Archive for the 'Microfinance' Category

Common ground

I’ve been blessed to make some great Congolese friends in the past 14 months and I’ve gotten to know some very nice fellow expatriates. When I first arrived in Kisangani I spent a week learning from my predecessor, Peter. Then he went to Kinshasa for a week to start stepping into his new position there. Finally, he came back for a week to see how I was doing and answer my newbie questions.

We share the common experience of working as the manager of this microfinance institution in a city that is quite isolated from the rest of the world. While we haven’t experienced life here in exactly the same way, it’s been an intense and rich time for each of us respectively. Peter was here from the start and I got to pick it up one year in - but I’m the one person who can best relate to his experience here and vice versa.

Peter is taking a five-day break out here. It’s been a great time. A great friend can make a long, warm Saturday zip by almost too fast. A good friend will sit through my stumbling preaching in French in a little church and not even complain. Sunday night we had French expatriate friends Jerome and Christilla over for dinner and games. We played alternating rounds of Boggle in English and French and had more than a few laughs. They have been a ton of fun to get to know.

I expected that I’d get to work on my French here. I expected that I’d really taste the challenge of living in a foreign culture and learn to accept it, love it, move in its rhythms. I expected that I’d experience the joy of working where I felt called, among the poor. I expected that I’d make some friends from Congo. I didn’t expect that I’d make a very good friend from North Carolina.

There have been some ‘Congo challenges’ recently for a few weeks and my awareness of these tremendous blessings in my life has been partly obscured by a stressed-out fog. It’s amazing how the simple fellowship and extraordinary mutual encouragement of friendship can clear the air.

Technical Difficulties

Lately every time it rains the power cuts out at the office. Lately, it rains a lot. This is the rainforest. The power company does not take responsibility for fixing their lines (unless you track them down and pay them on the side). In some places the lines are above ground and openly spliced and puddles can become deadly. In other places, the lines are buried but they look like a patchwork quilt. When the water soaks in, the lines short out and our computers go dead, work goes manual. Get out the abacus.

As the manager of a small financial institution that is looking to grow, my computer is an important tool. Unfortunately the battery is so worn out that it only lasts about 45 minutes tops. When the power goes out longer than that, so does much of my effectiveness. Even as I make it, this complaint feels absurd to me in a country where 99% of the people have never touched a computer. But days like today feel about twice as long as normal computerized workdays. I realize how big the computer is in my work and life when I am relegated to shuffling paper and meanwhile growth planning models are locked in a laptop with a dead battery. It’s frustrating when communication with coworkers in other cities costs 30 cents per minute instead of free online chat. (And there’s a good bit of stuff to touch in on from government issues to health issues to those planning models.)

I went generator shopping and found that just about nothing is available. The one available in town is without any brand name at all and I’m fairly certain it would krunk out in weeks or months rather than years. Some men are digging up the shredded cables and work is being done. Tomorrow is another day.

Anybody got change for a 500 Franc note?

I’m surprised to see that the US is releasing new dollar coins.  There’s a New York Times article about it today.  Currency is funny in the DR Congo.  Congo’s economy has been linked to the dollar for awhile now in an attempt to curb wartime inflation.  I’m not sure when it will lose dependency on the USD.  We might be the only microfinance institution that loans in Congolese Francs, and it’s not always easy with value fluctuations.

Awhile back I mentioned how dollar bills are not taken in Kinshasa but they are here in Kisangani.  Bills generally need to be without the slightest tear and must be series 2000 or newer.  These rules are in response to likely rampant counterfeiting.  Bills that don’t meet these tests will not be bought back by banks that ship them to the USA.  The tradition of stamping money with initials is strong in Congo.  Some say it’s just so that wealthy people can see their money coming back to them.  Others say that it’s a way to show others that you’ve touched a lot of money.  It’s only done with the US dollars.

The article talks about how the $1 bill is the among the smallest valued paper money in the world.  They obviously refer only to wealthy nations.  They cite Japan’s smallest Yen bill at a value of about $8 and the smallest Euro note around $6.  Here in Congo our largest Franc bill is 500, which is about $0.92 right now.  That’s right, our LARGEST bill is SMALLER than $1!!  It doesn’t circulate nearly as much as the 200, 100, 50, 20, and 10.  The 10 Franc bill is worth 1.8 cents!  They are not remade often enough and so widely circulated that they are often shades of brown and absolutely falling apart.  There is no way that the government can afford to make the tiny currency that we have.  We use no coins at all in DRC.  I don’t know how we make decisions without coins to flip!
This makes for all kinds of challenges in microfinance.  There are rumors of a new larger bill coming out, but this causes inflation fears based on what has happened in the past.

Grad trip.

John Sanja My friend John is leaving on a business trip today. He’s going to ride on the back of a bicycle taxi for a day and a half down a deteriorated, potholed fossil of a highway to reach a village where he will buy 22 bags of unprocessed rice and then load it into a wooden canoe and ride down the river with it for several days back to Kisangani. He’ll take malaria medicine with him and he promises me he’s taking a mosquito net to hang from the trees when he beds down at night. John just completed his university studies in agricultural science. This isn’t exactly the Southern California senior grad cruise to Mazatlan and Cancun. Poverty leaves people with few options.

When I sit and think about my friends in Nairobi, I am amazed at how gifted they are. They are bright, motivated, creative and kind. If I ever had a business in Kenya, I’d beg them to manage it with me, I’d make them partners. These guys are sharp. They look out over a Nairobi metropolis that thrives economically in ways that Congo doesn’t. But even these highly talented youth are left unemployed and on the fringes. There simply aren’t many jobs available to them. They can’t get married and have families until they have work and stable income. These guys are so strong in their faith and friendship, but there is a certain untamable malaise that comes from being stuck in the life-neutral of poverty.

The chasm between the world of wealth and the world of poverty is deep. But wait, let me correct myself: There aren’t two worlds. We all live in but one world. They say that we are all at most six degrees of separation from any other person on earth. Yet we can be pretty good at not noticing or downright avoiding others who are so “other”. There are all kinds of potential risks and barriers of fear, misunderstanding, discomfort, insecurity and fear that come with making friends whose lives are so unknown to us. I’m not out to lay guilt on anyone and I’m certainly nobody special, but by the grace of God and the grace of others I’ve been invited into relationships with a group of people who are tremendously culturally and economically diverse. I can’t help but testify to the blessed goodness of these friendships. They’ve taught me about their lives and they’ve taught me about mine. They help me to recognize my own poverty. And at the end of the day it’s really true: as much as we are different, we are so much more the same.

I’m learning so much and I’m nowhere near a textbook or chalkboard. I learn while sitting on the sofa sharing a snack or catching a bus or walking down the street or talking with the guards behind my building over their cooking fire. Among the lessons: poverty stinks. It’s a reality that can’t be rationalized away or blindly blamed on bad personal choices.

Most of us from the West spend considerable effort in life avoiding poverty or seeking wealth. We work a lot and we are blessed to have the opportunity to do so. Many of us in the USA are even free to choose our career from among any number of potential paths. Maybe that’s the way it should be everywhere, but from where I stand it’s such a luxurious notion. The good lives we work for often leave us with little time to even consider the real and persistent suffering in our world. We do give from our excess, but mostly to charities that alleviate suffering after a loved-one struggles and dies from that ailment- when it “hits home”. It’s the way we tend to behave and see the world and it’s not at all unnatural or malicious. The Indigo Girls put it this way, “It’s a perfect world when we look the other way.” I’m fortunate that I am in a place where it’s not so easy to do.

If you are a person who prays, please pray that John has a safe trip.

Some intense days.

These have been some intense days.  The day before my birthday a member of my staff resigned abruptly.  It was on the best of terms and had to do with an educational opportunity, but it was sudden.  So instead of sharing sodas and fried bananas with the staff, I spent my b-day learning the finer points of updating and managing our savings and loan data from 8AM to 6PM.  C’est la vie!  Just as I was settling into two jobs at once, our computers started coughing and dragging their feet and then like clockwork keeled over with viral infections!  Now the database was locked inside of a sick computer and I was making phone calls on the quarter hour to one of the few computer techs in the province.  A few high stress days and long caffeinated nights later the computers are talking to us again and the data is up to date in smiling precision.  We’ve got the vacant job posted; applications are rolling in.  We won’t replace Tony, but hopefully we’ll find a great, capable new colleague.  I’m enacting some new strategies to keep the computers safer and getting good experience with our loan software- a technological baptism by fire.  It’s all good and I am still looking forward to going to work tomorrow.

