At the risk of my first post sounding like a sappy Oscars speech, I want to start off with a few thank you’s to Kate and Nick for making the training a mix of sessions for our general microfinance knowledge in addition to things that will directly apply to our fieldwork, for making it an enjoyable time with Boston outings, but most importantly for the wonderful group of trainees they allowed me to spend the week with.
On Tuesday, after our AUSA client visits (or as I like to remember it, our delicious cupcake visit), we had a session on Intercultural Training, in which we shared past experiences and concerns about encountering norms of different cultures, since we are all about to be thrown to a certain extent outside of comfort zones. I’ll confess now that at the time, I didn’t place much value on the intercultural training session, but I felt differently about it by the end of the week.
Last week was the first time I’ve spent such a large chunk of time with Chinese people who have lived mostly in China, and I learned something valuable from them in an unusual way. English may not be their first language, but I came to like and respect the way they spoke it more than I do a lot of native English speakers, myself included. I think that sometimes people use far too many words to express thoughts, oftentimes in an attempt to sugarcoat their actual thoughts. Our Chinese Ambassadors, Han Shao and Weiwei Pan, on the other hand, always spoke in a manner that was both sincere and direct at a level far higher than I have ever been accustomed to.
Looking back on the list of valuable things I learned last week, I rank this bit of intercultural training highest. In our upcoming blogging of client stories, all of us Ambassadors have been instructed to, albeit carefully, “tell it like it is.” We’ve learned that microfinance, or any intervention in the lives of people struggling to sustain themselves, can be very dangerous. No matter how much benefit the intervention provides, it must also take responsibility for the harms that it unintentionally and indirectly produces.
The point I’m trying to make (perhaps with too many words) is that writing about it objectively can be difficult, and I will strive to do it in the upcoming weeks with the kind of simultaneous conciseness and honesty that I’ve had the pleasure of experiencing from my new Chinese friends.
My next post will begin client storytelling in Mumbai, but before I sign off, I want to thank Kate for working way too hard to make my blogging possible (who would have thought the brown kid would give you the most computer trouble?!) and last but not least for the gracious hospitality of the coolest married couple I know, Mrs. and Mr. Firth Bard, who I look forward to seeing again in three weeks at our India Ambassadors reunion in Mumbai.
ACCION International’s Ambassadors are headed to five countries. We will document the impact of microfinance and work with local institutions, ACCION affiliates, on special projects. My fellow ambassadors are recent college graduates or graduate students, and some have already worked in the field of microfinance. I am a “mid-career” investment manager taking leave from my office in Boston to go to Paraguay. I will work with Fundacion Paraguaya, a social enterprise that counts microfinance, business education, an organic farm school among its programs.
Armed with a netbook, a notebook (the kind with pages), a Flip videocamera, and more websites than I know what to do with, I am headed to Ciudad del Este, Paraguay’s second largest city. Ciudad del Este borders Brazil and Argentina. It is the home of Itaipú Dam, the world’s largest hydroelectric plant and source of much of Brazil’s electricity. Ciudad del Este is also a shopping destination; people are drawn to the city to buy “duty-free” electronics and other goods. Settled by the world’s traders, it appears there will not be a lack of Chinese food.
Amidst the mayhem, I will meet clients of Fundacion Paraguaya, recipients/users/beneficiaries of microlending programs. How has this helped? Has it hindered? How does this fit Paraguay and its needs? As an investment manager my job is to look at the use and impact of money, with a view to making it grow. My work involves families, so I am close to the “human” side of finance. Having a look at the effects of finance on a different end of the financial/social spectrum will be a valuable and eye-opening experience. Stand by for further posts. I don’t know what lies ahead, or what conclusions I will draw, but I’m keen to look and listen, and to share what I learn.
Less than one week to go!
I struggled to compute the pilot’s explanation of the current ground temperature in Dar Es Salaam.
51 degrees Celsius times one-point-eight plus thirty-two was coming in at over 120 degrees Fahrenheit. That couldn’t be right. I didn’t sleep much on the flight over, but after ransacking my neurons storing my eighth grade algebra syllabus, looking for any kind of lost variable that would explain that perhaps the temperature was more like 90 degrees, I was certain I had the arithmetic right.
Plane has touched down. Doors are opened. Deep breath, here we go.
Hot, yes, but not impossibly oppressive for a short walk across the tarmac. Once inside, I unleashed my limited Swahili banter on the Customs agents, who engaged me in pleasantries before mercifully switching to English for the trickier questions.
Francis Musoke, my supervisor at Akiba, was waiting for me at the gate with a sign reading ‘JASON ACCION.’ Not my last name, but I like what he did there.
