Met with Susan Dik, professor of Business at Kapi’olani Community College. She teaches the Basic Entrepreneurship course, so I sought her advice on the level of preparation needed for our borrowers at Kuleana Micro-Lending. She initially said that a certificate could work or even creating a booklet of handouts that helps applicants articulate their business idea, identify their customers, estimate revenue/cash flow (basically Peter Drucker’s principles). Essentially, though, she said the class she teaches could be a bit daunting to an incipient entrepreneur and that the drop out rate is very high even among her current students.
The bottom line we determined is that the business preparation should be simple and doable versus technical or overly academic. She thought it would make sense to give each borrower a box or a folder in which they would keep all receipts and everything else having to do with their business (ideas, brochures from other/related business, etc.). Then the mentor or business counselor would help the borrower organize everything at their regular meetings. They could also use Quick Books to enter all the information that related to revenue, costs, and cash flow. Bottom line, she maintained, is that the business support needs to be organic so that it can adjust according to the unique circumstances for each borrower.
A final idea that came out of our conversation is the idea of instead of just conducting workshops at various partner agencies we should turn it into a competition. That way we can generate some “sizzle” to get the people in the partner agencies excited and could possibly get more media coverage, thus generating additional interest from the public and potential donors. The judges could be the Loan Review Committee and various members of the community.
I also had a chance to speak with John Reppun from the Kaneohe Ecumenical Youth (KEY) Project. He expressed interest in micro-lending for some of the people they work with. Some of the projects he envisioned are a farmer’s market hosted at the KEY facilities that also had movies for kids and celebrations of various kinds. His grander vision for the area is to use the natural resources and the educational resources to create an alternative education for non-school hours. He wants people to “see the community as a campus.”
From this meeting Rep. Wooley and I explored the idea of convening a meeting to pull together various parties from the Kahalu’u/Kaneohe area to discuss:
— school garden program viability
— farmer’s market
— micro-lending
— land use (county and state)
Some of the people she proposed inviting are:
— a representative from the Lieutenant Governor’s office
— Kokua Foundation (Lydi Morgan)
— Dept. of Education (Glenna Owens, Director of School Food Services Branch)
— Feed the Hunger (Patti Chang, Denise Albano)
— Ulupono Initiative
— Punahou School (Eliza Lathrop)
— Reppun family
— Ho family
— Hakipu’u Learning Center
— Waiahole/Waikane Community Association
Tuesday, April 19, 2011
Monday, April 18, 2011
Jay Fidell, Economic Recovery Relies on Supporting the Homeless
Another good point in rallying people to support micro-lending for people attempting to transition out of homelessness. A great articulation of kuleana by Jay Fidell:
Although it’s hard to get a bead on the economy these days, for many of us the sea change seems to be trending down. Unless we can somehow jump out of the pot, like the proverbial frog we’ll be unwittingly boiled in this recession.
As if the Great Recession and the end of earmarks weren’t enough, the tsunami goes further. Japan tourists were 20 percent of our 7 million visitors, but that’s no more. The Council on Revenues is worried, and the Legislature is wrestling with a $1.3 billion deficit. Stand by for more pay cuts and tax increases.
Last week we read that oil would reach $200 and gas at the pump would reach $6 within five years. This means less money coming in, more money going out. Oil increases undermine tourism. They also make everything more expensive, further reducing our disposable income. Some of us aren’t faring very well.
Wishing it’s temporary won’t help. Like the departure of the Japanese in the 1990s, it’s not temporary, and it is redefining our economy and quality of life.
Forget about the new car, house and trip to Paris. Get used to being on the wrong side of an increasing income disparity and shrinking middle class.
This is an economy where we work too hard to pay the rent or mortgage, where our aspirations soften as we age and where the government nickels and dimes us but still can’t fix the potholes.
We used to have more millionaires per capita than other states, but now our economy is generating more homeless instead. And homelessness is not limited to the homeless — others will follow soon.
In a recent Star-Advertiser article, we heard more hapless stories about the homeless. For everyone who falls out of the system, our economy shrinks further. This crisis makes us look Third World to tourists, APEC and ourselves. We’re raising a generation of homeless children, and theirs is a shame on all of us.
Some say these people want to be homeless, but that’s a rationalization. Nobody wants to be homeless. This isn’t Walden Pond or Taylor Camp. Our way of life depends on collaborative economic activity. We can’t afford to have breadwinners drop out of our economy and become streetside eyesores.
