Today, I celebrate my 2 month anniversary here in Benin. As such, it’s probably time to detail a bit of what I’ve actually been getting up to here (it’s not all surfing and kiting, but I’m trying to keep the ratio healthy…).
The task:
In San Francisco, the Kiva guys gave me a lovely “workplan” with lots and lots of “deliverables”, which were all cleverly thought out by someone partly in the States, sometimes as close as Dakar. But not actually here. The voiceover from Kathy (my regional coordinator, who keeps me linked to Kiva HQ) was more honest: “They’re not doing great, and we don’t know why. So, just go along, get involved, and see what you can do”.
Although unclear, that’s the kind of carte blanche direction I like. A bit like James Bond. The James Bond of microfinance. Not with a licence to kill, but with a licence to help. Oh, yeah.
So here’s what I did. The first two weeks were pretty quiet, balancing careful observation of how things run here with my stringent acclimatisation routine of going to the beach most days. You can’t put a value on spending time reflecting on your observations…
Then – Eureka. I pulled out my help-gun. And pulled the trigger.
Oh Yeah.
A bit of (probably boring) detail:
There are a couple of key methodologies for doing microfinance. The simplest is the “one loan to one person” approach, which needs some form of collateral such as obligatory savings alongside repayments.
The next level up is the Grameen-style group solidarity lending, developed in Bangladesh. In this approach, a group of borrowers get together and provide social collateral – in other words, if you don’t pay, the other members of the group will have to pay for you, and you will suffer some social backlash (not to mention being kicked out the lending group). This approach is good as it avoids material collateral (which often doesn’t exist, these guys are poor), and it gives authority to the lending group – the extent to which I want to punish someone for not repaying depends on whether it was a genuine problem (illness etc) or whether they were just not pulling their weight.
Now, the partners here operate mostly with the latter. Something we at Kiva had completely missed. So when we published loans on the site, we published individuals. With life stories and photos. Which takes a long time to gather. All for loans in the region of $250. The guys here got fed up with it, and thought it was too much work for the benefits of the interest-free capital we give them.
The Golden Bullet:
On the Kiva site we have a way of publishing group loans, with a story on a “featured member”. So I simply rolled out this mechanism to all the credit agents so they got the relevant information. Now, rather than finding 10 clients, writing 10 stories, and taking 10 photos, they find one group at their group meeting, write one story, and take one photo. That saves about 90% of the work, if my maths is right.
These are savings which can be passed on as decreased interest rates, greater outreach to marginalised communities, and increased client services in the form of support and business training (note these guys are non-profit so it’s not a case of celebrating better profits).
Simple solution. And it shows the value of having someone out here to really understand what’s going on.
Hitting the target:
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| Just like Daniel Craig |
So followed two weeks of driving around on motorbikes, getting burned, and training agents at the branches and out in the field with clients.
Now we’ve just finished publishing loans for the month of March. Kiva imposes a fundraising limit on its partners every month. For the past few months the guys here have raised in the region of 5% of that limit.
This month we raised 150% of that limit.
Boom.
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