The drive from Julius Nyerere International Airport to our apartment building, my first view of life in Dar and East Africa, reminded me of similar introductions I had to Central America – billboards for foreign companies I vaguely recalled, aggressive flouting of traffic standards, thin old women begging at intersections, teenagers tapping on the car windows trying to sell hand-tied plastic bags of fruit, and an unmistakable smell of burning trash. Having visited Honduras twice in the last six months, rather than be shocked and excited at my new surroundings, I felt more like I was about to rendezvous with an old friend.
Once we turned off the main barabara, the road immediately devolved into an intensely rutted dirt path – wide enough in most places for two cars to theoretically pass one another, their original girth substantially diminished by decades of water clipping relentlessly at their edges. We tugged along, finishing the last half-mile in an efficient 10 minutes and miraculously (to me) with both axles intact.
Francis clued me in to his theory on the degraded state of Dar’s roads: the politicians know how bad the city’s roads are, but rather than spend infrastructure funding on repairing the omnipresent potholes and permanent drainage blocks, they spend the money to buy bigger cars with better shocks.
If there’s any social benefit to the horrific state of the local roads, it is that drivers can’t help but drive slow, undoubtedly saving countless lives. With no physically distinct sidewalks and a population largely unable to afford cars, most roads are specked with a consistent flow of pedestrians, which much like the traffic, waxes when people are going-to or coming-from work. Thus, slower roads mean slower driving, which grants an easier time to Dar’s walking. Whether the pedestrians wouldn’t be so bold without the potholes must be filed away as a counterfactual impossible to know.
But allow me to bring it back to the billboards for another stanza. Many of the names were familiar from my coursework in microfinance – names like Diamond Trust Bank, National Bank of Commerce, and NMB (National Microfinance Bank). The billboards often advertised mobile banking services – NMB’s “Pesa Fasta” being one that was new to me, but which I immediately took an interest in.
NMB, though a competitor of Akiba, is unquestionably the largest and therefore most important player in Tanzania’s microfinance market. Any effort to integrate mobile services into financial inclusion would necessarily need to be coordinated with NMB on board, if not leading the charge. In a country where mobile phones are ubiquitous (close to 100% penetration is expected by the end of 2013), even among the poor (I just bought a fine, not fancy, Nokia device for about $28), microfinance institutions should be pursuing mobile platforms aggressively. Regulatory hurdles remain, but it’s encouraging to see them pushing for another M-Pesa miracle in Tanzania.
Quite the first day. In just a few hours I established my opinion on Tanzania’s infrastructure policy and the future of its mobile banking industry. Tomorrow brings my opening day on the job and a tutorial on Akiba’s new home improvement loan product.
As always, tell me why I’m wrong in the comments, and stay tuned for more insights.
ACCION’s Ambassador training ended today.
Technically we were done with formal training yesterday, around 4:30 pm, but we were then treated to a “training graduation party” evening of flatbread pizza and candlepin bowling.
I suppose the educational component of training continued, in a sense – I learned that my strategy of whipping the tiny bowling ball as hard as I can results in a lot of gutterballs, rather than causing the pins to burst into flames and explode as I had suspected. Shocking.
Today we had a social day, which included a duck boat tour of Boston and lunch at Doyle’s café, a traditional establishment whose lovely waitresses sounded like they taught Ben Affleck how to ask about liking them apples. After lunch, we took a tour of the Sam Adams Brewery, taking plenty of time to sample the establishment’s fine cuisine.
Despite the ostensibly “fun” activities, the day was not without microfinance.
Our Sam Adams tour guide mentioned the Brewing the American Dream program, a partnership between Sam Adams and ACCION USA to finance and nurture small start-up food and beverage establishments.
Our table went naturally went crazy when she mentioned ACCION, much to the confusion of the tour’s other patrons, who were more than likely just jealous of our camaraderie.
I’m leaving Boston in about an hour, catching the train to NYC, then grabbing an 11 am flight tomorrow from JFK to Dar Es Salaam, via Johannesburg. It’s an efficient 24-hour journey in which I’ll have plenty of time to catch up on sleep and to contemplate my summer.
I’m equally nervous and excited to get to Africa.
Nervous that logistics will fail me, that I won’t find my pick-up at the airport, or that I’ll forget to say goodbye to someone.
But I’m excited to be embarking on a ridiculous adventure halfway around the world. I’m excited to learn more about microfinance, about Tanzania, and about another culture. Frankly, I’m excited to get back to actual work after a year of grad school filled with problem sets, papers, and exams.
Thanks to the International Development Program and the Non-Profit Leadership Development Initiative at SAIS and to everyone at ACCION for making this wild ride possible. Farewell to my fellow Ambassadors, it been awesome getting to know you, and I’ll be following each of you on this very blog.
Jason Loughnane, signing off stateside. Stay tuned.
