Tamale Photos
March 28th, 2010 § Leave a Comment
Some photos from around Tamale:
What it says on the tin
Travel agency in the downtown Choggu neighborhood catering to the majority Muslim population
Vodafone has taken Tamale by storm
Where I’ve been
March 20th, 2010 § 1 Comment
A random sample of a different sort
There is a very strong correlation between my returning to Africa and my completely neglecting this blog – which says less about African internet than about how busy I always find myself when I’m here! I came into my current position with IPA at the beginning of a two-month household survey examining underinvestment in agriculture in northern Ghana, and since then our whole team has been working non-stop. Our surveyors leave for the field between 7 and 8 am every day, so I’m usually at the office by 6.30 to make sure that everything’s prepared. Then it’s a long day of tracking survey documents, sorting soil samples, assigning survey teams to new communities, preparing per diem payments, troubleshooting the netbooks & survey software used in the field, selecting respondents for field audits, taking calls from surveyors, and making frequent three-hour round trips up to our satellite office in Walewale, among any number of other things. An early day might end at 7 pm, and a late one at 10 pm. The sheer amount of work has forced me to grow more as a manager than I have in any other position I’ve yet had, which has been fantastic. It simply doesn’t leave much space at the edges of my days for anything else.
On microloans & credit cards
August 6th, 2009 § 5 Comments
Patriotic plastic chair (“Let’s Reconstruct the Congo!”)
Ah, I have so much to write about after 2.5 months with FINCA in the DRC, and so little free time in which to do it! But one comment that I’ve been turning over in my mind for some time now is something my father said to me when I was explaining the concept of group microlending to him. I pointed out that most clients don’t borrow for discrete events, like buying a car or paying for college, but rather take out multiple sequential small loans to finance everything from business activities to children’s educations. (Granted, many microfinance clients aren’t supposed to be using loans for consumption purposes, but even the social pressure of group lending can’t always prevent this.) My father’s response was that this type of lending sounded much more analogous to owning a credit card than taking out a “traditional” Western loan. And I’ve been increasingly fascinated with this idea as its implications have sunk in.
Consider the long-dominant narrative of microloans as a pathway out of poverty, now coming up against a more nuanced narrative of microloans as consumption smoothing tools whose efficacy in moving borrowers out of poverty is also dependent on the individual borrower. (See the end of this post for more on individual variation.) I don’t actually find these positions contradictory, just varying in their levels of nuance, but for those who do find them mutually exclusive, I think the credit-card-vs.-traditional-loan idea may resolve many of the apparent contradictions here. “Traditional” loans are usually aimed at smoothing consumption around the type of significant investments that provide positive, and lasting, long-term shocks to income levels. Borrowing to finance a university education is a good example of this. Credit card companies, on the other hand, make few claims about their beneficial effects on one’s long-term financial health – and are better served overall when a portion of their customers spend themselves into debt and pay hefty fees for the privilege. The whole point is to smooth consumption of inexpensive-to-midrange products & services, and few people consider them a substitute for a larger “traditional” loan unless they’ve no other choice. (Have you discussed putting a $180,000 undergraduate education on a credit card with your friendly local admissions officer? [Hello, Dartmouth, you expensive old dear.] I didn’t think so.)
In short, the “pathway out of poverty” narrative expects microloans to function similarly to “traditional” Western loans, and play a significant investment and capacity-building function on a personal level. The consumption smoothing narrative, on the other hand, is redefining microloans as something closer to cash-only versions of credit cards. (Without so many options for punitive fees for defaulters, and with a greater risk of an angry group of Congolese women coming to your house at 6 am to repossess all your plastic chairs as punishment for a missed payment.) There are a thousand interesting directions one could go with this thought, but what I think it mostly points to is the fact that the formal economic structures of microfinance are still going through a dramatic period of evolution. There aren’t many Western banks that wake up wondering if their primary product is a mortgage loan or perhaps really a credit card, after all. And that leads into implications for product design, and the unbanked’s perceptions of and interactions with formal banking institutions, and on and on into what I’m sure will be many future blog posts.
Matadi Photos
August 3rd, 2009 § Leave a Comment
A few shots from a business trip to Matadi, in southwestern DRC:
City on a hill
At the main market downtown
The port by night
Kinshasa Photos
June 28th, 2009 § Leave a Comment
With apologies for the low-quality BlackBerry photos, I thought I’d share a few images of Kin:
Inside the bank
Downtown Kinshasa, Boulevard 30 Juin
A typical market scene
Other Rwanda Photos
May 8th, 2009 § Leave a Comment
Photos from around Rwanda:
Lake Burera
Tea fields near Nyungwe National Park
Decorative shields at the National Museum, Butare
Goma Photos
May 4th, 2009 § Leave a Comment
A friend and I spent part of a day in Goma with Dawn Hurley, who’s working with a talented group of disabled women to allow them to support themselves and their families through Shona Congo. A few surreptitious photos of the city:
Shacks and mansions
A building partly buried in lava during the 2002 eruption of Mt. Nyiragongo
Microfinance & child labor
April 30th, 2009 § 2 Comments
Schoolchildren outside of Accra, Ghana
I’ve seen some interestingly conflicting reports lately on the impacts of microfinance upon education. Someone directed me to one which showed that microcredit clients were more likely to pull their children out of school to do the domestic work which parents gave up in order to run their microcredit-supported businesses, but I’ve also seen another which found that the children of microcredit clients were actually more likely to be in school, as their parents could more easily pay their school fees. I can think of several different ways in which these elements of small businesses, children’s labor, and schooling could interact:
- Maybe the parents who pulled their children out of school to cope with successful businesses worked far from their homes and didn’t have the time to handle both business and domestic work, while successful clients whose children stayed in school worked closer to home and were more easily able to balance the two.