Worth a thousand words

All is well with me in Congo, here in the gap between Election Day and Results Day, it’s just another day.  So far it’s been a pretty good one.  After some wrangling with and by the UN office of Humanitarian Affairs, I am scheduled to fly to Kinshasa tomorrow to meet with my colleagues there, have my visa renewed, and hopefully get a haircut.  I’m trying to get around to sending out an update e-mail which I will post here.  If you happen to read this blog and you’d like to get my update e-mail, feel free to contact me here and I will add you to the list.

In the meantime, here are some recent photographs:

Joy  Mr. & Mrs. Sylvain Mukana

At left, a woman in one of our community banks is full of contagious joy.  At right, our accountant Sylvain and his wife who stopped by the office recently.  They are expecting their third child.  He’s hoping for twins, she’s not.

Mama Ruth  Floating Political Rally

At left, Loan Officer Mama Ruth with one of the calculators donated by my friends.  At right, President Kabila crossed the river to campaign on the other side and many local fishermen and canoe taximen held a rally on the water to accompany him.

Continuity

It’s just after 6:00 PM and the day has started its fade into night. One thing I like about living so close to the equator is that you always know the sun will come up just after 6:00 AM and it will go down just after 6:00 PM. It’s something highly reliable in a life that comes with frequent surprises.

Today I visited two community bank loan disbursals and they were both great. The second one was the community bank “Continuity”. The group is located in the part of town that’s known for violent gang activity. Things are a little heavier in this part of Mangobo. Ironically one of the main gangs is called “United States” and there’s also “Vatican” and something called “Kata-Moto”. They are sometimes connected politically and they are generally regarded as the greatest local security risk. But these mamas inside the bamboo church today, they were full of joy. I’m really enjoying making speeches of encouragement to our members. I like helping them laugh and smile and recognize the good things, the daily bread, that the Good Lord is providing in their lives.

I even got to hold a precious tiny baby wrapped up in blankets. Here’s an empirical truth for you: there are few things in life more wonderful than holding a sleeping baby. And fortunate for me, I did not wake him. Many small children here are horribly afraid of the big white guy that I am. I probably look like the abominable snow monster to them. Peter told me that, “A smile goes a long way here”. When people are frightened, curious or scowling at my presence, I often give them a huge grin. With upset little ones, that seems to multiply their distress.

Life in San Diego was more or less consistent, good weather, functional utilities, busy, busy, busy. Life here is generally less busy but also less consistent. I’ve joked with some of my coworkers that if I were to rank my days on a scale of 1 to 10, there are weeks where I’d be all over the map. There are some days when nothing seems to go well. But then the very next day will be full of joy. Earlier this week I was having about a 4 day and just as I was nearing my apartment I saw a lone boy on the side of the road. I gave him a grin and he returned the favor with a smile from ear to ear. That moment alone pushed the day to a 5 or 6.

The civil atmosphere is still calm though many people are again sporting their propaganda-wear. There is talk that this or that candidate has claimed victory – but no results have been announced. It’s going to be tenuous until results are officially announced and that date is unknown. It should be sometime in the next two weeks. Hopefully the official announcement will pass peacefully as Election Day did. International observers are beginning to head back home now. I heard one observer say, “I witnessed random outbreaks of joy… that’s about it!”

Calculators

If anyone out there thinks it’s a cool idea to be able to buy a simple calculator that will be used as a tool in microfinance here in Congo, please keep reading…
Sure we can buy calculators here, even wacky talking calculators. But they fall apart. All small electronics may be made in the same factory in China, but they ship the good stuff to the USA. If you are willing to donate, please follow the link below to www.amazon.com and have the calculator shipped to my name at HOPE International. The next colleague traveling here will bring them and we’ll put them into use. We currently have 9 staff that can use these and if more are donated we will save some for future expansion or share them with our sister offices in Kinshasa and Lubumbashi.

