Gavin Sword KF9 Rwanda

There is a TV show that profiles treacherous jobs around the world, the episode i recall was one about Alaskan King Crab Fishermen.  These brave men (typically) work night and day in stormy seas on slippery decks in frigid waters.  The ships are rocking violently with waves crashing over the decks – death just a misstep away.

Here in Rwanda on my drive to work each day, I see women who are employed as Street Sweepers doing a job that rivals the dangers faced by the men on these Alaskan ships.  Working from dawn til dusk, these intrepid souls stand ON THE HIGHWAY with cars zooming past at 50+ miles per hour, sweeping the debris and dust from the road with meticulous care.  There are no pylons or barriers, no “Caution” signs, no “Slow Down – Sweepers at Work” signs.

Most drivers that I’ve seen do not even give any special wide berth to these courageous workers, they are missed by inches – not feet, by cars and trucks speeding to and fro.  These women truly have nerves of steel – and the pay for this work, I have heard, is the equivalent of $US70/month.  It is hard to grasp this number – they work 6 days per week, so that is approximately $3 per day.  Adjusted for pay vs. danger – i have to say that I think these women win the title of the “World’s Most Dangerous Job” hands down.  (I don’t recall the exact pay for the Alaskan King Crab Fishermen, but I do know that it was considerably more than $3/day).

Regardless, I am told that these jobs are actually sought after.  In a country with nearly 30% unemployment, it is still a job – and it allows them to feed their families or at least to contribute to the effort.  Menial jobs are common in Rwanda -  street sweeping, grass cutting  (with rudimentary instruments) or cleaning people work grueling hours for subsistence pay.  It is no wonder that so many Rwandans opt for self employment through borrowing from MFI’s like Vision Finance.

Kiva borrowers in Rwanda may not be making large profits each month but most make far more than $70, they have some control over their destinies and their jobs are generally not vying for the “World’s Most Dangerous” title.  I have learned that the options for employment in Rwanda are severely limited and whatever your perspective on microfinance, it offers other options for employment in a country that desperately needs more options.

Suzy Marinkovich, KF8 Peru & KF9 Bolivia

One of the most exciting things about being a Kiva Fellow is the opportunity to tell the untold stories of those so remote, so rural, and so ignored by the media.  When there are six billion humans sprinkled across the world, the media has the unenviable task of picking and choosing stories that deserve local, national, or even global attention.  As a result, we hear about unimaginable tragedies plaguing certain parts of the world — and often only the most painful and shocking stories are told.  Ayacucho, Peru during the 1980s was simply a red zone, a place known only for the violence between the Peruvian military and maoist-terrorist group Sendero Luminoso (Shining Path).  After spending four months in Ayacucho with partner FINCA Peru, my husband and I made our way overland to Bolivia.  En route, we took a taxi in La Paz and as we chatted with the driver, he asked us where we’d been.  When I told him, the next thing he said was: “Ayacucho, oh that’s where the terrorism is, Shining Path, why would you go there?”  The reality is that the Shining Path has fragmented and exists only in the most rural parts of that region, and the estimated 70,000 people killed is a tragic echoing statistic from pre-1993.  But he made a great point; often, the way we look at certain parts of the world is through the lens of their tragedies.  As a result, we forget that there are innocent mothers, fathers, children, farmers, market vendors, beauty shop owners, cell phone vendors, and artisans that exist there, too.  Their stories fall by the wayside, and sometimes we associate the conflict with the region or country itself, and we wouldn’t dare going there.  It was so when two years ago I went to the D.R. Congo’s North Kivu region — its most volatile.  I was scared to cross over the border, having only heard about the horrible atrocities and human rights violations occurring in the very border town I was entering through.  But after walking across the border, I was surrounded by women carrying fruit in baskets on their heads, their babies on their backs, children in school uniforms, and dozens of smiling innocent faces.  My hope is that through the wonderful story by PBS Frontline World on Kiva’s borrowers at FINCA Peru in Ayacucho, we can all begin to look beyond the lens of tragedy and see the talent and remarkable entrepreneurship hiding among some of the many innocents and those left behind.

Click the photo above or follow this link to check out the iWitness story on PBS Frontline World about FINCA Peru’s rural borrowers!  Then, lend to Kiva’s entrepreneurs here.

Gavin Sword KF9

I read with great interest the very thoughtful blog by David Roodman: as well as the more sensational New York Times article about Kiva’s loan disbursement disclosure issues.  I agree that Kiva could have done a better job of explaining the nuanced realities of fund disbursement on its website.  And I think that insightful blogs aimed at holding Kiva accountable are useful and will serve to strengthen the organization. But beneath all the controversy, for many, I think a line blurred between connecting to an individual and controlling an outcome.

As lenders we like to think we are really making a difference in someone’s life and we are…but it’s complicated and it actually bumps up against something we all value greatly about Kiva: Empowerment.  For three key stakeholders: lenders, borrowers and MFI’s – empowerment is key.

I completely understand that stories and photos are a necessary piece of the Kiva model, but can you imagine going to your bank for a loan and being asked for a photo and life story?  And then be told that this photo and story will determine your loan approval outcome? Not empowering.  I much prefer that Kiva’s carefully selected MFI partners are trusted to make their own lending decisions based on business criteria. As lenders we can feel connected but the control of who gets funded is best kept in the hands of the MFI.

I actually think most Kiva lenders like very much that Kiva promotes a business-type relationship between the borrower and lender.  These are loans – not donations.  And following this logic, loans are about creditworthiness not appearance or life stories or likeability.  The fact that pictures and profiles are necessary to create empathy and elicit our generosity is ok with me – we are human, but I prefer that they are not the final random, subjective arbiters of who gets funded.

I think that all of this points to a plural P2P model for Kiva.   People to People lending (with regional, country and/or MFI selection enabled) will be a good thing, and I suspect that the empathy-generosity link will not be jeopardized. As lenders we do lose some perceived control but the connection is still there.  Without being too preachy, in my opinion, the connection we feel when we lend is not so much to the specific person: it is a connection to humanity.

People to People also solves for two things that I find unsettling (and dis-empowering) about the concept of “Person to Person” lending as it stands today.  The first is that the person I lent to did not know who I was – it seemed unequal and unfair to me.  (Even if they could get online access, many Kiva lenders choose not to have their photos on the site).

The second thing that troubled me was learning that the loans that get funded fastest are inevitably those with an attractive person in the photo, smiling brightly with a touching story that mentioned sorrows endured.  Other equally deserving but less appealing looking people, perhaps not smiling enough, or with stories that were somehow not evident of sufficient hardships or pluck or whatever struggled to receive funding.  I think it is dis-empowering to the MFI and the qualified borrower.  (I was heartened to learn that there is actually a Lending Group that focuses on loans about to expire).

As a lender, what I really should care about is to know that all of the intended funds are actually getting to a borrower screened and vetted by the specific, capable MFI partner chosen by Kiva.  This is something I can definitely vouch for in Rwanda from my experience here. Good loans are being made to deserving entrepreneurs.

So in all this rambling, I submit that a People to People model removes bias and prejudice and levels the playing field, empowering in equal measure borrowers, lenders and MFI’s alike.  This is certainly a good thing.

As for the optics and transparency regarding the mechanics of actual fund disbursement realities, I say good catch by Roodman.  I also say that Kiva has responded in a balanced, reasoned and open way that reflects well on the organization.  It inspires confidence that as it grows and evolves, Kiva will continue to strive to do the right thing in the future.

Let me end by saying that I am very proud to be a part of this dynamic, transparent and caring organization as a Kiva Fellow.

Rebecca Corey, KF9 Tanzania

The first time I got shoved out of the way in a mad rush to the dala-dala bus, my friend Victor said to me, “This is the local local lifestyle, pole sana–I’m very sorry.” The next time he said it was when the electricity went out and I was reading in the living room. “This is the local local, pole dada–sorry sister.” Then again when I had Malaria: “The Tanzania local local, pole sana, pole sana.” In the streets, when Tanzanians are shouting to me, “Mchina, mchina!” Chinese person, chinese person! : “They are local local, they cannot tell you are Korean. Pole.” And every time, he smiles his big smile, apologetic, almost wistful, partly amused, always sincere.

I have also started to think to myself, “local local,” several times each day. We haven’t had water for the past eight days because of a broken water pump, so we fetch bucketfuls from next door. Tanzania is suffering from a major power crisis, so electricity is rationed. Ours goes out for a full day once every three days. I get up at five every morning to catch the dala-dala before the major traffic jams so I can get to work by eight. I see one bus that says on the back, “Don’t Hide, Just Pay,” another claims “Jesus is Power,” and a third “Blootooth On.” “Local local,” I think.

