Microfinance and beyond...

Book Tips: 2 books I enjoyed reading in 2011

2011-12-29T06:26:48Z

2011 ...a busy year and one that went by so quickly... I managed to read a few books finally in the second week of December.

Most fun and inspiring read was Steve Jobs by Walter Isaacson. The 570 page biography is a page turner and a must-read. The subject matter of course is fascinating, a genius, a powerful and intense individual with many contradictions that transformed 7 industries (personal computer, animated movies, music, phones, tablet computing, digital publishing, retail stores) with his passion and pursuit for making great products and making a great company that would last. And it is beautifully written.

Another book which is a useful read for people interested in social entrepreneurship, the future of capitalism and how the silos are breaking between the business and the social world is Sir Richard Branson's latest book "Screw Business as Usual" I enjoyed reading the second half as it iillustrates many examples of how some of the large global corporations/brands are starting to shift/experiment ways for "doing well and doing good". I find it powerful that this call for change is coming from one of the world's famous and admired business leaders.

sosense.org - where philanthropy meets entrepreneurship

2011-09-25T15:44:38Z

We (Socential Ltd.) are happy to announce the launch of sosense.org. Our new platform sosense.org is dedicated to support high impact social enterprises operating both on a global scale, mainly in developing countries, as well as those operating in Switzerland. We strive to make it simple for social investors and donors to search, select and support these enterprises. Our aim is to facilitate collective impact.
We feature outstanding social enterprises that are working efficiently and effectively in solving some of the major social and environmental issues that we face today. Take a look at VisionSpring, Tostan, International Bridges to Justice, Riders for Health, Gram Vikas, Landesa to name a few. You can see the short video on their pages to get an overview of these inspiring organizations.
We realized during our pilot phase that supporting the social enterprises makes much more sense and creates a larger and long lasting impact than trying to dedicate to funding independent projects. www.sosense.org is a brand and it is owned and managed by Socential Ltd.
We still have a lot to improve on a number of fronts. It is work in progress which shall improve and we look forward to your collaboration and feedback!
..

Barefoot Women Solar Engineers (Zanzibar)

2011-08-14T10:39:45Z

Bunker Roy, founder and Director of Barefoot College visited Zanzibar from July 31 to Aug 3 to select the women (young grandmothers) in rural villages who would be trained to become solar engineers. I have been a fan and supporter of Barefoot College for some time especially after I visited them in Tilonia, India in early 2009. (visit report) Also as part of Socential, we have been promoting and funding solar electrification projects in Africa and Central America. I was very happy to be able to join Bunker in Zanzibar thanks to the invitation from my friend Meagan Carnahan who is a member of Giving Women, a Swiss based philanthropic organization and the leader of their Zanzibar Barefoot women solar engineers project. It was facinating to see Bunker at work. At the end of his short stay we had achieved to 1) select 2 women from the village of Kandwi which was approved in a meeting with the entire village and in the presence of the Indian Consul General H.E. D.S. Singal (top foto second from right). These 2 women will be travelling in September to Tilonia for the 6 month training program. 2) Meagan wrote a press release of this event which was published in the section of Zanzibar in The Guardian, a major newspaper in Tanzania. 3)The selection of one woman in the village of Matemwe was also made in a village meeting and the second candidate will be approved by the village chief (These 2 ladies will be attending the 6 month training in March 2012)
Barefoot College has solar electrified over 1000 villages in 37 countires (28 countries in Africa) saving 4.6 million kerosene a year, reducing carbon emission of 7 million kg a year, lighting over 34,000 house and training 683 solar engineers.

Thank you Professor Yunus

2011-05-15T11:10:21Z

On May 12th, Nobel Laureate Yunus Muhammad resigned from Grameen Bank after a two and a half month battle with the Bangladesh government which was determined to remove him as the head of the successful bank he created. It is a sad and unjustified chapter for Prof Yunus but this shall not discredit what the microfinance movement has accomplished and its continuing positive impact. Prof Yunus addressed his colleagues a letter on his departure, asking them to to remain strong and united. I thank Yunus for his wonderful and inspiring work which lead me (and many others) to move from mainstream into the world of social enterprises. I have no doubt that he will continue impacting lives through his work in creating social businesses.

