Each semester, students enrolled in the Global Microloan Program will update this site with their weekly program logs and final student presentations.
Spring 2010 Team Members
Log # 1
By Andrew Chan
I am so glad to have the opportunity to participate in the GLOBE program. In the first two classes, I have learned much more about the history, roots and implementations of microfinance. The Two Cups of Tea presentation was a truly inspiring event. After the event, I felt more aware and informed of what is going around in the world. I was inspired how even children can make a difference. This was a motivating factor for me to get more involved and a catalyst to put my best effort in this course. The readings that were assigned have been very interesting. I particularly liked The Economics of Microfinance by Beatriz Armendariz. As an economics major, I have been studying economic theory. This background helped me understand how the concept of microfinance operates in theory. The other readings especially Banker to the Poor, by Muhammad Yunus, let me see poverty in a different perspective and how methods were initiated to alleviate it.
As part of the Technology and Communications Team, I am excited to work with my team members to make sure our websites are well maintained and that we can establish efficient and timely communications with the Daughters of Charity, our clients, and our donors. I hope that we can improve the website, make it more informative and spread awareness about our program. I can’t wait to meet with the Fall 2009 managers to discuss our objectives and strategies with them and to get their feedback. I welcome the challenges and tasks up ahead and hope we can make this semester another success!
By AJ Magali
The course of events that have led me to join GLOBE is something of a personal story. I was born and spent the first ten years of my life in the Philippines. The country is a Third World Nation, one mired by corruption and poverty. I had a naïve, innocent understanding of poverty and what it means to be truly poor. During the break before the semester, I returned to the country where I was born for the first time in thirteen years. What transpired was somewhat eye-popping and it awoke me to a new view of how to see destitution. I saw beggars in ragged clothes, there were people living in shantytowns with houses that could barely survive the rain, and worse I heard reports of people drowning when a typhoon hit the country a few months before my visit.
When I arrived into the D’Angelo Center for the first GLOBE class, I entered with a single-minded purpose of figuring out how to use microloans and microfinance to better arm the people of the Philippines with the understanding that they could start their own businesses to better their lives. I was dead set in making a difference in people’s lives.
Yet, when I arrived into the classroom, I was shocked with the back- stories that brought the students together to collectively serve a purpose. I was not the only person that had an emotional tie into the group. Everybody did. Everyone in the class had a deep understanding on the ideals that were built from Muhammad Yunus’ mission. Each member seemed like they were willing and primed to make sure that they could make a difference.
And with that said, I’m quite excited in this upcoming semester because I feel like the group assembled will be up to task in making sure that we further the cause that the past GLOBE classes have started. Their seed, we will sow. And what makes this class and this group so great is that this is not a one-man effort. It’s a team effort. And we’re about ready to make our impact.
By Minela Feratovic
I am honored to be part of GLOBE, a program that utilizes the concept of microfinance. I have heard nothing but good things about the program from my peers. I am prepared to expand on the success of this very program.
Microfinance is a revolutionary approach to benefit low-income women and men. This economic development is an excellent move toward alleviating poverty. It is not charity because the loan recipients are learning how to work their way out of poverty. These entrepreneurs have capabilities that they can use to successfully accomplish the needs of their business. Most of the entrepreneurs are women because they are more likely than men to use the money they make to help their household. The Grameen Bank, founded by Muhammad Yunus, is a prime example of how small loans help the poor. Yunus is an inspiration. His microfinance initiative proved that the poor are bankable.
In the last class we started to get down to business. We were shown a video of a woman who received a loan that helped her tremendously. It motivated me because I know that this program has the power to change someone’s life for the better. A history lesson followed the video. I learned that microfinance is not a recent development. It’s been in existence for quite some time. Only recently has microfinance generated a great deal of interest. The microfinance approach is undeniably working and I am more than ready to jump on the bandwagon.
I am thrilled to be on Finance and Risk assessment team. My team will play a critical role in the entrepreneurs’ fight against poverty. As a group we hold the decision to approve or deny loan requests. This will prove to be a daunting task because we are the ultimate decision-makers that help pave the way the applicant escapes from poverty. As a group we prioritized our critical tasks. Developing measures of the project’s success and evaluating the progress is one of our top priorities. Even though we prioritized the tasks we were given, we understand how important it is for us accomplish each task with all of our efforts. My team will face challenges throughout this semester but we are ready to do whatever we can to tackle them.
It’s early into the semester and I am extremely excited about the progress the Spring 2010 is making. Every microloan manager in the class is eager to make a long lasting impact. We have a strong group dynamic that will undoubtedly make the program better than it already is. I am enthusiastic about the program’s future.
By Gabriela Papadopulos
It has been only two weeks since the first meeting of The GLOBE Microloan Program but for this short period of time we have established a strong entity, I would name it a family sharing one ultimate goal: to reach out to the poor and give them a chance to survive, grow their potentials and engage in constructive activities . Being aware of existing inequalities, I remain struck by the fact that half of the world population lives on $2 per day and 1 billion live on less than a dollar. It is painful to admit that poverty is of such a great scale, and therefore it is my obligation as part of the program and as a member of the accounting team to facilitate the shift of funds from those who have them in excess to those who are in need.
Microfinance focuses on what formal financial institutions seem to omit, i.e. the vast majority of people who are stamped as deprived of credit reliability due to insufficient income or lack of any collateral to guarantee the repayment of their loans. Isn’t it paradoxical, however, that impoverished people who are typically disqualified by banks, display a 98 % rate of loan recovery, which significantly reduces the default risk for lenders. A possible reason for this is their higher working ethics and motivation to justify the chance they have been given.
We should also not forgo the importance of microfinance to women who appear to have the best credit ratings. The impact of miniscule loans on their lives goes much further than the reach of our imagination. The ability to control their own income and manage their funds transgresses the oppression of female rights and empowers them as individuals, mothers, wives and members of their societies. Being able to develop small business enterprises and provide for their children’s education and healthcare is what marks a significant improvement in the quality of life of their families. I could closely relate females and their trustworthiness as potential borrowers to an article written by Nicholas Kristof where he claims that men in the poorest families tend to spend 20 % of their income on alcohol, cigarettes and other extravagant activities as opposed to women who would reinvest 40 % of their gains into further development of the small businesses they are running.
If anything, one thing is certain- there is a long list of goals down the road for us to achieve. However, there is nothing more rewarding than being part of a program that prepares households and individuals to join the mainstream of economic and social development.
By Binh Nguyen
Last week was our second week with GLOBE and we have been asked to come up with a topic for our research paper. Our IT group is facing two difficult options for our research topic. Firstly, as the Technology and Communications Team, we realized that communication is a severe problem that is recognized by people working in microfinance, particularly Dr. Muhammad Yunus, but the issue was never solved thoroughly before. Secondly, it is crucial for MFIs to make sure that the loans arrive in the hand of the poor fully, which means MFIs actually have to come up with solutions to keep the money out of reach of the corrupted authorities in developing countries. In addition to working on the research paper, we started to get familiar with GLOBE’s page on Facebook, Twitter, and GLOBE’s email accounts. Moreover, we also came up with our IT Team’s Gmail account which allows us to keep up to date with other groups’ work.
I found the chapters for this week’s readings, quite interesting. The readings, on one hand, pretty much involve identifying a target market, in other words, identifying who the poor are and analyzing the impact of services on that market. On the other hand, it points out that the effects of cultural, religious, ethnic and political factors apparently define the unserved and underserved group; and influence the types of service needed by the target market. Undoubtedly, the importance of identifying the target market (identifying who the poor are) connects closely with an MFI’s long-term goals which are outreach and sustainability. Indeed, these two goals are equal in importance, and strongly depend on each other so that MFIs maintain its objectives of servicing the financial needs of unserved or underserved market. In the process of identifying the target market, the author of Microfinance Handbook stated the central role of focusing on female clients who obviously are the most unserved and underserved group in every society. Taking Dr. Muhammad Yunus’s story of Grameen Bank as an example, women in developing countries like Bangladesh are mistreated by the society they live in for so long that they never got a proper education, training and access to borrowing before microfinance institutions like Grameen Bank reached out to them: “Women face cultural barriers that often restrict them to the home, making it difficult for them to access financial services.” (Ledgerwood. 37). Seeing the successful result of lending loans to women in Bangladesh that Grameen Bank has done, the vital role of women in reducing poverty becomes clearer. And Joanna Ledgerwood states in Microfinance Handbook that: “The objective of many MFIs is to empower women by increasing their economic position in society.” (Ledgerwood. 37)
Apart from being interesting, I also found out that the books are useful in the way that the authors actually teach us how to actually run a MFI efficiently and effectively, which will be also very helpful for us when working on our tasks with GLOBE.
By Amanda Leys
Going into week two, the marketing team and I felt much more organized and equipped. After meeting with last semester’s marketing managers we were able to draw from their experiences, both positive and negative, and come to some conclusions about the direction we wanted to take. One of the most frustrating things about GLOBE is when fellow St. John’s students have no idea what it is! Keeping this in mind we tried to imagine an event that would raise awareness about Globe both as a class and a cause. With the venue and date pending- this was a little difficult. But we tried to keep up momentum and explore some of our other marketing tactics.
