Tag Archives: microfinance

THINK micro session 4 ~ 2012

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This week at THINK micro we got deep into the concept of social innovation, thanks to Priya’s brilliantly constructed micro-presentation and discussion. Some of the highlights include:

- Hearing the story of Sumitra, an EKO Financial customer talking about how access to banking positively changed her life (can you imagine an Australian saying that about Comm Bank, NAB et al??)
- Crowd funding/sourcing/creativity for social innovation… tapping into distributed knowledge, cloud labour and open innovation. Awesome stuff!
- Then Priya showed the group the amazing social innovation, Litre of Light. Developed by My Shelter Foundation, it shows how the community must be involved in social innovation. See the promo video:

Priya then drove a group discussion around social innovation… is it just a passing fad? The group proposed that it’s here to stay, though that important lessons had been learnt in the last few years including:
- Need to get local community involved (grass roots)
- Collaborative solution design and operation is powerful
- Transparency of where money comes/goes is key
- Should be easily accessible for everyone

Priya Patel social business micro presentation THINK micro

Following this Matt F showcased the work of a university micro-finance club in Melbourne, Melbourne Microfinance Initiative. This is a well established group (more than a few years) who have projects in far-flung places like Laos, Kenya and Ghana. From his analysis we could draw out some learnings that could be applied to our own group including utilising a Board of Advisors and potentially running a creative micro enterprise competition in conjunction with MMI. Matt also proposed approaching MMI to discuss strategic partnership with THINK micro.  See his slides here.Matthew Fink microfinance micro presentation think micro

Lastly, Nathan and Baptiste discussed the upcoming workshop to develop new social business concepts… this Saturday 19th May 10am to 2pm. All welcome! More info at Facebook or this recent THINK micro blog post… RSVP to nathwiltshire at gmail.com

Link

It was recently announced a raft of new regulatory measures are to introduced in India during the winter session of Parlaiment. Key will be an enforced registration for all MFIs with the Reserve Bank of India and a minimum net owned funds of 5lakh rupees (approx $1 Million). Get the full article from The Hindu

Even before this annoucenment, the Indian micro-finance sector was expecting a decline of between 20 to 40 percent. Read the Business Line article here. Much of this is due to a lack of liquidity in the industry, as commercial banks retracted their heavy investment in the sector with the growing uncertainty surrounding the long-term sustainability and viability of the industry. No doubt the industry will have to go through some pain as these regulations bite. However, now that the twelve month period of uncertainty is over, hopefully the cream will rise to the top and the rubbish will drown at the bottom. This has to  be a win-win situation for micro-finance’s best and truest companies.

MFI Network admits to mistakes made by the industry that led to crisis

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An article recently published in the Hindustan Times quotes the CEO from MFI [Micro-Finance Institutions - ed.] Network, the peak self-regulating body for Indian micro-finance institutions, had this to say in retrospect looking back on the Indian micro-finance crisis…

Where the MFIs went wrong was in growing too rapidly, lured by the business opportunity, without paying much thought to execution or hiring the right kind of people. And there was a disconnect between the headquarters and the field agents

Finally some straight talking coming out of the micro-finance industry! The article goes on to briefly discuss an interest rate cap as part of draft MFI industry regulations. Due to the abnormally high cost of capital MFIs  incur [as a percentage of the total transaction value - ed.], I would suggest this is a very risky proposal that may put a number of organisations out of business…

Meeting: October 11

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This bi-weekly THINK micro meeting was jam-packed with free food, new members and some really interesting MICRO presentations. Thanks everyone for coming!

MICRO presentations

  1. Marcus and Alex delivered a very interesting talk about micro insurance, describing how it works and its different implementations.  They discussed how large insurance companies (e.g. Allianz, working through Bajaj Allianz) do the actuarial work, and reinsure the micro insurers, and package together different insurance packages, such as income and life insurance, to be on-sold by local organisations or added to a micro finance loan for a small monthly premium.  Their discussion of “micro pensions” was also very interesting.  I think they are going to write up a little blog post explaining the basics in the near future.
  2. I (Yochi) gave a talk about how to use WordPress.com to write for a community blog (like this one).  I discussed creating a wordpress account, writing posts, embedding photos, meta tags, and how to use different post “types” such as links, asides, images and the standard blog post (like this one).  You can find a little PDF spiel here; and, if you have any questions, email me!
  3. Hasan discussed the social business he is working on, “Khoombi”, which aims to allow farmers to grow mushrooms, full of protein and other nutrients, alongside their own crops at home.  Khoombi seeks to provide the resources for the farmers to grow the mushrooms, and a market to sell them (cutting out the middle men to increase their profits.  He showed us a video presentation of his business plan, which will hopefully be up soon!
  4. Amanda and Nathan gave a talk about Skateistan, and their plan on integrating it with the UTS Long-boarding Society to hopefully run a few fundraisers. It sounds very exciting!

