn. Although we have
brainstormed ideas for this, there was no definitive thing that we
agreed on, so we have to finalize that particular aspect of the
fair as soon as possible.
Reading “A Better Mattress” from The Economist gave me a clearer
perspective on how we can encourage the poor to save. Even average
income people like us have trouble resisting the temptation to
spend sometimes, and we need to force ourselves to save. I thought
that the suggestion to sell “savings cards” to them is a good idea.
This way, it seems like they are purchasing a tangible good that
locks in their savings, and it is not as liquid as accumulating
money in a savings account, since they can just withdraw money at
anytime. The article also addresses the problem of making a profit
from customers who make many tiny deposits and the high transaction
costs that come with it. The widespread use of mobile phones
by poor people in developing countries may provide one answer.
People in Kenya, for instance, already use a successful
text-message-based service called M-PESA to transfer money
electronically to other mobile users. Transaction costs are minimal
with no field surveys, no paperwork and no middlemen. Tying this
back to our course, such a system may be costly to set up and we
are still unsure if all of our clients have cell phones. This is a
possibility that future classes can explore as we get more
experience in approving loans.
Finance and Risk Assessment
Team
Log # 6
By Jenai Mapp-Watson
Savings as “What didn’t happen” is a phrase that impacted me in
this week’s supplemental reading. We look every week at business
models that include savings components and many ask why we would
think that it is feasible for the impoverished to save. We base
this on our own difficulty that we have when trying to save. We
look at the things we want to buy and so often muddle the line
between needs and wants. We are so attached to what we have on our
side of the poverty line and we have developed a bad relationship
with money. At the end of the movie, Schindler’s List, someone
remarks on the fine ring that a character wore. He asked, “Imagine
how many more lives I could have saved with this ring?”
Should we sell all that we have and give it to the poor? Though a
noble life, it may not be necessary. However, there are
opportunities that we have where we can set aside just a little and
dedicate it to at least one cause. What about our own self
discipline? We should take an example from those who live on $2.00
a day but, still manage to accrue savings. What are the things that
we could cut out from our daily lives to create our own
savings?
“What didn’t happen”…the extra and unnecessary…the over
indulgent.
The reading shows that though we may be dedicated to helping the
poor financially, we are no higher than they are. We are all on the
same level. We can learn from those around us who have had a
different experiences and we can teach others from our experiences
as well.
I am now personally challenging myself to look more at where I
throw away money that could be put to better use. Not only do I
strive to follow their example and save money from what I currently
have, I also attempt to set aside a little and start a budgeting
routine so that when the opportunity presents itself to help, the
resources are there. I am challenged to be aware of my own pride,
so that it does not hinder me from learning from another because
society says that they are lower than I am. That same pride may
also cause me to think less of my own experiences and hinder me
from sharing what I have learned with others.
Accounting and Program Audit
Team
Log # 6
By Mae Hassanien
This weeks class session was extremely inspirational, to say the
least. Sister CJ Willie’s visit opened my eyes to the windows of
opportunity throughout microfinance and the many ways it can be
applied. Hearing her stories and the experiences she shared with
the class made me feel as if the opportunities for helping those
living in poverty are limitless.
The Jamii Bora project that was run by Ingrid Munro provided a
variety of programs within the project that allowed for the growth
of the community. Ingrid started her project by going to the
village for 2 consecutive days with bananas and passed them out to
the villagers. On the third day, she came to the village without
gifts to bear and when the villagers asked her where the bananas
were, she replied that they could get their own bananas through
saving, thus starting the project of Jamii Bora.
Jamii Bora has currently improved the lives of many, including
ex-criminals, prostitutes, and beggars. The story of the 2 most
notorious criminals in the village rebuilding the village after
they burnt it down and providing security for it afterwards shows a
complete change in attitude due to simple access to money. The
people who were leading the youth to violence now hoped to provide
opportunities for youth by creating sports leagues. Jamii Bora also
started a business academy to teach the borrowers of loans how to
apply their skills and manage their businesses after they receive
the loans. Courses include literacy, business management, and many
others. Jamii Bora has had a substantial increase in members
starting from 50 people and becoming 235,000 members in a mere 10
years. This program has provided many people with the opportunity
to live better, healthier lives for them and their families.
The next program discussed was one that I found particularly
interesting. It applies microfinance in a manner that I haven’t
seen before, providing live pregnant cows as the means of a loan
instead of the usual, money. This is done by simply providing a
pregnant cow to a family that earns it through training for 2
years, and a number of benefits come along with it. Since the cow
is pregnant, the calves that it gives birth to are given to other
families as their loan. The milk from the cows is used by the
families and the extra is brought to a dairy which was started
through this program. The meat of the male cows is used to be
eaten. Not only are the actual cows used to the families’ advantage
but they even put the cow feces to use. Bio gas is produced
from using the feces, which then is used by the villagers as a
means of propane to light their stoves and as electricity to light
their houses. It’s phenomenal to see how one simple cow can make
such a difference and impact an entire community.