Actually, the thousands of homeless are the canary in our coal mine, the measuring rod of our real economy. The increase in their numbers and alienation stands as a billboard of our economic failure. How can we attend to other issues while they’re out there as a constant reminder of our inability?
We must identify and incentivize them into rebuilding their lives. It’s a condition of fixing everything else. If they don’t like the shelters, let’s change the model.
Hats off to Gov. Neil Abercrombie for releasing funds to kick off the New Day Work Projects initiative, and to state Sen. Suzanne Chun Oakland for her efforts at finding vacant rental units and acquiring property that can be used for permanent housing for the homeless and for those at risk. Let’s do everything we can do and spend whatever it takes. Yes, it’s that important.
As they go, we go. This is not just another budget debate. It’s Job One. We can’t make things right until we get them back in the boat.
It will require tough love by all branches of government and widespread support by the public. If we are to go forward, we need to bring the homeless back.
Some say that we can’t afford to help them, that we don’t have the money and should just keep them out of sight. But there for the grace of God go us. They are our fallen neighbors and friends, and our work force. For our own future, we need to get them off the street and deploy them in a new diversification.
If we help them, they’ll help us. If not, we’re all going to boil together.
Although it’s hard to get a bead on the economy these days, for many of us the sea change seems to be trending down. Unless we can somehow jump out of the pot, like the proverbial frog we’ll be unwittingly boiled in this recession.
As if the Great Recession and the end of earmarks weren’t enough, the tsunami goes further. Japan tourists were 20 percent of our 7 million visitors, but that’s no more. The Council on Revenues is worried, and the Legislature is wrestling with a $1.3 billion deficit. Stand by for more pay cuts and tax increases.
Last week we read that oil would reach $200 and gas at the pump would reach $6 within five years. This means less money coming in, more money going out. Oil increases undermine tourism. They also make everything more expensive, further reducing our disposable income. Some of us aren’t faring very well.
Wishing it’s temporary won’t help. Like the departure of the Japanese in the 1990s, it’s not temporary, and it is redefining our economy and quality of life.
Forget about the new car, house and trip to Paris. Get used to being on the wrong side of an increasing income disparity and shrinking middle class.
This is an economy where we work too hard to pay the rent or mortgage, where our aspirations soften as we age and where the government nickels and dimes us but still can’t fix the potholes.
We used to have more millionaires per capita than other states, but now our economy is generating more homeless instead. And homelessness is not limited to the homeless — others will follow soon.
In a recent Star-Advertiser article, we heard more hapless stories about the homeless. For everyone who falls out of the system, our economy shrinks further. This crisis makes us look Third World to tourists, APEC and ourselves. We’re raising a generation of homeless children, and theirs is a shame on all of us.
Some say these people want to be homeless, but that’s a rationalization. Nobody wants to be homeless. This isn’t Walden Pond or Taylor Camp. Our way of life depends on collaborative economic activity. We can’t afford to have breadwinners drop out of our economy and become streetside eyesores.
Actually, the thousands of homeless are the canary in our coal mine, the measuring rod of our real economy. The increase in their numbers and alienation stands as a billboard of our economic failure. How can we attend to other issues while they’re out there as a constant reminder of our inability?
We must identify and incentivize them into rebuilding their lives. It’s a condition of fixing everything else. If they don’t like the shelters, let’s change the model.
Hats off to Gov. Neil Abercrombie for releasing funds to kick off the New Day Work Projects initiative, and to state Sen. Suzanne Chun Oakland for her efforts at finding vacant rental units and acquiring property that can be used for permanent housing for the homeless and for those at risk. Let’s do everything we can do and spend whatever it takes. Yes, it’s that important.
As they go, we go. This is not just another budget debate. It’s Job One. We can’t make things right until we get them back in the boat.
It will require tough love by all branches of government and widespread support by the public. If we are to go forward, we need to bring the homeless back.
Some say that we can’t afford to help them, that we don’t have the money and should just keep them out of sight. But there for the grace of God go us. They are our fallen neighbors and friends, and our work force. For our own future, we need to get them off the street and deploy them in a new diversification.
If we help them, they’ll help us. If not, we’re all going to boil together.
Friday, April 15, 2011
Asia Pacific Economic Cooperation (APEC)
I attended the Exchange Club luncheon yesterday to hear Lieutenant Governor Brian Schatz speak about APEC and its potential impact on Hawaii. Mr. Schatz's first statement put this event in perspective for the audience in describing it as "by an order of magnitude the most important meeting in Hawai'i's history."
