Visiting a Village--Part 1

Written on 02/08 at 03:26 PM by Andy Posner 0 comments

Filed under: philosophy Business environment brown micro credit News

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Andy and Jill with a Grameen Bank Center Manager and Borrowers

If you talk to anyone at Grameen Bank they will tell you that the real bank can only be found by going to the villages where Grameen operates.  Grameen, after all, means rural, and in fact by law Grameen can only operate its lending programs in the villages.  It is for this reason that on our third day in Bangladesh we--Jill, me, an Australian named Mark, our translator Matin and Mark’s translator Yunus--are all crammed into a mini-van barreling down the roads that lead to Rashahi, the zone that we will be visiting. Traffic here is an eclectic mix of motorcycles, bicycle rickshaws, cars, trucks hauling absurdly large loads and comically unstable buses all chaotically weaving and swerving, honking and narrowly avoiding catastrophe. 

After 6 hours of bouncing along these roads we are happy, if not relieved, to have arrived at the Branch that will be our home for the next 10 days.  It is a two-story building--the first occupied by Grameen--with two small rooms for guests.  In order to understand where branches fit into the Grameen hierarchy, I need to take a moment to explain how the bank is organized.  For in truth, Grameen is nothing short of an organizational miracle.  In fact, I would go so far as to say that while Dr. Muhammad Yunus is praised for recognizing that the poor can be credit worthy, his real, lasting achievement is in the details of how he goes about delivering that credit to them in a cost-effective manner.

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First Experiences With Bangladesh and Grameen

Written on 01/08 at 03:16 PM by Andy Posner 0 comments

Filed under: philosophy Business environment brown micro credit

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This photo shows one of the Grameen center meetings

First Impressions of Bangladesh and Grameen Bank

When Jill and I landed in Dhaka on Sunday the city was shrouded in an intense fog that, we later learned, is quite common this time of year.  The scene when we walked outside the airport was pretty much what one would expect of a third world capital city: people everywhere; rickshaws competing for space with taxis and buses and all manner of other vehicles, human, animal and fossil-fuel powered; bustling markets; polluted air, etc.

We were taken to the Grand Prince Hotel and then immediately met up with our interpreter, Matin, who accompanied us to Grameen Bank’s head office.  Our first adventure took place when Muhaimeen hailed a bicycle rickshaw that, in just three chaotic minutes, brought us to the office.  Amazingly, Grameen, a Bank that exists for and is owned by the poor, has a 21 story head office, one of the tallest buildings in the area.  One can’t help but feel that Grameen is a kind of conglomerate for good: leveraging all the ingenuity, efficiency, scale and power of corporations while being driven entirely by the motive to eradicate the world of poverty, of pollution, of injustice.  The numbers are staggering: Grameen has 8 million borrowers, 97% of whom are women and all of whom are poor.  They have 20,000 employees, a staggeringly high repayment rate, 4 million bank accounts for non Grameen borrowers (all borrowers must open an account so that they can deposit their required weekly savings there), and have turned a profit all but three years of operation.  Lastly, they are 95% owned by the borrowers themselves--each borrower gets a share in the company--and 5% owned by the Bangladesh government.  In short, Grameen’s Nobel Peace Prize was well deserved.

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First Blog Post From Bangladesh--Actually, From the Bahrain Airport

Written on 01/03 at 03:09 PM by Andy Posner 0 comments

Filed under: Business environment brown micro credit News

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This photo is from our first flight from Boston to London on 1-01-10

Jill and I are currently in the airport in Bahrain waiting for the third, and final, leg of our 28 hour trip to Dhaka, Bangladesh.  We left Boston on the first of January at 7:20 PM and arrived in London at 6:50 AM on the second.  As you can see from the photo above, we really lucked out in terms of our seating on the first flight: we got the seats that are usually reserved for flight attendants when they take naps on long flight; as a result, we had seats that could recline all the way down (even though we were in coach) and we had as much leg room as we could possibly want!  The flight went smoothly and, as I have been reading The Rise and Fall of the Third Reich--an absolutely fascinating history of Hitler’s Germany--the time passed rather quickly.  Our second flight took us from London to Bahrain, where we are currently in the midst of a seven hour layover before one final flight to Dhaka.

