Article on Christian Micro Finance group

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
40,964
936
113
Fantastic! Highly endorse! Teaching a man to fish, and giving him a loan for a pole and bait.

THAT is how you "cure" poverty.

Thanks, MA!
 

mountainannie

Platinum
Dec 11, 2003
16,350
1,358
113
elizabetheames.blogspot.com
I interviewed them and was going to do an artilcle on them but could not.. because really they are a Christian missionary group. ok, that is their thing. The rates are very high but the director said that was because of banking regulations here in the DR. The group that i most admire is the one that runs in Haiti which is Fonkose Fonkoze - Haiti's leading microfinance institution | News which, although started by a Catholic priest, does not require Bible reading or prayer and sticks really to microfinance.

This is the Grameen Banking system that has had tremendous success all over the world.
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
40,964
936
113
I interviewed them and was going to do an artilcle on them but could not.. because really they are a Christian missionary group. ok, that is their thing. The rates are very high but the director said that was because of banking regulations here in the DR. The group that i most admire is the one that runs in Haiti which is Fonkose Fonkoze - Haiti's leading microfinance institution | News which, although started by a Catholic priest, does not require Bible reading or prayer and sticks really to microfinance.

This is the Grameen Banking system that has had tremendous success all over the world.
Aren't the results more important than ideology and religion?

To NOT write an article bbased solely on your distaste for their missionary work, even though their structure and success are impressive, is almost journalist malpractice.

I thought "bias" was not a part of responsible journalism. But then again, I'm Old School...and this is 2013. I suppose things have changed: if it's not Politically Correct, do nothong to promote even Good Works.

$38,000,000. That's a LOT of micro loans. And that 2% interest buys a LOT of counseling and expertise.

Good for Dave Valle. I am impressed.
 

mountainannie

Platinum
Dec 11, 2003
16,350
1,358
113
elizabetheames.blogspot.com
that would have been my editor's call

I suppose that I could have fought for the article if I had not personally felt that I was being preached at when I went to do the interview.. actually, I did not go at first to do an interview but to see about volunteering.

The rates of the loans are really within the range that are not considered micro finance by the Grameen Bank. I tried to do more research on this but just laid it down. The guy who runs it was very clear that he did not have the same freedom as FONKOSE had in Haiti.

They do use the Grameen model.. of making a group responsible for all the loans. And they do have an impressive record of repayment.

But I just felt that their primary purpose was conversion to Christianity. I did not really see a news story in that.
 
Last edited:

mountainannie

Platinum
Dec 11, 2003
16,350
1,358
113
elizabetheames.blogspot.com
I never wrote it .. But IPS has pretty rigid guidelines as to what they will accept. I have to pitch the story to the editor before I get approval.

If you go to IPS you will see that they are left leaning and cover the global south. A story on a Christian missionary microfinance organization which charges rates which are above the interest rates recommended by the Grameen bank would not have made it through the pitch. First requirement is that I have to be really enthusiatic about it, right?

This story appeared in the Christian Science Monitor.. which obviously has other guidelines for its writers.. and certainly pays better than IPS./. but they clearly just ran the piece that was sent to them by Esperanza, never went into the field, which would have cost them more. I know this because the wording in the article is almost the same as the pitch that I got from the director and the promo in the brochures.
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
40,964
936
113
I never wrote it .. But IPS has pretty rigid guidelines as to what they will accept. I have to pitch the story to the editor before I get approval.

If you go to IPS you will see that they are left leaning and cover the global south. A story on a Christian missionary microfinance organization which charges rates which are above the interest rates recommended by the Grameen bank would not have made it through the pitch. First requirement is that I have to be really enthusiatic about it, right?
I hope you quit working for such a publication.

Even leftists should show some lack of intentional bias.

That interest keeps the fund going and finances more loans.

Grameen is an extension of the Bangladesh gubmint; the gubmint owns a small chunk and the Bangladesh Central Bank funds it. I'm not aware of such involvement by either the DR or Haiti gubmint, so the criticism is unfounded.

I have always understood the prevailing interest rate on a Grameen loan was 20%. So it seems to me that 24% is not an outrageous rate for a PRIVATELY funded and operated organization that has no access to Central Bank credit, and who cannot float a bond (BTW: the Grameen bonds are also at premium investor rates.)

I also don't see a huge difference in how Grameen requires the recitation of the "Sixteen Decisions" and Christian Missionaries proselytizing. I don't disagree with them, but as a requirement for a loan they do seem similar to the requirements of religious organizations.