Firstly, the newsletter. I feel that this is one of the most important aspects of marketing the program. Keeping our donors and followers up to date is crucial to remaining relevant. Our followers have to know that the loans are going out, and that we are expanding. AJ took the reins on the writing. Next, after speaking with last semester’s managers we discussed our options for an item to sell. The bracelets and the t-shirts are the current products. In promoting GLOBE as a cause, the bracelet is ideal because it is wearable on an everyday basis- however it may not always catch the eye and it doesn’t say anything more than the program name. Bearing this in mind, we came up with the idea of some sort of tote bag. This product would be usable, wearable, and informational. It could have the logo, the name, and an explanatory motto, “Students fighting poverty one loan at a time.” But creating such a product will require design and preordering. We may find that this is out of our price and time limits and then there is the issue of ethical production.
Moving on we also tackled a yet unused fundraising technique- letters! Yvonne drafted a simple informational letter that could be sent to potential donors. I am in the process of designing an attractive email that could be sent out. The thought occurred to me that if everyone in the class contributed 10 email addresses- friends, family, coworkers, etc. we could add numerous contacts to our database. If they forwarded it on, then our numbers would grow even further. Having already created an email account on Gmail we could add all the names to our contacts to easily update the database. We should also work with IT on this to add email contacts to the [email protected] account. In addition to these plans, we hope to create a “press kit”- some sort of info packet or brochure that would be ready at a moment’s notice to send out to anyone from donors to newspapers to students.
Another task we deemed highly important was the creation of a folder or binder that would keep track of the work we did as marketing managers and could be passed on to future classes. We felt that last semester’s team accomplished so much, however the resources they created were somewhat scattered. Making the transition between manager more efficient will allow for more to be accomplished.
Again, the week ended with a full plate. I can’t help feeling that we have a lot on our hands and even more on our minds. But I mean this in the best way possible. We are so excited to gain exposure and see our ideas come to fruition. I can’t wait to see the results!
By Amanda Pasciolla
Despite still being early in the semester, a number of challenges have not failed to arise and quickly present themselves. Working in the informal sector is proving to be difficult, especially when communication with those whom we are giving loans to is virtually non-existent. Being that most of the loan applicants are illiterate, obtaining the proper information about the loan and its purpose is complicated, and a lack of basic information is a huge obstacle in deciding whom to accept. The criteria for how our team will choose is still being decided, but it is clear to all of us that it cannot be based on emotion and feeling alone. If this were the case, it would prove to be an impossible decision to make because all their stories are so very moving.
It is one thing to read books and articles regarding poverty and the difficult challenges faced by many around the world; and another to receive personal statements, written by the individuals themselves, that directly ask for your help. A widow with six children seeking to provide food and support for her family, men and women whose goal is to be self-dependant, a woman with eight children to look after and a husband who struggles to find meaningful employment, and the many applicants who hope to send their children to school. Choosing who to respond to is far from easy; and again, a lack of basic information regarding the purpose of the loan and business activity for which it will be used is the biggest challenge.
The readings stress how a microfinance enterprise needs to first decide whom they will target for loans, and what level of the poor they wish to focus. In our situation, choice is not a factor as we are sent applications at random from the Sisters of Charity working in the field with these individuals. Additionally, it is said that the level of business development is another consideration when determining the type of business a loan program wishes to provide financial services to. In trying to determine the level of business development of our applicants, the lack of information provided again proves to be a challenge. However, based on what information we have been given, many of the individuals appear to be stable survivors, those for whom microenterprises help to provide a modest living, the goal being to reduce poverty. However, some applications have been received asking for money in order to grow an already existing business as growth enterprises, while other applications can be categorized as unstable survivors, coming from households that lack any stable flow of income. Again, I knew it would not be easy deciding what loans to accept, but it is proving to be more difficult than I had previously imagined. I have been told by those who have had to make the same choices that doubt will always be a factor and faith and trust, not always reason and certainty, will have to be relied upon. I can only hope, with confidence, that we make the right decisions.
One of the major topics discussed in this week’s readings was the impact analysis of microfinance, being able to determine if intervention has had the desired outcome, in this case, has helped that individual positively provide a better life for him or herself and their family. I did not realize the many factors and small details that all need to be considered when determining the effects of microfinance. Furthermore, it will prove to be very difficult for us to determine the effect our own loans have made because of the lack of communication that exists. Those in the field trying to examine the effects of loans directly have trouble determining their impact. It is no doubt, that being thousands of miles away from our loan applicants will be a challenge when evaluating the success of the loan. However, to learn of any effect our loan is having on the individual, no matter how small the report back may be, would be extremely gratifying.
I did not realize that the impact of microfinance was in as much debate as it is today. As explained in The Economics of Microfinance, finding a control group in which to base studies against is alone extremely challenging without even considering the actually process of making such an evaluation. He explains that results vary considerably, and that some studies have found little profound evidence that microfinance makes a difference, except to help diversify income streams. However, there are so many factors to be considered when making such assessments that it is not a surprise why different studies yield such varying results. As explained, it is impossible to truly accurately determine the impact when dealing with human beings because there is so much to be considered, and the effect may be personal and unobservable in many ways.
I was feeling uncertain and very much disappointed in finding that such a strong skepticism exists around microfinance; however, after reading Muhammad Yunus’s book, it is hard to not believe that the effect microfinance is having in many cases is profound. A study or numerical equation cannot measure the level of confidence and self worth gained by a woman when she receives a loan to support her family, after being told for years she is worthless, nothing but a burden. The amazing story of Amina and the extreme level of cruelty she had to face from members of her own family, after returning home to find her own house had collapsed on her daughter, is disgusting and proof that these women need help. The fact the wealthy women cannot take out a loan from a commercial bank without verification of their husband’s approval in many countries is astounding. It is confirmation that a poor woman, whose life has been reduced to begging, has no hope without microfinance institutions, like Grameen, in receiving a loan. Therefore, there is no doubt in my mind that the impact microfinance is having and can have is endless. Whether institutions are carrying out services efficiently and in ways that work best for loaners can and should be debated; however, the positive effects microfinance can have on these women’s lives should never be underestimated.
It is clear that understanding the culture and social obstacles of a certain community is key to providing a successful loan program and evaluating its effects. When riding a bicycle is considered inappropriate for a woman, meeting and payment offices have to be of walking distance if the program is to be successful. Similarly, the fact that Muhammad Yunus has difficulty communicating with women because social law provides they not be in the same room alone together, in addition to the fear and skepticism that already surround loan programs, is a testament to the many challenges faced by microlenders. It no doubt puts into perspective how difficult our fight to provide loans from St. John’s University to those around the world will be, but in the words of James Grant, “It is doable!”
By Christina Demos
In order for the accounting team to continue to move forward we need to push through a couple of setbacks we are facing. During our last class the accounting team decided on the need to update our databases and obtain a version of Quick Books Pro. Compared to the Excel databases currently utilized, the use of Quick Books will enable the team to work more efficiently and accurately. In addition we are having issues with attempting to find ways to locate where the funds are, at all times of the lending process. This is a difficult process being that it is hard to stay in contact with the daughters of charity, the banks and the borrowers.
As an assignment for the week, the team came up with ways in which to determine the successes of the loan program. Some of the ideas that were suggested were to assess social and economic factors of the borrowers before and after the loans are distributed. The social and economic factors will be assessed with a series of questions that request employment status, land and property ownership, access to water/sewage connection and access to healthcare. Through out the week the team also came up with an idea for our term paper, “The emergence of Social Business in Today’s Economy”. I believe that this topic is intrinsic to the course and it is a strong value approach to the work the class is performing.
In continuing to read the assigned books, I found that Muhammad Yunus also had difficulties when starting the Grameen Bank. He had experienced problems while trying to find borrowers. In order for an individual to even become a prospective borrower they are required to find four other willing borrowers and organize themselves into a group. This was especially difficult for women because they hardly had any rights or respect from village men. Second Mr.Yunus had experienced difficulties in collecting the loan repayments. Accounting for the daily repayments was troublesome because of the methods of collecting. A popular village man, whom volunteered to be a collector, did not have an accurate accounting method to note which borrowers repaid and which of the borrowers he didn’t collect from. As a result many of the borrowers opposed when informed of their missed installments.
To conclude with my second log I would like to state that I am very hopeful. Our minor difficulties are only temporary. I know that through hard work we will achieve our goals. The success of the class will reflect on the achievements of Muhammad Yunus and The Grameen Bank.
Log # 3
By Eric Suen
Productivity is the key to success. With the first loans given out in January, everyone in the GLOBE program is very happy. It gives us hope that the poverty in the world can be fought and the GLOBE program will continue to fight the poverty so long as the program is out there. I personally hope that there will be more loans given out this semester. Our goal every semester is to give out more loans and help fight poverty in the world.
To help the progress, every group has given their all. After four weeks of classes, the IT team has been able to come up with what we want to accomplish by the end of this semester. Everyone in the group has been contributing to keeping Facebook, Twitter, LinkedIn, the GLOBE website, and e-mails updated with the current events. We were asked our goals and here they are. The first goal is to create a sky drive which will allow all the students to have any files from the GLOBE course available and easy to access. This will most likely be done through Google documents or through the St. John's University’s server.
The next goal is to obtain a Flip video camera which will allow the IT team to record videos and take photos during events. These videos and photos will all be posted on all the GLOBE websites. This will be continued on through all the future IT teams. Another goal that is central to GLOBE program will be to give out additional loans by the end of this semester. This seems to be the main focus of every semester and will be the focus for upcoming future classes. The IT team will keep updates for when the loans are given out and keep the donors and alums updated on what has been happening.
