Two and a half months in Paraguay working for Fundación Paraguaya has been a really valuable experience. I think there was an excellent fit between my ambitions (learning about microfinance on a local level) and the needs of the Fundación (analytical person with finance background). One thing I’ve learned is that lifting people out of poverty through microfinance is complex because of the playing field between efficiency (that requires a certain standardization) and the observation that people, better yet, families, are poor in their own unique way. Continue reading
The World Wide Web tells us that: “traditional franchising is when a firm with an established product or service (the franchisor) enters into a contractual relationship with other businesses (the franchisees). Franchisees operate under the franchisor’s trade name and guidance — in exchange for a fee.”
Microfranchising is a business model that applies traditional franchising (e.g. McDonalds) to very small businesses or micro-entrepreneurs, like cleaning supplies, eggs, and reading glasses in the case of Fundación Paraguaya. Microfranchising is a concept that differs from microcredit in that it mainly provides a proven and successful business model for replication, rather than just startup capital. Continue reading
Consider this the sequel to my last story about the Client Protection Principles. Planet Rating is visiting this week to conduct an organization-wide evaluation in order to decide if Fundación Paraguaya will be eligible for SmartCampaign certification.
(Tip: If some of these names do not sound familiar, probably better to read the prequel first).
Planet Rating has been so nice to let me join them on one of the days, which at the time of writing was yesterday. We visited the branch of Villa Elisa, a city in the Central Department of Paraguay that borders with the capital Asunción. At the branch, Anali from Planet Rating conducted interviews with three focus groups:
- Asesoras & Oficiales de Crédito
- A group of 8 male clients
- A group of 5 female clients (we hoped it would be more)
Some of the more interesting observations were:
Imagine you are a farmer with a few scattered small plots of land where you cultivate beans, peanuts and maize. There is a machine you would like to buy that helps you harvest the land more efficiently . This way, you spend fewer hours in the field, and will have more time to earn additional income for the family by doing motor repairs in the community. However, you barely have any savings at the moment because you spent most of it on unexpected medical expenses for your five-year-old child. You decide to take out a loan at a microfinance bank. After a visit to the bank where you indicate your interest in a loan, a loan officer visits you two days later at your home to see if your business actually exists, and to gather financial information about the costs and income that your family has (not just the farming activity). You have all this information more or less in your head (there is no written administration) and you share it with the loan officer. After the loan officer has done the financial analysis back in the office, he/she calls you to say you have been accepted as a new client and you make an appointment to come to the office to sign the contract and other formal documents before you can take out the loan. There is only one problem…you don’t know how to read.
When I was living and working in Chandigarh (India) for a few months back in 2011, I was also writing a blog series (www.dennisversusindia.blogspot.com) in which I kept track of the competition I started against India and its people (I am very competitive). Every time I got frustrated with something ‘typically Indian’, India would score a few points. Every time I managed to turn a negative situation into something positive or I did something out of my comfort-zone, I scored a few points. In the end I won, of course, but it was a tight game!
Looking back at my recent stories as an Accion Ambassador and comparing these with the ones from India, I feel I have been very informative about what I’ve learned about microfinance, but not so much about the cultural differences I have been experiencing. I consider myself to be more mature now than in India and the Paraguay experience has been mainly professional, whereas in India partying was definitely a central theme as well. Reading the last sentence aloud makes me realize I am also more boring now. Anyway, for the readers that need a break from the microfinance stories (I am one of them), here is a little sneak peek into three different cultures from a Dutch perspective.
Last week I had the privilege to attend a workshop in La Paz, Bolivia. La Paz is located at an elevation of 3,600m above sea level and sits in a bowl surrounded by the high mountains of the altiplano. As it grew, the city of La Paz climbed the hills, resulting in varying elevations of 3,200 to 4,100m. Right after I arrived at the airport of El Alto, I was quickly blown away by the spectacular views over the city.
Born and raised in a country that is partly below sea level, I happily followed the three rules that, according to the locals, every visitor to La Paz should obey in order to prevent altitude sickness:
- “Camina lentito” (Walk slowly)
- “Come poquito” (Eat in moderation)
- “Duerme solito” (Sleep alone)
- Red: Your family does not have access to electricity
- Yellow: Your family has access to electricity but it is clandestine and/or not constant
- Green: Your family has permanent and non-clandestine access to electricity