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Hearing Dr. Muhammad Yunus Speak in Queens, New York
April 20, 2009

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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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brown  / micro credit

Social Business and The Genius of Muhammad Yunus
April 2, 2009

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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brown  / Business  / environment  / micro credit

Microfinance, Microfinance and more Microfinance
March 26, 2009

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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brown  / Business  / environment  / micro credit  / Thesis

A New Logo For Two New Endeavors!
January 26, 2009

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As soon as Mike and I incorporated our environmental services company–The Capital Good Group, Inc.–on January 1st, we wanted to get to work branding ourselves as a socially minded, mission driven company dedicated to serving people and the planet.  Our first step was to hire Douglas Bonneville, owner of BonFX, the company that designed and built this web site, to create a logo for both The Capital Good Group, as well as The Capital Good Fund.  The idea was to develop a logo that would convey the concept of a “triple bottom line” (social, environmental and profitability); that would be applicable to environmental consulting, microfinance and any other endeavors we undertake using the ‘Capital Good’ name, brand and concept. 

After several rounds with Doug, we finally settled on the above logo.  Mike and I really thrilled with the way in which it conveys the concept of three without being oppressive about it, and how the shapes in the logo can be viewed as trees, or a family, or just interesting geometric shapes.  Read on to see the logo for the Fund.

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brown  / Business  / environment  / micro credit  / News

Executive Summary of the Capital Good Fund Business Plan
December 8, 2008

Things are moving quickly on the microfinance initiative I’ve been working on with a team of Brown students since June.  We–the Capital Good Fund–have just completed the business plan.  Between now and February 1 (when our pilot phase of 10 loans begins) we need to raise another $15,000, and iron out some of the details of our operations and loan provision.  However, I feel very happy about our progress thus far.  Below is the Executive Summary of our business plan which, in two pages, outlines our programs, comparative advantage, and plans for future growth.  Comments are welcome and appreciated!

Executive Summary

The Capital Good Fund (CGF or The Fund) is a microfinance organization initiated by Brown University students and supported by several local community partners.  The Fund will provide affordable microloans, access to bank accounts, credit building, business and financial literacy training and other support to low-income residents of Providence, Rhode Island who seek capital for income generating activities.  CGF is inspired by the success of micro finance institutions (MFIs) around the world, in particular the Grameen Bank in Bangladesh, the founder of which–Muhammad Yunus–won the Nobel Peace Prize in 2006.  CGF is predicated on the belief that access to affordable capital can play a critical role in unleashing the entrepreneurial capacity of the poor, thereby raising each borrower’s standard of living and bettering the community in which he/she lives. 

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brown  / micro credit

An Exciting Update on the Micro-Credit Project!
September 19, 2008

I have some exciting news regarding the micro-credit initiative I’ve been working on. For starters, I just found out that our team was awarded a $2,000 grant by the Clinton Global Initiative!  Student teams from around the country applied for grants for student-led initiatives, and only several dozen projects were chosen out of a large pool of applicants. Needless to say, we are very excited to have been chosen, and the $2,000 will be added to the $5,000 that we’ve already received from Brown for a pilot phase.

The Business Model Is Coming Together

Amazingly, that might not even be the most interesting news regarding the project.  During the last few weeks we have continued developing relationships with community partners, and we are now on the verge of conducting roughly 6 focus groups with potential borrowers to better understand their needs; their business ideas; barriers to implementation; what they are currently doing for loans (loan sharking?); etc.  Our business model is also beginning to take shape.  The project team, which now consists of four students and a faculty advisor, will be developing the business model during the Social Entrepreneurship class that we’re taking this semester.  We spent much of the summer wrestling with the question of whether or not the group lending model employed by Grameen Bank in Bangladesh can work in the United States; in my last post, I wrote about a possible solution to the limited success of micro-finance in the U.S. Since then, we have had some realizations and come across other models that have enabled us to start figuring out the nuts and bolts of how this micro-credit program will work.

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brown  / micro credit

A Solution to the Limited Success of Micro-Credit in the United States?
August 16, 2008

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 in Bangladesh, won the Nobel Peace Prize for his work.  In addition, thousands of micro finance institutions (MFIs) have sprung up all over Africa, Asia and Latin America.

Micro-Credit’s Limited Success in the U.S.

Micro-credit has also made its way to the United States, a country that, despite being the world’s wealthiest, still has a poverty rate of over 13% (in 2006 over 39 million Americans were living in poverty.) In fact, one of the earliest U.S.-based micro-credit initiatives was begun in 1985 when Bill Clinton was governor of Arkansas and heard of Mr. Yunus’ work; however, the program, called the Good Faith fund, failed, because “the group lending model never caught on.” Since then, dozens of similar attempts have been made, and while many have been successful, the scale pales in comparison to that of Bangladesh and other developing countries.

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brown  / featured  / micro credit

Micro-Credit, Major Impact
July 15, 2008

Among my numerous ongoing projects (which include my masters thesis and starting a company) I’m also working with several Brown students to create a student-run micro-credit program in Providence, Rhode Island.  Initially, I had the idea to do something like this around 5 months ago when I read Muhammad Yunus’ autobiography Banker to the Poor.  Muhammad Yunus won the Nobel Peace Prize in 2006 for founding the Grameen Bank in Bangladesh 30 years ago, and bringing micro-credit to the fore as a means of addressing poverty.  After I read his book, I began researching the possibility of starting a similar initiative locally. 

Micro-Credit Serves a Need

Basically, the idea behind micro-credit is that the world’s poorest individuals are often, by necessity, also the world’s most entrepreneurial people. In order to survive they have to find creative ways to create and sell goods or services.  What they lack, then, is not energy or ideas, but rather access to capital.  As a result, they are forced to rely on loan sharks who charge them exorbitant interest rates, keeping them in perpetual poverty no matter how successful their business is.  And of course traditional banks don’t bother providing loans to the poor, both because they view them as an unacceptable credit risk and because the transaction costs of dealing with loans as small as $10 USD are too high for them.

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brown  / micro credit

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