Events

October 11th was the launch date for the first Dine It Forward and was very successful – a sold out event.  There are subsequent events on the 25th and 30th of October, so buy some tickets if you want to come (good food, good entertainment)! All money raised goes to Palmera Projects’ Mannar Rice Mill Project (a social business/micro-finance project in a war-torn area of northwest Sri Lanka).

We also held a fundraiser for the Naandi Foundation, run parallel with the BUiLD awards dinner.  It was a photography exhibition and a silent auction that was very successful, all the photos were sold!

Meeting: September 27

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Yesterday’s THINK micro meeting was one for the true diehards thanks to uni holidays. Nevertheless, it was a hot-bed of awesome ideas, passionate discussions and collaboration!

Activity

We started off the group meeting with an activity headed off by Fiona, whereby we each introduced our partner by discussing their passion, knowledge and skill.  We had people passionate about things as diverse as international humanitarian law, developmental economics and ballet; we had people knowledgeable about HR, physical computing and more; and we had people with a “general nerdery,” communications, compassion and other skill sets.  It was an interesting excercise where we saw the diverse scope of our micro THINKers.

THINK micro - September 28

Listening intently to Martin's MICRO presentation [Sydney, Australia: September 2011

MICRO presentations

5 minute presentations on our members’ areas of expertise/interest

  1. Martin delivered a micro-presentation about his time in India with BUiLD, explaining to us some of the different models of micro-finance and showing us some examples of social business (he showed us some hand-made paper bags that an Indian housewife made and sold as a means of supplementing her household revenue).
  2. Then, Nathan gave a micro-presentation [micro presentation - what is a social business] introducing social business to the group.  His discussion presented the staples of social business (shared value, positive work conditions, etc.); the model that Prof. Yunus of Grameen Bank proposed (not for profit, dividends to the beneficiaries); and a relaxed model, whereby profit and not-for-profit sectors of a business coexist.  His presentation (which you can download above) also gave a beginners reading list on social business.
  3. I (Yochi) then presented about the social business I worked with on my volunteering trip to Sri Lanka, a Rice Mill coupled with savings groups that re-invests all of its profits into the community.  Then, I presented on the Dine-It-Forward campaign, raising money to set up another such rice-mill in Mannar (Northern Province, Sri Lanka) — a town severely affected by the 30 year civil war in Sri Lanka.
Giggling

A Sri Lankan schoolgirl whose mother is an employee of the Trincomalee rice mill [Trincomalee, Eastern Province, Sri Lanka: July 2011

Miscellany

Whilst eating the lollies Fiona bought for us we got onto a discussion of fair work conditions and supply chain analysis.  Fiona brought up an interesting application, Free2Work that helps track the supply chain, work conditions and overall “fairness ranking” of different products and brands.  How interesting!

Upcoming events

  • We are collecting photos for an exhibition fund-raiser we are running: post your pics up here before Wednesday the 5th of October for your photos to have the chance to be printed in high quality for the auction!
  • Dine-It-Forward has a VIP night on the 11th of October, and subsequent events throughout October, get your tickets here!
  • Our next meeting is on Tuesday the 11th of October – see our Facebook Page for more details!

Link

40% of the world’s population living on less than $2 USD PPP per day

I wrote an article about the effects of poverty on the developing world including a discussion of a few of the more important policy options available, both on the macroeconomic (tied aid, debt forgiveness, tariff reduction) and microeconomic (social business, micro-finance and law reform) scale.

An unemployed fisherman at the camp

An unemployed fisherman at an IDP (internally displaced persons) camp in Trincomalee, Sri Lanka [July 2011

Effects of poverty on the developing world

It is important, when considering how to reduce poverty on a global scale, to note that there have been several success stories [...] However, there is still a large proportion of the world that lives in poverty, with (at 2005) an estimated 40% of the world’s population living on less than $2 USD PPP per day, and almost 90% of the world’s population living on less than $10 per day. Further, whilst countries like China and India have burgeoning middle classes, there are still many nations in the world that are not even on a track to reducing poverty, particularly in sub-Saharan Africa.

Tied aid

“International transfers necessarily harm the donor and benefit the recipient [… However, where] donors require that aid be spent in a manner not close to the preferences of the recipient […] there is the possibility that aid perversely leaves the donor better off.”

Debt forgiveness

[Debt forgiveness] may be more effective than aid, since money that would otherwise have been transferred to the creditor nations would be invested by the debtor nation, where the multiplier effect would increase the benefit to the recipient nation.  Thus, debt relief remains one of the more effective means of poverty reduction on a macroeconomic scale, and the HIPC and J2K models of debt forgiveness may, if followed through to completion, severely dent international poverty.

To read more, including a discussion of the effects of poverty on the developing world and full explanations of the mechanisms of these different policy initiatives, check out the full article.

THINK micro is born!

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Welcome to THINK mico – an active community of like-minded people with a passion for micro-finance and social business as solutions for our damaged world. THINK micro is a sort of think tank/social club/venture incubator that will be an open source collaborative environment to discuss innovative, creative ideas in micro-finance and social business.

More info coming soon!