Working with an NGO called United Action for Children (UAC) in Buea, Cameroon, Dave, a member of the microfinance club, developed a microenterprise program for graduates from UAC’s Vocational Training Center.  At the center, rural and street youth participate in a free three-year program which trains them in technical skills such as electricity, carpentry, or computers.  After the program, many of these young adults wish to use their skills to start businesses, but they lack the financial capital to do so.  They often end up working odd jobs or forced back into unemployment and poverty.  Dave set up a business training class for graduates to learn the essentials of starting and running a business and to develop a business plan.  Through a partnership Dave established with a local microfinance institution, graduates now have the opportunity to apply for a loan for their project.  So far, a yam farming project and a cosmetics shop have been financed and are currently underway, and more microenterprises – including a documentation center, an electronics shop, and a village motorbike service – will be coming to Buea soon.

For more information on the Cameroon project please visit: http://vanderbiltmicrofinanceclub.wordpress.com/current-projects/microenterprise-in-cameroon

In the early weeks of March, nine members of the Vanderbilt Microfinance Club had the opportunity to spend a little over a week in Panama. While a large sum of the trip focused on cultural exploration and a hiatus from academia, we also dedicated several days to visit and learn about Panamanian microfinance organizations.

One such organization that we visited was called Microserfin. Microserfin is a for-profit microfinance solutions enterprise that is supervised by the Panamanian Department of Finance, Ministry of Commerce and Industry. Since 1997, Microserfin has lent over $52 million in more than 31,000 microloans nationwide targeting ambitious entrepreneurs who have difficulty accessing necessary capital for their business ventures. The initial loans range from $100 to $3000 and the amount can then gradually increase depending on the debtors credit history and business needs.

When we were first arrived at one of the Panama City branches, the office’s Business Development Manager, Ricardo Rodriguez, began to explain the general business practices and organizational structure of Microserfin. Instead of explaining the practices of Microserfin in a general sense, he was kind enough to lead us to one of their other office branches in the outskirts of Panama City to show us how the credit approval process functioned.

After arriving at the other branch, Ricardo and one his associates grabbed several files of current and potential borrowers, and went page by page with us to discuss the discrepancies. Ricardo explained that each application must be submitted with proper identification, a drawn out business plan, and pictures of tangible assets worthy of collateral. Even though some of the assets were seemingly worthless in resale value, Ricardo emphasized that this was simply a display of contractual commitment and was nothing more than an empty threat to keep the borrower on a steady business track. Additionally, he discussed how Microserfin creates their system of credit scoring to determine feasible interest rates based on the content and history of the potential borrower.  After properly assessing each application, branch managers and associates meet in a committee to approve or deny each request. According to Ricardo, about 90% of borrower’s requests are approved.

Immediately after going through the logistics, Ricardo and one of the branch’s credit officers drove us to three successful entrepreneurs that have maintained steady relationships with Microserfin. All three entrepreneurs were on their third or fourth loan with Microserfin, and were satisfied with the organization’s benevolence in assisting them with their startup and growth.

The first entrepreneur was a mechanic who rented out part of his lot to another colleague who specialized in fixing and reselling cars. He utilized loans from Microserfin to finance tools and parts necessary for his practice.

The second entrepreneur was a hair stylist who owned a salon. She utilized loans from Microserfin to finance her stock of new and appealing hair products.

The third entrepreneur was a landlord with a deep-seated passion for cockfighting and raising roosters. He utilized loans from Microserfin to maintain upkeep for his tenants.

The next day, Ricardo invited us to another office branch in Panama City to discuss the potential opportunities and future relationship between the Vanderbilt Microfinance Club and Microserfin. We agreed that it would be possible for the VMC to invest in several entrepreneurs seeking credit through Microserfin. While the specifics have not been formally laid out, we have been able to maintain contact with Ricardo and over the next couples weeks, hope to have a concrete plan in which the VMC will be able to assist several entrepreneurs seeking assistance and access capital.

Check back with the website in the next couple of weeks to see what type of progress we have made!

Vanderbilt University is excited to announce that social entrepreneur, Jessica Jackley, Co-Founder of Kiva.org, will be speaking at Langford Auditorium on Wednesday February 9th at 7 pm. This event is hosted by an alliance of Vanderbilt’s student organizations, including the Global Poverty Initiative, the Vanderbilt Microfinance Club, and Alpha Kappa Psi business fraternity.

