Vittana Ambassador Nathan Richardson, who I met in Los Angeles earlier this year, is going to Jordan for 16 weeks for a Fellowship for Vittana. But here’s the kicker – he needs YOUR help to fund the trip! He’s trying to raise $7,500 to cover expenses (which is nothing for 16 weeks). If you can afford to help him out, I know he would be extremely grateful. More details about the opportunity can be found on his blog:

My placement will be at the Microfund for Women which in the country of the city of Irbid in Jordan. For 16 weeks in 2011, I’ll be assisting in efforts to help alleviate poverty in the area through microfinance and education. To say this honor bestowed upon me is a once in a lifetime opportunity is definitely an understatement. I will be helping to start a program that doesn’t exist anywhere in the Middle East.

In addition to contributing to his fund via the ChipIn module (which can be found on Nathan’s blog), another great way to help out would be to spread the word about Nathan’s opportunity to anyone who you feel might be inclined to help.

In my mind, helping passionate people such as Nathan reach their goals and help others is a much better investment than your next big screen TV will ever be.

Eric Kissel, Microfinance Partnerships Manager for EIC

True confessions: all this green is starting to make me see red.  I like clean air and water, and am fairly frugal so conservation makes sense to me, but without a positive economic return I don’t believe many alternative energy initiatives can or should survive.  RFPs for projects which combine green energy and microcredit seem to be popping up more and more frequently, making my skeptic’s radar glow hot.  Can microloans for green energy products make financial and environmental sense?

Projects like Energy in Common give me hope.  Energy in Common has demonstrated both positive economic and lifestyle returns for its borrowers who invest in alternative energy, utilizing a Kiva-like platform to finance investments.  In order to get a better understanding of why and how it works (and hopefully pick up some how-to tips), I interviewed Eric Kissel, Microfinance Partnerships Manager for Energy in Common (EIC).

Hi, Eric.  So what exactly is this “energy poverty” I’ve been reading about?

Eric:  One-third of the people in this world still rely on rudimentary, polluting, inefficient forms of energy. Charcoal, dung and wood for cooking, kerosene for lighting – these are still common in much of the world.  Using this type of energy is more expensive than you would imagine. Families spend hours gathering wood and a significant part of their income is spent on products like charcoal and kerosene. 

I noticed in your bio that you learned about the relationship between access to credit and energy needs when you were in Bangladesh.  So what’s the relationship?

Eric: The families I spent time with in Bangladesh were forced to rely on dirty forms of energy until they were extended credit to pursue other options. Gaining access to modern energy comes with higher upfront costs than business as usual. Cash-poor families require access to cheap credit to be able to spread out the costs over time.  Over the long run an improved cook stove or a solar-powered LED lamp ends up being cheaper for them and more efficient.

Is it really cheaper and more efficient?

Eric: Absolutely. For example, two of EIC’s current partners – Christian Rural Aid Network and Toyola Energy provide solar-lighting kits using microcredit to tackle the high up-front cost. Toyola supplies solar-powered LED lamps and with money raised through Energy in Common, CRAN provides the financing.  A typical client in this part of Ghana spends about $10 every month on kerosene for lighting.  These solar-powered products are being sold for $45 for the basic model.  You can see how the savings will start adding up quickly.

How do these solar kits work?

Eric: They come with a panel and a lamp with different power settings. They also have an outlet so that, in addition to lighting, you can charge a mobile phone off of the system.  While their main use is for providing light for a client’s business or home after dark, users have realized that they can bring in additional revenue by letting their neighbors recharge their mobile phones for a fee.

I think it’s interesting that EIC is lending primarily to entrepreneurs – for the most part these aren’t consumer loans.  Why did EIC choose that route?

Eric:  The majority are for business use, but often, particularly with the improved stoves and solar lamps, the products are used within the home as well. The customer might take the lamp with them to their storefront, use it to extend store hours, and then take it home in the evening.  The same is true with the cook stoves– many are being used in a restaurant, which is often attached to their home.  Many women express that the improved stoves will help them save time and money acquiring wood and charcoal. EIC also features loans that are solely quality of life improvements for families. Most of the clients purchasing improved stoves cite health and safety high on the list of reasons for moving away from charcoal and wood in the home.

