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

Written on 05/06 at 03:15 PM by Andy Posner 0 comments

Filed under: environment featured brown micro credit Thesis

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 loans and other financial services to people not considered credit worthy by traditional financial institutions--can be used to advance environmental sustainability as well as social equality and empowerment in the United States.  The thesis starts out by explaining the philosophical approach that I applied to problem, namely, that to create a green economy in the US we need to ensure that all segments of society are engaged on environmental issues through entrepreneurship, jobs, investment opportunities and a sense that environmental problems are relevant to people’s lives.  The rest of the thesis explores how microfinance can accomplish those goals through 1) supporting ‘green collar entrepreneurs’--low and moderate-income individuals who want to start or expand green micro and small businesses, 2) by providing environmental education to all borrowers so that they are empowered to become civic leaders advocating for policy changes, organizing community events, and starting businesses that improve environmental quality, and 3) by providing loans for residential energy-efficiency and renewable energy upgrades to homeowners that wouldn’t ordinarily be able to partake in these types of programs due to problems with credit history or other barriers.

A key component of my thesis was working to develop an organization, The Capital Good Fund, that can implement these aforementioned ideas.  In particular, we are working to develop “green credit builder loans,” which are loans of $100-$300 that finance the installation and purchase of low-flow showerheads, energy-efficient light bulbs and programmable thermostats.  The borrower receives education on how to use the product and realize additional savings; she also sees reduced energy bills AND she gets to build her credit history as well.  In addition, we are working to develop a larger loan product ($3,000-$10,000) that will cover 100% of the up-front cost of doing residential energy-efficiency projects.  What’s unique about the loan is that it is structured such that the payments are equal to or less than the savings, meaning that at a minimum the loan is revenue neutral to the borrower.  Lastly, we are working with our business borrowers to green their businesses and we are developing an environmental literacy curriculum that can be taught to our borrowers. 

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The Commencement Speech That Never Was

Written on 04/30 at 01:42 PM by Andy Posner 0 comments

Filed under: philosophy brown News

Several weeks ago I was nominated--and then auditioned--to speak at the commencement ceremony for graduating graduate students from Brown.  Though I was not selected to be the speaker (I have some conspiracy theories on that front, I assure you!) I would like to share the text of the speech that I wrote, because I believe it captures the essence of how I feel about leaving the confines of the university and entering the ‘real world.’

New Opportunities in A Global Century of Innovation

At first glance it would seem that now is an inopportune time to leave the grounds of the university and venture out into the world.  After all, between rising unemployment, a financial system in disarray, and a whole host of other local, regional and global problems ranging from urban blight to climate change, it would seem that the prospects for putting our newly minted skills to work as teachers, researchers, entrepreneurs and employees of firms large and small are, to put it bluntly, dim.  Yet we are also entering a world rife with unprecedented opportunities for those willing and able to take advantage of them.  An explosion of innovation in information technology has made it easier for more people to collaborate to tackle poverty, to create new products and services, and to share thoughts, ideas and experiences.  The cost of renewable energy is falling.  Social entrepreneurs are creating self-sufficient businesses that solve social and environmental problems.  The list is seemingly endless, and I believe that regardless of our particular field of study, as graduates of one of the finest universities in the nation, we are in a unique position to seek out these opportunities and apply our intellectual and financial capital toward them.

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Hearing Dr. Muhammad Yunus Speak in Queens, New York

Written on 04/20 at 12:19 PM by Andy Posner 0 comments

Filed under: brown micro credit

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This unfortunately grainy photo was taken while Dr. Yunus spoke about microfinance on Saturday, April 18, 2009

Ever since I read about Muhammad Yunus and the Grameen Bank in 2007 I have been absolutely enthralled with the concept of empowering people to help themselves through access affordable, small loans.  After all, my masters thesis deals with green microfinance, and during my time at Brown I have co-founded The Capital Good Fund, a non-profit microfinance institution.  So when I heard that Dr. Yunus would be speaking at St. John’s University in Queens, New York, I knew that I could not pass up the opportunity to go.

I went with two other Capital Good Fund staff members, Nabeel and Faiz.  We met at 8:30 in the morning at Kennedy Plaza in downtown Providence, Rhode Island, and caught a bus to New York City. From there, we took the subway and a bus to get to St. John’s.  Outside of their basketball stadium, a market had been set up where Grameen America’s borrowers were selling their wares--food, purses, jewelry, etc.  Grameen America was founded in 2008 by Muhammad Yunus, and is being run by senior executives of Grameen Bank.  In their first year of operation, they made 650 loans totalling $1.5 million dollars, with a repayment rate of over 99%.

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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…

continue reading »

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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