Living On $2 a Day in San Diego, CA

Alyssa Jones is a student at Point Loma Nazarene University. Along with her friends, Alyssa lived on $2/day for 3 days to raise awareness about poverty and raise money for Grameen Foundation.

Alyssa and her friends camped out in cardboard boxes for 3 days

I’ve never done anything like the $2 Challenge before. The experience was amazing, and really changed my perspective on poverty and homelessness. There are so many homeless people in the city of San Diego, and living like them for a few days helped me see them differently. Of course we had luxuries that they may not have, and our experience was over in three days, but I learned a lot regardless. Sleeping outside in a cardboard box isn’t very comfortable, and meals consisting of only beans and rice get very bland after awhile.

Not showering for three days and wearing the same clothes, especially during college classes where everyone else is clean and wearing nice clothes is very humbling. The lack of cleanliness was the toughest part, and gave me a lot of insight into the difficulties of poverty. Despite the difficult aspects of the challenge, there were a few good moments. The community feel was my favorite part, as we prepared the meals together, and prayed over our dinner before we ate family-style. There was simplicity to life, as we did everything together and enjoyed a break from technology. Living homeless for three days was hard, but it changed my whole view, and I’m so thankful for that.

Read more reflections from another participant at Maira’s blog about her experiences and thankfulness for being able to sleep on a real bed after the challenge is over.

Watch a video from last year’s challenge:

PLNU $2 Challenge from Point Loma Nazarene University on Vimeo.

Microcredit Summit Fuels MFIs Passion for Empowering the Poor

Alex Counts is the President and CEO of Grameen Foundation.

Grameen Foundation’s recent trip to Kenya was a watershed event.  Our founding director Professor Muhammad Yunus joined us at our Board meeting, held for the very first time in Africa.  In addition, and members of our Board and our staff participated in the Africa-Middle East Regional Microcredit Summit, the largest microfinance convening in Africa’s history.  Several of us presented Grameen Foundation’s work to the assembled delegates at some of the event’s sessions.  Staff members Camilla Nestor, George Conard, and Julia Assaad (of our joint venture Grameen-Jameel Pan Arab Microfinance) presented to scores of delegates eager to learn from our experts.  Most of the presenters, however, were African microfinance leaders including several who are long-standing partners of ours. 

I was pleased to kick off the third day of the summit by addressing a plenary session moderated by Dr. Helene Gayles, CEO of CARE International. During the session, I spoke about microfinance as a platform for improving the health and well-being of Africa’s poor and poorest families.  Although we spent 45 minutes on questions from the attendees, I was still left with a huge pile of unanswered written questions after the session ended! The 800 delegates who attended the session seemed hungry for information on making microfinance a more effective tool for empowerment.

Me with Teresia and Lucy

The most memorable part of the trip was our visit to Kenya Entrepreneurship Empowerment Foundation (KEEF), a Kenyan microfinance institution that is benefitting from, and helping to further refine, some of our signature initiatives designed to advance microfinance in Africa.  They are one of the earliest adopters of our Mifos technology platform that is designed to dramatically increase the efficiency and transparency of microfinance.  They are also using the Progress out of Poverty Index^TM, our industry-leading tool that measures poverty reduction outcomes.  KEEF is the first MFI globally to pilot our mobile money concept to make the transfer of loan monies and repayments much easier and more secure for clients. 

It was clear to all of us who participated in the field trip how much KEEF and its clients are benefitting from these programs and the important role our staff, volunteers, and donors are playing in making this powerful alliance possible.

Witnessing Our Impact in Nairobi, Kenya

Sandra Adams is Grameen Foundation’s Vice President of External Affairs.

During the first week of April several Grameen Foundation board members, other staff and I traveled to Kiambu, Kenya—about 45 minutes outside Nairobi—to see how local organizations are making a difference in the lives of poor families. Staff at the microfinance institution Kenya Entrepreneurship Empowerment Foundation (KEEF) and some of the MFIs ambitious borrowers welcomed us and shared their triumphs and challenges in the fight against poverty in their communities.

Upon arrival, we had the pleasure of meeting the “Bright Vision” borrower’s circle. What a perfect name for a group on their way up out of poverty! They told us that they began as a small, informal borrowers circle (called a “merry-go-round” in Kenya) that provided loans and a place to put savings.

Rose, right, with Bright Vision’s treasurer Elizabeth

The group then decided to join KEEF because they felt they could trust the MFI with their money. They can drop by the KEEF office anytime and staff there will show them their records.

In the past year, Bright Vision has grown from 11 to 22 members. Their loans have funded a variety of businesses: a day care, a pub, a fruit and vegetable stand, a couple of cows, supplies for a storefront chemist’s shop, a breakfast porridge stand, and others.

I was really impressed with KEEF’s loan officer Rosaline “Rose” Myra who services 35 groups. Rose is on the road constantly, usually traveling from group to group by matatu (the informal van service that links towns together). She loves Mifos because she no longer has to keep track of hundreds of loans on ledger sheets—the pre-printed loan/savings forms save her 30 minutes of work per group!

After saying goodbye to Rose and Bright Vision, we were off to visit borrowers Lucy and her niece, Teresia.  Lucy’s home is a two-room wooden building with cement floors, a screened porch for cooking, and a yard for her goats and chickens. She is Member #1 of her group, “Manchester Banana”— “Manchester” after a popular sports team and “Banana” for the name of her town. Lucy bought goats with her first loan of 15,000 shillings (about $200), and she sells their milk, and sometimes their kids, for traditional Easter dinners. With her first profits, she bought chickens and sells their eggs. She was proud to show us the corn crib on stilts that houses the maize she also sells.

