In Support of Micro-Savings

In reply to Holden’s post on GiveWell, one of my favorite blogs…

I would have to disagree with David & Basti.

MFIs do not want to provide savings products for many different reasons, but most of all because it is less profitable. The ROI on savings is far lower than that for MFIs, and so MFIs avoid providing savings alternatives. (Compartamos, for example, one of the financially most successful MFIs – think $467M IPO – has had savings pilots for years they have not launched)

The real challenge behind this, as Holden correctly points out, is that the priorities of the ‘financial services for the poor’ sector is skewed too far toward monetary return on investment and not enough toward social returns on investment. This creates entities that look good financially but are not delivering as much social return.

I am also in the process of reading Portfolios of the Poor and studies like these clearly articulate the needs of the poor, and savings is a need that is not receiving enough attention. This is partially because of regulatory hurdles, which are quickly being changed here in Africa, but it is mostly because of skewed priorities: financial over social returns.

Cell phone technology promises to reduce the costs of servicing even the poorest and least-densely populated regions to the point where it will become a more viable social enterprise with better financial ROI. In the meantime, however, I think we all need to re-adjust our priorities and focus more on Social returns. With additional funding and focus, savings can and will be realized for the bottom billions.

Approval from Mongu!

You may have been wondering why I have not written in a few weeks. No, it is not because I have been lazy, but because my main project, implementing Savings and Internal Lending Communities (SILC) in Western Province was postponed until an important visit was made.

Last week I took the bus seven hours to Mongu in Western Province of Zambia. I would be catching a ride back with co-workers coming up through Sesheke & Shangombo. Our goal was to gain approval for the SILC project from the Director of Caritas of the Diocese of Mongu, CRS’s preferred partner of implementation in Western Province. The director also happens to be local royalty, meaning his thoughts carry more weight than the average Joe. If we did not receive approval, the project would not be going forward, no matter how beneficial it could be or how well it fit into our other programming.

We wanted to create SILC groups in conjunction with the nutritional groups and agricultural cooperatives that are already in place in five communities one-to-two hours outside of Mongu town. Not only would this have the normal benefits of SILC of increased savings, financial literacy and access to capital, but it would also bring cohesion to these existing groups, strengthening them: true program synergy.

We started off our first day visiting the Director of Caritas and he was extremely welcoming and readily gave his approval of our SILC project. A small miracle had happened. Bishop Duffy had seen SILC in Ethiopia and communicated to the Prince and others that he would love to see more SILC activity in Mongu.

Easy enough, right? Not quite. We next had to visit the agricultural cooperatives and nutritional groups and see whether SILC would be appropriate for those populations. To get to one of the communities, Lukulo, we had to drive two hours on a sand road. (read sanD, not sandy) Needless to say it was quite an experience!

The groups had the characteristics we were looking for; Continue reading

Fighting Poverty from Space

What if the first world trained its eyes on developing nations? Daily monitoring from satellites in orbit overhead is a reality today, and the pictures are becoming just as clear of the fields in Zambia or los campos de El Salvador as they are of the home where I grew up in the US.  As this overhead view becomes more current and freely available to aid organizations and the public, I wonder how Africa and everyone’s efforts to fight poverty can benefit.

Some thoughts might be monitoring and assisting refugee camps, identifying those most in need post-disaster, or identifying farmers who could most use capacity-building; enabling more effective interventions. What are your ideas?

Gender Roles in Rural Zambia

This past week I spent observing farmer field school trainings in the town of Choma. On the last day the facilitator conducted an exercise on gender differences on farms. Two of the four groups drew pie charts of an average male and female day; what activities they performed at each hour during the day. The other two groups wrote a list of all the assets that an average farm in Zambia has and whether the male or female uses it, and whether the female or male controls it.

For someone who has studied the challenges of the developing world, the results were not a complete surprise, but shocking and sobering all the same. Men worked less than the women (on average) and men spent a fair amount of time ‘thinking,’ ‘socializing,’ and admittedly drinking.

The second exercise found females and males both using most of the assets of a farm; ploughs, animals, equipment, etc. However, on the matter of control, males were in charge of almost all assets (chickens being one exception.)

Something that appears strikingly un-equal to a westerner was defended by a room full of Zambians, male and female, as ‘not right or wrong, but how society is.’

The facilitator asked the audience, ‘why?’ Why the men worked less, used assets equally or less, and yet controlled most of the family property. The audience had no conclusive answer besides, ‘that is how it is, and society doesn’t change.’ Lucky for me the facilitator decided to motion toward me stating that things are completely different where Dave is from, and no-one dies. He told the group that norms change, and no-one dies.

Some in the group later stated that this is the way things are, but things are changing.  Looking at the pictures I have posted here, how do you think this information informs interventions NGOs are making to combat poverty?

Sachs! Easterly! Neither!

For anyone unfamiliar with the international development debate, Sachs and Easterly present polar opposite perspectives on how the international community can and has supported or failed to advance the development of growing nations.

Sachs contends that international aid and development has been positive, but it is not enough. We have all the tools, but the intensity of our interventions have not been strong enough. We need more money and support to be really successful. (for more on the school of thought, click here)

Easterly directly disagrees with Sachs stating that we do not have the correct tools and the incentives of the organizations that deliver aid are mis-aligned. Easterly advocates for efforts that incorporate free-market principals in order  to drive innovation and competition. (for more, click here)

There are still others who agree with neither Sachs nor Easterly. They lie somewhere in-between on the spectrum.

This is why I am here, in Zambia, working for CRS. From my ‘ivory tower,’ I found it hard to know who was right, or how correct each side of the argument was. It required first-hand experience for me to really know what is going on, and it is sufficiently complex that I am interested and eager for any thoughts people have on this topic.

So what do you think? Who is right? Easterly or Sachs? Both or Neither? And why?

Hello Again!

It has been a while since I last posted and I am looking forward to re-engaging in discussion over the Nonprofit Life. So what have I been up to? I found a job, graduated from Yale School of Management, made some money, got married, and moved to Zambia. Yep!…

My job search went well and required a bit of patience before I found the right opportunity. My goal was to work overseas so that I could better understand the environment in which NGOs work in the developing world. The Catholic Relief Services International Development Fellows program provided the proper support, learning and career opportunities I was looking for.  After a few interviews and a language test, I was happy to be one of the 25 out of 350 to receive an offer.

Shortly after accepting the offer, I graduated from the Yale School of Management on May 25, 2009. I was joined by all my immediate family, including my favorite nephew/godson, Zane. It was a great occasion commemorating two years of hard work, amazing experiences and lifelong friendships formed.

Looking forward to my wedding, I realized I had better get cracking on making some money Continue reading


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