The direct economic impacts are obvious:
15,000 to 20,000 participants
120,000-plus hotel room nights
$120 million in direct spending
Meeting space filled at more than 16 hotels and the Hawai‘i Convention Center
Neighbor island travel expected
Hawaii’s chance to shine as a destination for business and high-level meetings
Hawaii’s opportunity to build more relationships in Asia and the Pacific
It is crucial, according to Mr. Schatz that we put our best foot forward, which is our natural beauty as a destination resort area, but there are also three primary opportunities to influence Hawai'i future in the long-term:
1) We need to prove to the world and the U.S. business sectors that Hawaii is a place to do business; that it is not just a place for sun, sand, surf, and mai tais. Asia has a more serious impression of Hawai'i as a conferenc and business venue because it is half-way to the Mainland U.S. but it is crucial for our tourist industry to change thr prevailing perception in the U.S. that Hawai'i is only a vacation destination.
2) As stated by Dept. of Energy Secretary Steven Chu, Hawai'i is an ideal location for alternative energy experimentation. We can't come close to matching China for scale (and who can?) but we can work to out-innovate them. One major driving force is the Pacific Fleet which views alternative fuels as a priority national security issue— we shouldn't be powering our fleets and airplanes with fuel that we purchase from our enemies and potential belligerents. The military has the money and the resources to do the experimentation on a larger scale than any state government ever could and Hawaii provides an ideal location to do that due to its natural resources: wind, wave, solar, geothermal, ocean-thermal, bio-fuels.
3) Finally, Mr. Schatz spoke about our deep connection to Japan, brought to light most acutely after the tsunami/earthquake/nuclear disaster of 3/11/11. One would think that Hawai'i would always have an easy, organic relationship due our cultural, historical, economic ties but it is actually a result of decades of hard work, and APEC will enable us to build on that even more.
The role of micro-lending is not very obvious in this very macro event about macro economic policy, but one connection I made from the meeting is with Ho'ola Greevey who is good friends with State Senator Maile Shimabukuro who represents the west side, the location of what I imagine will be the recipients of many of our services. We'll see what develops from that.
The direct economic impacts are obvious:
15,000 to 20,000 participants
120,000-plus hotel room nights
$120 million in direct spending
Meeting space filled at more than 16 hotels and the Hawai‘i Convention Center
Neighbor island travel expected
Hawaii’s chance to shine as a destination for business and high-level meetings
Hawaii’s opportunity to build more relationships in Asia and the Pacific
It is crucial, according to Mr. Schatz that we put our best foot forward, which is our natural beauty as a destination resort area, but there are also three primary opportunities to influence Hawai'i future in the long-term:
1) We need to prove to the world and the U.S. business sectors that Hawaii is a place to do business; that it is not just a place for sun, sand, surf, and mai tais. Asia has a more serious impression of Hawai'i as a conferenc and business venue because it is half-way to the Mainland U.S. but it is crucial for our tourist industry to change thr prevailing perception in the U.S. that Hawai'i is only a vacation destination.
2) As stated by Dept. of Energy Secretary Steven Chu, Hawai'i is an ideal location for alternative energy experimentation. We can't come close to matching China for scale (and who can?) but we can work to out-innovate them. One major driving force is the Pacific Fleet which views alternative fuels as a priority national security issue— we shouldn't be powering our fleets and airplanes with fuel that we purchase from our enemies and potential belligerents. The military has the money and the resources to do the experimentation on a larger scale than any state government ever could and Hawaii provides an ideal location to do that due to its natural resources: wind, wave, solar, geothermal, ocean-thermal, bio-fuels.
3) Finally, Mr. Schatz spoke about our deep connection to Japan, brought to light most acutely after the tsunami/earthquake/nuclear disaster of 3/11/11. One would think that Hawai'i would always have an easy, organic relationship due our cultural, historical, economic ties but it is actually a result of decades of hard work, and APEC will enable us to build on that even more.
The role of micro-lending is not very obvious in this very macro event about macro economic policy, but one connection I made from the meeting is with Ho'ola Greevey who is good friends with State Senator Maile Shimabukuro who represents the west side, the location of what I imagine will be the recipients of many of our services. We'll see what develops from that.
The Blue Sweater, Chapter 8, A New Learning Curve
We are made wise not by the recollection of the past, but for the responsibility for our future.
— George Bernard Shaw
If we could find a way to help the market actually work for poor farmers, then they could make their own investments...and repay when the harvest came in. They wouldn't be waiting for an agency to give them things...a mind-set beyond charity...they were market driven and deserved solutions that could help sustain themselves for years.
