Category Archives: Miscellaneous

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

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 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 a new person every month as previous micro-loans get re-payed. To date, the doctor has made twenty $25 Kiva micro-loans (which get bundled with other micro-loans to fund loans to individuals and groups through Kiva’s micro-finance partners). The loans are:

Individual Institution Total Loan Loan Funded Disbursed Repayment Term Repaid to Date*
Gulchehra Rahimova LLC MLO Humo and Partners 1,175 June 28, 2008 July 12, 2008 12 months 67%
Din Ly CREDIT (World Relief) 250 June 28, 2008 July 12, 2008 18 months 44%
Araba Awotwe Christian Rural Aid Network (CRAN) 350 August 14, 2008 August 28, 2008 7 months 100%
Serigne Cisse UIMCEC (Christian Children’s Fund) 975 August 15, 2008 August 29, 2008 12 months 58%
Mavluda Tosheva LLC MLO Humo and Partners 450 September 1, 2008 September 15, 2008 12 months 50%
Mario Aguilar Fundacion Paraguaya 475 September 1, 2008 September 15, 2008 11 months 55%
Irene Microfinanzas PRISMA 1,200 October 11, 2008 October 25, 2008 6 months 83%
Sokhna Sene UIMCEC (Christian Children’s Fund) 300 November 1, 2008 November 15, 2008 12 months 33%
Essoneya Tchindo WAGES 300 November 1, 2008 November 15, 2008 12 months 33%
Guillermo Microfinanzas PRISMA 325 November 1, 2008 November 15, 2008 10 months 40%
Olinda Microfinanzas PRISMA 325 November 27, 2008 October 31, 2008 6 months 67%
Sron Chea Group AMK 200 November 27, 2008 October 28, 2008 4 months 100%
Kayi Lawson Microfund Togo 1,175 January 2, 2009 November 17, 2008 18 months 11%
Abdulhokim Azimov LLC MLO Humo and Partners 600 January 3, 2009 January 17, 2009 10 months 20%
Feliciana Llano Ramirez Manuela Ramos / CrediMUJER 475 Feb 4, 2009 Jan 15, 2009 5 months 67%
Atta Ofori Sinapi Aba Trust (SAT) 525 Feb 4, 2009 Jan 26, 2009 10 months 14%
Moeun Sileng CREDIT, a partner of World Relief 1200 Mar 1, 2009 Feb 12, 2009 21 months 6%
Mohammad Ameen s.a.l. 1200 Mar 1, 2009 Feb 5, 2009 15 months 8%
Daniel Adu Sinapi Aba Trust (SAT) 725 Apr 5, 2009 Mar 26, 2009 8 months 0%
Adetokunbo Fajuke Lift Above Poverty Organization (LAPO) 500 Apr 6, 2009 Apr 20, 2009 10 months 0%
Averages 636 11 months

Since my last update in January, where I presented an interim verdict that Kiva appeared to be great, based on the fact that all loans over 3 months old had partial repayments, I’m happy to say that Kiva beat my expectations. I expected that it would take 13 or 14 months to reach the point where the repayments coming in would be enough to guarantee at least one new (minimum) loan of $25 every month, and preferably two, when, in fact, it only took 10 months! As of this month, the cumulative repayments coming in for the month are enough to make two new $25 loans next month.

Conclusion? While the site continues to disclaim (in the footer of every page) that lending to the working poor through Kiva involves risk of principal loss, Kiva is working great. And in this economy, it’s less risky than investing in the stock market and mortgage funds, especially since an investment in Kiva last year would have resulted in your principal being returned to you, while those of us with market-based investments (stocks, mutual funds, 401Ks, RRSPs, etc.) are finding them (considerably) underwater at this time.

Thus, I would still encourage you, if you’re still lucky enough to have any discretionary funds left, to 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 (at the liquor store and not your local 300% mark-up restaurant), it’s an endeavor that the vast majority of us should be able to afford. And if even half of the 1.2B people in the developed world made even one loan a year, think of the sustainable difference it could make. That’s something worth aiming for. 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.)

And remember, there is a supply chain lesson here for all of us. 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.

*As of April 22, 2009

Top 10 Reasons That Good Employees Quit

A recent article on Material Handling Management on-line which noted that, according to the U.S. Department of Labor and Statistics, turnover can cost an organization 33% of an employee’s total compensation was kind enough to summarize the “top 10 reasons good employees quit”. It’s an important read because they’re all preventable, and keeping good employees not only lowers costs, but it maintains morale … and a happy employee is a productive employee.

