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
“Banco Occidente, Banco Caja Social, Citibank, BBVA…” Don Hugo listed off the banks he had taken loans from in the past. A microentrepreneur, José Hugo Beceira runs a construction shop in a neighborhood on the outskirts of Bogotá, and as he described, there is no shortage of credit for small business owners in the city. Entrepreneurs can walk into any number of NGOs, Colombian banks, or multinational banks, and walk out with a loan.
So if a microentrepreneur like Don Hugo can get the loans he needs to grow his business from so many providers, can’t we just consider this microfinance business a success and pat ourselves on the back?
Not so fast.
Though credit is widely available in major Latin American cities like Bogotá, we’re still very far from universal access, and moreover, easier access doesn’t necessarily guarantee better results for individuals or at the macroeconomic level. So, why do we need a continued focus on microfinance? Continue reading
My last week in India has come and gone, and I have been reflecting on the eight weeks I had the privilege of spending in this amazing country. In my previous blogs, I have shared some of my experiences in Mumbai and the many fascinating things I have seen. Yet, although my understanding of India is much better now, I still feel I have not been able to triangulate all the different pieces of the new things I had the opportunity to experience and learn during my time here. India is an intense country. As soon as you start discovering this country, it is easy to get overwhelmed by its contrasts, colors, food, people, religions, streets, architecture, and more. Mumbai, formerly known as Bombay, is also an international and very fascinating city that is much more than the home of the Bollywood film industry and the main financial district in the region.
During my professional career, I have had the opportunity to work in microfinance across different places, including Latin America, Africa, the United States, and, more recently, India. Although each country and region has its own peculiarities, they all share very similar challenges to balance financial sustainability and financial inclusion, which requires continuous innovation to meet the needs of customers. In addition, providing financial services to very low-income households is just a gateway – but not a sufficient condition to – achieving financial inclusion. The role of governments and banks is increasingly important – governments through regulation, and banks through building and creating roads into markets. In this scenario, it is critical to continue innovating and learning more information about the impact that microfinance has on the lives of our customers and communities. This type of information will be useful to policymakers, donors, investors and financial services.
I would like to thank to all of the Swadhaar and Accion team, especially Preeti Telang and Nihar Jena. Also to my teammates Madhan and Pravash, thanks so much, I learned so much from you during these last eight weeks. Lastly, I would like to thank to my friends Apurva and Rathna who made my adaptation to living in India very easy and helped me so much to better understand the Indian culture. It will be impossible to remember India without a smile.
Pablo Nunez is working out of Mumbai, India, with Swadhaar FinServe, an Accion partner and microfinance institution, on a small and medium enterprise lending project.
The first thing I noticed when I arrived in Lilongwe was cash. While Zambia rebased its currency two years ago, there are still an inconvenient number of zeroes on Malawian Kwacha. The highest denomination note is worth less than $2 USD. This causes several inconveniences for ordinary Malawians, and Zoona agents, in particular.
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:
I was never a big fan of vegetarian food. As part of my everyday diet since I was a child, I would consume at least some meat (either beef, pork or chicken). However, when I arrived in Mumbai, I found very few non-vegetarian places to eat, and learned that beef or pork is not sold in the markets. Only chicken is available for purchase at markets, and sometimes, fish.
Although I have been in Mumbai for almost two months now, I still find the respect cows receive here fascinating. In this city, they live freely in the streets and are not threatened by human presence. Hinduism (which is the main religion in India) preaches that human beings should care for everything that lives and the cow falls into the highest honor category as a sacred beast. Some people believe that cows play a big role in daily life because the cow provides people with milk and the dung may also be dried and burned to cook or warm the house during cold season. Across the state of Maharashtra, indeed, selling beef is prohibited and killing cows is a major offense by law. Those who violate the law face up to five years in jail.