Just two days before, on May 10th, I attended an exhibition on "How I can make a difference" by the 5th graders at the Inter-Community School in Zurich. This is a programme that requires that students engage in a collaborative, transdiscipplinary, inquiry process that involves them in identifying , investigating and offering solutions to real-life issues or problems. Connor Frey, one of the bright 5th graders (and the son of my friends Ali and Markus) had chosen "microfinance" as his topic. A month ago I was interviewed by Connor on this subject. I was very impressed and moved to see Connor's exhibits about microfinance, the history, about Yunus Muhammad and the pamphlete he made on the dos and don'ts on investing in microfinance. He is passionate about the subject and spreading the word! Great job, Connor. I could not stop thinking that Yunus would have enjoyed seeing his exhibition.

Skoll Forum 2011

2011-04-24T16:52:03Z

A belated report on the Skoll Forum 2011. This year's main theme was "Large Scale Change" . Lots of content. I recommend the selection of superb blogs, and in highlights you can find all the sessions and plenaries as video or podcasts. It was nice to have been able to attend Skoll forum for the 5th time in a row as initially I planned to be in Japan teaching social entrepreneurship for the YES Japan Creating Drivers for Sustainability program (which was understandably cancelled due to the triple disaster). My takeaways: of course the optimistic, positive energy that always flows at Skoll Forums, networking, the interactive meetings at Oxford Jam and last but not least connecting with Shino (Japan Research Center), Ichi (Social Media) and Patrik Meier (Crisis Mapping, Ushahidi) to discuss and share information on how to support Japan in the wake of the recent triple disaster.

Rebuild Japan! Social Entrepreneurship Fund launched

2011-03-26T17:23:04Z

We (at Socential) have launched an initiative to help rebuild the lives of the Japanese people impacted by the triple catastrophe (earthquake, tsunami and nuclear power plant damage) that hit northeastern Japan on March 11. The fund aims to mobilize youth and social entrepreneurs to create initiatives/projects for the rebuilding of the infrastructure and to help the families and children impacted in northeastern Japan to rebuild their lives. The fund also aims to unleash the entrepreneurial spirit in Japan and to provide much needed hope by encouraging them to work and engage for their future. Socential is teaming up with trusted partners in Japan in the area of social entrepreneurship (Ashoka Japan) and sustainable development to select the initiatives. Please join us in our efforts by spreading the word, donating for this project and/or praying for Japan.
For more information go to Rebuild Japan! Social Entrepreneurship Fund.

Impact investments and social entrepreneurship: opportunities and awareness emerging in Japan

2011-03-08T15:29:06Z

On March 1st Daiwa Microfinance Fund, the first Japanese investment trust fund to provide commercial financing for microfinance institutions was launched with the fund size of USD 242mn. The fund will be managed by Developing World Markets (DWM) which launched at the same time the underlying vehicle DWM Microfinance Fund-J.The fund is distributed by Daiwa Securities and managed by Tokyo Marine Asset Management. The minimum subscription is of Yen 1000 or 12 USD.
Daiwa seems to be leading the way amongst the big financial institutions in Japan regarding impact investments they had launched a bond that invests in IFC (which invests in MFIs) and also have distributed the GAVI bonds.

Japan has been lagging in the area of impact investments but during my last visit to Tokyo in mid January I could feel/hear that there is finally a lot more interest, awareness on the topic of social entrepreneurship and impact investment. I was lucky also to coincide with the official launch of the Ashoka Japan office. Bill Drayton was in Tokyo to give interviews and to introduce the Japan representative Kashiwa Maki and the long time Ashoka supporter Nana Watanabe. Ashoka Japan had started to operate last year the Youth Venture program.
I also met with Ichi (Hiroyasu Ichikawa) who I had met last year at SOCAP and Skoll who is doing a great job as a social media consultant in Japan. I also met several players in the financial industry that expressed their interest in making impact investments. Once there is interest.... Japan can move boldly... a lot to look forward to!