From our first few loans given to Nigeria, we were given an article to read entitled “Microfinance in Nigeria and the prospects of introducing its Islamic version there in light of selected Muslim countries’ experience.” This article explores the different challenges that face the Microfinance institutions in Nigeria and possible solutions. One challenge that is stated in the article was outreach to the many that are in poverty. This seems to be the focus for every microfinance institutions and even for the GLOBE team.
Through use of IT and communications and marketing, we can overcome the challenge and allow the world to be able to fight poverty. Communication is key to getting the word out about what we’re doing and through IT and marketing, we will help to make aware everyone about the GLOBE program.
Log # 3
By Nicole Pasciolla
I cannot believe we are almost at the half way point. My time in GLOBE is going by very fast and there is still so much the marketing team wants to do. This past week we have accomplished so much and every time we get together we become more organized and the goals become clear.
One of the main points we talked about this week is the upcoming GLOBE event that will be held in April. We have thought a lot about what the goal of the event will be, and it is decided that we are going to aim our efforts at the St. John’s community. In order for GLOBE to grow further, our own St. John’s community needs to understand who we are, and how much of a wonderful impact we can have in other countries. Plus, it is truly important to reach out to our students because St. John’s is such a diverse campus. We have students from all over the world that come from all difference cultures that have been exposed to what Microfinance is trying to fight. Many students can relate to our program so much, and I want them to become exposed to GLOBE and see how, even though they may be far away from their home and culture, that there are still great things they can do. I feel that St. John’s students will be very enthusiastic.
Students who have grown up in the United States can also greatly benefit. I feel that many of us are closed off to the real world. Even though there is inequality and poverty in the U.S. it does not compare to some of the other countries that microfinance reaches out to. Only being in the class for a short time, my eyes have already been opened to a world that I did not know about. The extreme poverty, abuses toward women, and the social norms that some societies have accepted all over the world is something that I never exposed myself to or took the time to learn about. Microfinance has changed that for me, and if we can reach out to St. John’s students, I hope it can do the same for them. Being part of the marketing team, our goal is not just to raise money, but we want to educate people on what microfinance is and the great affect it has. Many business students have never even heard of microfinance, and this is what needs to change. St. John’s GLOBE can be a leader in this.
For GLOBE Day we are planning to have all mini events going on. There will be GLOBE products like shirts being sold, there will be an informational video playing, there will be informational booths, there will be mud cookies, facts on all the tables, and great decorations to attract students. We are still thinking on how we can make it better, but this is a great chance to educate and raise money.
Some other great strides this week is the outreach to other communities and high schools. I have written up a preliminary letter to send to an all girls catholic high school in New Jersey that I feel would be perfect to reach out to. This is a great audience to reach out to because they strive for women empowerment. I would love to talk with them about microfinance because they could truly help GLOBE and raise awareness about microfinance. Also, the fundraising letters and the newsletter have been fine tuned and are almost ready to send out.
I truly love microfinance and I really want to get the word out about it. The more I read the more I learn and I cannot believe how naive I was toward certain things. If people were more informed about things, I feel there would be more active change. Just the mix of cultures I have been exposed to by reading is amazing. The wonderful part is that in many cultures microfinance has fit. Microfinance can fit into many different cultures because it respects the culture it is in. This is so special, and the more I read the more I want to know and the more I want to share.
Log # 3
By Hadia Sheerazi
This past week has been a blur of activity: emails have been flying back and forth, we’ve been doing research on the costs of computers and chemist shops in Nigeria, poring over our books, tweaking the loan application and trying to decide on our countries for the research paper.
Now more than ever, I realize the enormous responsibility that has been bestowed upon us – we have to decide the fate of the hopeful borrowers who have sent us applications for loans. As I read and re-read their applications, and deliberate (both internally and over emails with my group) I wonder if I’m making the right decisions. I am moved by their stories and I am enthused by the opportunity to literally make a difference, and yet I have a responsibility to the GLOBE managers, our fund, and the university to make the right decision. As I try to piece together the stories of these two candidates, I find myself trying to imagine their circumstances. I know that I must not allow emotion to guide my decision making, but how can I not think of their circumstances, of their frustration at being unable to make ends meet, or their disappointment at not being able to find adequate employment? Risk is a part of the endeavor we’re undertaking. Calculated risk, however, will allow us to make wise decisions.
We’re trying to change the loan application slightly, so that we can gather more information about our borrowers, their communities and their lives. We have too many unanswered questions, and too many queries. Yet I worry that the application might be too long. It’s hard to decide what the line between “not enough” and “too much” is, especially given our technological and communicational limitations. I’m hoping that the cell phone or calling card ideas get approved so that we have some way of communicating with the Daughters. I’ve been racking my brains for other options but I should probably wait to hear what the Steering Committee decides.
On that note, we’ve also been trying to list factors that will help us evaluate the impact of microfinance on these individuals and their families’ lives. It’s hard to gauge the impact, and as Armendariz points out in Chapter 8 of The Economics of Microfinance, “we have to ask whether these changes would have happened without microfinance,” (Armendariz 200). This is even more important as we need this data as proof that microfinance is the most effective way (if not the ONLY way) to pull people out of poverty. We face several critics, skeptics and theorists who doubt the value of microfinance, and we need all the proof we can get to prove them wrong.
I especially liked Chapter 19 of Bornstein’s How to Change the World. I could relate to the example of the provision of ORS (oral rehydration salts) to prevent children from dying from diarrhea (249). As I read this chapter I recalled the countless commercials I had seen on television, having grown up in a third world country where disease was a foe the poor battled daily. It’s tragic that so many people live lives of deprivation and despair – why should they have to go without, when there is enough to go around?
Yunus, as always, is providing me the most food for thought and the best advice. In last week’s class, I suggested that we consider giving some sort of reward or bonus to the borrowers for repaying their loans on time. Yunus writes about the difficulty poor people face when it comes to parting with large sums of money, and how that can be alleviated by making them return the loans a little bit at a time. I think the idea of a bonus or gift of some sort might be a useful incentive (as humans we can’t help but respond to such offers!). I just hope that the idea gets a nod from the steering committee.
I think what I love the most about this class is how I’m finally able to actually DO something, and each day I find myself coming up with newer and more creative ideas on how to make GLOBE more effective. I always wondered what kind of executive or decision-maker I’d be, I wondered if I’d be able to rise to the occasion and come up with solutions to problems. I’m so glad that I have a chance to see that I can do it. My dream to make a difference is not just an intangible idea, it’s slowly but surely becoming a part of tangible reality.
Log # 3
By Mae Hassanien
Culture, a major influential issue that has arisen in the world of microfinance, was the topic of this weeks lecture. The differences in the traditions and values of a country’s culture are always obstacles when trying to present new ideas. In one country, it may be considered disrespectful to shake the hand of a new acquaintance while in another it is an honorary gesture. Spreading the idea of microfinance also faces the issue of culture.
Muhammad Yunus discusses the issues of culture differences he faces when trying to establish loans to potential borrowers. The main problem he comes across is the concept of purdah which “refers to a range of practices that uphold the Koranic injunction to guard women’s modesty and purity.” This was a major interference in the works of Muhammad Yunus because he was unable to interact directly with the women to allow them to feel at ease with the concept of microloans. The only approach Yunus could take to getting the borrowers to hear his ideas was to have on of his female students work as a middle man and run back and forth between Yunus and the women of the village. This was a disadvantage because sometimes words would get lost in translations and ideas wouldn’t be fully transferred. Not only were the woman of the village hesitant about speaking to Yunus, but even his female employees faced troubles explaining their job to their family and sometimes were forced to quit. It is truly astonishing how different of a technique Yunus has to use based on his target population. Had Yunus wanted to speak to women in another country, such as America, he would not face any of the troubles he went through in the Islamic villages of Bangladesh.
Other cultural issues can have an effect on the terms of a loan and the manner to which the loan is given. For example, a country in which a borrower’s reputation is known and considered extremely important giving group loans may be the most effective approach because the borrower will be less likely to default in fear of tarnishing his/her image. Also some communities may be used to working in groups and may functions better that way, while others will succeed with a single handed approach. Overall the issue of culture is one that plays a massive role in the idea of microfinance whether it be helpful or hurtful.
Log # 4
By Bria Spease
This week has been kind of intensive. It seems backwards since we had less reading this week, but organizing the next couple of weeks for GLOBE, in respect to IT, has filled my week. Coming up on the midterm made me realize that there is so much that we want to get done as a team and personally for GLOBE. Time is starting to run out. As we put together our midterm reports, we created a timeline for projects and events that are coming up. Luci was a major help in this because she gave us some amazing ideas about how to bring awareness to GLOBE, both internally and externally. We are extra excited about the “Capture the Storm” video contest. Although, it’s a very small amount of time to get it done in, we think it’s possible. Hopefully, the whole class will be excited about this contest, especially since we can raise $1000 for GLOBE.
Reading the microfinance handbook reminded me of Management Information Systems. This is important to microfinance because it’s a way to keep track of everything that goes on. This was especially interesting because we are working on corruption for research topic. Management information systems can help to create a system of checks and balances. The Youtube video we watched last week in class really put poverty in perspective and placed it in real life. To see how people live everyday in this section of the Philippines made me grateful of all the opportunities I have. It especially made me realize that everything I call a necessity, these people barely have and they survive without it. It kills me that people are still living in poverty in 21th century. I am just so glad that there are a whole group of people (GLOBE) dedicating their time to the plight of poverty.
