The first iPhone app for donating to charity. Note they position it as a way to give to "top performing" nonprofits and use Charity Navigator's ranking system to determine "performance". Shows how influential Charity Navigator is and how important their shift to outcome based ratings is.
The Beyond Good Intention web based film series is getting a lot of attention. In this episode they cast a critical eye on microlending and question Kiva's impact.
Nell Edgington compares Jim Collins' Good to Great leadership style to Ronald Heifetz’s Leadership Without Easy Answers style and suggests that social entrepreneurs might not want to follow the Jim Collins approach.
On microlending. The Tomsk initiative and microfinance bank in Russia took an holistic approach to community-centered development and resulted in 10,000 new business entities in a city of 600,000 over 4 years from $6 million invested. Replicated in Novisbirsk and several other cities, it pioneered the moral-collateral lending model in Russia to form the template for the Russian Microfinance Centre in 2002.
I offered a presentation to the APPG on microfinance for the 2005 ‘Year of Microfinance’ meeting but was turned down.
It’s not perfect, but when a group of people in a loan circle take responsibility for each other’s debt, it tends to sharpen the focus on mutual success and thus was able to demonstrate survival rates of 95% for more than a year, with full ROI over the project duration. The project itself delivering proof of concept for a model aimed at both ROI and SROI.
In a later interview on a subsequent project in Crimea, founder Terry Hallman describes the “more inclusive” form of capitalism.
So, it may not be a panacea, but when deployed as part of a toolkit for microeconomic development, can demonstrate remarkable success.
Thanks Jeff. Do you have any comment on the Beyond Good Intentions video? Do you think she’s correct? It seems to me that the “moral collateral” is the key aspect. Does the Kiva program highlighted in the video utilize this?
Well Sean, it seemed to conclude that microloans were being applied in a fairly haphazard way with the sample lender admitting that he’d not really understood it.
I’m no expert on how well it’s worked in Africa, but I suspect she’s pretty accurate in the context shown.
Kiva, I understand, works with local partners who may have greatly varying interest rates. Kiva provides the mechanism for the online investor, to target the would be lender through the local partner. I don’t know how many of them operate a moral collateral model.
Incidentally, there’s a Bill Clinton video somewhere on Youtube where he makes the point that Grameen style collateral free loans do work consistently.
On the other hand there’s the Guardian’s Katine project where Barclays have invested in an existing moneylender scheme, which would seem to buck the trend.
In the interview script I linked above, you’ll read a criticism of collateral based lending in that it excludes those who most need funding, in favour of existing business. We can from our own research point to instances of it being used to launder money right under the nose of an international development agency.
In the Crimea development paper, there’s a comparison on existing loan models and perhaps more interesting, the concept of Transformational lending designed to address the needs of SMEs rather than the solo entrepreneur.
Thanks Jeff. I’ll check it all out.