Impact investments...going mainstream in 2011

2011-01-28T07:37:31Z

Looks like 2011 will be a breakthrough year for impact investments. A recent report by J.P. Morgan/Rockefeller Foundation and Global Impact Investing Network (GIIN) defines impact investment as "investments intended to create positive impact beyond financial return". In other words, investments intended to; improve or provide access to energy, water, education, health, housing, and financial services for the poor, create jobs or mitigate climate change while also providing a financial return.
The term "impact investments" only surfaced less than 3 years ago and now thanks to the impressive efforts of the Rockefeller Foundation and GIIN it is emerging as an asset class. It is capturing the attention of investors in all segments from philanthropic foundations, high net worth individuals, financial institutions and governments as they all seek to make more efficient use of their capital, achieve better returns (social, environmental and financial) and help solve the world's social problems. Estimates on potential market size (investment capital) over the next 5 to 10 years range from USD 400bn to USD 1 trillion. Major efforts have been made also in developing standardized metrics with Impact Reporting and Investment Standards (IRIS) and more recently on ratings the Global Impact Investment Reporting Standards (GIIRS) is testing its rating methodology with 25 pioneer funds. Impact investments has been featured in conferences such as Skoll World Forum, Clinton Global Initiative and SOCAP last year and certainly this year it will take center stage.
Suggested readings
Impact Investments- An emerging asset class (J.P.Morgan, The Rockefeller Foundation, GIIN)
Impact Investing: A Framework for Policy Design and Analysis (Pacific Community Ventures, Harvard University)
Money for Good (Hope Consulting)
Investing for Social and Environmental Impact (Monitor Institute)
related blog What is impact investment?

Book Tips: 3 awesome books I read in 2010

2010-12-07T16:08:00Z

My favourite books this year may seem a bit biased geographically as all authors are living in California.

-Switch-How to change things when change is hard- by Chip Heath and Dan Heath
-The Dragonfly Effect -quick, effective and powerful ways to use social media to drive social change by Jennifer Aaker and Andy Smith
-the Mesh -why the future of business is sharing- by Lisa Gansky

I was very fortunate to have been able to attend the lectures of Chip Heath and Jennifer Aaker when I participated this summer in the Stanford GBS Executive Program in Social Entrepreneurship (EPSE). Both are remarkable lecturers and their books are fun, effective, full of amazing examples and inspiring. Switch is about how we can effect transformative changes by understanding the two competing systems; the rational mind and the emotional mind. The Dragonfly Effect is a how to guide on driving social change (by using social media). I picked up Lisa Gansky's book, the Mesh, while attending SOCAP10 in autumn. The Mesh explains one of the "big ideas" or one of the most important trends that is shaping new businesses logic providing products and services through sharing.
Happy reading!

The microcredit crisis in Andra Pradesh, India

2010-11-17T06:24:56Z

The microcredit crisis in India has been unfolding since mid October when the state of Andra Pradesh issued an ordinance to crackdown on microlenders. The ordinance required that all microlenders cease disbursing and collecting loans, register to the authorities and declare the interests charged. The state was concerned with the explosive growth of loans and around 50 suicides reports by rural men and women that were attributed to overindebtness. Although some of the MFIs have been able to resume their activities this kneejerk reaction by the state of Andra Pradesh has sent the industry into a crisis and is more likely to do harm than protect the poor borrowers. Shares of SKS Microfinance which had a successful IPO in August this year has been plunging and is currently less than half of its peak in September.The Indian microcredit industry is the largest in the world. The state of Andra Pradesh is the center of microcredit in India and home to India's largest MFIs such as SKS, Spandana, BASIX and Share Microfin as well as the government nurtured Self-Help Groups or SHGs. There has been excellent writeups on this subject and background which I can highly recommend.
- Indian Microfinance Crisis of 2010: Turf War or a Battle of Intentions? Intellecap White Paper
- Who is the Culprit? Accessing Finance in Andra Pradesh, CGAP
- India's Microfinance Crisis is a Battle to Monopolize the Poor, Vineet Rai, HBR
- Backgrounder on India's Microfinance Crisis, David Roodman

SOCAP 2010 Mainstreaming Impact Investments

2010-10-18T20:25:56Z

SOCAP 2010 took place in San Francisco on Oct 4-6. Over 1200 participants. Energetic, lively, sharing, innovative. Impact investments took center stage.Watch these amazing videos of Jacqueline Novogratz (Acumen Fund) Matt Flannery (Kiva) and many more http://video.socialcapitalmarkets.net/live-video-stream/ The first SOCAP Europe will take place in Amsterdam May 31-June 2, 2011.