Log # 4
By Connor Cherry
It’s hard to believe a month has flown by. Looking back on what the marketing team has accomplished in a matter of weeks explains why I have not had a moment to realize where the time has gone.
As a team, we have managed to create many new marketing tools for not only the current GLOBE class but GLOBE classes to come. One obstacle we encountered as a team is the lack of communication between GLOBE members each semester. As many people know, communication is an essential component to the success of any organization, which is why the marketing team is working diligently to improve communication. Not until being accepted to GLOBE did I realize the amount of time and effort it takes to create a stable skeleton for a new organization. The marketing team and I have taken the initiative to create standardized documents that can be passed on from class to class. These documents are the framework for the marketing team and can be utilized by future classes to improve communication within GLOBE community. There never seems to be enough hours in a day to complete everything that the marketing team hopes to accomplish, however if we can help future classes by creating these documents their time can be dedicated to new exciting projects. I can enthusiastically say that we are currently standardizing three types of donation letters, a press kit, pamphlets and newsletters.
When we are not working on the documents, we are designing new merchandise items and planning a GLOBE fair that will take place April 20th. We have chosen to focus our marketing this semester on the St. John’s community, which includes all three New York campuses. The GLOBE fair will provide an opportunity to expose, enlighten and inspire the St. John’s community to the great works of GLOBE. I am proud of the marketing team and what we have undertaken in such little time and look forward to what will be accomplished with another month under our belt!
Log # 4
By Rahel Solomon
Can microfinance be considered unethical? Is microfinance always ethical? As it appears there are valid arguments against microfinance, as well as a plethora of supporting arguments for microfinance. We discussed in class, the ethical issues regarding Microfinance. We realized that although on the surface microfinance appears to be only for the benefit of recipients and their communities, microfinance could also cause harm. Cash infusions into communities that hitherto didn’t possess capital but rather bartered for their livelihood could cause dangerous competition within the community and the finance gangs and other underground groups. While the arguments against microfinance are valid, I still believe that the advantages of microfinance far outweigh the negatives. Included in the plethora of benefits of the microfinance program include women gaining better knowledge of community social issues, and aiding women in social / political mobility within their community.
When the actual impact of microfinance is examined, we realize that microfinance has helped more than 100 million people out of poverty. In the context of the larger picture, 100 million is a very small percentage of the world’s population. In addition, we recognize that microfinance tends to help those people who are not the poorest of the poor; in fact those that benefit from such loans are better off financially than the poorest of the poor because they have better access to landlines, the internet, and may possess some knowledge of English- all of which facilitate the process of making the microfinance loan.
We watched a short film about the effect that the Homeless People Federation of the Philippines is having on the Philippine people. The film underscores the importance of saving not only in developed nations like ours (though we’ve also started to appreciate the importance of saving due to recent financial events) but, also for the poor. What we’ve come to understand is that though individually, the saved amounts may not add up to something great- collectively within the community, the amount is substantial and this amount enables the purchasing of land. With this purchase of land, the people of the Philippines are taught to handle the community’s needs, how to properly handle their own finances, the best strategies for securing land, and even how to bargain effectively for land. They are also taught the legal and technical considerations accompanied with owning land through various training programs offered. The funds saved are not only used for acquiring land but also as an emergency fund for the savers; community leaders are very important in encouraging the community and unifying the community.
Another active organization in the Philippines area is the Urban Poor Development Fund which has acquired more than 30M Pesos worth of land and has used 11M Pesos for site development. The poor in these communities are empowered to improve their own community rather than rely heavily on the government or corporate sector which is often more expensive.
The poor are leaning valuable lessons in saving, bargaining power, basic money management and though the skeptics argue against the success of microfinance, we choose to believe that we are making progress in the right direction and the future of microfinance has never looked more bright.
Log # 4
By Jennifer Specht
It’s hard to believe, but we are already half way through the semester!
The Accounting Team is working hard as usual. Although we have accomplished one of our most important goals that we have set for ourselves we still have much to do. During the last class, we were able to finalize our ideas about different ways we could measure our success as a program, as well as helping our lenders. We will be presenting these ideas to the class during our midterm progress report during the next class session. The Accounting Team also had a set back from last class where we determined that we should not purchase QuickBooks like previously thought, but make our own accounting and records files in Excel. It will be a little more difficult and tedious to do it this way, but we feel it is the best way to go about keeping our records at this point in time due to the fact that we do not have a central computer to keep all our data and information stored on. By using Excel, all the members of the Accounting Team can access the files when needed and we can all send the file to each other over e-mail rather than referring to one computer or having just one person be in charge. Creating and improving upon these files will be a big goal for the rest of the semester.
The (Chapter 7) reading by Joanna Ledgerwood in the Microfinance Handbook stated many points about creating accounting files that my other teammates and I discussed last class about the importance of accuracy, creating reports, making the files user friendly, and security issues. Ledgerwood also stressed the importance of giving accurate, up-to-date information as well as keeping track of historical information that may be useful in years to come. Although we have a rough template to improve upon for making our own files, the MF Handbook suggested many ideas about keeping the accounting software/files easy to access and understand, while still keeping the files secure from those who may use the information for wrong doings. It was a good feeling to read the handbook and see that many of the ideas we had discussed about creating accounting software had also appeared in the handbook as being important. The Handbook gave many suggestions for running a MFI, but to be able to run this as a smaller “business,” we are not able to use all the suggestions due to limitations on ability to buy certain software. But, where there is a will, there is a way and we will definitely be able to create something comparable and run it successfully!
I look forward to hearing the midterm reports from the other teams and hope they will be as excited as I am to see what we all the groups have accomplished so far for what we hope to accomplish by the end of the semester.
Log # 5
By Winnie Chan
Although when we proposed the idea to make the “Capture the Storm” video and enter the contest at the last minute right before the break, we did a pretty good job. We hunted down most of the people that we needed and filmed them all within two days. AJ and Eric spent their break putting it together and they finally finished on the day before the deadline. However, we found out that the deadline has been extended, so we have even more time to put it together and make it even better. I bet we can win this contest! By making this video, we are able to work as team on putting this together and getting to know our classmates better. We are able to get the name out to the public in hopes that more people at St. John’s will know about GLOBE. Also, with the prize money that we could win we’ll be able to donate to GLOBE which means more money to change the lives of more people.
In Muhammad Yunus’, Creating a World Without Poverty, he mentions that with Grameen bank going well, he thinks that it is time to broaden the market place. He first created Grameen Healthcare Trust (GHT) a not-for-profit company and then Grameen Health Care Services (GHS), which is a for-profit company. So if an investor wanted to invest their money, they would invest it in GHT which funds GHS. When Tom Bevan and Milla Sunde visited Grameen Bank and the village; they fell in love with it. Tom even wrote a song about the story of a borrower of the bank. They later came back to make a music video in the village. By them doing this they basically provided free advertising for the bank and created awareness about poverty and how to help resolve it. This is similar to what we are going to do with the “Capture the Storm” video.
Yunus also asked a very good question that many people had: “Why should anyone in their right mind invest his hard-earned money in something that yields no financial return?” And it is true, if you thinking like a businessman, however he also make a good point defending his stance. Even though you do not make a profit from the investment, it does not mean that you get nothing back in return. You may not get a profit but, you do get your money back and end up owning part of the company.
I agree with Yunus on this statement, “I told him that I don’t believe in hybrid business models… Companies that espouse these programs often do so and genuinely feel uncomfortable over the fact that their social concerns have been left behind in the crush of daily business.” Many companies decide to use a hybrid method of business only to make themselves look good, which probably helps to improve their business. Some use this method only to get rid of their own guilt. Either way, they only do it out of selfishness or guilt, not out of love or caring.
Log # 5
By Valerie Rodriguez
This week has definitely been great. The marketing team had two meetings with Institutional Advancement and Jennifer Maizel, where AJ, Yvonne and I were present. It was a very productive meeting where we learned ways to take advantage of St. John’s fundraising services. It is truly amazing how much one can do in order to reach out to our alumnus. We are planning on reaching out to everyone through electronic funding, which are emails with a video to inform our audience about GLOBE. Then the emails are tracked by those in Institutional Advancement and once we get a more concrete list of those interested in the program, we send out the official donor letters with donation forms.
I was very interested in this idea because it is something that we can track and at the end of the semester we can contact these people and provide them with a video of our end-of-semester-presentations. The marketing team will further look into this project on Tuesday at 6pm where we will discuss the details with the rest of the members that were not present.
During our meeting with Jennifer Maizel, we confirmed that going through STJ vendors wouldn’t be efficient for ordering our tote bags for GLOBE DAY. However, we finally ordered the tote bags, which is a big step forward in our preparation for this event. We are looking forward to this week in order to finalize most of our plans and preparations for this event.
One of the things Dr. Sama assigned to us was an article called “Social Entrepreneurship: The Case for Definition.” I found myself very interested in this article because it explained what social entrepreneurship was and described the differences between entrepreneurship and social entrepreneurship. Social entrepreneurship is a combination of having the passion of social mission with business discipline which brings out the increased awareness of social inequalities worldwide. What makes social entrepreneurship unique from entrepreneurship is that it gears towards solution for long-term problems instead of short term interests. People like Muhammad Yunus fit this definition since he came up with this brilliant idea of servicing the poor in such a way that strengthens their living standards.