...the only way this will work is if they own it themselves, if they can see their own lives getting better because of their efforts and ability to control their own futures and not have to wait around for the government.
The developing world needed management skills. It needed people who knew how to start and build companies, not just people with good intentions.
...those who sought power and money made the rules; yet power alone could corrupt and corrode.
"Power without love is reckless and abusive; love without power sentimental and anemic."
—Martin Luther King
(So, in other words, the bottom line is money = power, but that power uses the world for its own benefit. power + love = changing the world for the benefit of everyone)
There had to be a way to combine the power, rigor, and discipline of the marketplace with the compassion in so many projects aimed at the very poor. Capitaslism's future rests on how much creativity and room for inclusion it can tolerate.
John Gardener, founder of Common Cause: ...community, what does it mean, how do you foster and build it. Humans thrive in relationship to each other and that communities in which each individual feels a sense of belonging and of accountability are key to our individual and societal success.
(Sounds like an article by Joseph Stieglitz in the latest Vanity Fair, "Of the 1%, by the 1%, for the 1%":Alexis de Tocqueville once described what he saw as a chief part of the peculiar genius of American society—something he called “self-interest properly understood.” The last two words were the key. Everyone possesses self-interest in a narrow sense: I want what’s good for me right now! Self-interest “properly understood” is different. It means appreciating that paying attention to everyone else’s self-interest—in other words, the common welfare—is in fact a precondition for one’s own ultimate well-being. Tocqueville was not suggesting that there was anything noble or idealistic about this outlook—in fact, he was suggesting the opposite. It was a mark of American pragmatism. Those canny Americans understood a basic fact: looking out for the other guy isn’t just good for the soul—it’s good for business.
The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.")
Gardener: "...communities today transcend geography and you belong to multiple ones...but to be truly effective you must root yourself more strongly in your home's own soil. Only by knowing ourselves can we trult understand others— and knowing where you come from is an important part of knowing who you are."
Business is a powerful way to bring discipline and rigor to sokutions that could lead to a greater feeling of independence and choice among people too often treated as invisible...Everyone wants the same things. And low-income people the world over are challenged by many similar constraints.
Peter Goldmark, President, Rockefeller Foundation: "...giving away money effectively can be much more difficult than making it...philanthropy can appeal to people who want to be loved more than they want to make a difference.
"...philanthropy could effect systemic change...dare to dream big...large sums of money don't always translate into big dreams or big results. (lack of accountability)
"How can you help those who are interested in doing something important with their wealth?
"The one thing for you to teach is that the most important skill needed is listening. If philanthropists don't first listen, they will never be able to address issues fully because they will not understand them. Second, philanthropists should focus on supporting others to do what they already do wel, rather than running programs themselves...ego is a powerful burden.
"... philanthropists should find innovations that release the energies of people. Individuals don't want to be taken care of— they need to be given a chance to fulfill their own potential. Too many projects create dependence that helps no one in the long run.
"...Think about community. People need to feel responsible to one another. Otherwise, we will breed successful individuals who don't feel connected enough to the greater society.
"...the intellectual elites who run society often have very little empathy for people with less. And when they do think empathically, they focus on the pooerst of the poor and not on the lower middle portion of society, though it is so critical to societal change."
Maha Ghosanandra: "If you move through the world with only your intellect, then you walk on only one leg. If you move through the world with only your compassion, then you walk on only one leg. But if you move through the world with both intellect and compassion, then you have wisdom."
— George Bernard Shaw
If we could find a way to help the market actually work for poor farmers, then they could make their own investments...and repay when the harvest came in. They wouldn't be waiting for an agency to give them things...a mind-set beyond charity...they were market driven and deserved solutions that could help sustain themselves for years.
...the only way this will work is if they own it themselves, if they can see their own lives getting better because of their efforts and ability to control their own futures and not have to wait around for the government.
The developing world needed management skills. It needed people who knew how to start and build companies, not just people with good intentions.
...those who sought power and money made the rules; yet power alone could corrupt and corrode.
"Power without love is reckless and abusive; love without power sentimental and anemic."
—Martin Luther King
(So, in other words, the bottom line is money = power, but that power uses the world for its own benefit. power + love = changing the world for the benefit of everyone)
There had to be a way to combine the power, rigor, and discipline of the marketplace with the compassion in so many projects aimed at the very poor. Capitaslism's future rests on how much creativity and room for inclusion it can tolerate.