- Perhaps there’s some sort of U-shaped curve of parental income (as supported by microcredit) and the likelihood of children’s schooling. Parents who are suddenly busier with work than previously, but are still too poor to afford to hire domestic help, may be the ones more likely to pull their children out of school – the low point of the U. Parents whose businesses are quite successful, on the other hand, might better be able to pay for both domestic help and school fees.
- This is probably also correlated with whether parents were successfully able to repay their loans. There must be some exogenous shocks to parental earnings that affect both their ability to repay their loans and their financial capacity to send their kids to school – drought, for instance. So one might find microcredit clients pulling their kids out of school for reasons unrelated to their loans.
On an unrelated note, I came across a sentence I totally loved whilst rereading Understanding Poverty recently – “these essays presage what we feel is an important new trend in the economics of poverty: a willingness to take the social and psychological environment of the poor seriously.” This is probably the most fruitful interaction possible between qualitative and quantitative disciplines in the study of development – a genuine respect for the psychosocial lives of the poor.
Information & pricing in local agriculture
March 20th, 2009 § 2 Comments
Landscape, Murambi District, Rwanda
Thinking some more about the geographic scale of different agricultural markets has led me to consider how information availability and pricing might differ between them. Mobile phones are still a fairly rare commodity in rural Rwanda (outside of the towns), and if some set of extremely poor farmers were only selling extra produce hyperlocally, it seems that perhaps prices would either be set in total isolation from regional or national prices, or might be determined exclusively by a few people with mobiles. (I wonder if outside information would be convincing in this scenario – if the phone guy says to the farmer, “this cassava is 5 francs cheaper in Nyamata,” would the farmer accept this as a negotiating tactic, or assume that he’s lying? Perhaps it’s connected to how easy it is for the phone guy to actually access the cheaper cassava in Nyamata – the credibility of his threat.)
Then again, even with mobile technology to help information access along, its helpfulness still seems fundamentally predicated on A) physical mobility and B) social networks. Information about great prices in a town up the road will be less useful to a farmer if he still can’t reach it easily, and receiving the information in the first place is still connected to one’s actual social network (and ability to pay for airtime, of course). I wonder if the differing availability of mobiles to rural residents of different socioeconomic statuses may actually increase the vulnerability and exclusion of the poorest of the poor, rather like differing levels of access to microinsurance might actually push healthcare farther out of reach of the poorest.
Microcredit & entrepreneurship
February 11th, 2009 § Leave a Comment
Loan repayment book, WomensTrust Microfinance, Pokuase, Ghana
I think I missed an important point in my last musings on microfinance – that ex-post savings does actually make sense if the loan is given for investment rather than consumption. So the salient factor in assessing the potential of microloans to help or harm their recipients is also connected to their intentions for the use of the loan, as well as their existing income level.
But this does come back to the broader point currently being raised by many people, about the apparent contradiction between views of the poor as necessarily innovative, and the fact that most people, rich or poor, aren’t good at being individual entrepreneurs. I do wonder if the “poor as inherent innovators” view doesn’t suffer from some confirmation bias. There certainly are many memorable examples of entrepreneurship born from poverty, but, as in the developed world, it seems that there’s a subset of people who are actually responsible for innovation. The demands of living in poverty do include hard work and often creativity, but while those characteristics are also necessary for market-based entrepreneurs, they’re not by themselves sufficient. Even investment-oriented microloans can turn into consumption-oriented ones, in practice, if their recipients don’t have adequate business strategies and market knowledge for their use. Perhaps it’s not quite as bad at the level of larger microfinance banks with better data-gathering operations, but at the level of the small organizations at which I’ve worked, there seems to be a lot of fuzziness around the use of loans and their ultimate impacts. I worry that this is one of the situations where a lack of data may actually end up harming people who really can’t afford to be harmed, in improperly distributing loans.
From Sen’s perspective of freedom, I suppose the ultimate question of entrepreneurship is whether self-determined employment (but perhaps a lower wage) or higher-waged corporate employment (but less career self-determination) is more conducive to personal freedom, in the end. For the majority of people, I’m guessing it will be the latter, once you average the benefits of a higher wage over all the categories that it affects.
