A Quick Word About Microfinance

My friend Anthony and I have a blog where we occasionally discuss various political issues. He posted a question some weeks ago concerning microfinance, which you can read here. Here is my response:


Microfinance is lauded by some as a silver bullet which will rescue poor societies by allowing people to pull themselves up by their bootstraps, through providing financial services, training, and small loans to poor entrepreneurs. When microfinance is at its best, this is exactly what it does. It provides the means for people to provide for their families, save money, and improve their living situations. It avoids some of the problems of the traditional aid models, such as relying on corrupt governments, skewing local markets, and building dependence among the poor. Microfinance banks have typically targeted women, which has resulted in more freedom and empowerment for them; loans reduce the vulnerability of the poor during crises like sickness and drought. Repayment rates are typically high, and World Vision has reported increases in health and education, as families with loans are able to afford better living conditions and school fees.

But it comes with problems of its own. One obvious one is that microfinance, like any other tool, can be mishandled. It is not free from problems such as fraud, usury, and human error, just like other banks. Anthony mentions wealth disparity as a problem that might arise; to be frank, the real problem is nearly the opposite of this. The fact is that microfinance does little to help the poorest of the poor. They are usually trapped in subsistence activities, and if their loan does not help them grow their income beyond the interest rates, they will be worse off in the end. Most people in the developing world are not true entrepreneurs who have a visionary idea which can turn into profit and jobs for their community; 90% of these populations would be most benefited by a factory moving to their area and providing jobs. The International Labor Organization says that “nothing is more fundamental to poverty reduction than employment.”

So if a micro-entrepreneur is able to use a loan and develop a business where he can employ 100 people in his community, that will be far better than those 100 people getting their own loans to fund subsistence activities. The factory is able to access economies of scale and increase productivity; 100 women with their own sewing business simply crowd the market.

So to answer your question, in 10-20 years the criticism of microfinance will be that it wasn't able to deliver on the promise of curing poverty. It still is a good idea, and still helps millions of people around the world to provide for their families and defend against crises. But large-scale enterprises intensive in labor, public or private, will go much farther towards pulling societies out of poverty.

Into My Own

Picked up a collection of Robert Frost poems for my kindle last week, and just cracked it open today. The first poem in the set is about a boy leaving home, titled "Into My Own:"

ONE of my wishes is that those dark trees,
So old and firm they scarcely show the breeze,
Were not, as ’twere, the merest mask of gloom,
But stretched away unto the edge of doom.
I should not be withheld but that some day
Into their vastness I should steal away,
Fearless of ever finding open land,
Or highway where the slow wheel pours the sand.
I do not see why I should e’er turn back,
Or those should not set forth upon my track
To overtake me, who should miss me here
And long to know if still I held them dear.
They would not find me changed from him they knew—
Only more sure of all I thought was true.

Trip to Kenya Part 3: Mombasa and Nairobi

The bus back to Mombasa was relatively quick, and I was greeted upon arrival by the local branch manager who took me to the hotel. As I mentioned before, the hotel is pretty nice. It's situated on the beach, and has terrific buffets for the meals. I spent the weekend pretty much entirely at the hotel, taking a windsurfing class (verdict: I'm pretty terrible) and otherwise relaxing. Monday and Tuesday were spent at the office and in the field, where I got to meet some more clients.

Street scene outside the office in Mombasa

Back in Nairobi, I went into the office to wrap up some final business, and then went out to dinner with a former WV director who now lives in the Nairobi area. We went to 'Carnivore' restaurant, famous in its past for serving exotic game meats. Unfortunately, as of 2004, these meats are banned by law. There's a card on each table assuring the guests that the Carnivore management is committed to having these laws changed.

When you sit down, you are not brought a menu. You just get a heated plate, and a lazy susan filled with various sauces (above). The waiters carry around spits of meat, and they continue to pile slices on your plate until you lower your table's flag in surrender. The meats that I had were chicken, beef, pork, lamb, turkey, camel, crocodile, ostrich, and bull testicle. Terrific experience, but I have no desire to ever do this again.

Thursday I checked out of the hotel and went to the airport to meet another WV person, this time the marketing director who's partly in charge of my project. He wanted to see the giraffes, so we went to the Nairobi Giraffe Center.

As you can see by my photos, you can get pretty close to them. We fed them handfuls of pellets, which they would take out of your hand with their tongues. Our guide had a giraffe take food from between her lips, which is gross. I kept it in the hand.

After that, we went to the nearby Mamba Village (Mamba = crocodile in Swahili). Our guide helpfully poked at the crocodiles with a stick to make them hiss and roar and thrash about, which is significantly more entertaining than most crocodile exhibits at zoos.


There were also ostriches:


I'm back in Kigali now, and it looks like I'm here for the near future. I'll post more pictures from my trip on Facebook.

Mombasa!

Mombasa!

I'm in Mombasa now. It's hot, humid, and sunburny. And the hotel has delicious food, and I'm enjoying it here despite being constantly slapped in the face by the Valentine's Day decorations and the hostesses who keep asking, "How many? Just one?" Which makes sense because this is a beachside resort town. I need a woman to come travel with me.

Trip to Kenya Part 2: Kibwezi and Mutomo

I woke up at 5:30 to pack and get ready to catch the bus to Kibwezi. Kibwezi is a small town a little past halfway between Mombasa and Nairobi, on the main highway. So Lilian (the team leader/branch manager of the local office) picked me up at the hotel and got me on the bus to Nairobi. Since it's a major route, it's not exactly a matatu, but more of a tour bus with as many seats as passengers (usually). Still no AC though.