How long has EIC been around?

Eric:  Energy In Common has been built over the last year and our official launch was in March. 

You’re probably getting tired of being compared to Kiva, but lots of people know the Kiva model so… how does Energy in Common compare?

Eric: We have a similar model in terms of the person to person lending approach, loans being repaid to the lender, and then, ideally, the lender loaning money all over again.  We believe, however, that access to modern forms of energy is key to all development outcomes. EIC lenders exclusively fund green energy projects. These projects typically allow for extra income generation while creating tangible quality of life and health benefits.

Like Kiva, we accomplish this through strong partnerships with our MFI partners. For many of our MFI partners energy loans are a new kind of product. A lot of work goes into building strong ties between the MFI and the energy service provider.

Last, our focus on energy allows people to combat climate change AND poverty at same time. Every dollar that is lent through EIC funds a product that reduces dependency on polluting fuels.  Every LED lamp, every fuel efficient stove, and every solar panel purchased, not only makes life a whole lot easier for these communities, but greenhouse gas emissions drastically drop as well.

 What is EIC looking for in an MFI partner?

Eric:  Since our MFI partners are the ones who actually administer the loan at the local level it is critical that they have a strong reputation for good business practices. A strong presence in rural areas, straightforward loan products, and a willingness to innovate with energy loans are important. The real challenge that I’ve seen so far is finding MFI partners that have an established relationship with an energy service provider or that are willing to develop that relationship.  Creating strong bonds between the energy service providers and the MFIs is crucial – making sure there’s an understanding between both parties on the financing that’s involved, product costs, what the customer can expect, what kind of after-sales support there is, if there’s a warranty, and who’s on the hook if the product malfunctions.

It’s still a bit early in the game for EIC, but are there any lessons learned you’d like to share?

Eric: The practice of making clean energy available and affordable to the poor using microfinance is still new. Many of our MFIs have not entered into this sort of partnership before. Developing those strong partnerships I mentioned between MFIs and energy providers takes time and that has been a learning experience for us. But we are learning!

By Kirsten Weiss

IShop4Microfinance is a new website that just came out that is similar to Project Red, but benefits microfinance. The way that it works is that when you shop at any of their partner stores, including: Amazon, Gap, Best Buy, itunes and more, 4% of your total purchase goes towards Kiva, Grameen, or Acumen.  The great thing about Ishop4Microfinance is that it never costs you more than if you made the purchase on other sites.  They have partnerships with all sorts of stores that have allowed them to get a discount on their items, which is then being given to microfinance.  So go shop for some gifts, spread the word to friends, and lets get more money going to microfinance.

Here are some of the stores that you can shop at:

Last month I wrote about some spam that I had seen hit a microfinance platform, well now I am seeing it in another form.  Yesterday I was going through my emails, when I saw an email that I thought was from Kiva, but it just didn’t look right.  I decided to cautiously open it just to be sure.  The email turns out to be from a company called “Kiva Micro Financial Loan Company.”  Once seeing the details of the email, it was obvious that it was a scam that was phishing for information.  In my case, as with many I am sure, since I was opening it with gmail, I received warning that I should be cautious opening the email.  However,I’m sure there are many people who don’t have the same security settings that I do, and might be getting caught by this.  It is a shame seeing scams hit the microfinance world.  Most people don’t get caught by them in this day and age, but the scammers will keep trying to impersonate lenders and organizations to trick people, and all it takes is a couple of the wrong people to get scammed and it will make microfinance look bad.  If anybody sees any other form of Microfinance scams, please share them with the group.

Shalini Kannan, Mariko Kuga, Greg Lance, Joel Olazabal, and Katharine Kaputo of The Hillsdale Effect

Occasionally I’m asked about microcredit programs targeting youth, and I confess I remain skeptical of them.  But recently I came across a really remarkable model for engaging youth – not as borrowers, but as funders of microcredit – and it turned up in my home town, of San Mateo, CA.