Sixteen Decisions said:
  1. We shall follow and advance the four principles of Grameen Bank: Discipline, Unity, Courage and Hard work ? in all walks of our lives.
  2. Prosperity we shall bring to our families.
  3. We shall not live in dilapidated houses. We shall repair our houses and work towards constructing new houses at the earliest.
  4. We shall grow vegetables all the year round. We shall eat plenty of them and sell the surplus.
  5. During the planting seasons, we shall plant as many seedlings as possible.
  6. We shall plan to keep our families small. We shall minimize our expenditures. We shall look after our health.
  7. We shall educate our children and ensure that they can earn to pay for their education.
  8. We shall always keep our children and the environment clean.
  9. We shall build and use pit-latrines.
  10. We shall drink water from tubewells. If it is not available, we shall boil water or use alum.
  11. We shall not take any dowry at our sons' weddings, neither shall we give any dowry at our daughters' weddings. We shall keep our centre free from the curse of dowry. We shall not practice child marriage.
  12. We shall not inflict any injustice on anyone, neither shall we allow anyone to do so.
  13. We shall collectively undertake bigger investments for higher incomes.
  14. We shall always be ready to help each other. If anyone is in difficulty, we shall all help him or her.
  15. If we come to know of any breach of discipline in any centre, we shall all go there and help restore discipline.
  16. We shall take part in all social activities collectively.

I applaud any group who helps people help themselves regardless of the wrappings and ideology. I'd be OK with an Aleister Crowley group if it teaches folks to help themselves.
 

mountainannie

Platinum
Dec 11, 2003
16,350
1,358
113
elizabetheames.blogspot.com
Esperanza says on their website that they charge 2% of the principal per month for a 24 month loan on a declining balance. Which would be less than 24%, right? (math is not my strong suit) but my memory is that when I was talking with them, I had the rate more at the 36% level.

From this, all the staff are paid.

per a bank.

so, my delimma was .. are you a bank, or are you a Christian missionary organization? and the answer is that they are both.

I could not find a micro finance bank here that was NOT a Christian missionary group.

Ok, they are up front about that on their web page. Their first mission is show God's love. They do say that they read the Bible and pray in their meetings.. If you read the fine print. So you will know something.

And you will see that they are not just into Microfinance but into health care, education, and community development..

Unlike Fonkose, which only does microfinance.. which it has expanded to now include small business loans up around the 25k mark. and banks all around Haiti in small communities where anyone can open an account, and sending remittanced into those accounts from abroad.

So I guess I think that if you are going to teach fishing.. then JUST teach fishing and get really good at it.

Surely you cannot be an expert fisherman, seamstress and businessman at the same time, right?

But if you are in the "business" of showing God's love, well, then you can do anything.

So if you are looking for a really good microfinance model, for my 2 cents, look at Fonkose.
 

mountainannie

Platinum
Dec 11, 2003
16,350
1,358
113
elizabetheames.blogspot.com

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
40,964
936
113
so, my delimma was .. are you a bank, or are you a Christian missionary organization? and the answer is that they are both.

I could not find a micro finance bank here that was NOT a Christian missionary group.

Ok, they are up front about that on their web page. Their first mission is show God's love. They do say that they read the Bible and pray in their meetings.. If you read the fine print. So you will know something.

And you will see that they are not just into Microfinance but into health care, education, and community development..
An organization can be anything they choose. A potential client can accept those tenents or reject them. Nobody is forcing anyone.

MA said:
Unlike Fonkose, which only does microfinance.. which it has expanded to now include small business loans up around the 25k mark. and banks all around Haiti in small communities where anyone can open an account, and sending remittanced into those accounts from abroad.
Fonkose can approach microfinance any way they want.

MA said:
So I guess I think that if you are going to teach fishing.. then JUST teach fishing and get really good at it.

Surely you cannot be an expert fisherman, seamstress and businessman at the same time, right?
From the perspective of division of labor expertise, yes, you can. Look at any university. They are experts in all their disciplines. Other organizations, in varying degrees, can develop various levels of competence away from their core mission.

MA said:
But if you are in the "business" of showing God's love, well, then you can do anything.

So if you are looking for a really good microfinance model, for my 2 cents, look at Fonkose.
There may be numerous solid, productive, successful models out there. I just applauded what Dave Valle accomplished. He didn't have to, but did.