Entrepreneurs are so gripped by the opportunity to change things that they possess a desire to demolish the condition of things. This is not the end result of a social entrepreneur, as I just described with Yunus’s case, as they are driven by altruism instead of money/profits. However, both do have something very important in common; the pursue of making their visions and ideas reality. A great example of this is when Yunus confronted the system in Bangladesh and lend a total of $27 to 42 women in Jobra. He made his vision of proving the poor were a good credit risk, and so he proved it so well that his operations globalized.
At times, it is difficult to consider people like Muhammad Yunus as entrepreneurs because we are so stuck on the idea of entrepreneurs simply wanting just money and profit from their visions and ideas. Well, what about bettering the lives of others? Or giving the less fortunate the opportunity to truly become fortunate? This article definitely makes that distinction between both sorts of entrepreneurs and how it fits into our world today.
Log # 5
By Abiola Ayinde
Social entrepreneurship is often neglected as one of the most important constructs of entrepreneurship. And as for Management 4310, I think most of us students get caught up in the idea of microfinance and tend to forget our roles first and foremost as entrepreneurs working in social environments to change lives. I was therefore pleased to see social entrepreneurship as a part of the course because I think it is the most powerful and the driving force behind me taking this class. This emanates just from the power of ideas providing the drive for changing lives all around the world.
One of the major factors that made me decide to take MGT 4310 was being able to change lives. Even though I was not foreign to the idea of microfinance and micro loans, I felt such a huge joy and profound satisfaction to an extent that I was at last going to impact the lives of people that I may have been in the same situation as. In the Root Capital video, I could feel the people’s pain deep in my marrow. I might not be rich enough to create such social change in many third world countries, especially Nigeria from which I hail, but the fact that I can actually see changes in the lives of people makes me want to do much more when I have more resources to do so.
One conclusion I can make from social entrepreneurship is that sometimes it might take an external factor to jumpstart dormancy in societies with unlimited potential to create wealth and improve the lives of their people. I can tell this from my own personal experience. While growing up back home, it was a trite statement to say that “we cannot help ourselves at this point in our lives; only someone from elsewhere can bring a change”. In as much as this is such a sad statement to utter, it was very realistic. The basic element of trust that was supposed to exist between people of a community and their governments, especially, was missing. Most believed that people in government did not have an agenda to serve them anymore. They were on their own, waiting for a miracle to happen. The creators of these miracles happen to be firms like Ashoka. They awaken long dead dreams of people who can lead better lives and expect greater for their children and other generations to come.
This is the latent effect of a social entrepreneur; rekindle shattered dreams and build on them while inspiring people not to believe in the status quo but know that their conditions can be improved. This should be a focus of class members every time; that we are social entrepreneurs bringing change, both individually and to communities.
Log # 5
By Patrick Cassidy
This is our fifth log and I’m beginning to see progress towards each team goal and in particular, the accounting goals we’ve set for ourselves. There has been increased enthusiasm in our approach to simplifying and increasing the impact of our team on the overall fund. I’ve learned that the Accounting Team is the backbone to the success of the organization in maintaining proper and efficient records and keeping track of distributions and monetary allocation. The draft version of our index analysis’ have been completed and redrafts and finalizations are currently in progress. I’m excited for the information session coming up as well as our major event in Marillac Terrace in April. It’s important for us to voice the purpose of our class and the impact we’re making throughout the world. I think it’s especially exciting to see that St. John’s does a lot for the local community and communities it’s located but we’re able to show that we’ve started to make a footprint in foreign nations and helping the extremely less fortunate out of poverty. It truly is an exciting time for me, GLOBE and St. John’s.
In the book How to Change the World by David Bornstein, he lists six qualities of successful entrepreneurs, seeing as I and everyone else in my class, including Dr. Sama, are all entrepreneurs, these qualities are especially important in providing direction for GLOBE. The six qualities are: Willingness to Self-Correct, Willingness to Share Credit, Willingness to Cross Disciplinary Boundaries, Willingness to Work Quietly and Strong Ethical Impetus. It’s important for me and for all of the individuals in my class to understand these qualities and use them in the construction of GLOBE. To be able to understand these entrepreneurial qualities in this semester-long course and carry them into the work force or graduate school, we’ll be better prepared to excel in the entrepreneurial spirit. GLOBE has taught us this and I’m fortunate to say that I feel I’m not only making an impact across the world and here at St. John’s but, also within myself.
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.
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.
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.
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.
Log # 7
By Eric Suen
“People may live in poverty and may not have formal education, but they are nonetheless talented and highly entrepreneurial. Microcredit invests in people so they can advance themselves and the generations that will follow them.” This was quote from our guest presenter last week; CJ, who gave the class a presentation on microfinance in Kenya.
From CJ’s numerous stories, we obtained a better understanding of microfinance and its function in helping to fight poverty. Her stories included Jane, who was a prostitute because the only way she knew how to make money was to sell her body in order to support her three children. After obtaining a loan, Jane began to sew jewelry and sold them for a profit. Another story, which I personally enjoyed because it was heartfelt, was about a woman named Joyce, who lost six of her sons and her husband to a tribal war but is now very successful with her three restaurants. Although she happened to lose all three of her restaurants, her persistence to continue from scratch again questions the integrity of many others. From losing everything, many would have given up after they have lost everything, but Joyce on the other hand continues to strive for success.
Finally, there were stories on criminals such as Bernard and John and Wilson. Bernard and John were criminals out to kill a speaker, but one day they decided to work together in creating boxes which helped their community. Through microloans, John and Bernard are owners of their own store and have smiles on their faces that were genuine from all their hard work. Wilson was also not only a criminal but, the most wanted criminal. After obtaining a microloan, he now owns three stores.
Another thing that was interesting was the technology that the loan officers had. They could bring up a person’s files just by using their finger prints in a portable scanner. The technology seemed far more advanced than technology used elsewhere. Also by utilizing one cow, many opportunities for borrowers were created. The milk from the cows was sold for profit and the manure was used for bio-gas, which heated stoves and created electricity for homes. The cows also provided opportunities for kids to get an education from the profits created from selling the milk.
In the end, the final quote that stood out was from someone in Kenya, “We live in poverty but we are not poor.” We refer to poor people very often and do not understand the distinction between being poor and being in poverty.
Log # 7
By Nicole Pasciolla
I cannot write this week without talking about last class. The presentation last class has impacted me, and is continually pulling emotions out of me. Sister CJ, who made the presentation, has had such an interesting life with her travel and experiences in different cultures. She is an amazing woman who had so many stories to share. I loved her presentation because when she was sharing her experiences, I could feel the passion and love she had for microfinance and the fight to end poverty. She has befriended so many people, and being part of the U.N. she has heard so many different opinions and stories. One of the points that really stuck with me is when she said that when sitting in on meetings in the U.N. there are so many different opinions from each country. Each country is out to get what is best for them. This only confirms my opinion that the government cannot solve poverty, and with this microfinance plays a very big role.
In sister CJ’s presentation a particular picture stunned me. This was the picture of the people of Kibera. In GLOBE we always talk about what we view as poverty, and what actual poverty is all over the world, and this picture proves to me that I do not have a realistic understanding of what extreme poverty entails. Kibera took my breath away, and in such a way that I feel ashamed that I did not know. One million people living in one square mile is something that I cannot conceive. The idea of a flying toilet, where the people of Kibera go to the bathroom in a bag and throw it, is hard to understand for me. Just thinking about the flying toilet, the amount of fifth, germs, and smells that the people of Kibera live in must be close to unbearable. This is why there is so much crime in slums like Kibera. For them, there is no way out, nothing to look forward to, and nothing to live for. I can understand that crime is probably the only thing that gives existence to their lives. This is a very sad reality, and it is hard to understand for me living the way I do.
Hearing about Ingrid Munro exemplifies the belief that anything is possible. For her to go into a slum of this proportion and try to change it, and challenge people to save is something that goes beyond any strength and passion I have ever felt. Munro showed the power not only of the difference one individual can make, but the power of microfinance. For Munro to challenge people to save in a place where this is an unbelievable task is a hard endeavor. I think of how we save in America. I feel like in society today we think of change as something that is annoying to carry, and a thing that we just want to get rid of. I have seen people throw away change or drop change on the floor and leave it, while people in Kibera work and save months for the change we so easily discard. This shows me that microfinance can be about the little change in our pockets. If everyone took the spare quarter or dime in their pocket and put it into microfinance, so many lives could be changed. It is truly not about the amount, but the amount of hope something so small can give to a person. Like Ingrid Munro says, “It does not matter where you come from, but it is where you are going.” This puts a whole new meaning on life. This single statement alone sums up all the hope and excitement microfinance can give. The simple question of “what do you want to do” can make a difference. The option to have a choice, the option to get a chance to change, and the option to get a chance to live is what everyone deserves. I can imagine a woman in Kibera just praying for someone to give her a chance; to give her the opportunity to be someone. I want to help an individual reach their potential, and through microfinance I feel I can do this.
Log # 7
By Minela Feratovic
This week’s class was different. We finally had guest speakers discuss their personal experiences with microfinance. Caroljean Willie was one of the guest speakers. She works at the UN. Her presentation was extremely interesting. We learned how Jamii Bora, a provider of microfinance services, improved a community in Africa. In this community resided two notorious killers. They were given loans to improve their lives. These loans transformed them. Now they have homes they love and they are helping the youth in their community. Furthermore, they are no longer feared. One of the most important things she said pointed out was, “People have to participate in their own development.” She is absolutely right. Giving out money will not solve problems. People have to learn how they are capable of leading themselves out of poverty. She also mentioned how group work allows people to develop. The second speaker was Sister Ann Moyalan. She worked in a Muslim community in India. While she was there she helped educate woman who in return educated the rest of their community. The stories from both speakers were truly inspiring.
