News & Updates
December 15, 2011
Today there is a lot of press about the banking crisis. The headlines blast us with news about bad loans, the need for bank bailouts and now the threat of junk sovereign debt. All of this has made most banks skittish about making loans.
One form of financial assistance that is flourishing, however, is micro-lending. In micro-lending, loans, very small loans by traditional banking standards, are made to individuals who are too poor to appear on the radar of any financial institution. Micro-lending has become very popular as a way for individuals to make small loans that go a long way in helping the poor establish or expand a business that will lift them out of poverty. One of the pioneers of micro-lending was Muhammad Yunus who won a Nobel prize for his pioneering work in making loans available to the desperately poor through his micro-finance institution, Grameen Bank. The bank estimates its micro-loans have helped over 8 million of the world’s poorest citizens become more financially self-sufficient.
The Internet has made it possible to easily connect micro-lenders with small borrowers. Consider Kiva, a San Francisco-based non-profit organization with a mission to connect people through lending to alleviate poverty. The Kiva operating model is simple:
- Let’s say you want to lend money to one of Kiva’s entrepreneurs. You open an account and then can make loans as small as $25.
- Kiva’s field partners (micro-finance institutions in areas where loans are made) vet the entrepreneurs and administer the loans.
- Kiva provides progress updates via e-mail.
- When the loan is repaid the money is once again yours to either withdraw or use to make another loan.
Video Explaining How the Kiva Micro-lending Model Works
Each loan has its own page on the Kiva website. The page has a description of the entrepreneur, the amount of money to be raised, the repayment schedule, a list of contributing lenders and information about the partner administering the loan, including other loans that partner has supervised.
Since it was started by Matt Flannery and Jessica Jackleys in 2004, Kiva has built up an impressive set of stats:
- Total value of all loans made through Kiva: $264,818,925
- Number of Kiva Users (those who have opened an account to make loans): 1,035,157
- Number of Kiva Users who have actually funded a loan: 651,686
- Number of countries represented by Kiva Lenders: 217
- Number of entrepreneurs that have received a loan through Kiva: 692,882
- Number of loans that have been funded through Kiva: 349,124
- Percentage of Kiva loans which have been made to women entrepreneurs: 80.52%
- Number of Kiva Field Partners (micro-finance institutions Kiva partners with): 146
- Number of countries Kiva Field Partners are located in: 61
- Current repayment rate (all partners): 98.96%
- Average loan size (This is the average amount loaned to an individual Kiva Entrepreneur. Some loans – group loans – are divided between a group of borrowers.): $385.41
- Average total amount loaned per Kiva Lender (includes reloaned funds): $256.61
- Average number of loans per Kiva Lender: 7.78
And perhaps best of all in this era of oversized executive bonuses, Kiva distributes 100% of the loan funds it collects to its entrepreneurs. The non-profit uses a combination of fundraising and grants to pay for its operational overhead.
As with any financial endeavor, there are risks for the lender. For example, the loan may not be repaid. Or the field partner could engage in fraud. Or the countries where the loan is made might go through political or social upheaval. But Kiva’s 98.96% overall loan repayment rate is a number most large banks can only dream about.
Micro-lending represents a powerful, sustainable method for people to help other people move out of poverty. And taxpayers needn’t fear that they will ever have to bail out the micro-lenders.
November 14, 2011
These are busy times for the world’s disaster relief organizations. International Medical Corps (IMC) is one of many global relief organizations that provide emergency assistance to countries stricken by natural disasters or violent conflict. However, International Medical Corps goes beyond providing assistance. It also rehabilitates devastated health care systems and helps bring them back to self-reliance.
Introducing International Medical Corps
IMC accomplishes this by setting up programs training local people to provide medical care so they can carry on when the relief organizations leave. For example, in its first year in Haiti, International Medical Corps physicians worked with Haitian medical staff, local organizations, and the Haitian health ministry to identify gaps in knowledge and skills. Together they developed training programs and provided on-the-job support to improve quality of care throughout the existing health care infrastructure. IMC trained primary health care staff on triage, drug and pharmacy management, infection control, STI/HIV management, disease surveillance and outbreak preparedness, vaccinations, nutrition, and mental health diagnosis and case management. IMC also established a program in coordination with the Hopital de Universite d’Etat d’Haiti (HUEH), which will train 50 physicians and 100 nurses in nearly every component of emergency care delivery. The program goal is to rebuild Haiti’s virtually non-existent health care system.
As Jocelyn Zuckerman observed in a recent article she wrote about IMC’s work in Haiti for Fast Company:
Most important, the organization encourages its trainees to return to their native communities to serve, using skills they never would have developed without IMC. This commitment to empowering locals–the whole teach-a-man-to-fish thing–is what distinguishes International Medical Corps from such better-known NGOs as Doctors Without Borders.