CLICK HERE to purchase this calculator on Amazon.com

Calculator

I have picked this calculator out specifically for its features and so that all staff is supplied uniformly. It keeps things simple and gives us the potential of using spare parts to make repairs if necessary.

Ship to:
Brian Becker
HOPE International
214A Willow Valley Lakes Dr.
Willow Street, PA 17584

Let me know if you have any questions and please let me know if you decide to order one for us! Many thanks! -Brian

Mwangaza=A Ray of Light

It was already hot this morning before we left the apartment for work at 8:00 AM. As we sang and prayed to start the day at the office, I noticed that the fan wasn’t oscillating anywhere near my general direction. It was one of those days when you can’t help but notice the direction and general behavior of fans. But by around 10:00 AM the sky started to cloud up and the heat broke, the temperature dropping several degrees. The flowers around the office were bathed by intermittent showers.

Purple flowers at my office

One nice thing about my office here is that it has a great big casement window that I open up every morning and it gives me air-flow, the smell of anything burning nearby, and the occasional cool, fresh breeze. Through the window I can also see the tree on the other side of the street and occasionally my eye catches movement up in its branches. If I look long enough I can usually pick out the form of a small child slowly moving down a limb toward one of the few remaining fruits and I can hear his friends cheering him on. Sometimes a truck rumbles by and the men sitting on top cruise right along the top of our wall. Sitting atop a large truck not only provides transport, but a unique view of town. There are many big walls here for protection and privacy.  Those guys are getting to peek over every wall the truck rumbles past.

Just as we were getting ready to leave and disburse a new loan to one of our community banks we got word that some tax men were here to see us. (I’m expecting each of the local government offices to arrive in turn to try to take a slice of the new guy.  Still, it grates on the nerves when they turn up.) These guys were surprised to see Peter in the office with me and he quickly set them straight. The issue that they brought had been cleared up months ago and by their boss no less. They are sneaky but their arguments do not often check out in the end. We are always working to ensure that we are in compliance with all of the tax codes. But the tax codes are not always easy to find until someone is pointing out your most grave error in a photocopied book they’ve laid before you on your desk.

Finally the tax folks were gone and we got on the road to our disbursal out in a nearby rural commune. Kisangani is made up of several sectors called communes. Once we turned off the main road it was clear that we were driving into a neighborhood that didn’t often see cars. The roads are really footpaths and the area is not mapped out in gridlines like the Belgian parts of town. The houses are almost all made of stick and mud construction with banana leaf and palm frond roofs. As we passed the children playing together in their yards were waving, smiling and shouting “MONUC!” which through their accents sounds almost like your neighbor in America shouting, “Morning!”

The UN is known by it’s French acronym MONUC here. This is the first time that I have witnessed the UN in action. They rise above local laws, labor codes, traffic cops. They are effectively a global trump card. Without their presence, things would undoubtedly be much less stable. There are a lot of diamonds here and it seems that diamonds often fund political instability. So MONUC watches over the city and the nation. They keep the peace. They are also able to take very long lunch breaks. Who is to tell them not to?

The loan disbursal ceremony was a wonderful time. The members of the Mwangaza Community Bank have built their own small bamboo structure to house their meetings. The rains had brought much cooler air with a little breeze. Everyone had brought out their own chair from their living room and the group looked quite comfortable as we approached. I told the group that since I’d grown up in the country, I felt quite comfortable with this fine group in the rural area.

Pete and a Mama from Mwangaza

-Pete with one of the Mamas of Bank Mwangaza.

There were many very dignified and gracious older mamas in this group. Everyone seemed to be wearing their most colorful African dress. This group has even come up with their own songs and cheers. They sang one song about how their group is like Noah’s ark, taking them away from the flood and on to better days. It was great to share in the laughter and joy that this group exuded.

I love the little moments like these that make Congo great fun. I was delighted when I noticed pineapples growing nearby and I got to take a close look at a pineapple plant for the first time. I could hardly keep from chuckling when six or seven ducklings walked right through the gathering during the serious speeches and no one even reacted. The group’s president made a very nice speech that he’d typed on an old fashioned typewriter.  And then it was wonderful to be introduced to the mama in the group who has among them all saved the most in her HOPE savings account. She was bashful when the others told us that she is saving to buy a home for her family.