Last week Robert De Niro, Woody Allen and other Hollywood icons were basking in the limelight in Cannes, France. One week later, a few thousands of miles across the ocean, quite a different event is taking place at the ACCION HQs in Boston, MA. Just like in Cannes however the ACCION organizing team can boast an excellent line-up: us, 14 ambassadors are gathering here, all with at least one eagerness in common: to share ideas and visions about microfinance before our plunge into the field realities of Tanzania, Mexico, Paraguay, India, China, Ghana and Nigeria.
In 50 years (ACCION 1961-2011) microfinance grew and saw numerous efforts, innovative breakthroughs and unprecedented funding and targeting of services for the unbanked. Currently 150 million people have access to microfinance.
Despite all attempts we are not yet there: an estimated 3 billion of people still could benefit of access to financial services. Meanwhile microfinance is no longer a cottage industry, it is coming of age as show the media, the risks perceived in the Microfinance Banana Skins and the need for consumer protection principles (Smart Campaign), regulation and vision.
Field stories from Melissa Baez (ACCION Program Manager for Africa) and Michael Schlein (ACCION CEO & President) aroused my curiosity even more to explore what microfinance means for people in Tanzania. Despite the fairy dust wiped off, I believe that microfinance can take an important place in working towards a financially inclusive world.
Oh and about Cannes and Microfinance: the red carpet! Only will ours be filled with the people at the centre stage of microfinance. Find out with us in the weeks to come. Join us in reading the blog, living it with us and contributing with your comments.
May this haiku poem inspire you:
Dialogue is on
Microfinance yin and yang
Spirits are moving
Today in the Ambassadors’ training we had a crash course in microfinance lending practices. It was focused on individual lending strategies and how MFIs and loan officers decide to whom and how much they will lend. Aside from being thrilled that I was able to utilize liquidity ratios that I learned last semester in Financial Management (thanks Professor Rose), it was interesting to practice an “on the ground” process and see how loan officers decipher how much a loan can be and how often a client can make loan payments.
This really hit home with me, especially following my class I had last semester with Professor Jonathan Morduch at NYU Wagner. Morduch has many opinions on microfinance that, and my apologies, I will be discussing ad nauseam on this blog. If you’re not familiar, he is one of the leading researchers on microfinance, and probably his most well-known book was Portfolios of the Poor.
I was reminded of one of the themes from Portfolios as I poured a single-serving creamer into my coffee during the lending workshop–the importance of bite-sized finance. Since low-income people face the “triple whammy” of poverty, which entails an inconsistent income stream, low-income stream, and lack of financial tools, it is important that financial tools are designed with this in mind. It is extremely important that borrowers are able to make small, regular payments. This was a major departure from traditional finance to microfinance, and it was truly fascinating to see that process first hand on a microloan application today. I cannot wait to actually see it in action in Paraguay!
A clear case of all of us bonding…
Steven is heading to Bangalore, India for the first time. So Bard got a 10 minute mini disc on India to prep him on what to expect. Now Steven has a MacBook, like a lot of us. His reservations about the mini disc working on the MacBook were immediately apparent. But because Bard and I (especially me) assured him that it would work, he put on a brave face and gave it a try.
Unfortunately it got stuck.
What ensued was an entire team effort consisting of bobby pins, cds, mini cards and many other tools we imagined would be helpful to try and get the mini disc out. Many brains got together to solve this dilemma and finally the ‘savviness’ of An prevailed as she vigorously shook the MacBook and let gravity and her nible fingers do their jobs.
To sum it up, we as a team prevailed. The mini disc and MacBook’s clear flaw regarding this issue was conquered.
I write this because I wanted to highlight how all of us have grown close and comfortable with each other over the course of the past 4 days. I also wanted to write about the importance of blogging small but funny and significant experiences that all of us will have over the next 10-12 weeks. It’s necessary because,problematic or just amusing, we will have our unique moments, and those are the experiences that will add up to make this summer one of the most memorable ever.
Cheers to the ACCION Ambassadors C/O of 2011 !! Hope everyone has an unforgettable time!
As any of my fellow Ambassadors can attest, we’ve learned quite a bit in training this week. How many people in the world are served by microfinance? (150 million.) What qualifies as “semi-urban” in Paraguay? (Oxen sharing the road with vehicles.) And what the heck is a banana skin? (The name of a survey of risk that identifies the most likely things to “slip up” a microfinance organization).
But this is just the beginning. I’m heading to Asuncion, Paraguay next week, and I expect that the real learning will begin when I arrive at Fundacion Paraguaya and begin to experience microfinance firsthand. Like many following microfinance from afar over the past few years, my thoughts on the industry have ranged from wide-eyed optimism to qualified skepticism to now, a strong sense that organizations like ACCION are truly making a difference in the lives of poor clients in developing countries.
