Daily Archives: November 8, 2009

An Update on the Kiva Micro-Finance Experiment, Part III

Last September, I introduced you to Kiva, the world’s first person-to-person micro-lending initiative in a post where I posed the question Can Micro-Finance Make a Macro-Difference? after being referred to the site by a fellow hoser.

In an attempt to answer that question, I decided to conduct an experiment. Since last July, I have been making a minimum of two loans a month under the hypothesis that if it works, after a year I will have enough capital in the Kiva system to help at least one new person every month as previous micro-loans get re-payed. To date, the doctor has made thirty-six $25 Kiva micro-loans (which get bundled with other micro-loans to fund loans to individuals and groups through Kiva’s micro-finance partners). Of these, 14 have been repaid in full and 17 have been partially repaid. In other words, Kiva is still working great and accomplishing its goal of making loans that change lives.

If you haven’t tried it out yet, why not give it a shot? Now it is true that lending to the working poor through Kiva involves risk of principal loss, as the site is careful to disclaim on every page, but over 90% of 99 active (& pilot) field partners have a 0% default rate (and none of its current active partners have a default rate of over 1%). It’s still less risky than investing in the stock market and mortgage funds. (As you can expect that over 99% of your principal will be returned to you, on average. How many of you can say that about your current investment portfolio?)

Furthermore, it now allows you to lend to small businesses in North America, including small businesses in the US! This means that you can now support your local business in a new way! So if you’re still lucky enough to have any discretionary funds left, why not take part of them and try lending through the Kiva platform? Considering that you can start for $25, or the cost of one good bottle of wine, it’s an endeavor that the vast majority of us should be able to afford. And if you do lend, remember to tell them that jeff <at> hosernews <dot> ca sent you (because one should give credit where credit is due). (And if you’re a fellow hoser, you can even consider joining his team.)

Finally, remember the inherent supply chain lesson. If a good supplier is in trouble in these hard financial times, key customers can band together to keep it financially solvent until times improve through faster payments, guaranteed orders, and low-interest loans. And, in addition to the good feeling these customers will get from knowing they did right, they can also secure long-term capacity from a strategic supplier. Let’s face it — most business people want to do the right thing when given the choice, and many will be quite happy to sign a long term contract or guarantee if you help to bail them out. This means that if you stick by a good supplier when it’s having a bad day, it’ll stick by you through thick and thin.

The following are the loans that the doctor has made since last July and their current status.

