Thursday, October 09, 2008

Popular countries for operations


Ryan Gunderson over at Riches for Good had an interesting post the other day analyzing the country site of operation of the organizations on Fast Company's Social Capitalist Award list compared to World Bank numbers of # of individuals living on less than $1 a day. Although the data is not academic by any means it is illustrative:

A couple things I noticed:

1. Obviously India is a popular country for social capitalists. Demographically it makes sense: population density allows for certain efficiencies/cost per client etc., the large numbers are appealing to the donors backing the social capitalists, operation is relatively cheap in India, and there is also great need according to sheer numbers. Additionally, there is also a very vibrant citizen sector in India allowing for partnerships and synergy. Finally, I think English language is a big factor.

2. China is lagging. Is this due to language and culture? Is the government not conducive to allowing social capitalists to operate? Are the funders of social capitalists not as aware of the image of the poor Chinese farmer as they are of the poor Indian farmer?

3. It would be interesting to see this data according to % of the country living under $1 a day as opposed to overall population numbers. I think some of the more needy countries are not being served in proportion to their desperate circumstances.

My conclusion: there is enough need out there that you can make a difference anywhere. We should not punish small countries with high poverty rates simply because the numbers to show our donors are not as impressive. Some of our efforts should go towards the areas of greatest need not only the areas of greatest ease of operation.

8 comments:

Leslie Forman said...

Excellent post! I think that China is both surging and lagging in terms of social capitalism. I used to work for the American Chamber of Commerce in Shanghai in the area of Corporate Social Responsibility, and this is a hot topic among companies, government agencies, non-profits, students, and others. Lots of foreign companies and expatriate entrepreneurs have made huge strides in this field, and China's state-owned enterprises have made it a high priority. However, it is also lagging, due to a lack of government recognition for the non-profit sector. China's development has been very top-down, focusing on big cities. I believe that social capitalism is much stronger in urban China than in rural China. My organization, Wokai.org, is working to promote microfinance in China. I recommend the following websites to learn more about these topics in China:
http://www.responsiblechina.com
http://www.china-crossroads.com
http://www.chinacsr.com
http://www.shokay.com
http://www.wokai.org

David Stoker said...

Hi Leslie, thanks for coming by and lending your expertise. I spent some time exploring the links you provided and I would actually be most curious to hear your thoughts about my post last week on Kiva, particularly in light of the question-what will you be offering that is unique from Kiva, the China focus? why not partner with someone like Kiva or Unitus as an implementation partner?

http://microfranchising.blogspot.com/2008/09/kiva-should-co-brand-with.html

Ryan Gunderson said...

Thanks for the shout out and additional perspective. Will you be attending the BYU CESR event in early November? I just signed up.

David Stoker said...

Unfortunately I won't be able to attend this year. I'm out in Washington D.C. area these days. The director of the CESR was just out here in D.C. so I did get my update of happenings but I would love to be there for the networking. Are you going to blog from the event?

Ryan Gunderson said...

I anticipate I'll do a single post after I'm done at the conference.

David Stoker said...

I'll look forward to it.

Leslie Forman said...

Hi David,

These are excellent questions! We at Wokai know both Kiva and Unitus well, and we have worked closely with leaders from both of these organizations. China's microfinance environment and monetary policy have led Wokai to build a China-specific platform.

1) China's microfinance sector began 15 years later than other countries', and remains underdeveloped. Through information and capital exchange, Wokai aims to grow the microfinance sector in China and correspondingly increase opportunities for the poor. You write in your article about Kiva that you'd like to see them "use their platform to strategically inspire change in the market." This is something that we are trying to do in China. By our third year of operation, we hope to expand to at least fifteen MFIs in China, over 20% of China’s non-government microfinance sector.

2) China's monetary policy does not allow Chinese currency (RMB) to be converted into other currencies. Therefore, Kiva's model of repaying lenders once borrowers repay their loans would not work in this environment. Wokai will serve as an online recycler of microfinance loans: each contribution gets used multiple times to help more than one person. Once the borrower repays the loan, the contributor will be able to select another entrepreneur from the same Field Partner and receive updates on that entrepreneur's progress.

Our website (which is launching soon!) will be like Kiva meets Facebook meets Wikipedia. The “Kiva” is a person-to-person contribution platform that allows donors from all over the world to go online, view borrower profiles, and make small contributions to support the loan of the borrower of their choice. The “Facebook” is a social networking platform that will connect everyone from MFIs on the ground in rural China to investors, capacity builders (like Unitus), and contributors around the world. The "Wikipedia" is a user generated information resource. Our site will host microfinance authorities that blog about the latest news in China microfinance, as well as enable users from around the world to upload articles, videos, pictures, and podcasts related to China microfinance.

We also work very closely with our Field Partners to train them in international-standard accounting and management systems. We are currently working with two field partners, in Inner Mongolia and Sichuan.

Also, I have a tiny correction to your blog article about Kiva. Kiva Friends was started by Kiva lenders, not staff members. This is an incredible example of "crowdsourcing against constraints" that Premal Shah from Kiva described in his presentation at the recent Online Giving Marketplaces conference at Stanford. Here's the link to the slides from that awesome presentation: http://www.slideshare.net/mrpremal/online-giving-marketplaces-kiva-presentation-presentation

Thanks again for your enthusiastic support of the world's nascent microfranchising industry. Feel free to contact me at leslie.forman (at) wokai.org if you'd rather keep this discussion going over email.

All the best,
Leslie

David Stoker said...

Thanks Leslie- that was extremely informative. It is interesting to hear the particular challenges working within China. I'll pick up the conversation offline.