John Gardener, founder of Common Cause: ...community, what does it mean, how do you foster and build it. Humans thrive in relationship to each other and that communities in which each individual feels a sense of belonging and of accountability are key to our individual and societal success.
(Sounds like an article by Joseph Stieglitz in the latest Vanity Fair, "Of the 1%, by the 1%, for the 1%":Alexis de Tocqueville once described what he saw as a chief part of the peculiar genius of American society—something he called “self-interest properly understood.” The last two words were the key. Everyone possesses self-interest in a narrow sense: I want what’s good for me right now! Self-interest “properly understood” is different. It means appreciating that paying attention to everyone else’s self-interest—in other words, the common welfare—is in fact a precondition for one’s own ultimate well-being. Tocqueville was not suggesting that there was anything noble or idealistic about this outlook—in fact, he was suggesting the opposite. It was a mark of American pragmatism. Those canny Americans understood a basic fact: looking out for the other guy isn’t just good for the soul—it’s good for business.
The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.")
Gardener: "...communities today transcend geography and you belong to multiple ones...but to be truly effective you must root yourself more strongly in your home's own soil. Only by knowing ourselves can we trult understand others— and knowing where you come from is an important part of knowing who you are."
Business is a powerful way to bring discipline and rigor to sokutions that could lead to a greater feeling of independence and choice among people too often treated as invisible...Everyone wants the same things. And low-income people the world over are challenged by many similar constraints.
Peter Goldmark, President, Rockefeller Foundation: "...giving away money effectively can be much more difficult than making it...philanthropy can appeal to people who want to be loved more than they want to make a difference.
"...philanthropy could effect systemic change...dare to dream big...large sums of money don't always translate into big dreams or big results. (lack of accountability)
"How can you help those who are interested in doing something important with their wealth?
"The one thing for you to teach is that the most important skill needed is listening. If philanthropists don't first listen, they will never be able to address issues fully because they will not understand them. Second, philanthropists should focus on supporting others to do what they already do wel, rather than running programs themselves...ego is a powerful burden.
"... philanthropists should find innovations that release the energies of people. Individuals don't want to be taken care of— they need to be given a chance to fulfill their own potential. Too many projects create dependence that helps no one in the long run.
"...Think about community. People need to feel responsible to one another. Otherwise, we will breed successful individuals who don't feel connected enough to the greater society.
"...the intellectual elites who run society often have very little empathy for people with less. And when they do think empathically, they focus on the pooerst of the poor and not on the lower middle portion of society, though it is so critical to societal change."
Maha Ghosanandra: "If you move through the world with only your intellect, then you walk on only one leg. If you move through the world with only your compassion, then you walk on only one leg. But if you move through the world with both intellect and compassion, then you have wisdom."
Monday, April 11, 2011
The Blue Sweater, Chapter 7, Traveling Without a Road Map
You see, I want a lot/ Perhaps I want everything:/ the darkness that comes with every infinite fall and the shivering blaze of every step up.
— Rainer Maria Rilke
Trust— it is such a simple word and so critical to the functioning of any good society.
When we ran our non-profit like a business, though we raised charitable money, we succeeded. When we acted more like a typical non-profit, neither holding ourselves to our mission nor measuring results, we usually failed.
How you see where you are depends on where you've been.
— Rainer Maria Rilke
Trust— it is such a simple word and so critical to the functioning of any good society.
When we ran our non-profit like a business, though we raised charitable money, we succeeded. When we acted more like a typical non-profit, neither holding ourselves to our mission nor measuring results, we usually failed.
How you see where you are depends on where you've been.
Thursday, April 7, 2011
The Blue Sweater, Chapter 6, Dancing in the Dark
"I have only one request./ i do not ask for money/Although I have need of it,/ I do not ask for meat.../ I have only one request,/ All I ask/That you remove/the roadblock/From my path."
— Okot P'Bitek, "Song of an American Woman"
Perhaps my pace had been more my agenda than theirs.
Meanwhile I found myself frustrated once again by development "experts" who looked in from the outside and suggested clever solutions that created a lot of noise, distorted markets, resulted in systemic corruption, and accomplished little.
How do you define success? How do you know you've been successful? How do you know what you're seeing without real measures of accountability? And how do you know when you've failed?
We should learn from failures, but we have to name them first, talk about them, learn from them.
Is corruption a cause of poverty, or is poverty a cause of corruption?
There might be some chance that you give them money if they answer your questions in the way you want to hear them.
