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Archive for December, 2009

Beard Difficulties

In my previous life, I worked at a job that made growing a beard difficult.  Every time I’d let it grow on vacation, I’d get close to an acceptable length, but still below the threshold of respectability.   Naturally, when I learned I’d be working with Negros Women for Tomorrow and Kiva here in the Philippines, I looked at it as a great opportunity to reinvent myself as a man with a beard.  On the street every day, people walk around with beards knowing that they are part of an exclusive fraternity, having chosen to distinguish themselves from the rest of the clean-shaven world.  On this trip, I would not pass up the opportunity.

The process began on November 18th, two days before I left work.  I had two weeks before work began in the Philippines, a narrow window for a full bloom.  The above photo was taken on December 20th, showing a month of unchecked growth.  In the first two weeks, I already had a nice base, extending from my sideburns, down my cheek, and underneath my chin.  Halfway down my face, the pattern forms a right angle, before dropping precipitously past my mustache and down to the area below my chin. (more…)

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In August of this year, Negros Women For Tomorrow celebrated its 25th anniversary.  The organization commemorated the occasion with an extravagant party titled “Handum” (Dream) with 6,000 attendees, including staff, borrowers, partners, and a pre-recorded message from the godfather of microfinance himself, Muhammad Yunus.  Yunus catapulted microfinance into the mainstream in 2005 when he won the Nobel Peace Prize for his work with Grameen Bank in Bangladesh.  Naturally, most people (including myself until a few months ago) think that it is a fresh, new approach to economic development and poverty alleviation.  At 25 years old, however, NWTF is hardly fresh or new.

As a means of immortalizing the 25-year anniversary, the organization created a book of 25 of the most inspiring stories from its borrowers.  In this blog, I’ve tried to lay out the history and mission of the organization to frame or provide context for other stories.  The foreword to the book, written by the founder of the organization Dr. Cecilia del Castillo, offers a much clearer description of the organization.  I quote it in its entirety here: (more…)

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The food in the Philippines garners mixed reviews from expats, but, as with most things, they might not be eating the right things.   Beef is harder to come by here, and usually much more expensive.  Fish, white meat (chicken), and the other white meat (pork) are the meats of choice in the country.  And everything comes with rice.  Rice and eggs for breakfast, chicken and rice for lunch, rice and anything else for dinner.  When in doubt, I know I can’t go wrong with old faithful – grilled barbecued chicken on a stick.

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Vacation

I am heading to Vietnam until December 23rd, and Cambodia until January 4th.  I am going to try to update the blog as much as I can during the break.  See you in 2010.

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The following is an article I wrote for The Inductive.

Within the international development community, a debate for the heart of the movement recently came to the fore with the IPO of Compartamos, the largest microfinance institution in Mexico.  Divisive and controversial, Compartamos’ decision to sell shares and publicly list on an exchange is perhaps the clearest manifestation of where the two sides diverge.  One side, led by Muhammad Yunus, founder of the Grameen Bank and winner of the Nobel Peace Prize in 2005, contends that, at its core, the sole fundamental mission of microfinance is poverty alleviation.  The other side argues that the goal must be maximizing profit and, more specifically, ROE (return on equity) – extending services to a previously unbanked population and expanding via revenue growth.  Just about everyone has an opinion on the decision and, at the very least, it allows for a great philosophical and economic debate about the most effective way to assist the billions of people who live below the poverty line.

It’s necessary to first give a little background on microfinance and its role in economic development.  Without going into too many specifics, microfinance describes the provision of financial services to individuals below the poverty line with no material collateral.  Microcredit, specifically, refers to the disbursal of small loans – generally between $50 and $1,000, depending on the sophistication of the institution and the industry in general (average loan with Compartamos is $623) – to individuals that cannot access credit via the traditional banking system.  Given their small size, the cost of servicing these loans, as a percentage of the total, is high.  Remember: it costs the same amount to service a $10,000 loan as it does a $100 loan (salaries, office materials, etc.), and these microfinance institutions often have to track down the borrowers on a weekly basis to collect the interest and principle.  In other words, interest on microfinance loans are higher than one might think appropriate.  In the United States, 50% for a loan may seem exorbitant.  But, when you look at it relative to the alternatives (up to 800% from loan sharks) and the fact that these loans are expensive to service, high interest rates are a necessity.  But at what level are interest rates exorbitant, even for an MFI?  This is the question at the heart of the Compartamos debate.

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In the Philippines, or maybe just here in Bacolod City, people enjoy celebrations.  Bacolod is called the City of Smiles and is known for its annual MassKara Festival held in October.  The tradition began in 1980, in response to a sugar crisis plaguing the island of Negros and a ferry-capsizing that killed over 700 Negrenses.  To pull the island out of a pervasive gloom, the government organized a weeklong festival in which the participants wear smiling masks.  The festival is a nice metaphor for the general outlook of the island and its people.

In a country that is 80% Catholic, at an organization that values family, community, and faith, celebrating the birth of Christ provides a great opportunity to let down your proverbial hair and celebrate.  A Filipino Christmas party is a highly choreographed spectacle of extravagance, filled with singing, dancing, and revelry.  Participation is required by all, including your humble correspondent.  Imagine bottling the spirit that drives some people to sing karaoke, and unleashing it on a Christmas party. (more…)

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For a brief overview of the GBR (Grameen Bank Replication) methodology and its use by NWTF/Project Dungganon, see here.

Microfinance institutions (MFIs) are often affiliated with larger networks, which help to secure funding, offer back-office services, and provide an operations model.  These organizations – Grameen Foundation, FINCA, Accion International, and World Vision, to name a few – partner with MFIs across the world to replicate the model, be it village banking, the Grameen model, or another.  These networks span countries and continents, and operate as umbrella organizations for the global microfinance community.

NWTF founder Cecilia del Castillo with Muhammad Yunus.

Negros Women for Tomorrow Foundation (NWTF) is affiliated with Grameen Bank.  Its founder, president, and CEO, Dr. Cecilia del Castillo, received her doctorate in psychology in the United States before returning to the Philippines to create an NGO that would serve women in her native island of Negros Occidental.  A meeting with Muhammad Yunus convinced her to found NWTF in 1984, with the goal to “help women achieve self-sufficiency and self-reliance, particularly in Negros Occidental’s low-income and depressed urban and rural communities.” In 1989, NWTF introduced Project Dungganon (“honorable”) and Dungganon Bank Inc., NWTF’s traditional microcredit lending program, which most people associate with microfinance.  (In reality, microfinance describes a much larger suite of financial services, including savings accounts, insurance, and rural energy delivery, capital equipment assistance, and personal loans, but that is for another post). (more…)

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