Children in the neighborhood: the Obama hat made me feel right at home!

A huge proponent of microfinance, Lucy recruited almost all of the 28 women in her group! “I was really poor and I want to help other women so they can get out of their houses and so they don’t have to try to make a living being farmhands,” she told us. She helps new group members figure out good businesses to start.  Lucy suggested Teresia begin selling detergent door-to-door because people can only afford to buy a small amount at a time. Teresia makes a profit of about $63 for each enormous pail she sells. Her goal is to bank some savings and start a small curio shop selling crafts from Uganda, her home country. Lucy has a big dream, too.  She wants to buy the land next to her house and, with the help of her three sons, build 10 one-room houses to rent out for guaranteed income. I’m positive that with the work ethic and determination these women share, their dreams will come true in no time!

What is the true cost of microfinance?

Alex Counts is President and CEO of Grameen Foundation.

Wednesday’s front-page article in the New York Times by Neil MacFarquhar raised some important issues facing the microfinance industry, but, unfortunately presented a distorted picture.  I had the opportunity to challenge the author about his assertions on the Takeaway radio program.

Ibu Yusnaini is a beneficiary of microfinance

His sweeping generalizations about interest rates, while focusing on just two countries, could lead the average reader to believe that rates above 80 percent are the norm.  This is far from the truth, as evidenced by a recent report by the Consultative Group to Assist the Poor that found that, on average, sustainable microlenders were charging 26 percent. (Grameen Bank, our model for microfinance efficiency, charges rates from 8% to 20%, and gives interest-free loans to the ultra-poor as a transitional strategy to get them ready for regular borrowing.)  The same report also noted that rates have been falling by 2.3 percent annually and that less than one percent of microfinance clients worldwide actually pay rates as high as those cited in the article. Moreover, in most of the 36 countries studied, microfinance interest rates were below the rates charged on consumer credit cards, which is an appropriate benchmark.

Most microfinance involves substantial direct contact with clients in remote locations and this can be costly.  However, we believe that interest rates will continue to fall, getting closer to the rates charged by the Grameen Bank and other efficient lenders, as more institutions are able to lower their operating costs. These costs are largely driven by local factors, and this is something the article didn’t adequately address.  For example, in taking aim at LAPO (full disclosure: Grameen Foundation has worked with LAPO  for nearly a decade), the article ignored the high costs of doing business in Nigeria and omitted the fact that it actually charges the one of the lowest interest rates among Nigerian MFIs (something that was acknowledged by the client that was interviewed).

Reflections from the Microcredit Summit in Nairobi, Kenya

Maddie Brandenburger is a former development intern with Grameen Foundation and is involved with MFI Connect and the Nyanya Project. She recently reconnected with friends from GF at the Microcredit Summit in Nairobi.

A highlight was meeting Muhammad Yunus

I’ve just returned back to Wake Forest University, where I am a junior studying economics and international development, after spending a week at the Africa – Middle East Microcredit Summit in Nairobi, Kenya.  I feel more than ever, extremely enthusiastic about the pivotal role students are playing in the microfinance industry.  We are in a time of economic uncertainty, but it is a very important point in modern history for young people to step up, as the entire world reevaluates the definitions and parameters of success and service. I was given an incredible opportunity and provided with a grant to attend the conference in large part because of the knowledge and skills I gained interning at the Grameen Foundation last summer. MFI Connect and Wake Forest examined my experiences with Grameen Foundation and had the confidence in me to fund the conference costs.

MFI Connect was created by former Grameen America interns who identified the growing need of a resource for students wanting to engage in microfinance opportunities. Just one year old, MFI Connect boasts membership of 1000 members in over 60 countries and across 120 universities. It was MFI Connect who created the student delegation of 50 students from all over the world to attend the conference.

My week in Nairobi proved to be an invaluable exercise in harnessing the combined power of intelligence and experience of microfinance professionals. The spirit of collaboration, the passion for progress, and palpable excitement in the conference tent is something I will take with me always, and try to call upon if I ever feel overwhelmed or unsure in such an evolving industry.  I was surrounded by the best and the brightest in the world, and in a continent riddled with so much poverty and sadness, I felt nothing but hope.  MFI Connect arranged for private sessions with Muhammad Yunus of Grameen Bank, Fazle Abed of BRAC, Ingrid Munro of Jamii Bora, Sam Daley-Harris of the Microcredit Summit Campaign and Hans Reitz of Grameen Creative Labs. Throughout the week I was able to reconnect with many of the GF staff members who I worked with last summer.

Seeking Student Hackers to End Poverty

Edward Cable is Community Manager for GF’s Mifos Initiative.

This blog you’re reading and the computer you’re using right now run on millions of lines of code. Computers and software have changed the world. And we’re looking for more “student hackers” who want to continue doing so.

Mifos is our open source information management platform currently serving 10 Microfinance Institutions and 550,000 clients worldwide. These people have access to capital that is transforming their lives and empowering them to lift themselves out of poverty.

Our Mifos team is partnering with the Google Summer of Code to offer students paid internships to work on open source software projects. If you’re a student or know of a student, learn more about how you can apply your coding skills to help end poverty. If you’re interested, be sure to apply now, as applications are due Friday April 9. You can read about our last year’s participants Udai and Johan at the Google Open Source blog.

Learn at the Mifos blog, and be sure to check out our new video: