Accounting and Program Audit
Team
Log # 5
By Daniel Crean
At times throughout the course, the
distinction between handouts and hand ups has been broached, and
the morality of microfinance has been examined. When dealing with
the poorest of small business owners, it is natural to question the
moral unassailability of micro lending. Why do we ask the
impoverished to pay us back? Why don’t we simply gift this money to
budding entrepreneurs? Wouldn’t grants be more helpful than loans?
While from some view points, asking poor borrowers to pay back
loans may seem extreme, I am of the belief that it is ultimately
beneficial for the individual to take a loan rather than simply
receive money as a gift. This gives the entrepreneur an opportunity
to pull themselves up by their bootstraps. Transforming a loan into
a successful business must be one of the most rewarding feelings,
both leaving the borrowers dignity intact and ensuring sustainable
income for themselves in the years to follow. Along the way, the
borrower has also learned a valuable lesson in fiscal
responsibility, their dedication to repaying the loan is good
training for any future business they may conduct.
This is not to say that accepting a gift is in any way
contemptible. Given the situation that these people are in,
anything they need to do to survive is understandable. However, the
point I would like to emphasize about micro lending is the
sustainability and recyclability of the loan itself. For instance,
if a borrower was to accept a loan of $300, when they repay their
loan, that money can be reissued to another person in need. Also,
in order to repay their loan they must have generated at least $300
in income throughout the year. If that same person was to simply
accept a gift of $300, if they were to spend only one dollar of it
a day they would still exhaust their resources within the year. To
support an individual purely on donations requires perpetual
payments. However, those entrepreneurs who borrow money begin to
have the ability to support themselves. The act of repayment places
an incentive on those borrowers to generate more income as they
work towards supporting themselves. After this process, the
borrower can either take another loan, or if their business has
become sustainable they may not need it, which would free up the
funds to be lent to another borrower in need. In this way, the
loans can be redistributed after they come to term and are
repaid.
There are a lot of positive moral components to micro lending, in
what it does for the borrowers and their communities. The borrower
learns about credit and saving, while the credit grants them access
to transforming their own financial situation. The work they do as
entrepreneurs can improve their own communities as well.
Furthermore, loans are sustainable when they are paid back.
Essentially, micro lending allows borrowers to sustainably improve
their lives on their own merit, improve their communities.
Finance and Risk Assessment Team
Log # 5
By Nattalia Balkaran
After completing the midterm progress report, I must say, I did not
realize all the things we’ve been trying to accomplish. I
feel confident that our team will be able to make a fundamental
difference this semester. We all have different talents and
passions within the work that we have to do. I am super excited
about Peru! I think most of the challenges we face with the loans
issued in the African regions will not be of concern in South
America. We have a great location. There is no doubt in my mind
that our borrowers will be able to repay their loans. The
conditions are perfect to issue loans. They have a need, they have
a great tourist industry, and the infrastructure is already in
place. Also, because these people are remnants from the Incan
Empire, profitability will be large. They are literally part of
ancient history. Therefore, the goods that they sell will be able
to reap a significant profit!
Our business plan idea is becoming more realistic as we continue to
move forward which is a plus. Placing the solar charger in an area
where cell phones and electronics play a vital role in
communication with the business of our entrepreneurs is huge! The
development of this social business plan is exciting and daunting
at the same time, more –so on the anxious side, just to see how it
will turn out. I think we can make a significant difference and
because our team is so passionate about making this business work,
the thought of it happening is even more tangible.
Overall, I think we are on the right track, we are doing the things
necessary in order to promote GLOBE through every venue we can.
Holistically, all of us are participating and trying to make our
organization stronger and better through the social media. After
witnessing what the other teams are doing, our bases are covered.
The finer details just need to be ironed out, in regards to finance
and risk management’s case, can easily be done once we speak with
the daughters in the region.
