I had to pleasure of traveling to San Francisco a few weeks ago for the Inman Real Estate Conference. Though most of my trip involved socializing with real estate folks and working, I made some time for talking to people in the microfinance industry while I was there and wanted to put together a few thoughts as a result. I’m annoyed it took me so long to get to this post, but better late than never.

I took Monday off and had coffee at Coffee Bar with April Newman from SVMN in the morning. We had a great chat for a good hour and a half and I came away very impressed with her knowledge and passion. She is stepping down from her role as Interim Director of SVMN in order to work with an organization more hands with improving the lives of others, so if you know someone who may be a good fit for the SNMN job, let her know. I didn’t know it at the time, but Coffee Bar in the Mission was about 3 or 4 blocks from Kiva’s offices. Randomly, a Kiva Fellows meeting with 3 Kive employees started about half hour after I got there and April introduced me to JD (who runs the Fellows program). I stuck around until they were done, walked back to their office with them, and got a quick tour of Kiva headquarters. I posted a few pictures via Twitter, but don’t know how to search twitter to find those tweets or else I’d re-post them here. Thanks to JD for giving me the tour!

That same day (Monday), I met Kirsten Weiss for coffee in the late afternoon. Kirsten has been a contributor on myKRO.org for quite some time. It’s always good to put a real face to the name of the person who I’ve conversed with for months via e-mail. I’d never even spoken to her on the phone prior to my trip, but it wasn’t difficult to strike up a conversation given her fascinating background doing microfinance in a number of countries overseas (including Afghanistan) for ShoreBank International prior to coming back to the states to do financial consulting. I look forward to seeing more of her interviews on myKRO.

Later in the week I grabbed coffee down at South Beach Cafe with Courtney McColgan, one of the co-founders of Wokai. Where as most people I know were drawn to the human side of microfinance — the touching stories of the individuals and families touched on a day to day basis — it was the economic development component that initially attracted Courtney to microfinance (she worked at Morgan Stanley). Particularly with a country as vast and underdeveloped as China, improving access to capital had the capability to improve lives on a large scale — and she wanted to help facilitate access to capital to the working poor. She gave me more background on the creation of Wokai and her current role at Draper Fisher Jurvetson working on solutions for clean technology. Lastly, one thing I definitely related with her on — being a venture philanthropist would be the coolest job ever!

A few thoughts I’d like to throw out there that came up:

• Does Kiva have any plans to license some of their underlying lending software to other niche microfinance lending platforms such as Wokai or OptInNow (though both sites have already built their own)? It seems very inefficient to continue to spend development time and resources, particularly when the dollars are spent from donated funds, toward something that’s already been built.
• 501 (c) 3 status – is there room for an overarching non profit focused on microfinance that niche microfinance organizations like Lumana Credit could branch out from? Still let each organization develop and build their own brand, but cut out the overhead of each organization going through the 501 (c) 3 paperwork.
• What sort of open-source initiatives for the microfinance industry are underway? Is there someone working on WordPress themes optimized for microfinance institutions? Are there even microfinance institutions using WordPress as their content management system?

To conclude, it was simply an amazing trip filled with talking to some great people. Further, awareness for microfinance is growing; it seemed microfinance and Kiva continued to be brought up amidst my real estate conversations. For instance, I found Garron Selliken at mRealty to be a huge advocate, and had lunch with Haley (who works for Garron and is working on TheOctopus) last Friday as a result. Maybe it’s because I constantly promote microfinance via Twitter and my blog, but I think there’s more to it. After 25+ years, I think microfinance is finally close to reaching mainstream awareness — and articles like this in TIME magazine are only going to speed up the process.

There is a great post over on the Kiva Fellows blog by Joel Carlman — it’s called On Buoyancy and it’s about Joel’s experience as a Kiva Fellow in Kenya. Here’s an excerpt:

Their lives have been built one step from the ledge of despair and crippling poverty, and forces beyond their control threaten always to push them over.  And yet, they sing and dance and are thankful.  The difficulties of life are found only in their eyes, never on their lips.  Unsolicited shouts of “I am fine!” from across the street are so common!  And the question follows: “How are you?”

Now, go on and read the whole thing.