If there’s an overarching theme of what we’ve learned this week, it is that microfinance is an incredibly complex undertaking, and the questions that remain for the industry (or remain to be asked) are just as numerous as the answers that have been gathered over the past 50 years of ACCION’s existence. As a soon-to-be MBA student, I’m particularly interested in the issues surrounding the definition of impact, questions of scale, and the delicate balance between self-sustaining MFIs and continued commitment to the social mission of the enterprise. I’m eager to use my 10 weeks with Fundacion Paraguaya to dig into these issues, and I’ll keep you posted on the experiences and perspectives I gain throughout.
Yesterday, those of us going to Fundacion Paraguaya chatted with last year’s inaugural class of Paraguay Ambassadors. We learned that we’ll see unique animals around town, like the capybara and giant anteater. We learned that a farmer’s market under a nearby shopping mall is the best place to buy fresh produce. And we learned that we’ll be living in a house with up to 20 people passing through Asuncion to work with the Fundacion in varying capacities. At least after living in New York for the past three years, I’ll probably still enjoy a higher square footage per capita. Flexibility and open mindedness are clearly of the essence, and we’re all eagerly anticipating an experience that is sure to be educational in countless ways.
After an inspiring conversation with ACCION President & CEO Michael Schlein, we’re wrapping up training, and the level of excitement among all of us Ambassadors is palpable. We are ready to go. My countdown is officially one week, and I can’t wait. Stay tuned!
I was halfway through my second cup of coffee this morning when it hit me.
Melissa Baez, a project manager for some of ACCION’s programs in Africa, was presenting to our Ambassador class on ACCION’s work with Akiba, where I’ll be working, and how their relationship has evolved in the last decade.
One of her introductory slides included a basic map of Tanzania and a lovely but somewhat generic picture of giraffes in the foreground of Mount Kilimanjaro.
Despite having seen hundreds of similar images, this time, something clicked.
Today it finally hit me. In just four days I’ll be in East Africa. Having travelled to Morocco last summer, I have technically been on the continent, but never before to Sub-Saharan Africa.
Through the hectic final few weeks of my first year at SAIS, between various papers, finals, and presentations, I never had a spare moment to stop and comprehend my summer plans. I knew that I would be going to Tanzania, I had after all been to the Embassy in DC for my visa and paid for a flight on South African Air, but until today, it didn’t sink in.
I’m still not sure it has. But ready or not, I’m going.
Day three of training ended with Deb Drake of ACCION’s Center for Financial Inclusion presenting the results of the 2011 Microfinance Banana Skins survey. For those unfamiliar with the Banana Skins series, this year’s results indicate many more practitioners and investors worried about reputational risks and political interference, consistent with the very public series of body blows which hit microfinance square in its gut of India and Bangladesh.
Despite the negative press, I’m confident in the ability of microfinance to contribute to making the lives of the poor more manageable and dignified (and maybe a little less poor).
Perhaps I’m naïve. Perhaps I need to see a few branches and work for an MFI to really understand whether microfinance “works.” More likely than not, I’ll have many more questions at the end of my time as an Ambassador than I do now.
Either way, in just four days, I’ll be in Dar Es Salaam. I’ll be meeting with loan officers and clients, traveling between Akiba’s fourteen branches to better understand the institution and African microfinance.
It’s going to be an awesome experience. I’m finally excited.
My name is Iveth Yanez, I was born and raised in Quito, Ecuador. I am a recent college graduate with a passion for development and a great interest in microfinance.
Until very recently, I was working in research and development in Ecuador and saw from first hard experience the need for opportunities that can help people develop their own capabilities. Working in the field of development, I realized that the only way for true development to occur is by giving the “poor” the necessary financial services that can help them put their creativity in ACCION and will encourage people to start or grow their own business.
The new paradigm in development usually comes associated with the common understanding that if “you teach a man to fish you will feed him a lifetime”. However, I have come to the realization that in order for a man to fish, he needs the necessary instruments to catch a fish, that is, for matter of this metaphoric endeavor, give people the financial opportunities to grow and sustain that growth. If financial services come in hand with capacity building and business education, our average street vendor and local shopkeeper can become a true entrepreneur with opportunities to grow, take risks and benefit from the outcome.
For the next two months, I will be working in Mexico city with Banco Compartamos, the biggest success story/controversy in the microfinance world, depending on what side you look it from. The bank, as of 2010 had 1,546,059 active borrowers, almost 98% woman. From a woman’s view, I say ! ! ORALE COMPARTAMOS!!
I will have the opportunity to visit the microentrepreneurs, listen to their experience and share with you their stories. Stay tuned for my next posts.
I Look forward to reading your commnents.