Once the guest speakers completed their presentations, my team went over some ideas we had in mind. One important idea was expanding our partnerships. Ms. Willie emphasized the importance of having partners in the field who constantly communicate with the loan providers. We feel like we are not getting enough information from the Daughters of Charity. It is vital that we are frequently updated to build up the operations of GLOBE. Our next action step is to research possible partners we can work with. These partners can help us overcome communication problems and they can assist us in diversifying our loan portfolio.
This week one of the assigned readings was a chapter in The Economics of Microfinance. The reading discusses subsidies. Many microfinance institutions take advantage of subsidies. There are only a few that are financially sustainable. Grameen Bank takes makes use of subsidies. Between 1985 and 1996, the bank reported profits of about $1.5 million. The author points out that it took out $16.4 million in direct subsidies between those years. In reality the bank did not make a profit. The author tries to answer whether or not subsidies yield social benefits. Studies show that subsidies do lead to benefits and these benefits outweigh the costs. However, there is a push for microfinance institutions to transform from depending on subsidies to becoming financially sustainable.
In Chapter 11 of Banker to the Poor, Muhammad Yunus discusses the hardship Grameen Bank dealt with in the 1990s. A cyclone hit Bangladesh in the early part of the decade. The borrowers lost everything. They quickly overcame the difficulties caused by the cyclone. They started new businesses or rebuilt their businesses. Once again they were on the path toward on-time repayment. Grameen was growing in the middle of the decade. It lent out it one-billionth dollar in loans in 1996. The MFI was extremely successful. Grameen expanded to further the economic development of Bangladesh.
Chapter 12 of the book details the enterprises and companies started by Grameen Bank. Yunus took over the fisheries project from the government. The government’s poor management led to the failure of the project. When taken over by Grameen, the poor participated in the development of the project. In the end it turned out to be a huge success. Another success story is Grameen Phone. This initiative increased cellular phone usage in Bangladesh. This project also paved way for expanding internet service across Bangladesh. My synopsis of the readings is that small steps can make a huge impact. Each project can lead to another project that advances economic development.
Log # 7
By Mark Braithwaite
This past week we finally had guest speakers come talk to us. I had written in previous logs that I was anxious to hear from guest speakers. I knew it would be good but, I never imagined that it would be so inspirational. I honestly can’t find the words to express the impact that Sr. Caroljean Willie and Sr. Ann Moyalan had on me. It was so amazing to see how they’ve made huge changes in impoverished societies. The best part is that for these societies, it wasn’t all about the loans. It was the mindset of these people. One of the questions I asked in class is how often do they run into troublemakers, people who may try to rob recipients of the loans or in the case of Sr. Ann’s community, people who may try to stop the women from becoming empowered and educated. And surprisingly, they don’t run into those issues. Here in America we’re cultured to be so individualistic. We’re always thinking about getting ourselves ahead, having a huge career, and amounted some amount of material wealth (some more than others). Sr. Caroljean and Sr. Ann Moyalan helped me appreciate that these people don’t think like that. The people in these countries are looking to bring their communities out of poverty, not just themselves. The peer mentality is just amazing. That’s why I thought Sr. Caroljean’s comment about calling them poor was so interesting.
The people don’t want to be called poor because by doing so, we put them below us. They’re rich in culture, history, values, and community. They live in poverty because they don’t have a lot of money, but they are by no means poor. That statement really gave me food for thought. The innovations that these people came up with to substitute for the commodities we have were just amazing. For example, using the feces from cows to produce bio gas to fuel stoves that allow them to cook easily, saving the kids the trip of having to go find firewood was mind-blowing. I’ve been through over 15 years of schooling and I had no idea you could do something like that. Now the kids can use that time going to school and getting an education. One thing that Sr. Caroljean helped us see was that the number one concern for the parents she’s helped was making sure their kids could go to school. Those parents understand that education plays a big role in eradicating poverty.
I was also amazed at how Sr. Ann was able to fight such strong cultural norms without disrespecting or violating those cultures. She’s a Christian but she deals with Muslims in India. The Muslim culture doesn’t encourage the education and empowerment of women. In fact, they are strongly opposed to it. The work she has done has helped to educate many women, saving them from abuse and the poverty that comes with living in dirty slums. She’s been able to win the trust of their husbands so that her work can be done without significant interference. Again, it’s because these people want their communities to do better, not just individuals.
Log # 8
By Andrew Chan
Beth Dunphe, the director of development from Project Enterprise spoke about the operations of how her organization provides micro loans to clients. Project Enterprise serves four out of the five boroughs in NYC: Bronx, Brooklyn, Manhattan and Queens. 80% of their clients are non-white; 55% coming from NYC. 34% of their clients live below the poverty line. Those that live below the poverty line earn less than $21,000. The median family income was 55% of the NYC median income of $55,000. It was interesting to see compare the differences in microfinance abroad and microfinance domestically. I thought that Project Enterprise’s services make their organization and operations efficient and successful. They provide training/workshops that help their borrowers develop a practical business plan. In addition they have one-on-one technical assistance that aid in the loan application process and developing a business strategy. Most interestingly was the legal assistance. They have a pro bono partnership with Dorsey and Whitney. I think that legal assistance is important because it helps the clients understand their boundaries, limits, and rights.
I was impressed by the impact that this organization has made. They have trained 2,997 clients. The average monthly profit increased by 42% after getting a loan from Project Enterprise. This demonstrates another example of how microfinance makes a positive impact on disadvantaged entrepreneurs.
Log # 8
By Yvonne Lee
Project Enterprise is the third biggest lender in the US, and they have always sworn by their motto of “Small Loans, Big Connections”. They place a lot of emphasis on growing a business. Project Enterprise serves 34% of individuals below poverty, who are those with an annual income below 21,000 USD. Their clients have a median family income of 55,000 USD, and 80% of them are non-white. They came about because traditional commercial banks used to red-line some communities and never approved their loan requests. Hence, there was a need to cater to the minorities and people who did not have good enough collateral or credit ratings.
Project Enterprise has disbursed more than $1.7 Million in loans to more than 650 entrepreneurs. They have three programs:
I thought that their peer program was the most interesting and relevant to GLOBE. It operates on a group methodology with a center structure. Basically, it is a group of groups. Individuals are tested on Project Enterprise’s criteria and what their fellow group members’ businesses are about. In order to make sure that everyone is on the same page before extending a loan to them, individuals need to get certified by the organization, and go through six week intensive pre loan training. This teaches them how to establish a business plan as well as predict project costs, sales and cash flows. At center meetings, they have to present to the board and other lenders what their business is about. Group members of the person who is asking for the loan have to convince the committee that he or she is credible and will be able to pay the loan off. These center meetings are very transparent and loans get approved there and then. If one person does not pay the loan off, group members have to pay up.
I’m currently a Financing Intern at NYC Business Solutions Lower Manhattan Center, so I was familiar with a lot of the terms and concepts that Beth covered in the lecture. Project Enterprise is one of the biggest lenders that NYC Business Solutions work with. We offer a suite of services that help small businesses expand, and offer help to minority communities through our Minorities and Women Better Enterprise Certification Program. We help prescreen clients that need loans and then refer them to the most suitable lender. We then package their loan applications before sending them to the respective lenders. Hence, listening to Beth’s lecture put things in a different perspective and helped me better understand the microfinance industry in the US.
Reflecting on last week’s email blast about the GLOBE Microfinance event on April 20, we thought that the message was too wordy and the long paragraphs did not really help either. We are going to send a second one out that is in bullet form and with “bite-sized” pieces of information so that at a glance, people will comprehend what we are trying to do. We also faced an obstacle with the bake sale. Student Life only allows student organizations to reserve tables and chairs for bake sales in Marillac Hall and D’ Angelo Center. Since GLOBE is an academic program, the office may not approve of our request. Hence, we have reached out to one of the marketing team members from last semester to find out what they did to get approval for their bake sale. We also need to book a video screen and projector for the event in Marillac Terrace, and work on the tote bags that we are handing out to students and faculty. With just about two weeks to the event, we are all extremely excited but are aware that there are still a lot of things to do.
Log # 8
By Rahel Solomon
Recently, we had the pleasure of meeting Beth from Project Enterprise. I didn’t know about much about Project Enterprise before her visit but was delighted to learn of the success of microfinance on the domestic level. When I tell friends, family and others about Globe, sadly the first response is often about how there are needy entrepreneurs in the US. I am now very happy to learn about Project Enterprise. Project Enterprise serves 34 % of individuals below the New York City poverty line with 88 % of borrowers being African American and 58 % of borrowers being women.
Beth mentioned early in her speech that Project Enterprise originally began with a very “Grameen” like business model but have since strayed from that model. As she continued, the extent to which Project Enterprise has strayed became more and more clear. It makes perfect sense that the two companies are very different considering they operate in completely different environments.
With a 92 % success rate and more than $1.2 million disbursed in the last 5 years clearly Project Enterprise is doing something right. What I thought most interesting about Beth’s lecture was that PE is almost completely funded by donors and the interest from the loans are used for administrative expenses. I wonder about the sustainability of such a program; I realize that Project Enterprise has been in existence for quite some years now but I can’t help but wonder if there isn’t a more efficient way to fundraise.
I also loved the fact that Project Enterprise at almost all costs attempts to work out a payment schedule with its borrowers. Entrepreneur Week I found to be a great way to keep borrowers informed, connected and entertained. It seems that Project Enterprise, though inspired by the Grameen Bank model, clearly understands its unique differences and how to keep its borrowers satisfied and re paying in a timely manner.
Log # 8
By Gabriela Papadopulos
The Grameen model of group lending or the so called “joined responsibility” is what has been a major factor for its success in Bangladesh and consequently it has been replicated by different types of microfinance organizations. Group lending offers a number of advantages for both borrowers and lenders. It provides access to microcredit for underprivileged individuals while lenders’ responsibilities are shifted to the group. Some of these responsibilities include screening through potential borrowers in the group formation, peer mentoring and monitoring, and enforcement of the loan repayment- all resulting in cutting the costs for processing the loans. The joined responsibility condition is what leads to “assortative matching” in the formation of the group as safe borrowers stick to safe types and respectively risky borrowers are left with no alternative but organize in a group with not quite reliable types. This sorting mechanism mitigates the risks of adverse selection caused by lack of information about the borrowers since it turns out that risky clients pay more often under group lending where shared responsibility is present. As a result safe borrowers are charged at lower rates and they are no longer placed under pressure to shoulder the defaults of their riskier peers and subsidize them by paying higher costs for them. The reduction of interest rates for safe borrowers illustrates higher efficiency resulted from the operating model of group lending as individuals who have been previously pushed away from the market are being encouraged to reenter it at more reasonable price.
As I mentioned before, the Grameen model has been replicated by MFIs all over the world therefore I found it interesting to hear about its domestic applications by our guest speaker from Project Enterprise. Having annual income of $21 K or under is considered the poverty line in the U.S. and surprisingly for everyone 34% of New Yorkers live below this level. The data is not just simply statistics that could be disregarded and the operation of a local microfinance organization was necessitated. Project Enterprise laid its foundations on the group methodology with its center structure. Two of the programs provided by PE are Peer lending and Fast Track lending and they involve the provision of small loans and business development services without any preliminary credit score or background checks. The best part is that after a six-week intensive pre-loan training the self-selected groups are given the full responsibility to attend center meetings, approve each other’s loans and monitor the disbursements.
Group lending is the source for numerous successful stories that happen every day domestically and abroad. Peer support and networking, exchange of ideas and solidarity are some of the key benefits to borrowers of this type. Moreover, the Grameen model encourages the community spirit while at the same time develops a sense of pride and achievement in group members who realize that they are in possession of the power to improve their standard of living.
Log # 9
By Binh Nguyen
“We provide you with the ladder, but the climbing, my friend, you have to do it yourself.”
This quotation from the video “The Ladder to Prosperity” that we watched last week. I wrote this sentence down since it reflects the nature of microfinance and Jamii Bora itself as a MFI.
In addition to our initial knowledge about Jamii Bora two weeks ago, the video “The Ladder to Prosperity” gave us a closer look at the amazing impacts that Jamii Bora have done to people in Kenya. Being a MFI for the local community and powered by the local people, Ingrid Munro and those people sharing her passion have been changing the face of poverty in the country radically. Indeed, starting with borrowing and saving, the impoverished is climbing the ladder out of poverty. Jamii Bora helps them along their way by providing assistance with business planning, giving them necessary guideline to begin their businesses. As a further development in the organization’s services, Jamii Bora opened its own business school to train their members in business area. As a result, the members starting as beggars on the streets are giving opportunity to actually become loan officers, managers or even higher positions in the organization. Moreover, Jamii Bora also offers the ladder with life insurance and disaster insurance so that its members are ensured to go up to prosperity without worry about debt burden after death or destruction by the natural disasters. Without a doubt, Jamii Bora is an amazing example of a successful MFI which has found every possible way to assist people passing the poverty line. As a result, Jamii Bora members now can proudly say: “I know to do something myself”.
Watching the video about Jamii Bora in class last week, I felt that it was really interesting not only because of its inspiring content but, also because Dr. Sama was actually visiting them in Kenya around the same day. As this semesters GLOBE class, we were able to actually experience the impact that an MFI can have on the world, regardless of the fact that we do not have much time in the program.
Indeed, I almost cannot believe that the semester is coming to an end in only about three weeks. Although our GLOBE video did not win in the “Capture the Storm” contest, the whole class did try our best getting the video watched by as many people as we could. In addition, I believe that GLOBE will be known over the campus after our upcoming big event for the semester, the GLOBE Fair.
Log # 9
By Amanda Leys
This week marks the final countdown to what is arguably our entire semester's work. With the fair rapidly approaching there is much to do. I feel that we are adequately prepared at this point, what it really comes down to is the support of our other teams on the day of the fair. My fingers are crossed that the weather is beautiful and students are wandering around campus happily when they find Marillac covered in blue. I am more convinced than ever that choosing a student awareness event to gain exposure was absolutely the right decision.
There needs to be a stronger connection between the St. John's community and the communities which we aim to serve. I firmly believe that our fair will reconnect the two and gain massive student interest.
After the fair, we must jump immediately into preparing our final presentation. I had hoped to conduct a small survey pre and post fair to try and gage whether our event was as successful as we hoped but there are only so many hours in a day! For the presentation, the marketing team will have much to discuss. We have continued to keep our database updates on our activities, we have created a valuable pamphlet for semesters to come, and we will have hopefully captured the attention of the student population. There will also be MANY recommendations for the future. It’s funny that over the course of the semester GLOBE becomes your baby- and it will be extremely hard to pass it on to the next group.
Today at our bake sale, a group of girls instantly recognized our table and said how one of their friends had been in the program. It reminded me again of the first day of class and the impact one person could make. As the program continues and our web of students past and present grows, one can only wonder how far across the "GLOBE" we will reach.
Log # 9
By Amanda Pasciolla
I can honestly say that this past week has been one, if not the most, exciting yet heartbreaking and challenging weeks of GLOBE as a member of the Finance team. Upon receiving new loan applications from Kenya, I am thrilled and very happy that we now have our first set of candidates from a new country, and I am very eager to approve a loan as soon as possible. However, I say heartbreaking and challenging because I am finding it extremely difficult to determine which applicant should be first approved.
Out of the five applications that we received, each one tells a story that is equally moving and touching. Microfinance institutions and GLOBE are so willing to work with applicants to ensure the loan does not increase stress, but that it supplies opportunity more than anything else. Furthermore, it is impossible to deny the strong sense of determination and desire that one can feel upon reading each application, and it is this that supplies me with great hope that success is very possible.
I find these applications to be somewhat different from the ones we previously reviewed because of their detail and the emotion and compassion they evoke. These people work very hard and they want to provide for their families, but in some cases no matter how hard they work, there is little money to be made. Plagued by sickness and disease with no help or support in which to turn, it becomes impossible for one to work or provide the care needed in order to escape poverty. Furthermore, the fact that most of these applicants have an annual income of less than $100 even when healthy, with in some cases more than 10 children in which to care, makes one realize how extremely difficult life must be on a daily basis. I am reading these applications knowing that on the other end of the process is the family, wife, husband, or single mother that not too long ago sat and filled out this application in hopes it would be approved; my heart breaks.
Where else is a student able to connect and provide help to those who are in such desperate need of support? Where else is a student going to be able to personally review and read the stories of individuals whose lives could be changed by a $70 loan? GLOBE is hands on work involving real people who need support, and I cannot imagine a better opportunity to help those who truly need it most. This is the message fellow GLOBE members and I need to be sharing in our classrooms and with friends who may not fully understand the impact one can have as a member of GLOBE.
Log # 9
By Christina Demos
We are boiling down to the last few classes of an exciting but short lived semester. In the next two weeks we have our presentations due as well as our group research paper. In addition the entire class is taking on initiatives to help the marketing team with awareness events such as the bake sale, the campus walk threw, and the GLOBE Fair. Although there is a substantial amount of pressure all at once, there is also a feeling of great excitement and satisfaction as the class is coming to an end. The accounting team is slowly able to recognize the outcomes of our hard work as well as the knowledge we have gained from each class lesson. Furthermore, we are eager to distribute questionnaires in order to put together our evaluations of each team’s end of semester performance.
During our last class and throughout the past week I have been putting a lot of effort toward study and research for our term paper. The theme of our term paper is to describe “the impact of a social business in today’s economy”. Social businesses have a significant impact on society both financially and socially. My goal is to key point the effects of a social business, as its objective is to pursue a specific social goal. If companies are successful in reaching their goals, I will research to find if the social change is a temporary change or a long term change. My research is to discover the long term and future improvements that a social business will create for society. In addition I will research to find out how the social business will sustain itself in a community, where individuals may be more egotistical or greedy.
In my recent research, I discovered a case study done by a Brazilian woman Reneta Arantes Villella, an Ashoka Fellow. Renata opened a school for disabled children in rural Brazil. She also created work-shops and radio broadcasts to educate families on pre-natal care. The social business that Renata has created has been successful in making a long term change for the families and communities in Arantes Villella. Renata has formed an integration of disabled individuals into society as productive and respected members. Over time, the system creates a more enabling environment by dissolving stereotypes, changing the mindset of communities, and using disabled individuals for their skills to help society grow. Reneta’s organization is a perfect example of a social business that is successful at making long term social impacts.