Here’s a good interview on NPR with Anthony Pace, the executive director of The Plan Fund.  Here’s a little background on The Plun Fund:

Starting in 1999 The PLAN Fund has been committed to making a positive difference in the lives of working class entrepreneurs. The PLAN Fund is a non-profit organization whose mission is to assist entrepreneurs to achieve success in starting and or expanding their small businesses. Our program’s underlying goal is to increase our member’s economic self sufficiency through entrepreneurship by developing sustainable businesses. Through 2008 we have distributed 490 business loans worth almost $725,000 our average loan size is $1,475.

Source: SeaMo, good stuff Ryan.

There are three available positions at Washington CASH:

• Volunteer Coordinator/Program Assistant
• Business Specialist
• Business Groups Coordinator

This is just a quick reminder that the Kiva Monthly Community Call is taking place tomorrow:

When: The call is scheduled for Wednesday, August 19th at 2 pm US Pacific time.
Dial in US: 866-740-1260 Access Code: 6415483
Dial in (Outside US): +1 303-248-0285 Access Code: 6415483

For those in the Bay Area interested in microfinance, there is an event on Wednesday you might want to consider attending.

Microfinance is changing the way we look at sustainable living, economic development and welfare throughout the globe, even in the US.

During this Girls in Tech panel discussion we will highlight some of the most influential and powerful women in the microfinance world, as they share the trials and tribulations of running a microfinance or a microlending organization, share inspirational stories on helping women run businesses succeed in developing countries, provide insights on how technology is advancing global economies and more.

Here are the logistics:

When:
Wednesday, August 19, 2009 from 6:00 PM – 9:00 AM (PT)

Where:
Adaptive Path
363 Brannan Street
San Francisco, CA 94107

Cost: $10 on EventBright

Moderator:

• Sundeep Ahuja

Panelists:

• Ashwini Narayanan, General Manager – Microplace
• Chelsa Bocci, Community Marketing Director – Kiva
• Casey Wilson, co-founder – Wokai
• Shubha Shankaran: Co-Founder & Director, Community Development – United Prosperity
• Emily Gasner, Executive Director – TMC Working Solutions

[via Causemopolitan]

Back in November last year I wrote about a new lending organization called United Prosperity that has a new take on microfinance lending.  United Prosperity recently launched the full version of their website, which allows its lenders to guarantee loans for entrepreneurs rather than loan money to directly the the entrepreneurs.
Here’s some more information about United Prosperity:

United Prosperity is a non-profit organization that helps you combat extreme global poverty powerfully by multiplying the impact of your money through loan guarantees. We are the world’s first person to person loan guaranteeing website.  You can become a compassionate social guarantor with United Prosperity by providing an interest-free cash collateral or guarantee for an entrepreneur on our website. No minimum amount is required, and you are able to choose which entrepreneurs you would like to support.

The biggest question that I had when I was surfing the site was why should I choose United Prosperity over other sites?  Of course, a few minutes later, I found my answer.  Here are some good examples of how United Prosperity is different:

Example A: Providing a loan to a poor entrepreneur: A poor entrepreneur needs a $1,000 loan. Ten lenders could each contribute $100 to make a loan of $1000 to the poor entrepreneur.Thus a total $1000 in contributions results in $1000 of loans made to the poor entrepreneur. On an individual basis, a $100 contribution results in a $100 loan to a poor entrepreneur.

Example B: Providing a loan guarantee to a poor entrepreneur through United Prosperity: Guarantee amounts are typically only a portion of the loan amount. For example, for a bank to lend $1000 to a poor entrepreneur, it might require a guarantee of only $200. Thus 2 social guarantors could each contribute only $100 and cover the $200 guarantee needed and thereby make a $1,000 loan available to the poor entrepreneur.Thus $200 in guarantees results in $1000 loans available to the poor entrepreneur. On an individual basis, $100 loan guarantee results in $500 of lending to a poor entrepreneur.

We maximize the impact of your dollar:
For every $1 you put toward a guarantee, you will allow nearly $2 or more in microloan to the entrepreneur from local banks either directly or through our partners. Better yet, you will be able to track your chosen entrepreneur’s progress, and when they repay their loan, you will be repaid in full! At that point you will have the opportunity to support another entrepreneur if you wish.

Although the website has a lot of information, it is easy to navigate.  United Prosperity does a really good job explaining what the benefits and risks of microfinance are but still manages to have the human touch, rather than just being a website full of information.  They have a team blog were members of the organization write updates, as well as a great community page which allows lenders (and even non-lenders) to share insight about the platform as well as microfinance in general.