The founder and chairman of IMC is Robert R. Simon., M.D., Professor in the Department of Emergency Medicine at Rush University, Stroger-Cook County Hospital in Chicago, Illinois. He started International Medical Corps in 1984 in response to the need for medical services and training inside war-torn Afghanistan. During that time, he developed the model that IMC now uses in all its deployments. He recruited locals from underserved areas of Afghanistan, trained them for nine months, and then sent them back to their communities with supplies, medications, and skills to set up clinics. By 1990, IMC had graduated more than 1,000 health-care workers who helped establish 57 clinics and 10 hospitals throughout rural Afghanistan.
Since that time, IMC has delivered more than $1.1 billion of humanitarian assistance, health services and training to tens of millions of people in more than 65 countries. It now has 4,000 staff and volunteers. Overseeing its operations is Nancy Aossey, President and CEO. She joined the organization in 1986 and manages the delivery of assistance to the world’s hardest-hit places, including Haiti, Darfur, Congo, Pakistan, Afghanistan, Somalia, Uganda, and Iraq.
Recently, IMC has been active in Libya, where through a $1 million grant from USAID’s Office of Foreign Disaster Assistance (OFDA), it is addressing immediate health care gaps in the strife-torn country. Teams are also assisting in establishing a unified mechanism for reporting needed medical supplies and coordinating donated items.
Despite its size and scope of operations, IMC has avoided the bureaucratic inertia and waste that can plague not-for-profit organizations. Charity Navigator, which evaluates and ranks charitable organizations, gives IMC its top 4-star rating (62.7 out of 70) for its financial stewardship and accountability / transparency.
With its focus on training locals to take over the delivery of healthcare, International Medical Corps provides a gift that keeps on giving.
October 24, 2011
In rural India, one man – Bunker Roy – has embraced the potential of the poor and built a college that is for them. He has been living and working in the rural areas of Rajasthan, India, since 1967 and started the Barefoot College in 1971 in the village of Tilonia. The goal of the college is to improve the quality of life of the world’s rural poor living on less than $1 a day. It is constructed on the knowledge that the poor themselves already possess; its focus is on how to move out of poverty. Since its founding, the Barefoot College has trained more than 3 million people for jobs in modern society, from teachers and doctors to solar engineers.
The Barefoot College website characterizes its mission as “. . . a non-government organization that has been providing basic services and solutions to problems in rural communities, with the objective of making them self-sufficient and sustainable. These ‘Barefoot solutions’ can be broadly categorized into solar energy, water, education, health care, rural handicrafts, people’s action, communication, women’s empowerment and wasteland development.”
In 2010, Bunker Roy was named to TIME magazine’s annual list of 100 people who most affect our world. As Greg Mortenson noted in the article, “Roy combines humanitarianism, entrepreneurship and education to help people steer their own path out of poverty, fostering dignity and self-determination along the way. His simple formula holds a key to what nations and aid organizations might do to build a more just world.”
In the video below, Bunker Roy tells the story of the founding of the Barefoot College and how his idea of a college dedicated to ending poverty has spread from India to other parts of the world.
Bunker Roy: Learning from a barefoot movement
October 6, 2011
“There is a great satisfaction in building good tools for other people to use.”
– Freeman Dyson
Social networks have been much in the news recently as tools for political change that helped bring to an end brutal dictatorships in Tunisia, Libya and Egypt. Facebook and Twitter were cited for their pivotal role in helping citizens in these countries coordinate their protest activities and maintain an open communication channel to the outside world when mainstream media could not. But there are other, less publicized social tools which have been deployed in response to intolerable conditions. Consider Ushahidi.
Ushahidi was first conceived by political activist and blogger Ory Okolloh. In December 2007, she was blogging about the government violence that followed the disputed election of Kenya’s President Mwai Kibaki. The mainstream media was banned from reporting on the crackdown. Okolloh collected reports of the government’s misdeeds and reported them on her blog, the Kenyan Pundit. It quickly became a key source of information for the outside world about the violence occurring in the country.
Overwhelmed by the large number of reports being e-mailed to her, Okolloh posted an idea about a tool that could be used by citizens to report incidents of violence and have this information displayed on a map in near real time. Okolloh christened it Ushahidi, which is Swahili for “witness” or “testimony.” Her vision became reality when her post was read by two programmers, Erik Hersman and David Kobia, and turned into a web-based application.
Today, Ushahidi is a powerful social platform that aggregates information and provides it on a map as a way to get an immediate sense of a situation – e.g., the pattern of violence during ethnic conflict. But the real genius of the tool is that its creators made it flexible enough to apply in many critical situations. For example, Ushahidi has been used to:
- Monitor violence in the Democratic Republic of the Congo
- Track election fraud in Mexico and India
- Record supplies of vital medicines in several East African countries
- Locate the injured after the recent earthquakes in Haiti and Chile
The recent events in the Middle East and the evolution of tools like Ushahidi make one thing clear. The interactive nature of social media is transforming us from consumers to collaborators; from audience to actors. As our tools become more powerful, we have the opportunity to effect positive social change on a scale never imagined.