...Stephen Biko, who understood that freedom is not just about political liberty, but also economic independence and the power of choice.
If women had been given a chance to borrow for a project they believed would generate income, they would have focused more seriously on the work. A market mechanism would have provided a better feedback loop for both women and donors. Instead, the system festered under low expectations and mediocre results.
— Okot P'Bitek, "Song of an American Woman"
Perhaps my pace had been more my agenda than theirs.
Meanwhile I found myself frustrated once again by development "experts" who looked in from the outside and suggested clever solutions that created a lot of noise, distorted markets, resulted in systemic corruption, and accomplished little.
How do you define success? How do you know you've been successful? How do you know what you're seeing without real measures of accountability? And how do you know when you've failed?
We should learn from failures, but we have to name them first, talk about them, learn from them.
Is corruption a cause of poverty, or is poverty a cause of corruption?
There might be some chance that you give them money if they answer your questions in the way you want to hear them.
...Stephen Biko, who understood that freedom is not just about political liberty, but also economic independence and the power of choice.
If women had been given a chance to borrow for a project they believed would generate income, they would have focused more seriously on the work. A market mechanism would have provided a better feedback loop for both women and donors. Instead, the system festered under low expectations and mediocre results.
The Blue Sweater, Chapter 5, The Blue Bakery
"Poverty won't allow him to lift his head: dignity won't allow him to bow it down."
— Madagasy proverb
I wanted to know what it would take to build a business that actually created jobs for poor people.
...we show the world who we are through our actions, not merely through words or intentions.
The world had written off this little group, yet they had a chance to do something important for themselves, and in doing so, maybe they would change perceptions of what the poorest women are capable of accomplishing.
...we were all in this together.
...the women began to see— for the first time in their lives— a real correlation between the effort they put into their work and the income they earned.
...listening is not just having the patience to wait, it is also learning how to ask questions themselves. People who've always been dependent on others for some kind of charity or goodwill often have a hard time saying what they really want because usually no one asks them. And if they are asked, the poor often think no one really wants to hear the truth...still building trust.
Money is freedom and confidence and choice. And choice is dignity.
— Madagasy proverb
I wanted to know what it would take to build a business that actually created jobs for poor people.
...we show the world who we are through our actions, not merely through words or intentions.
The world had written off this little group, yet they had a chance to do something important for themselves, and in doing so, maybe they would change perceptions of what the poorest women are capable of accomplishing.
...we were all in this together.
...the women began to see— for the first time in their lives— a real correlation between the effort they put into their work and the income they earned.
...listening is not just having the patience to wait, it is also learning how to ask questions themselves. People who've always been dependent on others for some kind of charity or goodwill often have a hard time saying what they really want because usually no one asks them. And if they are asked, the poor often think no one really wants to hear the truth...still building trust.
Money is freedom and confidence and choice. And choice is dignity.
The Blue Sweater, Chapter 4, Basket Economics and Political Realities
"If you don't like the way the world is, you change it. You have an obligation to change it. You just do it one step at a time."
— Marian Wright Edelman
...only when women control money will they have the power to walk away from being hurt.
...most big dreams originate in someone's living room (or a bar or a bus) with a small group of people, regardless of where they come from or how they are dressed.
The real problem with big donors was that the money usually came with strings attached— they wanted us to carry out their projects and typically wanted the money spent in a year...
We have to show them that we care: This meant hanging in there with the tough questions and holding our clients accountable even if the rest of the world didn't.
One of the lessons of start-ups, though, is that whenever you think things are going well, something happens to hand you back your humility. (Sounds like what Peter Drucker also said. The key is to be prepared for those eventualities.)
— Marian Wright Edelman
...only when women control money will they have the power to walk away from being hurt.
...most big dreams originate in someone's living room (or a bar or a bus) with a small group of people, regardless of where they come from or how they are dressed.
The real problem with big donors was that the money usually came with strings attached— they wanted us to carry out their projects and typically wanted the money spent in a year...
We have to show them that we care: This meant hanging in there with the tough questions and holding our clients accountable even if the rest of the world didn't.
One of the lessons of start-ups, though, is that whenever you think things are going well, something happens to hand you back your humility. (Sounds like what Peter Drucker also said. The key is to be prepared for those eventualities.)
The Blue Sweater, Chapter 3, Context Matters
"Hope is a path on the mountainside. At first there is no path. But then there are people passing that way. And then there is a path."
