Slashdot Mirror
The Mifos Project Makes Software To 'Accelerate Microfinance' (Video)
You think you have problems getting a bank loan? It's much harder for a small-town woman in Uganda or India. But Indian microfinance provider ASOMI has more than 50 branches and over 40,000 clients, and is an active Mifos user. The loans ASOMI makes are absurdly small by U.S. bank (or Indian bank) standards. Ugandans in the same "I just need a little bit of money to start (or expand) my business" predicament can turn to RedMutual Microfinance. And so on around the world, with the bulk of microfinance operators who use open source Mifos concentrated in S. and S.E. Asia and India. "But," you say, "I'm an IT person. I don't want to go into the microfinance business, and one of the little loans (often less than $100) they deal with wouldn't help me." True. But you can become a Mifos Specialist, which Mifos defines as "a consulting firm that provides technical support and consultation for microfinance institutions evaluating and deploying Mifos, and for ongoing use and customization." You won't get rich doing this, but it looks like there's a decent living (by Kenyan or Indonesian standards) in working with Mifos. They can use volunteer help, too. So check out Mifos and see if it has anything to offer you -- or if you have anything to offer Mifos. Either way, you can help poor people in poor countries become entrepreneurs and break the cycle of poverty that holds them down. (Alternate video link)
but you can be damm sure the founders are, and you muppets can help them get richer
I generally dislike the meme, but I mis-read this as The MILFOS Project.
"Oh no... he found the
Micro finance is indeed capable of a lot of good. But it's also still debt, and still carries with if all the personal (and macroeconomic) evils of debt. Non-performing loans in microfinance are still a major issue despite the claims to the opposite. The public-relations positioning of micro finance as "help for the poor" is a bit laughable as it can just as easily be construed as opportunistic bankers eager for new markets. Does it help society overall? That's questionable. All debt appears to help on a macroeconomic level at the beginning if the credit cycle.
On a larger level, debt is still tomorrow's demand, spent today. The notion that debt will always create a "virtuous circle" of ever increasing growth and demand has been proven wrong repeatedly by the credit cycle of booms and busts. A boom creates as many victims as it does beneficiaries, as rising prices burden those who do not participate in the game of debt.
Are there positive stories of individuals who make use of micro finance to build businesses and lift themselves out of poverty? Yes. But there is also debt which enslaves and burdens. Debt is debt. It's net benefits to society are zero sum, for all but the bankers.
------ The best brain training is now totally free : )
I've been researching microfinance and microlending for a couple of years during the early stages of my PhD program in a related field, and have been unable to find peer-reviewed research supporting claims that microfinance initiatives create positive outcomes for their recipients. There is certainly anecdotal evidence, but little to no hard data in the hundreds of papers and articles I've read on the subject. That's not to say I'm opposed to the efforts of such lenders.
However, I am a little concerned that the aim/objective is almost always to create entrepreneurs out of the poor. I have also seen very little evidence to support this emphasis as the primary objective of said lenders.
Seriously, that's what I'd like to know. Kiva allowed you to donate, but you couldn't make a profit off the loans you provided. So, what about this? Can I back a loan and earn interest off of it? I love the idea of this if it could be turned into an 'everyone wins' situation - i make money, the business person starts a business and makes money, the broker in the middle makes money.
I made a loan or two through Kiva and then one day it dawned on me that all this sort of microfinance does is enslave unsuspecting people to debt slavery.
Kiva was charging 18% interest then. Capitalism is much like some evangelical religions.... it needs to spread. Often times like a virus instead of a force for good.
What are the bankruptcy laws there? If the project goes wrong (like in poor crop due to inclement/extreme weather), can they declare insolvency, or do they have to commit suicide to clear the family from debt?
There's little data that evidences microfinance reducing overall poverty. Most of the evidence says it does NOT increase a community's wealth.
It moderately helps families. But most of the people receiving microfinancing just trade jobs--so their overall wealth doesn't increase much.
It does have a positive effect on the gender paradigm in a community, because having a group of entrepreneurial women (who are usually the ones receiving money, by a large margin) changes perspectives on the role of women.
If you want to help a whole community emerge from poverty, microfinancing won't help much. You need traditional financing, with much larger loans. But that won't happen without property and commercial reforms, because banks don't want to be involved in your business (it's exceedingly labor intensive and inefficient to oversee another business), and prefer securing collateral, in the form of legal property (real property, contracts, etc).
A million small businesses don't do much. You need larger, medium-sized businesses which can employ many more people other than the proprietors. And the business needs to have good long-term prospects (a prerequisite of which is strong financial backing), so that employees' incomes can stabilize. But you can't have any of that without a legal and political situation amenable to business. That means less corruption, uniform and consistent regulations, strong property rights, and access to much larger loans.
And, ideally, you want real property to be as equally distributed as possible. In most impoverished countries very few people own their land or have clear title. They're either squatters, or the property rights are uncertain and not transferable with any degree of confidence. Without any property to secure a loan, you can't get big loans. So businesses seek out concessions from government for financing, which leads to all kinds of trouble.
Great feel-good job, you won't make much money, they won't either so we'll all be poor together. Income equalization. Why does the company not invest in such talent? Don't they want to make their customers successful? Off course not, micro finance is just the new way of doing donations for Africa of the 80's and 90's - 80% of it sticks in the company's pocket, and 20% are bribes to local officials.
Custom electronics and digital signage for your business: www.evcircuits.com
The phrase "cycle of poverty" -- while meaningful, and sad -- is a tired metaphor.
Successful entrepreneurs are more like excited electrons, jumping to a higher orbital shell.
-kgj
I tried out funding a micro finance loan, but was never paid back; the borrower basically said, "Everybody in America is rich, I don't need to pay you back." A friend of mine who worked for many years in East Africa said such feelings are very widespread. Take care; if people don't pay you back, they aren't really getting the point of financing growth, and will therefore stay stuck in poverty. It's not that I lost a lot of money (a few thousands), but I lost the relationship I could have built.
"We receive as friendly that which agrees with, we resist with dislike that which opposes us" - Faraday
In case you are in position to help as the article suggests and, you just need a little kick to get you in action, watch this one: http://www.gapminder.org/news/...
Agreed, "cycle of poverty" is a descriptive phrase, not a metaphor. Poor writing on my part; thank you for calling me out.
I like the excited electron model of entrepreneurship, because electron-entrepreneur commonly de-excite and fall back to lower orbital shells.
By the same token, I can see how many restaurateur-entrepreneurs achieve creamy Alfredo-sauceness with just a hint of garlic, yet some revert to bread and water.
-kgj
Finally. That's what computer geeks need.