Posts tagged ‘small business’
Spring has arrived in Mongolia! That means warmer weather (afternoons creeping closer and closer to the double digits)… and, of course, baby animals!
By Marc Raifman | KF18 | New York
When I first met the other Kiva fellows, I asked them where they would be working. I heard Kenya, Peru, Indonesia, and many more places I someday hope to visit. I listened and began to share their excitement, worries and curiosities.
Then they asked me where I would be working on microfinance.
“Um, New York.”
“Um, isn’t that where you’re from?”
Indeed it is. Unlike many of my more impressive colleagues, I came back to New York, with all the amenities to which I’m accustomed, to be a Kiva Fellow.
While I don’t have the opportunity to explore a different culture, I find myself on an exciting frontier of Kiva, an organization that is perpetually searching for inspired and practical solutions to financial problems. As my fellow fellows work to expand and strengthen Kiva around the world, I’m working on a pilot project known as Kiva Zip. The lending model we seek to create will facilitate direct peer-to-peer lending, continue expanding access to capital in the U.S. and abroad, and explore untested hypotheses about the nature of borrowing.
Oh, and did I mention that our loans are made at zero-interest?
The traditional Kiva model has already inspired a new understanding of the concept of lending. By connecting people around the country and around the world, Kiva has shown that small groups of individuals can play the role of banker for those whose success would not generate enough profit for larger banks to take an interest.
What Kiva accomplished for lenders, we now seek to accomplish for borrowers.
Since its creation in November, Kiva Zip has sought to prove that in the right context, small-scale borrowers can outperform the expectations placed upon them by traditional lending criteria. We do not believe that credit scores and cash flow projections are the only ways to predict success.
The context that matters here is the community. There is no doubt that one’s community affects his or her behavior. We believe that with the community, friends and family invested in the success of a business owner, no matter how small, their success and repayment rates will stabilize at a high level.
That is why at Zip we are testing due-diligence models that make use of community partners with an established relationship with the borrower. These community partners are known as trustees. We will encourage individuals to play multiple roles, as borrower, trustee, and lender, so the connections among them increase and their investment in one another’s success grows stronger.
We are seeking a broad spectrum of partners, including advocacy organizations, entrepreneurship classes, chambers of commerce, and religious institutions, as well as individuals who understand where there is need and opportunity.
Kiva Zip loans in the United States do not currently exceed $5,000, but as we provide this stepping stone to entrepreneurs in the States, as well as entrepreneurs in Kenya where Kiva Zip is also active, we will be searching for and finding solutions that will eventually contribute to more opportunity for all.
I encourage you, reader, to not just make a loan, but to think about where these ideas can create a positive impact in your communities, and let us know about it!
Marc Raifman is a Kiva Fellow, working in New York and Chicago this summer with Kiva Zip. If you would like to find out how you can get involved with this innovative program, you can reach him at Marc.Raifman@fellows.kiva.org. You can also find out how you can become a Kiva Fellow or find more information on Kiva and microfinance in general on kiva.org.
By Amber Barger, KF14, Mongolia
A borrower verification is a thorough check of ten random Kiva borrowers of a field partner. It’s used to verify the accuracy of the information published on the borrower profiles on the Kiva website. A borrower verification happens several times throughout the course of a partnership in order to assess a microfinance institution’s performance levels. Read below about the ten borrowers I visited through a borrower verification with XacBank.
By Jerry Harter, KF13 Indonesia
During my three months in Bali, I gained an appreciation of people’s resourcefulness here. Typically, families have multiple streams of income. Various small enterprises are cobbled together, depending on the resources and demand in the area. Often some money can be made from the land, a little more is made from small-scale manufacturing, and perhaps some income is derived from providing services. For one reason or another, the following are some of my favorites.
Mongolia is known for its vast amount of open space and beautiful scenery. The population density of Mongolia is just over 1 person per square kilometer. In this post, I’ll share photos from the most rural of businesses to the most urban.
The term “countryside” can be translated into “khuudoo” in Mongolian language. However, the meaning of the word is slightly different in English and Mongolian. The term khuudoo in Mongolian is relative to where you are from in the country and where you are when you say the word.
By Amber Barger, KF12, Mongolia.
Mongolia is a landlocked country spanning 1,564,116 sq km, slightly smaller than Alaska. It’s situated between Russia and China. The main forms of transportation available from international destinations are flights from Russia, China, Korea, and Japan and the train route from Russia and China. Domestic flights, the train route and transport by road are options within Mongolia.
Small business owners normally don’t have the money to fly to and from Ulaanbaatar, this luxury is usually only attainable for government officials, foreigners, and wealthier urban Mongolians.
By Sloane Berrent, KF8, Ahon sa Hirap, Inc, Philippines
“How has Ahon sa Hirap, Inc.” (ASHI and my host microfinance institution) “being here in your barangay or in your town helped your community?”I ask the women from ASHI during each Center meeting that I attend. There are a few variations on this question. I ask how their lives have changed and what the Center means to them.
“My husband had a stroke and couldn’t work anymore. I worked as a domestic in town and had to travel very far every day for not a lot of money. I joined ASHI 7 years ago to start a buy and sell fish business so that I could stay closer to home to take care of my husband and help my children.”
“After my husband died, I was so lonely. My children are all grown up and out of the house. I was sad. I joined ASHI 13 years ago and now my life is so different. I laugh. I come here every week to see my friends.”
“My house was very bad and made from old bamboo. When typhoon season came, my family had to run to our neighbors because we were scared our house would collapse. With my ASHI loan, I was able to move my Sari Sari store to a busier corner where workers pass by on their way to the fields. I open at 4AM and close at 8PM but am very happy. Now 10 years later, we now have a house made of stone and we don’t run from the typhoons anymore.”
But has it changed MORE than that? What about an entire town?
I had heard that seeing microfinance in action could be like watching grass grow. So gradual, so slow. How could I say that there is indeed a larger change in the landscape of where microfinance sets up shop?
I turned to the ASHI staff. It was a Saturday night and we were going to go out to dinner together. The two Kiva Coordinators asked me if we could stop in the new local mall that opened so that could grab a few things.
“Sure,” I said. No problem.
We walked to the end of the drive and hopped into a tricycle and took off towards the mall. There was light traffic, the road wasn’t too bumpy, we arrived to throngs of people gathering outside the mall, in the entrance, more teenagers and families gathered.
“This has been huge for our town,” the one Kiva Coordinator said.
At the fellows training some of my companeros seemed shocked that I’d want to do a fellowship in one of the most expensive cities in the world. I have to admit, I admire the cost of a Terere in Paraguay compared to price of latte in NYC. Regardless, it’s been an incredible experience to participate with Kiva on the US launch.
In many ways the fellowship, the entreprenuers, even New York City itself has at times seemed enormously comparable to a fellowship in a developing country (I mean have you used the subways here!!!???). But about the cause…
Why US microfinance….
By launching in the United States, Kiva is creating a local lending place for global thinkers. By supporting US microfinance and organizations like ACCION USA, you are supporting community.
Kiva lenders want to support individuals around the globe that work hard to support themselves and their families. These entrepreneurs also dream of creating legacies. Kiva is helping to provide equal access to capital for business owners that, regardless of the country they live in, have struggled to obtain the credit elsewhere.
I believe that by supporting a US business on Kiva, we truly understand the goal of microfinance- and we are balancing the scales to open up opportunities for everyone.
Trinidad wanted to start a daycare, a bank turned her away, a loan shark almost lured her… instead a pool of individuals on Kiva helped to make her dream reality.
Sustainability is one of Kiva’s principles. Who can argue that sustainability isn’t needed in the US?
Kiva lenders are supporting sustainable businesses, building communities and helping to create legacies- 25 dollars at a time.
The other day in the Mission district at Kiva headquarters in San Francisco, I converged with three micro enterprises, on just one corner. A young man selling fresh oranges, a Popsicle and ice-cream cart vendor, and another man with a tall stick of cotton candy- $2 each. Although this coincidence is quite novel, it does explain another, larger phenomenon. Perhaps the true impact of small businesses in the U.S. is underestimated. AEO, the association for Enterprise Opportunity, says that 87% of all businesses in the U.S. are microenterprises, businesses with fewer then 5 employees.
As a fellow, Kiva has given me the opportunity to research U.S. microfinance as they look into expanding into the U.S. market. The Mission district for example is one of the most culturally and economically diverse neighborhoods in the U.S. There exists an interconnected community of businesses, many of them reminiscent of microenterprises I’ve seen traveling in the developing world or even on the Kiva website for that matter. It’s made me second guess why I hadn’t come here to study Spanish and Latin American culture- unarguably I would have had the most diverse experience possible.
In San Francisco, Denver, Omaha, Detroit and New Orleans there are all types of fascinating microenterprises. Businesses owners with retail shops, cosmetics sales, arts and crafts, janitorial services, and food vendors- just to name a few. Many of these businesses are using microfinance to get started and to get ahead. The backbone as U.S. businesses are sometimes referred to is asking for some reinforcement in a time of hardship. It may be microenterprise that helps tone the future of business in the U.S. Lets see.
Over the coming months of my Kiva Fellowship, I will continue to research U.S. microfinance on many different levels in several U.S. cities. Take a look at the video I made while in San Francisco’s Mission district. I will be continuing my research in New York City, so stay posted for more on U.S. microfinance.
Link to Video-