— Lu Xun
The real question was what it would take to make the institution real. My plan was to talk to as many people as I could, learn as much as possible, and then just start building. The work would teach us what was feasible and what was not. First step: endless phone calls and meetings.
...we are here to create opportunities that would only work if we believed in the people we were serving. I decided to avoid the cynics and the carreerists...By lending women money instead of giving handouts, we would signal our high expectations for them and give them the chance to do something for their own lives rather than waiting for the "experts" to give them things they might or might not need.
If you support a woman you support a family.
Think of charging fair interest as practice for the women to interact with the formal economy. It will help them build real businesses— and they want the option to borrow!
If you depend on grants each year then the project will only work if the donors keep giving.
...the importance of giving different kinds of people seats at the table in order to bring new ideas to reality.
— Lu Xun
The real question was what it would take to make the institution real. My plan was to talk to as many people as I could, learn as much as possible, and then just start building. The work would teach us what was feasible and what was not. First step: endless phone calls and meetings.
...we are here to create opportunities that would only work if we believed in the people we were serving. I decided to avoid the cynics and the carreerists...By lending women money instead of giving handouts, we would signal our high expectations for them and give them the chance to do something for their own lives rather than waiting for the "experts" to give them things they might or might not need.
If you support a woman you support a family.
Think of charging fair interest as practice for the women to interact with the formal economy. It will help them build real businesses— and they want the option to borrow!
If you depend on grants each year then the project will only work if the donors keep giving.
...the importance of giving different kinds of people seats at the table in order to bring new ideas to reality.
Tuesday, April 5, 2011
meeting with Quentin Flores, Bill Henry, and Howard Hodel
Met with Bill Henry, Howard Hodel (both formerly of Bank of Hawaii) and Quentin Flores from the Office of Hawaiian Affairs. Howard and Quentin had worked together to create the Malama Loan program that is a part of the Native Hawaiian Revolving Loan Fund. (This program is not to be confused with OHA's Consumer Micro-Loan Program that focuses mostly on emergency funds up to $7,500 at 5% interest up to 60 months for a death in the family, health crisis, home or auto repairs, or career development courses.) The Malama Loans can be up to $75,000 and they are to be used for education, business expansion, or home improvement.
OHA utilizes First Hawaiian Bank's application, underwriting, and servicing systems to manage the loans (although if you go their main site and plug in Malama Loan, or micro loan, or micro-lending into the Search function nothing comes up). The Native Hawaiian Revolving Fund apparently has close to $28 million in it, half from OHA and half from the federal government. According to to Howard and Quentin, the federal involvement has significantly undermined the efficiency of the program due to onerous guidelines— appointed committee to approve the loan, a committee to recommend processing, automated formula for underwriting— which cause a lot of duplication between OHA and FHB. FHB provides these service basically as a community service since the size of the loans do not make them very profitable for them.
One of the key challenges they mentioned is getting enough qualified borrowers for the money they have available. According to Quentin Flores they have approximately 140 outstanding loans totally about $700,000. The main reason they can't do more is that their underwriting is dependent on the applicants FICO score, which needs to be above 650 for a Tier One loan, and above 600 for a Tier Two loan. That right there will eliminate the vast majority of applicants and is also where an opportunity exists for something like what we're proposing at Kuleana Micro-Lending can step in. We will be utilizing a non-quantifiable underwriting process based on what has been called "character investing." Essentially that means that we will rely on the testimony of a case worker from one of our partner agencies to say that a particular candidate is worth the risk of receiving a loan.
This case makes me think of Dr. Daniel Kim's explanation of "stock and flows". The amount of micro-loans out there sounds sort of impressive but if people were made aware of the amount of waiting just sitting around waiting to be loaned they might react differently. We need to get more of that stock into the flow of credit being extended to low-income borrowers.
That leads to the next challenge— supporting the borrower in such a way that they can and do succeed. Quentin said many of their loans go delinquent around the holidays but then they get back on track by March. Bill and Howard also mentioned that mentoring/business training are crucial for the borrowers success, but there remains the question of whether a borrower will do the work in order to get such a small amount of money. The key is to establish a training program similar to the one utilized by Grameen Bank in their North American programs— 5 1-hour sessions. If those are weekly then hopefully the borrowers can take the classes while their application is being considered by the Application Review Committee and the Loan Review Committee. If the borrower drops out of the class then we probably didn't want to loan them the money in the first place.
Some possible partnerships we can explore for the training are: Bank of Hawaii, Pacific Gateway, SCORE, the Hogan Entrepreneurs program, the Akamai Foundation, and Empower Hawaii (several of which have micro-lending/enterprise program which we can learn from).