  1. The Job Was Not As Expected
    The job changes from the original description to something else. The employee, who believes that his new employer played a bait-and-switch game, wonders what else the company lied about and seeks greener pastures.
  2. Work Life Imbalance
    Forcing your staff to pick up the slack when a project’s behind, when a team-mate departs, or when you just finished a right-sizing might look like a great cost-savings opportunity, until your employees get tired of 60, 70, and 80 plus hour weeks and decide to stick it back to you.
  3. New Hire Mismatch
    Square pegs don’t fit in round holes. ‘Nuff said.
  4. Management Freezes Raises and Promotions
    Generally speaking, money isn’t the top reason someone takes a job or the top reason someone leaves one, but if an employee can earn 15%, 20%, or 25% across the street …
  5. Feeling Undervalued
    No one wants to feel less useful than a door-stop. A little praise for a job well done goes a long way.
  6. Lack of Decision-Making Power
    No one wants to be micro-managed, and there’s no need to micromanage a good employee who was hired because she can do the job better than you in the first place.
  7. Not Enough Coaching/Feedback
    Good employees want a career path … and want help getting to the next level.
  8. Management Lacks People Skills
    Not only do people not want to feel like doorstops, they don’t want to work for them either. Make sure that your managers are properly trained and developed, or they might just cost you your best employees.
  9. Too Few Growth Opportunities
    If there’s no career path within, your employees will look for one without (you).
  10. Lost of Faith and Confidence in Leaders
    Make sure you always do the right thing.

Open Call for Category Consulting Clarity

As some of you may have picked up from a recent comment of mine on Spend Matters, I got a bit of blasting behind the scenes for my recent post on how to deal with Yo Yo Contracts, with the notable exception of the constructive feedback from Barb Ardell of Paladin who was willing to publicly share her advice with you. The private feedback ranged from statements that I didn’t know what I was talking about because I’m not a “real” sourcing consultant (I never claimed to be a sourcing consultant, I’m a sourcing technology and process expert who freely admits his only category expertise is in IT … and that’s why you never seen me advertising traditional sourcing services through my consulting practice), through statements that questioned practicality (a matter of opinion), to stuff that I wouldn’t (or couldn’t) post, repeat, or respond to.

Usually my readers are pretty quiet, so I found this a bit surprising and, upon further contemplation, promising. If people are willing to get riled up over this topic, then they must be passionate enough to want to write about it. So, in lieu of the cross-blog series that I would normally try to pull together to kick off spring conference season, I’ve instead opted to run a special guest series on category sourcing, starting the week of April 27. I’ve already invited some of the thought leaders who’ve previously posted on SI to submit a piece on how you can save money on raw materials, goods, and/or services in these troubled times, but I don’t want to exclude anyone who wants to take a crack at educating the space. So, if you want to be front and center on SI, just drop me a line or send me a draft post and we’ll get to work on putting you in the limelight.

A Procurement “Metric of the Month” is a Bad Idea

As a prominent blogger, I get a lot of e-mail (or should I say spam?). One of them had “Procurement Metric of the Month” in the title. I was about to trash it, as this is one of the worst ideas I’ve ever heard (as I’ll explain shortly), but then I noticed it was from Hackett. Needless to say, this got my attention. Why would one of the leading research firms in the space, which produces the very useful and relevant Book of Numbers, be touting a “metric of the month”?

It turns out they weren’t promoting a “metric of the month”, which would be an incredibly bad idea because a metric is only useful if you benchmark against it month after month after month for an extended period of time to measure your progress (and changing metrics too often gets you absolutely nowhere), but a new free research offering as part of their Hackett Performance Network (where, if you qualify, you can get access to selected research reports, performance studies, and webcasts). Designed for Finance, HR, IT, and Procurement, this new offering is apparently going to showcase an important metric in each area each month, starting with “Tax Book Entries Requiring Correction Percentage”, “Outsourcing Utilization by HR Process Category”, “IT Business Value Contribution through Portfolio Optimization”, and “Level of Supply Risk Management Adoption”.

With respect to the latter metric, which focusses on procurement, Hackett points out how 67% of world-class organizations implement supply risk management consistently across the business as compared to only 13% of their peers, indicating that top performers are 5 times as likely to have a comprehensive supply risk management strategy. Considering that effective supply risk management is a way for procurement to elevate its value proposition and help the business protect its brand, cost leadership, and stability, this makes sense. It’s free, so check it out. Just don’t take “metric of the month” literally.