Log # 10
By Andrew Chan
Wow, I can’t believe this is it. This is the last log I will be writing and I am sad that this semester is soon coming to an end. I am so thankful that I was able to participate in the GLOBE program. GLOBE has taught me that opportunities are a catalyst to progress and improvements. Those living in poverty are often discriminated against because they have little or no financial backing. As a result, they are refused assistance and have to carry their own burdens and struggles. In addition to academic enrichment, I feel that I am more fulfilled as a person. Before taking this course, I was engaged in social welfare but limited at the local level. I felt that I wanted to contribute more and to make a larger scale impact. GLOBE has helped me accomplish this. I was pleased to hear that five applicants were approved for loans.
When I was making the video presentation for the GLOBE FAIR, I reflected a lot upon the accomplishments that we made throughout the semester. I feel that this video will be a great asset when telling people what GLOBE is about, how microfinance operates, and how it impacts society.
I am anxious to be updated with the progress of the loans and how the entrepreneurs are making a positive transformation. Although after this semester I will not be an active participant in the GLOBE class, I will be more than happy to offer my assistance to the new Fall 2010 GLOBE managers. I wish them the same success we had this semester and many more. I hope our constructive feedback will guide them in the right direction and that GLOBE can rise higher on the awareness scale. Thank you for a wonderful semester and life experience.
Log # 10
By Yvonne Lee
With just a week until the GLOBE Microfinance Fair, we spent part of class in Marillac Terrace finalizing the booths that we are having for the event, finalizing decorations, and trying to gauge the flow of traffic at the fair. I was really glad that the bake sale was so successful and I hope that it has increased awareness of the GLOBE fair on April 20th. I'm really excited for the event but at the same time, really nervous about its success. As long as people leave the fair with a better understanding of what microfinance and GLOBE are, I believe we are working towards our goal of raising awareness.
Seeing Dr. Sama's photos and videos from her trip to Kenya reaffirmed my desire to go there. It would be such an amazing experience to actually have direct contact with the field and see the possible ways that our program can make an impact. Perhaps one day in the near future, it will be possible to send GLOBE students into the field. With the last few weeks of class approaching, I'm really reluctant to leave the course. I think that there should be a GLOBE Alumni Club that we can join to continue our work in the program.
In the New York Times article “Many Borrowers of Microfinance Now Find the Price Is Too High”, Neil MacFarquhar discusses how banks and financial institutions now dominate the microfinance field, drawn by the prospect of hefty profits from even the smallest of loans. Some of them charge interest rates of 100% or more. Even though Muhammad Yunus says interest rates should be 10 to 15% above the cost of raising the money, this can be overly simplistic and too low. Costs of doing business in Asia and the sheer size of the Grameen Bank he founded allow for economies of scale that keep costs down. Not all financial institutions can afford to charge such low rates of interest. Most companies say that the highest interest rates reflect the costs of reaching the poorest, most inaccessible borrowers. It costs more to handle 10 loans of $100 than one loan of $1000.
I think that the debate about interest rates in microfinance is an issue that is very difficult to resolve. Sometimes, the borrowers do not even understand how they are being charged. This is due to inexperience and lack of education. Hence, it still comes down to having the appropriate infrastructure in place, especially in schools. This enables borrowers to make intelligent decisions about the details of a loan that they apply for.
As for lenders, I think one of the most effective ways of regulating interest rates is to reduce transaction costs. Indeed, it is every expensive to wire funds from one location to another. A pronounced backlash against high interest rates will prompt lenders to retreat from the poorest customers, and we would not want that to happen.
Log # 10
By Hadia Sheerazi
To say that time is slipping by would be an understatement. I cannot believe that the semester is almost over, yet I feel that we have so much more to do! The GLOBE Fair is tomorrow, and I have been talking about it non-stop for the past week or so to the point where everyone I know has promised to come just to make me stop talking about it! I’ve also been approached by a Campus Minister to think about setting up a table during Peace Week to promote GLOBE and I shall talk to Marketing about this idea tomorrow.
I am especially proud that our team came together last week and approved a whole batch of new loans from Kenya. It was heartening to read some of their stories, and I was personally moved by Mary Wanjiru’s story, her determination and her spirit. It was incredible to see how unanimous our votes were for all the borrowers and how excited we were about being the catalysts for change in a far off country in East Africa. We are especially happy about having Sr. Deborah Mallott on board with us (her picture with the computer is an added plus!) and we are excited about this new partnership.
This week has been pretty hectic with emails flying about, the Marketing Team gearing up to wow everyone with their great ideas and energy about the GLOBE Fair. I too cannot wait for the event tomorrow and am prophesying that it will be a huge success. I have also been issuing invitations for the annual presentations to all the faculty, administrators, and deans I know. The more publicity we receive the better!
I’ve been re-reading some of the older chapters in Yunus’ book because they remind me of the beginning of this semester, and winter break, when I was all excited about this new project and all charged up with energy. I think sometimes it’s important to step back and reflect so that we can move forward with a clearer vision. It is almost time to hand over the torch to the next group, and I want to be able to do so with certainty that we did our best this semester. I realize that Dr. Sama’s visit to Kenya fulfilled the main reason behind the trip – to find more borrowers, make new connections, and spread the word about GLOBE.
I heard the debate team’s coach talk about judging a debate competition about the merits of microfinance the other day, and I got into a debate with him about the merits of microloans and microcredit. It frustrates me that we have so many skeptics in a world that desperately needs a way to pull millions out of poverty. As humans we are the first to rush to stores to buy the latest anti-aging cream, or try the newest shampoos or perfumes, we believe commercials as though they were the Gospel, yet we doubt the most powerful truths that we see everywhere. Microfinance works – Bangladesh is proof of that. Microfinance works – ACCION, Project Enterprise, Jamii Bora and BRAC are proof of that.
I am glad that I have decided to take time off before law school to construct a better vision of my plans for the future. I know that microfinance is the key – it is up to me and the rest of my peers to go out and spread the word. To be leaders in our fields and contribute to this project of social justice the world over. I could write on and on about microfinance, GLOBE, this experience and my own personal growth, but I cannot think of a better way to end than by quoting Robert Frost:
“But I have promises to keep, and miles to go before I sleep, and miles to go before I sleep.”
Thank you Dr. Sama, for an incredible semester and the opportunity of a lifetime. To the GLOBE Class of 2010 – it has been an honor, a privilege and a joy to work with you, learn with you, and learn from you. May God bless you all in all your future endeavors!
Log # 10
By Patrick Cassidy
What an exciting day it’s been today, GLOBE has really made a strong presence on campus and I’m glad to say that I think the word is getting out about our mission and current contributions to the St. John’s Community and our borrowers. The fair was a swimming success, with the knowledge and awareness we were able to spread, and the amount of people who seemed genuinely interested in our cause. Whether people donated $1, $5, or came for the free giveaways, every individual that we were able to bring into Marillac Terrace gained some information about GLOBE. I’m extremely impressed by the way our class was able to come together and execute the major event of the semester. Marketing has truly done a marvelous job this semester, going above and beyond their necessary duties and making an enormous impact on the future of GLOBE.
I’m sad to say that this is my final log of the semester and I can’t believe it! We’ve surpassed considerable obstacles this semester and time truly flew by for this course. I can understand how difficult it is to make substantial progress with new GLOBE Managers coming in and out each semester. However, I think that we’ve tacked on another notch in the GLOBE timetable and moved the program to a new level with an unlimited future. The knowledge gained and the opportunity for me to step aside from a finance mindset and think like a social business entrepreneur, created a whole different take on my thought process.
The next step in the GLOBE process is to finish our group paper and prepare for our presentation next week. I said it before and I’ll say it again, it’s incredible how fast this semester passed. Preparing for commencement in three weeks and preparing to begin my life as a full time financier on Wall Street is an exciting opportunity. I’m incredibly fortunate to have participated in GLOBE and taken on a whole new light on the world of finance. Million dollar bonus’ on Wall Street would do wonders for entrepreneurs in impoverished nations. GLOBE has taught me this and I’m glad to say that my participation in this program has increased my awareness about poverty and increased my knowledge through all of our readings. It’s a well designed course that will have a lasting impression on every GLOBE Manager who passes through the ranks.
By Connor Cherry
The semester is sadly coming to a close and my Tuesday nights will soon no longer be occupied by microfinance and GLOBE. It’s been a bittersweet symphony over the past week, coming to this realization. I have never been part of a class as well-rounded as GLOBE. From the dialogues in class, to the texts and articles, to the inspirational guests working in the field, GLOBE has been the most enriching and engaging course that Tobin has offered me. I have challenged and deepened my beliefs on social justice, as well as for the first time applied my major of marketing to a realistic cause. For the first time I understood the challenge of branding and not only identifying a target market but, reaching them. It is opportunities such as GLOBE that remind me why I am at St. John’s University. It is easy to see that the potential for the program is endless. However, often overlooked are the students that come out of the program and have been transformed into global social justice ambassadors. Each and every GLOBE student I have spoken to has been moved by what was said and done in and outside of the classroom. This movement in the souls of the students is undeniable and will be forever in the hearts and actions of the future St. John’s Tobin alumni.
As a Vincentian community, we are taught the importance of reflection. Stopping to see the bigger picture, the greater cause, something more monumental then yourself is the essence of GLOBE. It is a misconception to believe reflection is a waste of time or a pointless act because without reflection, you cannot truly understand the magnitude of the reality you live in. I am forever grateful to be exposed to the realities of life I am a part of and am hopeful that I will be a social ambassador wherever life may take me. GLOBE came into my life at a pivotal point in my education and as a result, it is proudly engraved in my heart eternally.