Ms. Jackley Co-Founded Kiva, the world’s first and largest online microlending network that connects individuals to impoverished entrepreneurs by facilitating small loans for business development. Kiva has amplified and revolutionized the scale and scope of microfinance, a tool first introduced by Vanderbilt alumnus and Nobel Peace Prize Laureate, Muhammad Yunus. As of December 2010, Kiva has facilitated over $183 million in loans to over 474,000 entrepreneurs with a repayment rate of 98%.

Ms. Jackley holds an MBA from Stanford University and its Center for Social Innovation and Public Management. Most recently, she launched ProFounder, a lending network that allows entrepreneurs to raise investment capital from friends and online members. While Kiva focuses on planting the seeds of development in the poorest areas, ProFounder allows all entrepreneurs to have access to critical resources to accelerate business creation and expansion.

Global Mamas’ is a microfinance organization in Ghana that facilitates microcredit loans to women to open their own businesses and sell their products internationally. All products are handmade by local Ghanian women and each purchase will contribute to the empowering hand of microcredit loans and Global Mamas’. We will be selling tote bags, coin purses, necklaces, bracelets, soaps, and Christmas tree ornaments ranging from $4-$15 to fit everyone’s price and holiday gift needs.

We will also be selling christmas ornaments crafted by members of the Lost Boys Foundation of Nashville, an organization aimed to help fund the reunification and living enhancement of 150 Southern Sudanese refugees who have made Nashville their home.

We will be at Saratt on Monday December 6th and Commons on December 7th from 11:30am-2:00pm.

Happy Holidays and we hope to see you all there!

The Vanderbilt Microfinance Club proudly presents: Micro-Yoga for Microfinance.

On Sunday November 14th from 5:30-6:30pm, certified instructor and VMC board member Katie Ullman will be teaching yoga for students of all levels at Vanderbilt Hillel.

The $5 entrance fee will be donated to microfinance organizations. This includes, “Juhudi Kilimo”, founded by Vanderbilt Grad Nat Robinson who funds agricultural business in Kenya. This organization was a Top 10 Ashoka ChangeMaker finalist for 2010 and is now a Field Partner on KIVA.org.

The Vanderbilt Microfinance Club appreciates all aspiring yoga participants to bring roommates and friends as we attempt to confront global poverty through this relaxing and redeeming fundraiser.

The panel will include some of Vanderbilt’s finest professors and scholars: Professor Klint Alexander (Political Science and Law), Professor Jonathan Hiskey (Political Science and Sociology), and Professor Kathryn Anderson (Economics).

Perspectives will include the impact of access to microcredit on female empowerment, coexistence, political stability, and the transparency of the financial environment. Additionally, the event will be an opportunity to become more involved in the progressive mission of microfinance and learn about the exciting opportunities the Vanderbilt Microfinance Club has in store for the upcoming year.

Phnom Penh, Cambodia

Just outside the gates of the Royal Palace are beggars and broken down homes and a very poor city. It is just hard to believe such a paradox survives. I expect to see a similar image at the Taj Mahal in New Delhi. After this, we went on a sunset cruise around the local river in the city. Relaxing on a pontoon-type boat on the second tier of the small boat was just what I needed after a long, hot day of traveling. We made a loop around the river. With music heard from the distance, a slight breeze blowing across my sun burnt face, and a peaceful view of the city from afar made this sunset cruise simply perfect. As we traveled, we past by shanty homes, some were floating on the river and some were just off on land by the riverside. They were homes of Vietnamese people who could not afford to buy land property.

Varanasi, India

Our first stop on the trip was to the holy city of Varanasi. Not many tourists make this destination one of their stops in India and it’s really a shame that they don’t. Varanasi is an extremely impoverished city. It is difficult for me describe the poverty and the devastation that I saw. There was garbage all over the streets and narrow roadways and barely clothed people and emaciated cows and stray skinny dogs.

We started walking through this remote village on the outskirts of Varanasi with extremely narrow walkways in order to reach the main road. Our tour guide explained that we were walking through a village of people’s homes. We were lead through the most cramped streets I have ever walked through, filled with stray and big-toothed dogs, awful smells, massive amounts of feces, and small broken down shacks, with people wearing huge smiles on their faces. I have never felt so terrified, but so comforted in my entire life. The people of India are nothing short of amazing. They are extremely kind and welcoming and are so excited to simply be in your presence despite their awful poverty.