I myself am becoming more and more local local. I bought a kanga the other day, a long sheet of patterned fabric that is cut in half and worn around the waist and draped or wrapped over the shoulders. I sleep in it and wear it around the house. I’m also starting to think and speak in Tanzanian English. I have started to say things like, “this here pen” and “I live some few miles away.” When I want to say “etc.,” or “and so on,” it’s “and this, this, this.” When saying that someone went on and on (as in blah, blah blah), it’s “he said, ‘You are wrong,’ and what, what, what.” One of my favorites is “I feel to relax,” or “I feel to go to the store.” And not only have I started to speak like this, these phrases make perfect sense to me, have a charm and character of their own.

My Swahili is improving, too. This past week I went into the field to interview two Kiva clients who were filmed about five months ago for a documentary for BBC World. The film crew is returning soon to shoot follow-up segments on the same borrowers. With help from Rita, the Kiva Coordinator, I was able to ask a majority of the questions about Atuna and Neema’s businesses. While I don’t want to give away details of what will be in the film, I will say that I was humbled and inspired by both of these women. They are shrewd business owners, caring mothers, and true bread-winners. When one endeavor doesn’t work out–cassava crops fail, it’s too hard to turn a profit running a pharmacy–they adapt, start new businesses, continue without a thought of giving up. They, too, are local local.

At a Rotary event last weekend, a kind Rotarian expressed shock and dismay that I take the dala-dalas to get around. He suggested hiring a private car. At work, my co-workers have urged me not to move in with a Tanzanian family, and instead to “get a nice apartment for mzungu.” I even got an email today from the U.S. Embassy warning foreigners against living in unguarded homes and taking taxis and dala-dalas for transport because they are “frequently overcrowded, poorly maintained, a common site of petty theft, and [their] operation is generally unsafe.”

I don’t want to be reckless or unappreciative to those who are looking out for me–but here’s the honest truth: I love the local local. It’s not always easy, and much of the time it’s very hard. I’m on the edge of exhaustion, I’m sunburnt and hungry, but I am also supremely happy. I can get a mango or an avocado for 50 cents at the Mombasa market down the street. I can fight my way onto a dala-dala like any Tanzanian, and I’ve come to enjoy the nearly four hours I spend a day on those “overcrowded, poorly-maintained” vessels because they give me time to think, to listen, to watch, to become daily more a part of the world around me. Children shouting “Hello-madam-how-are-you-I-am-fine!” in one breath, sleeping outside on the porch during an afternoon rain, eating in the dark at one of the many small canteens around the city, perfecting the bucket shower, taking clean clothes down from the line, this is the local local. Friendliness, generosity, grit, patience, hope. These are the local local.

I am learning hard lessons the easy way. That is, I am doing something I love, that I believe in, and for that reason it is worth every moment of sweaty, dust-caked fatigue, of anger at the world’s injustices, of fear that change is hard to come by. I’m living for a while a faint imitation of what millions live every day, for their entire lives. And what I’ve found is that poverty is cruel, but human dignity, ingenuity, and heart are persistent, unafraid. This gives me hope, conviction, and a fierce pride in how strong people can be despite their circumstances. So here’s to that strength. Here’s to the local local.

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Rebecca Corey is a Kiva Fellow in Dar es Salaam with Tujijenge Tanzania, Ltd. See Tujijenge’s currently fundraising loans here, and join the Tujijenge lending team! Also, remember that the holiday season is coming up, and Kiva.org gift certificates make wonderful presents!

Me and the other Africa-based Kiva Fellows (photo provided by John Briggs)

By Taylor Akin, KF9, Togo

In the months of preparation leading up to my Kiva Fellowship in Lomé, Togo I have had plenty of opportunity to practice my take on the taxicab test – a concise explanation of Kiva’s mission and the work of a Kiva Fellow. Upon completing my training at Kiva Headquarters in San Francisco, I felt confident in my ability to accurately explain Kiva’s approach to microfinance to a relatively neutral audience. More often than not, I encountered the disinterested but common eyes-glazed-over look immediately following the words “non-profit.” To be sure, anyone who has ever gone to the developing world to do anything other than build schools has faced this problem.