A great debate on microfinance at CGI

2010-09-30T20:22:06Z

This I believe will become a "classic" or the debate between "who should benefit from microfinance". My humble opinion...I think that both have valid points and there is enough room for both ideals as there are so many people in need for basic services at the BOP or bottom of the pyramid.

Watch live streaming video from cgi_plenary at livestream.com

Kiva.org extends it services and start (pilot) offering student microloans

2010-09-20T20:11:17Z

Kiva.org, the world's first microlending website announced today its entry into the education field by offering a pilot for student microloans in 3 countries. So beginning today anyone can make a loan starting at USD 25 to students that are selected by Kiva's first 3 education field partners; Fundacion Paraguaya (Paraguay) IMPRO (Bolivia) and Ameen s.a.l. (Lebanon). Kiva.org an innovative social enterprise created a movement to connect people around the world through lending to alleviate poverty. In only 5 years, Kiva.org has provided over USD 160 mn in loans to 415,000 microentrepreneurs around the world and these loans (which are as little as USD 25) have come from close to half a million lenders spread in 206 countries!

"The pilot was born as a natural extension of Kiva's mission to connect people, through lending, to alleviate poverty. Kiva Student Microloans give recipients the opportunity to gain new knowledge and skills through higher education or vocational training. As a result, these individuals will be better positioned to find jobs, support their families and grow their communities -- and ultimately make a real difference in the relief of global poverty." (source: Kivablog)

IDEO launches OpenIDEO an online platform where we can design, collaborate and create solutions and social good

2010-08-24T17:39:55Z

Earlier this month, IDEO, the leading global design consultancy launched OpenIDEO, a collaborative platform to design and create solutions to the world's toughest challenges. This platform is cool. It starts with a big question (the challenge that needs a creative solution) and uses the design process; brainstorming, conceptualizing and evaluating to create with the online community innovative solutions. A very interesting point is that anyone that collaborates can get recognized accordingly to one's contribution. OpenIDEO kicked off with Jamie Oliver's challenge "How can we raise kid's awareness on the benefits of fresh food so they can make better choices?" so tackling obesity. The second challenge is "How to increase the availability of affordable learning tools and services for students in the developing world?" by Enterterprising Schools, a project of Grey Matters Capital. It reminded me a lot of Ashoka's Changemakers in that it crowdsources ideas/proposals and let the online community collaborate to create solutions. OpenIDEO is making it easier for everyone to become a changemaker!

Introduction to OpenIDEO / OpenIDEO.com from IDEO on Vimeo.

Turbulent month in the microfinance world: Death of BANEX and the successful IPO of SKS

2010-08-19T15:33:19Z

This month we have seen the death of a large microfinance institution BANEX (formerly Findesa), once the leading Nicaraguan MFI was forced into liquidation by the Nicaraguan Banking Superintendant (NBS) after defaulting on its creditors. Findesa was founded in 2002 had a spectacular growth and a remarkable track record til early 2008. They were granted the banking licence in September 2008 and changed its name to BANEX. The portfolio quality of Nicaraguan MFIs deteriorated very quickly in the past 2 years due to 1)the negative impact of the global financial crisis especially seen by the decline of remittances from Nicaraguans working in the USA, and 2) the "no pay movement" in the north and central parts of the country. Furthermore, Banex was hit by its product mix with high exposure to small and medium enterprises and high concentration in livestock loans. According to the national newspaper, NBS stated that all 3000 depositors of Banex were paid back in full. For more information please read David Roodman's excellent writeup and the short note from Microrate

The good news. The long awaited IPO of SKS Microfinance took place and the shares made an impressive debut on the Bombay and National Stock Exchange of India on Aug 16th. The IPO was over 13 times subscribed and the shares closed the first day with an 11% premium. The valuations are much higher than Compartamos and the topic of MFIs going public is actively debated as industry players are divided in their views.