I just made my first loan of $25, does anybody want to match me

The Silicon Valley Microfinance Network is looking for a new Executive Director. If you are in the Bay Area — or willing to relocate — and interested in getting more experience in the microfinance industry, this could be a great fit. From their website:

–Responsibilities–
The SVMN Board of Directors is looking for a strong, entrepreneurial leader with a passion for microfinance. The Executive Director will be tasked with taking this new organization to the next level, from a growing start-up organization to a robust, professional network. The Executive Director will be responsible for the overall strategic vision of the organization as well as the day to day management. Reporting to the Board of Directors, the Executive Director will start at 60% time, increasing as soon as possible to a larger role as SVMN’s activity base grows.

Specifically, the Executive Director will:

 Develop and implement a long term strategy with the Board of Directors
 Design and implement a marketing program to increase membership
 Manage fundraising required to support the financial requirements of SVMN
 Enhance and manage the Speaker Series program
 Continue to develop the website into a world class microfinance resource for members and non-members
 Develop additional microfinance-related programs or services of interest to SVMN members
 Leverage the membership by building a volunteer network to help run SVMN events and programs
 Manage legal, accounting and governance issues with guidance from the Board of Directors
 Manage communications with the Board of Directors
 Create business performance measurements / metrics to track improvements.

–Qualifications–
Successful applicants will be flexible, with both the strategic leadership of a seasoned business executive and the desire to roll up his/her sleeves in the start-up stage of development. Specifically,
 Excels at and enjoys networking
 Strong event planning skills
 Ability to coordinate and manage volunteers
 Passion for and knowledge of microfinance a must
 Skilled at fundraising
 Enjoys intellectual challenge and fast pace
 Thrives in an entrepreneurial environment
 Strategy and business plan writing experience
 Willingness to work from home
 Flexibility to work part time

–Application Process–
Please submit your cover letter and resume to april@svmn.net

On June 10th Kiva announced that it will open its loans to US based field partners ACCION USA and Opportunity Fund.  The response was pretty overwhelming.  Most people took either one side or the other, both for and against.  Kiva immediatley took action to get more and more feedback from its readers, including:

• Dissecting emails they received by their customer service team, at contactus@kiva.org
• Initiated an online poll that asked “Do you support Kiva’s decision to allow loan requests from the U.S.?”
• Read users comments posted to the letter posted on this blog on June 19
• Monitored messages posted to Lending Team message boards (Here’s a look at some of the notes for the Seattle Group)
• Monitored discussions hosted on KivaFriends.org
• They hosted a Community Conference Call on July 15th in which lenders were invited to give their feedback on the U.S. pilot

Here is a summary to their response to the main criticisms after Kiva collected data from it’s supporters:

Through the previously mentioned feedback channels, we have monitored the questions and criticisms that have been raised by the Kiva community. There are a number of themes that recurred throughout. We’d like to address the major themes of these criticisms here:

1 – “Loans to the developed world do not serve Kiva’s mission.”

There have been a number of criticisms of Kiva’s U.S. launch that fall within this theme. They include “U.S. borrowers are not poor”, “Kiva has strayed from its mission”, and “Loans to the developed world do not fight poverty.” The themes that connect these criticisms together are:
1. Definition of poverty: how poor is “poor”?, does poverty exist in the developed world?
2. Definition of Kiva’s social mission: do developed world loans contribute towards Kiva’s social mission, or do they detract from it?

We believe poverty is relative. There are many definitions of poverty that exist. One very common global definition is those who live on less than $1 a day. Many countries measure income to create their own “poverty line”, below which those living in that country are considered “poor”. The United Nations Development Program uses a Human Poverty Index that considers life expectancy, literacy, unemployment and income level. Others believe that poverty is something more abstract.

We believe there is no exclusive definition of poverty that defines who is poor and who is not poor. We respect that there are many different opinions of what it means to be poor, and we respect an individual’s interpretation of poverty that is most meaningful to them. We also believe that, within any poverty definition, one might further distinguish moderate poverty from extreme poverty, and we respect that there are many different ways an individual may understand the various levels of poverty that may exist.

We believe there are many factors that contribute to poverty. These can include access to credit, access to employment, access to education, access to health services, and access to food and clean water. As there are many contributing factors to poverty, there are also many solutions to poverty, none of which can eradicate poverty alone.