One of our goals will have to be helping our very incipient borrowers graduate up to more traditional, and therefore larger scale, lenders. That's the the the Credit Builders Alliance can help us and them as well.
OHA utilizes First Hawaiian Bank's application, underwriting, and servicing systems to manage the loans (although if you go their main site and plug in Malama Loan, or micro loan, or micro-lending into the Search function nothing comes up). The Native Hawaiian Revolving Fund apparently has close to $28 million in it, half from OHA and half from the federal government. According to to Howard and Quentin, the federal involvement has significantly undermined the efficiency of the program due to onerous guidelines— appointed committee to approve the loan, a committee to recommend processing, automated formula for underwriting— which cause a lot of duplication between OHA and FHB. FHB provides these service basically as a community service since the size of the loans do not make them very profitable for them.
One of the key challenges they mentioned is getting enough qualified borrowers for the money they have available. According to Quentin Flores they have approximately 140 outstanding loans totally about $700,000. The main reason they can't do more is that their underwriting is dependent on the applicants FICO score, which needs to be above 650 for a Tier One loan, and above 600 for a Tier Two loan. That right there will eliminate the vast majority of applicants and is also where an opportunity exists for something like what we're proposing at Kuleana Micro-Lending can step in. We will be utilizing a non-quantifiable underwriting process based on what has been called "character investing." Essentially that means that we will rely on the testimony of a case worker from one of our partner agencies to say that a particular candidate is worth the risk of receiving a loan.
This case makes me think of Dr. Daniel Kim's explanation of "stock and flows". The amount of micro-loans out there sounds sort of impressive but if people were made aware of the amount of waiting just sitting around waiting to be loaned they might react differently. We need to get more of that stock into the flow of credit being extended to low-income borrowers.
That leads to the next challenge— supporting the borrower in such a way that they can and do succeed. Quentin said many of their loans go delinquent around the holidays but then they get back on track by March. Bill and Howard also mentioned that mentoring/business training are crucial for the borrowers success, but there remains the question of whether a borrower will do the work in order to get such a small amount of money. The key is to establish a training program similar to the one utilized by Grameen Bank in their North American programs— 5 1-hour sessions. If those are weekly then hopefully the borrowers can take the classes while their application is being considered by the Application Review Committee and the Loan Review Committee. If the borrower drops out of the class then we probably didn't want to loan them the money in the first place.
Some possible partnerships we can explore for the training are: Bank of Hawaii, Pacific Gateway, SCORE, the Hogan Entrepreneurs program, the Akamai Foundation, and Empower Hawaii (several of which have micro-lending/enterprise program which we can learn from).
One of our goals will have to be helping our very incipient borrowers graduate up to more traditional, and therefore larger scale, lenders. That's the the the Credit Builders Alliance can help us and them as well.
Monday, April 4, 2011
Drucker’s Five Principles of Innovation
Drucker’s Five Principles of Innovation
Below are five principles that can help you take advantage of a new innovation you may have discovered.
1. Begin with an analysis of the opportunity.
2. Analyze the opportunity to see if people will be interested in using the innovation.
3. To be effective, the innovation must be simple and clearly focused on a specific need.
4. Effective innovations start small. By appealing to a small, limited market, a product or service requires little money and few people to produce and sell it. As the market grows, the company has time to fine-tune its processes and stay ahead of the emerging competition.
5. Aim at market leadership. If an innovation does not aim at leadership in the beginning, it is unlikely to be innovative enough to successfully establish itself. Leadership here can mean dominating a small market niche.
Some of this goes against the feedback we got from Island Innovation Fund, most notably the idea of starting small. We're in no rush so we're making sure we do this right.
Below are five principles that can help you take advantage of a new innovation you may have discovered.
1. Begin with an analysis of the opportunity.
2. Analyze the opportunity to see if people will be interested in using the innovation.
3. To be effective, the innovation must be simple and clearly focused on a specific need.
4. Effective innovations start small. By appealing to a small, limited market, a product or service requires little money and few people to produce and sell it. As the market grows, the company has time to fine-tune its processes and stay ahead of the emerging competition.
5. Aim at market leadership. If an innovation does not aim at leadership in the beginning, it is unlikely to be innovative enough to successfully establish itself. Leadership here can mean dominating a small market niche.
Some of this goes against the feedback we got from Island Innovation Fund, most notably the idea of starting small. We're in no rush so we're making sure we do this right.
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