Cape Town

The first day I was supposed to visit a township (underdeveloped urban living areas); however, if I had visited the township, I would not have been able to visit Table Mountain and explore the city of Cape Town. Therefore, with utmost regret (regret that I now have after having left this city), I didn’t get to see the township. (On a side note, I want to describe what a township is before I explain what I did the first day I was in Cape Town. A township is an area that was created for displaced blacks during apartheid when they faced- and still do face- endless discrimination and gratuitous violence. These townships are very similar to the Jewish ghettos that were designated for Jews during the Holocaust. Even though apartheid has been over for more than a decade, these townships are still filled with blacks and colored Africans who continue to face unjust discrimination and utter hatred).

Ghana

Global Mama’s is a free trade organization that has proven itself to be a true global citizen and a strong representative a sustainable microfinance organization.

At the boutique we had the opportunity to meet one of the founders and learn some information about Global Mama’s. The founders were both members of the Peace Corps in Ghana and after going back to school, decided to return to Ghana to help the impoverished, but very skilled women who live there. Global Mama’s incorporates many women who specialize in different areas, anywhere from clothing making to soap creations. All of the material used is organic and/or recycled, which makes the goods cheaper to produce and also ecologically sustainable. Besides the crafts being “green”, the money used to purchase the items from the organization goes directly back to the “mamas.” This is turn sustains the women and the local economy.

In Conclusion

Traveling the world, and Nicholas Kristof, has taught me that it is difficult to truly know how fortunate you are unless you go see how the “others” live. If you don’t go, you don’t know.

We have added a new category to our webpage; Relevant Organizations. This is a place where we can post about the various microfinance and/or enterprise development organizations that we have had great experiences with.

The first organization we are featuring is the Center for Jewish-Arab Economic Development. This is a prime example on how economic development can be used as a means for both welfare enhancement and cooperation between societies.

In Wednesday’s New York Times article “Banks Making Big Profits From Tiny Loans,” Neil MacFarquhar discusses the shift of microfinance from a main focus on providing capital to those on the bottom of the development latter to business businesses using microcredit for large profits. However, he fails to address the major positive effects of microfinance on millions of the poor previously stuck in the poverty trap. At the United Nations, Muhammad Yunus said “We created microcredit to fight the loan sharks; we didn’t create microcredit to encourage new loan sharks. Microcredit should be seen as an opportunity to help people get out of poverty in a business way, but not as an opportunity to make money out of poor people.”

Despite these criticisms, MacFarquhar asserts that even with high interest rates, microcredit continues to ease the blow of poverty. Because of conflicting interests between the least developed societies and big business seeking large economic gains, the journalist asserts that microfinance shouldn’t be viewed as “saving the world.”

I believe that it is idealistic and unsustainable to conceive that microfinance can save the world overnight. There are far too many complexities for this to happen. However, by giving the impoverished a chance to manage finances that were previously unavailable, there is a sustainable facilitation of growth over generations. Additionally, the backlash against big businesses’ motives to solely reap profits have encouraged greater transparency within the industry and have even spurred government intervention internationally.

In conclusion, business history is a repeated cycle of taking advantage of perceived profit opportunities. Microfinance is no different. Criticism of excessive interest rates have led to increased transparency measures and government intervention. In turn, this knowledge and awareness of business traps are beginning to penetrate into impoverished villages and educate the poor to the motives of certain MFIs. Along with any business cycles, there will be booms and busts. At least with these rising criticisms, the poor still have opportunities for growth and knowledge of others’ profit motives.

This documentary follows a group of American teenagers who travel to the Dominican Republic to see how their fundraising project made a real difference. A Seattle high school club raised over $100,000 for Esperanza International, which administers microfinance loans to start or maintain small businesses in the Dominican Republic and Haiti. Twenty-five students traveled to the DR to see first-hand how a loan for as little as $50-$250 can have such a large impact on so many people’s lives.

To see firsthand how their microfinancing funds were being utilized, 25 students traveled to the Dominican Republic to experience that which could only be told in the pictures and words of these remarkable young men and women. The teenagers visited small villages, pueblos, barrios and batays to sit in on loan meetings, talk to loan associates, and learn first hand how a loan for as little as $50-$250 can change not just one person’s life, but many lives.

When added to their experiences of actually going out and asking for the donations from their community, seeing how the funds are being used, and making new friends along the way, the kids from Bellevue High School Microfinance Club will carry with them indelible memories for the rest of their lives, learning that the amount of money you may have is not the key to happiness, that a dollar has an incredibly different value depending on your circumstances and most importantly, that young men and women CAN make a difference.