In these moments of joy it is easy to look past the poverty that is pervasive here. I suppose it’s a good thing. Poverty drains the life out of people and it can get everyone, present comapany included, depressed. We must not ignore it but always respond by praying (and working) for daily bread. As we said our goodbyes and began to drive away I noticed a small child with a distended belly and that was a powerful reminder of poverty’s grip. Often when children are severely malnourished the abdomen becomes large and hard. The child may be eating but s/he is not getting adequate healthy nutrition. We continue to pray and work for daily bread. God is faithful and will hear the cry of the afflicted.

Brian and Pete with the Managing Committee of Mwangaza Community Bank Community Bank MwangazaPineapple Plant

Loans to the mamas

This is a question that my Uncle Mike sent in and I figured my response (and subsequent brief elaboration of Microfinance theory) is something that many others might like to read. This fills you in on my understanding of what I’m doing with HOPE International here in Congo.

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Brian, I forgot to ask you about the microloans. What are the most common amounts and what are the general terms. I noted from your blog that you give out additional loans to some of the “mamas”. What are the qualifications to get a loan and to keep receiving additional loans. -Uncle Mike

Uncle Mike - our loans here start at around $40. Many of the people here are living on less than $1 a day (for the entire family in some cases). Since we don’t have anything close to a credit reporting system we use a “social guarantee”. That is to say that we only offer loans to groups of 25-45 people who have met together for some time, had training from our loan officers and who have begun contributing to a group social fund (something like $0.25 per week). They must meet weekly and elect a president, vice president, treasurer, and two controllers. We require that the borrowers approve one another’s loans and also deposit 10% of the loan amount into savings with us by the time of disbursal. We also do a business evaluation with each client before the loan goes out to make sure that they really have a business and to get them thinking about profitability and cash flow. The group is then responsible to ensure that the loans are repaid to HOPE. The term is four months with weekly meetings where our loan officers arrive to collect the loans. After one successful term, the clients are able to move borrow 50% more each cycle if they continue to qualify and their on-time repayment is good. We have many groups here in Kinshasa that are on their 4th and 5th cycle and they are doing well.

The administration costs are high with small loans- weekly meetings with loan officers mean that each officer’s portfolio can only get so large and that means that local staff payroll is always an issue. Loan officers, like most everyone else here, use public transit and that costs us quite a bit and takes a lot of time. They take the money right to the bank so that it is secure and that takes a lot of time since the formal banking sector here is very slow and inadequate. We charge 18% flat interest which works out to a pretty high A.P.R. but even still we are at this time only 50% operationally self sufficient. Still this means that half of our costs each year are self generated rather than hand-out style relief/development work which is in the business of giving everything away every year. Our goal is to become operationally self sufficient so that all money donated goes to loans instead of also covering local expenses. We serve around 6,000 clients after just over two years and as we ramp that up, the additional loan revenue will help our sufficiency. The idea is to create a financial organization that can eventually operate independently and offer loans to the poor in perpetuity, helping them to rise into a better standard of living. It’s a big goal.

One thing that I like about HOPE is that we strive to be frugal with expenses. You would be amazed how much luxury is taken in the world of Non-Governmental Organizations that are funded through government grants. HOPE works to be efficient and keep costs low and to do excellent work.

As it is now, administration costs are covered by our founder so everything donated goes to the loan operations. We are always looking for people who want to contribute to our work. Microcredit has been around for about 25 years and it has grown more popular in many cases not because people in the developed world were tired of seeing their donations to the poor go down the drain, but because the poor themselves have asked for it. It is growing so popular that there are many organizations wanting to partner with HOPE here in Congo. Our goal is to become known across Congo as an example of “best practices” in microfinance that truly reaches the poor. We hope that many local organizations will copy our methodologies once they are proven.

The ultimate goal of microeconomic development is that instead of creating a dependency, it creates opportunity and allows people to build their own economy.

The great thing is that the assistance helps one person and then another and then another, etc.

-Brian