Props.
 

mountainannie

Platinum
Dec 11, 2003
16,350
1,358
113
elizabetheames.blogspot.com
yes. They are dedicated. They do their work. They bring in volunteers. They get people to give them money to loan. They are expanding. They are on the Kiva website. They do not hide their religious intention. They serve a market that is underserved.

I do think that their interest rate has come down since I first talked with them. Certainly 24% is well within the bounds of microcredit.
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
40,964
936
113
Don't take it personally Annie, He just hasn't had a good chance to beat anybody up for a week or so and he has need to spank" people every once in a while.
Der Fish
'fish, it's kinda sad that all you can do is complain about me after getting batted around like a ball of yarn by a big tomcat because of your numerous absurd posts.

If you spent half the time getting smarter and better informed as you do obsessing about me, your posts woud rise from "absurd" to merely "ridiculous."

And I wouldn't be living in your head rent-free.

You may not care for my style, but you'd be hard-pressed to complain about substance.

But obviously you're a "style over sunstance" guy.

Challenging someone is not the same as beating someone up except in the PC world where everybody gets a "participation" trophy. I don't roll that way, never have, never will.

This may be waaay over your comprehension, but being challenged is one primary way of getting smarter. Try sitting in a room of 12 grad students knowing the course will be graded on a curve with a limited number of "A's" and see what "challenge" is all about. Try going into football training camp with 6 guys competing for 2 jobs and see what "challenge" is. The list is endless.

You just don't like being challenged on some of your absurd, fact-devoid posts, so you complain about the Mean Man to anyone who'll listen instead of simply "fixing" YOUR problem.

Now, 'fish, ^^^this^^^ is both "challenge" and "beat up". I wonder if you can tell which is which...
 

Matilda

RIP Lindsay
Sep 13, 2006
5,485
338
63
Esperanza charge 2% every 2 weeks not every month. Nearly 50% a year. Whilst much cheaper than the average money lender it is still an appalling interest rate.

Matilda
 

mountainannie

Platinum
Dec 11, 2003
16,350
1,358
113
elizabetheames.blogspot.com
One of the principal challenges of microfinance is providing small loans at an affordable cost. The global average interest and fee rate is estimated at 37%, with rates reaching as high as 70% in some markets.[12] The reason for the high interest rates is not primarily cost of capital. Indeed, the local microfinance organizations that receive zero-interest loan capital from the online microlending platform Kiva charge average interest and fee rates of 35.21%.[13] Rather, the main reason for the high cost of microfinance loans is the high transaction cost of traditional microfinance operations relative to loan size.[14]
Microfinance practitioners have long argued that such high interest rates are simply unavoidable, because the cost of making each loan cannot be reduced below a certain level while still allowing the lender to cover costs such as offices and staff salaries. The result is that the traditional approach to microfinance has made only limited progress in resolving the problem it purports to address: that the world's poorest people pay the world's highest cost for small business growth capital. The high costs of traditional microfinance loans limit their effectiveness as a poverty-fighting tool. Offering loans at interest and fee rates of 37% mean that borrowers who do not manage to earn at least a 37% rate of return may actually end up poorer as a result of accepting the loans.[15]


Example of a loan contract, using flat rate calcuation, from rural Cambodia. Loan is for 400,000 riels at 4% flat (16,000 riels) interest per month.
According to a recent survey of microfinance borrowers in Ghana published by the Center for Financial Inclusion, more than one-third of borrowers surveyed reported struggling to repay their loans. Some resorted to measures such as reducing their food intake or taking children out of school in order to repay microfinance debts that had not proven sufficiently profitable.
In recent years, the microfinance industry has shifted its focus from the objective of increasing the volume of lending capital available, to address the challenge of providing microfinance loans more affordably. Microfinance analyst David Roodman contends that, in mature markets, the average interest and fee rates charged by microfinance institutions tend to fall over time.[16] However, global average interest rates for microfinance loans are still well above 30%.
The answer to providing microfinance services at an affordable cost may lie in a rethinking of one of the fundamental assumptions underlying microfinance: that microfinance borrowers need extensive monitoring and interaction with loan officers in order to benefit from and repay their loans. The P2P microlending service Zidisha is based on this premise, facilitating direct interaction between individual lenders and borrowers via an internet community rather than physical offices. Zidisha has managed to bring the cost of microloans to below 10% for borrowers, including interest which is paid out to lenders, while maintaining a repayment rate of approximately 98%. However, it remains to be seen whether such radical alternative models can reach the scale necessary to compete with traditional microfinance programs.[17]
https://en.wikipedia.org/wiki/Microfinance