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Social Business and The Genius of Muhammad Yunus

Written on 04/02 at 12:53 PM by Andy Posner 0 comments

Filed under: Business environment brown micro credit

I am currently reading a book by Dr. Muhammad Yunus titled Creating a World Without Poverty: Social Business and the Future of Capitalism, and I am left mesmerized both by the brilliance of Dr. Yunus himself and the beauty of the idea which he proposes in his book--the idea of social businesses.  Let me start by providing a summary of what Yunus means by a social business. He defines it as an enterprise that has investors who recoup their initial investment but who do not receive dividends or profit from their investment.  Thus instead of making their investment based on the company that is most likely to offer them the highest, most secure return, they choose based on the company that offers the greatest social or environmental benefits.  Social businesses exist for the sole purpose of addressing social and environmental problems, but they are not charities.  Instead, they must achieve self-sufficiency by selling low-cost products and services, or through a myriad of other methods that enable the organizations to pay back the investor’s initial investment, to achieve financial sustainability and to achieve the mission of the organization.  In essence, then, what Yunus is proposing is a blending of for-profit and non-profit models, but in a way that I have not seen in the past.  He suggests that social businesses will compete with traditional profit maximizing businesses (PMBs) on quality, price, availability, etc.  He goes on to propose new innovations such as a stock market for social businesses where the company’s stock price reflects its ability to achieve social good, rather than it’s ability to make profit at any cost.

Perhaps if this idea were to come from anyone but a Nobel Peace prize winner and the founder of the Grameen Bank and the Grameen family of companies in Bangladesh--one of the most remarkable group of organizations ever established--it would be seen as naive.  But to illustrate the power of the idea, Yunus starts his book by describing how he convinced the CEO of Dannone Group, one of the largest companies in the world, to launch a social business in Bangladesh that would focus on providing low-cost, healthful food products the poor, rural Bangladeshis.  Within a year of proposing the idea, Grameen Dannone, as the new company was called, had completed an environmentally friendly yogurt factory, and were selling their nutritious yogurt through Grameen borrowers.  Dannone fronted half the start-up costs and, aside from getting back its initial investment, will make no money on the deal.  All profits earned by the company will be reinvested in the company to lower prices or to expand into new markets.

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Microfinance, Microfinance and more Microfinance

Written on 03/26 at 12:44 AM by Andy Posner 0 comments

Filed under: Business environment brown micro credit Thesis

Microfinance has completely invaded my life of late.  My thesis, titled ‘Green Microfinance: A Blueprint for Advancing Environmental Sustainability and Social Equality in the United States,’ is about 80% complete, and obviously deals with the various ways in which microfinance can be used for advancing environmental aims.  In addition, the non-profit that I co-founded, The Capital Good Fund, is in the middle of a pilot phase, and I have been very busy speaking to and meeting with applicants.  Lastly, I have been working with my business partner, Mike, and the company we founded, The Capital Good Group, Inc. so launch an innovative financing mechanism that covers 100% of the up-front cost of doing residential energy-saving upgrades and is, in effect, a microfinance program as well.  I haven’t written here in a while, and I want to provide some updates on these projects, as they are all intimately related despite the fact that one is a masters thesis, the other is a non-profit, and the last is a for-profit.

The Capital Good Fund
We have made a lot of exciting progress recently.  First, we just launched our new web site, www.capitalgoodfund.org.  On the site, you can learn more about microfinance, see our community partners, check out the latest updates on our program, make a tax-deductible donation, download a loan application or find out how else to get involved with us.  We are really excited to have the site up, and we have already received inquiries from potential borrowers through the site!

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Green Microfinance: Advancing Social Equality and Environmental Sustainability in the United States

Click here to download a PDF of my complete thesis. Questions and comments are much appreciated!

My masters thesis in Environmental Studies at Brown University looks at how microfinance--the provision of small…

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A Solution to the Limited Success of Micro-Credit in the United States?

Micro-credit has undoubtedly been a runaway success in developing countries as a tool of both poverty alleviation and economic development.  To date, some 100 million people have been reached by micro-loans, and Muhammad Yunus, the founder of the Grameen Bank…

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Tonight, the Oneness of Things

It is late and my mind should be drifting through the colorful abyss of deep sleep, yet instead i find that tonight sleep will not come.  I am like a hungry flower who dreams of bees so ardently that all…

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