We also believe poverty is an impermanent state. We believe that it is possible for an individual to move out of poverty, as well as to fall into poverty, according to circumstances that take place.

As such, Kiva does not define poverty for each individual entrepreneur on the Kiva website. Instead, we strive to provide an environment where people can choose who to support based on their own definition of poverty.

2 – “Loans to the developed world dilute Kiva’s brand.”

Kiva’s brand has been built on the concept of individual loans, to individual people, for poverty alleviation.

The first loans on the Kiva website were to entrepreneurs in East Africa. Over time, Kiva added Field Partners in different regions of the world, such as Asia, Eastern Europe and the Americas, and loans to entrepreneurs from these regions were funded on the Kiva website.

We have always considered Kiva to be a global organization, and, as such, we consider our brand a global one. We have celebrated each new country added to our global portfolio, as we have Kiva Lenders who have joined the Kiva community from new countries around the world.

While we recognize that early perceptions of Kiva may have been that our intention was to stay within one region of the world, defined by geography or development, this was never a part of our vision for the organization.

We believe that the addition of the United States to Kiva’s global portfolio does not dilute our brand, but strengthens it, as it emphasizes the global nature of the Kiva platform, reaching across nations, continents, and economies. We recognize that the addition of the United States to Kiva’s global portfolio may be the first time many in the Kiva community have been exposed to this idea.

3 – “Loans to the developed world take money from the developing world.”

Many Kiva Lenders have expressed concern that the addition of developed world entrepreneurs to the Kiva website would negatively impact the amount of money loaned to developing world entrepreneurs. The implication is that developing world entrepreneurs are more deserving, or more in need, of Kiva loans than developed world entrepreneurs.

We neither define poverty for our community, nor do we define which countries are more deserving, or more in need, of Kiva loans than another. Each time a new country is added to Kiva’s global portfolio, there is a risk that loans to entrepreneurs in this country might be more highly desired by the Kiva community than loans to entrepreneurs in another country. For example, loans to entrepreneurs in a post-conflict area that is experiencing high exposure in the media may be more popular than loans to entrepreneurs in a peaceful country with little attention by the media.

To ensure that Kiva’s global portfolio does not become “overwhelmed” by loans to entrepreneurs in one country, or one region of the world, Kiva enforces fundraising limits on each Field Partner, which contribute to a country limit of no more than 10% of the entire global portfolio. These country limits allow Kiva to both minimize risk to Kiva’s loan portfolio as a result of events on a national scale, and also to maintain a well-balanced global portfolio.

4 – “Loans to the developed world have fundamentally changed what Kiva is.”

We understand that for some in the Kiva community, facilitating loans to developed world entrepreneurs feels like a fundamental shift in what Kiva is and stands for. While we recognize that this sentiment exists, we respectfully do not share it with those who feel that way.

To us, Kiva has always been about making loans to people around the world. As the fundamentals of Kiva, for us, were never defined by country, we don’t feel that we have fundamentally changed.

5 – “Listing developed and developing world entrepreneurs side-by-side, on the same platform, is insulting to the developing world entrepreneur.”

There have been suggestions that Kiva should build a second website to facilitate loans to developed world entrepreneurs, in order that they not be listed alongside developing world entrepreneurs. The implication is that entrepreneurs from the developing world are so different from developed world entrepreneurs, that grouping them together is offensive to either group.

Our opinion contrasts entirely with this sentiment. Kiva believes that loans promote dignity and mutual respect, and we endeavor to carry these qualities through all areas of the Kiva platform.

By separating entrepreneurs according to the part of the world they are from, we would be highlighting the differences between them, based on geography. Kiva strives to highlight the similarities between entrepreneurs across the globe, not the differences, based on personal qualities, not geographical location. By focusing on personal qualities, we believe we can encourage the type of dignity and mutual respect developed when meeting a person.

Furthermore, the feedback we have received from our contacts in the developing world, Field Partners and entrepreneurs, demonstrates that listing developed world entrepreneurs beside developing world entrepreneurs is a source of pride, not insult. No longer are individuals differentiated according to the wealth of their nation, rather entrepreneurs from the poorest nations of the world are situated alongside entrepreneurs from one of the wealthiest nations of the world. We believe this promotes equality and engenders dignity, not insult.