In 2008, Hillsdale High School formed a club called The Hillsdale Effect, dedicated to raising funds for microfinance.  This year, the club raised over $6,700 for Namaste-Direct’s microloan program in Guatemala and an additional $5,000 for club members’ study trip to Guatemala through local fundraising events and through leveraging their partnership with the San Mateo Rotary Club.

The club’s advisor, Greg Lance, said, “My interest revolved on involving students in tangible projects in the real world.  The Rotary Club was already involved in microfinance and they thought involving youth would be a good idea.”

The group was initially formed by nine high school seniors, who studied microfinance – inviting speakers in banking and microlending, studying development economics, and even going to Guatemala to meet Namaste’s borrowers and see microfinance in action.  The video they returned with inspired many of the next generation of students to join the club in 2009.

Joel Olazabal, one of today’s members, joined after seeing the video.  “My mom and dad grew up in Mexico and didn’t have many opportunities.  Since I do have educational opportunities, I wanted to help others.”

Another student, Katharine Caputo, got involved after writing a paper arguing that poverty was inevitable.  “Mr. Lance challenged me on that,” she said, “So that was what sparked my interest in getting involved.”

The group cites three factors for success: strong partners, location, and knowledge of their donor markets.

Partnerships:   Rotary gives The Hillsdale Effect the opportunity to raise money through fund raising events targeting Rotarians, and they connect the group to other local Rotaries.  The San Mateo Rotary has also donated directly to the club’s fundraising program for Namaste-Direct, their partner-MFI.  “Also, because Namaste is a smaller organization, the president has been able to give us time – giving us instruction about the program, and even leading us on our trip to Guatemala this June,” says club advisor, Greg Lance.

Location, Location, Location:  The Hillsdale Effect chose to finance an MFI that not only had offices nearby, but also worked in Latin America – an area many of the students had a connection to.  “Originally, we were going to work with a Rotarian in Honduras,” said advisor, Greg Lance, “but communication was difficult because… he was in Honduras.  Namaste-Direct is based in San Francisco, so communication is easy.  However, they work a lot in Guatemala so they have a good awareness of what’s going on there.”

Know your Donors:  Perhaps the club’s most successful fundraising to date has been through its student market – and they know this market well.  Over a two week period, the club raised over $6,700 from Hillsdale High School students and staff with a “Penny Wars” promotional.  Each class was given a giant plastic water bottle – every coin deposited in a bottle gained a point for the class and every dollar deposited was a negative point.  “So you’d put coins in your own class jar and dollars in the jars of other classes.  At the end of the week, we’d announce who was in the lead and then they’d get sabotaged to the max with dollar deposits,” explained student Mariko Kuga.  “We raised $6,784 and there are only 1,200 students in our school.  It worked because it appealed to the high school student’s sense of competition.”

The impact of The Hillsdale Effect has gone beyond its microloan recipients, circling back to the local community in San Mateo.  The program engaged Hillsdale High School students, teaching them about developing economies, banking systems, lending, poverty, and microfinance.  Club members and advisor, Greg Lance, have aspirations to broaden the program – perhaps taking it into schools throughout the district.  Some Hillsdale Effect graduates have already gone on to introduce the concept at their colleges.  How do you think it can be taken to the next level?

I’m sure everybody knows about the major earthquake that has devastated Haiti, killing thousands of people. Over the last week I have seen support coming from all angles, from mainstream sites like Facebook, BBC, CNN, celebrities like Ben Stiller donating through their charities, to major non-profits in the area like Yele Haiti and the Red Cross.  It is great to see so many different companies and organizations contributing to help the cause.  Although the earthquake was major, it was only a little bigger than earthquakes in the US, but caused an expontentially higher amount of damange and casualties.  I think this earthquake opened peoples’ eyes about the impact that natural disasters can have on developing countries.  Similar to the Tsunami in Thailand earlier this decade, people have joined from all over to help donate money.  Although a lot of the rebuilding will be coming from the donations that people will be making, one of the next steps will be for people in Haiti to help themselves rebuild.  I think there will be a big microfinance push as things start to get cleared up in Haiti.  With all of the relief organizations helping out, it’s only a matter of time that microfinance will take over.  In the last week alone, there have been a lot of microfinance organizations that have been helping the cause.  I decided that I would share some of the ones I have heard about.