I took the 7:00 am bus to ensure that I would be in Kibwezi by noon or so to catch the 2:00 bus to Mutomo, another small town a few hours north that hosts a World Vision office. Look it up on Google earth to get an idea of where it is- it's in the middle of a drought-stricken but mineral rich region near Tsavo National Park, which is most famous for the Tsavo Man-Eaters, a pair of lions that killed 135 men working on the Ugandan Railway in 1898. The lions are now in the Chicago Field Museum (they're dead). So after driving through some pretty bleak landscape for six hours, I started to wonder when we were going to arrive. I had yet again failed to underestimate the African Way, and giving myself seven hours for what should have been a four to five hour drive was a mistake. The bus paused by the side of the road to let me out at 3:30 pm, nine hours after boarding. I was confident that I had missed the bus and would have to find alternate transportation to Mutomo. But as you may be able to forsee, I again overestimated the value of schedules in Africa. The bus was still loading, and Ambrose and myself were able to squeeze on. The best way to describe the bus is a Tokyo subway car combined with the family car from the Grapes of Wrath with all their household goods piled on top for the trip to California.


Since we were late, we were unable to get seats, so we had to stand in the aisle. As this is the only bus to do this route, and it only makes it twice a day, the bus was quite full- I did my best to count, and there were 40 seated, and almost another 30 standing in the aisle. No experience quite like barreling down a washboard dirt road packed into a bus so tightly that if anyone were to faint, they wouldn't touch the ground. And it's a given at this point, but there's no AC. Fortunately, we only had to stand for the first 45 minutes until some people left and we got their seats.

Notice the shadow of the bus? Those guys ride up there.

We arrived just before sundown and visited the ADP (Area Development Project- the name for a World Vision field office) office to use their internet and meet some of the staff. They were doing their work in the main meeting room that had a TV which was blasting En Nombre del Amor, a Mexican Telenovela which is dubbed in English for Kenyan consumption. It is apparently very popular- Ambrose told me on two separate occasions that he likes it because "the acting is very good." Ambrose is an interesting fellow- he is the middle child of 11, and is basically a one-man branch office for the Kenyan MFI, covering around 500 clients in a 50 km radius. As a result, he is an insanely hard worker.

L-R: Tim, Ambrose

We stayed in a local hotel that cost 500 Kenyan Shillings -about $6.50- for a room. Nothing fancy, but the hot water worked (despite nearly electrocuting me).

What $6.50 gets you in Kibwezi

Thursday morning we went to the WV office for the devotional and a brief presentation on the Micro project that I'm working on. They said they were busy, so I promised to keep it under 20 minutes- I finished in 15, and several told me it was too short. They said that usually when people say 20 minutes, it means an hour. We then took the Land Cruiser into the field to meet with clients. One client we spoke with, John, was a chemist who ran a small pharmacy in his village. With his loan he wants to increase the variety of drugs that he sells so that people in his community don't have to go the 30 km back to Mutomo for the Catholic hospital.

We were back on the bus down to Kibwezi by three. This time, the driver happened to be a friend of the WV driver, so we were able to get seats in the cab with the driver. This was much preferable to standing in the back, but was all the more frightening to realize how fast we were going. Back in Kibwezi, I spent the night in a hotel, and went out to the highway in the morning to flag down a bus going to Mombasa.

NEXT: Mombasa!

Trip to Kenya Part 1: Nairobi and Malindi

Like a boss

Flew into Nairobi for work on Sunday. I'm going to spend about two weeks in Kenya, doing training and various sundry activities related to microfinance. It's a nice change of pace, as Nairobi has full-on shopping malls that actually sell ice cream and donuts and Western candy (noticing a trend here?) and reasonably priced breakfast cereal. I walked from my hotel to the Nakumatt on Sunday and purchased a Snickers ice cream bar. Definite highlight.

I woke up at 2:45 am Monday morning to watch the Super Bowl. I watched on slingbox as best I could considering the poor connection, and went to sleep with the Packers up 21-10 just before halftime. I woke up two hours later just a few minutes after they were announced champions. Good way to start a day.

I spent Monday in the Nairobi office, and then flew to Malindi Monday night. It's a seaside city positively teeming with old Europeans with ridiculous tans and inappropriate clothes. Anyway, tomorrow I'm taking a matatu five hours into the bush to take another matatu another three hours further into the bush. Good times! I'll post photos when I get to Mombasa on Friday.

Couple o' photos

Apologies for the long delay since I last posted. It wasn't because I didn't have the time, although I have been getting steadily busier since my return from London, but because nothing very exciting has happened. Which I suppose is somewhat interesting in itself; it's feeling a lot more like home here, as I build routines and make friends.

Three activities that I've been doing pretty regularly- Ultimate Frisbee on Sunday afternoons, quiz night on Monday nights, and boxing class 1-2 times a week. I've met some cool people at all three, which has been nice. There's a decent expat community here in Kigali- lots of interns/aid workers/volunteers, but also embassy employees and businessmen. (Visitors' tip: the embassy people are the ones with sweet apartments. Go to their parties.)


Work has been going well. This last week I did a one-day training blitz from Gikongoro in the South to Ruhengeri in the North. The picture at the top is one of the volcanoes near the border with Uganda/DRC.

The other pictures are flowers at my house.