Marketing and Fundraising Team
Log # 5
By Deven Lall
This has been the busiest week thus far, for every team. This past
Monday, we held our first information session and bake sale. We had
a good turnout for the information session and we sold around $120
in baked goods. We were a little disappointed at first with what we
made but then we received an email from Dr. Sama. The email said
that the proceeds from the bake sale may be the beginning to our
first loan that builds a house. We, as students, can give someone
the opportunity to make a home for themselves. I have volunteered
for helping people learn English, soup kitchens, and animal
shelters. I felt good after volunteering for those activities, but
after hearing that we could possibly give someone a home, was a
feeling far beyond what I have ever felt before in this sense. It
was emotionally over whelming, the fact that we can give someone
the comfort of a home. It’s moments like these that the realization
of what you’re really doing and why you’re doing it. All of us, as
a class can give someone whom would not have the opportunity
otherwise the feeling, “There’s no place like home”.
Now today, we had our mid-term presentations to present to the
class. We were going to find out where all of the teams were in
accordance with their goals and how we were going to make the first
GLOBE loan to build a house come into fruition. We, the Marketing
and Fundraising team, gave our presentation and sighed of relief
when we were finished. We spoke about the events we have done so
far, the events to come, and how we are going to prepare for them.
The meeting with James Monnier and Tom Fike of Institutional
Advancement gave us a greater understanding for handling
events.Then our Finance and Risk Assessment team really inspired me
with how far along they’ve come, their ideas soon to be implemented
and their social business plan idea. I believe the idea of doing
risk assessment before lending will be instrumental with loan
repayments. Their social business idea was also very interesting
(don’t want to mention anything else about their plan!) and I think
has a lot of potential. Especially because they picked Nigeria, the
country with the highest repayment history when it comes to GLOBE
borrowers. Their choices were strategic and their past decisions
have been implemented well. Then Technology and Communications took
the floor. They have also come along way with our social media
sites. They have gained more followers, spread awareness about
GLOBE and have also started using another social platform to
promote the class. The Accounting and Program Audit Team changed
the way they rate our performances as a team and are using the
advice the class before us has passed on to them. All and all, our
class is now on schedule, on the same page, and we all now have a
deeper understanding of the goal we are working towards.
Technology and Communications
Team
Log # 5
By Patrick Diamitani
Microfinance exists in places we may have
never imagined. This past Sunday I ate lunch outside of a local
Queens’ Italian restaurant with a close friend of mine. We
discussed many things, but one of the topics that particularly left
it’s impression was a statement made about his mother. “ My mom
would put away around $100 a month…with a lot of other people…the
pool of money would be $5,000….and my mom would use the money to
make investments in certain projects….my mom makes $17,000 a year
Patrick, how else did you think we would survive?” If what I just
wrote sounds familiar to you, it depicts the same kind of money
service that occurs within ROSCA’s in third world countries. Many
“borrowers” would put away a sum of money every month to create a
pool, which would rotate among the borrowers. When the pool landed
on the borrower, they were free to use the money for whatever need
they had and even to waste it. Apparently, this same system exists
in America today; not by way of illegal crime Kingpins who partake
in loan sharking, but through an integrate trust of women who do
what is practical: set money aside and use the pool of money to
help them build a better future. And a better future she did build:
my friend’s mother made $17,000 a year (and probably less earlier
on), however she owns her own home and has several properties which
she rents out. She is a classic example of a woman who was able to
take what was given to her and multiply the fruits of her labor-
not through a pay increase in her job, but through the complex yet
simple workings of microfinance. Each day I partake in the class I
become a believer. It’s amazing that such a phenomenal occurrence
could happen so close to me. The benefits of microfinance in the
life of my friend’s mother transcended not just to material goods,
but in the form of important life lessons as well. My friend
learned a great wealth in regards to the value of money through his
mother and was able to make some incredibly wise business decisions
early on in his life, amassing a fortune of over $200,000 before he
even left high school and purchasing another home for his mother in
the Dominican Republic. He drives a Cadillac Escalade and, as he
did on this day, pays for his friend’s lunches, not because they
don’t insist, but because he truly cares. “They print money every
day,” he tells me, “all you need to do is go get it.” Now obviously
this isn’t as easy as it sounds for most, but my point is,
microfinance has truly helped shape a very important aspect my
friend’s life, and chances are he’s never even heard of the term.
Whodathunkit.