Individual Institution Total Loan Loan Funded Disbursed Repayment Term Repaid to Date*
Gulchehra Rahimova LLC MLO Humo and Partners 1175 Jun 28, 2008 Jul 12, 2008 12 months 100%
Din Ly CREDIT (World Relief) 250 Jun 28, 2008 Jul 12, 2008 18 months 077%
Araba Awotwe Christian Rural Aid Network (CRAN) 350 Aug 14, 2008 Aug 28, 2008 07 months 100%
Serigne Cisse UIMCEC (Christian Children’s Fund) 975 Aug 15, 2008 Aug 29, 2008 12 months 100%
Mavluda Tosheva LLC MLO Humo and Partners 450 Sep 01, 2008 Sep 15, 2008 12 months 100%
Mario Aguilar Fundacion Paraguaya 475 Sep 01, 2008 Sep 15, 2008 11 months 100%
Irene Microfinanzas PRISMA 1200 Oct 11, 2008 Oct 25, 2008 06 months 100%
Sokhna Sene UIMCEC (Christian Children’s Fund) 300 Nov 01, 2008 Nov 15, 2008 12 months 083%
Essoneya Tchindo WAGES 300 Nov 01, 2008 Nov 15, 2008 12 months 083%
Guillermo Microfinanzas PRISMA 325 Nov 01, 2008 Nov 15, 2008 10 months 100%
Olinda Microfinanzas PRISMA 325 Nov 27, 2008 Oct 31, 2008 06 months 100%
Sron Chea Group AMK 200 Nov 27, 2008 Oct 28, 2008 04 months 100%
Kayi Lawson Microfund Togo 1175 Jan 02, 2009 Nov 17, 2008 18 months 047%
Abdulhokim Azimov LLC MLO Humo and Partners 600 Jan 03, 2009 Jan 17, 2009 10 months 080%
Feliciana Llano Ramirez Manuela Ramos / CrediMUJER 475 Feb 04, 2009 Jan 15, 2009 05 months 100%
Atta Ofori Sinapi Aba Trust (SAT) 525 Feb 04, 2009 Jan 26, 2009 10 months 100%
Moeun Sileng CREDIT, a partner of World Relief 1200 Mar 01, 2009 Feb 12, 2009 21 months 100%
Mohammad Ameen s.a.l. 1200 Mar 01, 2009 Feb 05, 2009 15 months 058%
Daniel Adu Sinapi Aba Trust (SAT) 725 Apr 05, 2009 Mar 26, 2009 08 months 100%
Adetokunbo Fajuke Lift Above Poverty Organization (LAPO) 500 Apr 06, 2009 Apr 20, 2009 10 months 075%
Mujeres Emprendedoras Fundacion Paraguaya 1125 May 04, 2009 Mar 31, 2009 06 months 100%
Crescencio Ruiz Fundacion Paraguaya 400 May 04, 2009 Apr 27, 2009 14 months 041%
Noemi Salamanca Gutierrez Fundacion Leon 2000 425 May 31, 2009 May 18, 2009 11 months 037%
Crescencio Ozorio Fundacion Paraguaya 1000 May 31, 2009 May 18, 2009 13 months 036%
Hirma Microfinanzas Prisma 1000 Jun 28, 2009 Jun 09, 2009 10 months 037%
Komlanvi Gawonou Dzogbemah Women and Associations for Gain both Economic and Social (WAGES) 850 Jun 28, 2009 Jun 23, 2009 14 months 022%
Karina Pacaya Leandro Manuela Ramos / CrediMUJER 450 Jul 27, 2009 Jul 22, 2009 07 months 040%
Ana Virginia Leon Lacan Asociacion ASDIR 750 Jul 27, 2009 Jul 24, 2009 20 months 011%
Kobildjon Azimov IMON International 800 Jul 27, 2009 Jul 02, 2009 14 months 014%
Mostafa Al Majmoua Lebanese Association for Development 2000 Aug 25, 2009 Jun 15, 2009 14 months 033%
Iyabo Ezi Women and Associations for Gain both Economic and Social (WAGES) 1100 Aug 24, 2009 Aug 04, 2009 14 months 007%
Sakhavat Jafarov Aqroinvest Credit Union 2000 Sep 27, 2009 Oct 27, 2009 17 months 000%
Dul Soarphorn CREDIT, a partner of World Relief 400 Sep 23, 2009 Sep 17, 2009 14 months 000%
Juan Xxiii Group Fundacion AgroCapital, a partner of ACDI/VOCA 4900 Oct 31, 2009 Sep 28, 2009 07 months 000%
The Fruit Group ADIM (AsociaciĆ³n Alternativa Para el Desarrollo Integral de las Mujeres) 950 Oct 31, 2009 Oct 29, 2009 10 months 000%
Los Narditos Group FundaciĆ³n AgroCapital, a partner of ACDI/VOCA 1875 Nov xx, 2009 Sep 18, 2009 08 months 000%
Averages   910     11 months  

*As of Nov 2, 2009

Want a Turnaround? Start With Your Workforce

I enjoyed this recent article in Industry Week on the Miller Centrifugal Casting Comeback from revenues of 8M in 2003 to 22M in 2008 because it highlighted the key elements of a successful turnaround: your people. According to MCC, five key structural supports were required to achieve the turnaround, with the first two being workforce morale and employee satisfaction. In other words, it had to put the people who would ultimately be effecting the turnaround first.

MCCs secrets of a turnaround? They are:

  1. Workforce Morale
    MCC starting treating its workforce as valued customers and human beings, not just “resources” and numbers. Managers walked the floor, engaged in open dialogue, and equipped the workforce with decision making power.
  2. Increased Employee Satisfaction
    MCC implemented a gain sharing program in 2005 based on a pay-for-performance system.
  3. Lean
    Specifically, MCC focussed on eliminating waste.
  4. Quality
    MCC strategically invested in equipment and technology that would have a direct impact on quality.
  5. Customers
    MCC focussed on responding to actual customer needs and wants and not just perceived needs.

And they’re pretty much dead on. Add:

  1. Senior Leadership
    Leadership from senior management who embrace the change and walk-the-walk as well as talk-the-talk.
  2. A Realistic Transformation Plan
    Developed in conjunction with an expert that starts with a gap analysis between where you are and where you want to be and lays out a realistic path to get there

Then you are on your way to turnaround success.

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