-Alex Counts from the Grameen Foundation talks about the next step to help Haiti rebuild:

-Kiva’s field partner Esperanza wrote an update:

On Wednesday,20 January, at 6:00AM a 6.1 magnitude aftershock struck Haiti (with an epicenter approximately 35 miles north of the capital, Port-au-Prince). This is the largest aftershock yet and it comes just eight days after the tragic 7.1 magnitude earthquake hit the capital. As a result of the aftershock, many unstable buildings collapsed; however, we are fortunate they were empty as many survivors of the original quake have been sleeping on the streets. We ask for continued prayers and support for the people of Haiti.
In light of this disaster, Esperanza is partnering with various doctors and medical volunteers in the towns of Elias Pina and Jimani, located on the border with Haiti. Loads of water, food, personal hygiene items and medicines have been shipped to these areas. We are also working with our already established network of pastors and church leaders who are currently preparing sites in Port-au-Prince to receive aid directly into the country.
As the situation in Haiti becomes dire, we are still in need of cash donations from our partners abroad. Monetary gifts of $40 to Esperanza´s Disaster Relief initiatives will provide a family with its basic necessities (food, bottled water, healthcare kits, etc.). For more information on how to help, please contact the Esperanza Disaster Response Group at disasterresponse@esperanza.org

-Fonkoze, an MFI in Haiti, has an Earthquake News and Updates page that they are updating with information from the ground as well as some photos that their staff have taken.  Whole Foods has donated 1 million dollars to Fonkoze to help out the microfinance effort on the ground.

-In addition to MFIs and other non-profits helping the efforts, there are also local microfinance networks such as SeaMO, Seattle Greendrinks, Global Washington and Re-Vision Labs who are putting on an event here in Seattle to help raise funds and awareness about what is going on in Haiti.
You can RSVP for Washington for Haiti: A benefit to aid the relief efforts of Fonkoze on their facebook event page

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.

I just came across a cool site called Microfundo that applies the methods of microfinance to the music industry.  Their mission is to support the entrepreneurial activities of independent musicians from developing countries around the world – championing undiscovered musicians who would otherwise not have the means to develop their music careers.  Basically Microfundo is a Kiva for music.  Anybody can go to their website and browse through their various campaigns to choose a musician to lend money to.  Here’s how it works:

Choose a Musician’s Campaign, Lend, Get Repaid
1. Music Fans like you browse Campaigns of Musicians and choose an artist to lend to. When you lend, using Paypal or your credit card, Microfundo collects the funds and then passes them along to the artist once they’ve reached their goal.
2. Over time the artist is able to repay the loan via sales of digital downloads of their music that is distributed through Microfundo’s media partners at Natonal Geographic and Mondomix.
3. When you get your money back you can re-lend to another artist Campaign or choose to purchase their artists’ new releases or you can simply keep your money.

I think this is a great concept, especially for those that are musicall inclined.  Microfundo targets a niche group of lenders, so I’m not sure how scalable it will be, but ultimately I think it has a lot of potential.

For those who don’t quite know what microfinance is yet, here’s a great video from Unitus:

[via Seamo via Wokai]

Here is an interesting article by Dr. Bashir Mahmud Ellias that discusses microfinance and its relationship with dowries.

Over the last two to three decades rural Bangladeshi society has experienced a complex range of developments. Among these, NGOs, micro-finance institutions and garment industries have become the major agents of change in the lives of rural Bangladeshi women. Women’s increased access to independent sources of finance, through participation in outside paid employment or through micro-credit, is usually taken as one of the main indicators of the improvement of women’s status and of women’s empowerment.
However, a puzzle remains: if these positive changes have resulted in women’s “empowerment” , why has there not been the kind of improvements in women’s position that might be expected, such as the reduction or abolition of dowry payments, or a reduction in domestic violence? Indeed, if anything these tend to be going in the opposite direction. Dowry amounts continue to rise, as does the associated violence against women.

To read the rest of the article, check out Dr. Bashir Mahmud Ellias’ blog.