While we learned the many ways in which to defend Kiva, there was one area where our taxicab test fell short: defending our host countries. It had not really occurred to me that I would be put in the position of having to justify a five-month trip to the continent of Africa. Yet, I rarely got beyond “I’m going to Togo” before being hit with a surprising amount of ignorance, miseducation, and prejudice.

At first, the most common responses seemed innocent enough. They generally fell along the lines of cautionary warnings like “be careful,” “watch out for the lions,” and “it’s not safe there like it is here.” At other times, comedy was the vessel through which this prejudice was revealed. One co-worker recently asked me when I leave “for the jungle to visit Tarzan” despite my repeated explanations that I’ll be based in a bustling capital city.  Finally, there are the truly shocking remarks. About a week ago, a co-worker warned me to “be careful in Africa because the people there are like animals, not real men.”

I was horrified. And worst of all, I was rendered speechless. As a student of International Development Studies, I spent the last four years learning to take the African continent’s diversity of history, language, politics, and culture for granted. I had also learned to question colonial accounts of these diverse nations and expose any hidden biases. Yet, this prejudice encountered in my workplace was nowhere near subtle. Instead, it was so blatant that I had no idea how to even begin to respond.

To be sure, the prejudiced comments I encountered are certainly not limited to Africa. Before embarking on an independent trip to Ecuador 3 years ago, one friend of the family deemed it fit to summarize my 6-week experience as nothing more than “squatting in a bush.” Even my family in England is quick to label the entire North American continent as having one identity.

Yet, the ignorance towards Africa has certainly been astounding. Most commonly, Africa is reduced and homogenized into a single geographic region where specificities do not exist. As a result, my trip to Togo is consistently referred to as my trip to “Africa.” (Nevermind the fact that this one continent is home to 57 independent countries!)  Moreover, this homogenization is often coupled with a negative descriptor – poor, underdeveloped, dangerous, tribal, etc.

Africa is somehow…different.

While these comments may primarily reflect the specific views of a few colleagues, this single story of Africa – one of danger and underdevelopment – persists in a broader context.  In her lecture on Ted.com, Nigerian novelist Chimamanda Adichie discusses this concept of the single story in greater detail. She argues that we are consistently exposed to many versions of one single story that is meant to serve as an accurate description of the entire continent. While this story may take several shapes (an AIDS orphan on an infomercial, a tyrant dictator on the news, or an imprisoned diamond-miner in a Leonardo DiCaprio movie), the overaching theme is always one of sadness, turmoil, death, and struggle. As Adichie clarifies, many interpretations of this single story are true, but they do not tell the wholestory. As an alternative, we need to be exposed to a variety of African stories – good and bad and all true.

Despite these frustrations, I try to stay positive. I do my best to focus on the few co-workers who will listen long enough for me to explain microfinance, and the friends who are genuinely interested in the work I will be doing. Sometimes, all it takes is the simple response “Oh! That sounds cool” to brighten my day. While I’ve certainly had to alter the taxicab-test to incorporate a justification of travelling to West Africa, it has definitely given me some perspective. It is important to remember that my audience will rarely be neutral. Instead, many people have very strong opinions about what it means to be poor, how banks should work, and what Africa is like. The preparation for this Fellowship alone has presented me with challenges both intellectual and emotional, yet I look forward to the experiences I will have once I truly am in “Africa.”

Taylor Akin is  a member of KF9 who will be working with Women and Associations for Gain both Economic and Social (WAGES) in Lomé, Togo. To lend to a WAGES entrepreneur, click here. To learn more about WAGES, please click here.

By Mohammed Al-Shawaf, KF9 Palestine

Recently, Kiva’s been engulfed in controversy over how it presents its Person-to-Person lending platform–a convenient shorthand for the reality on the ground or a more draconian attempt to mislead the casual lender?  I will not weigh in on this specific debate because there is already a rich dialogue that has taken place. However, I have noticed that a theme in some of the posts and responses has been to lament the limitations of P2P lending today.  

In this equation, the microfinance institutions (MFIs) servicing the loans have been regarded as indispensable, but still undesirable middlemen between Kiva lenders and borrowers.  I can’t fault that view.  On the Kiva website, MFIs have partner pages that explain their missions.  But Kiva, above all, is a place that connects people and only in borrower and lender profiles can you learn what motivates individuals to engage in microfinance.

With that in mind, I asked employees at Ryada, the MFI I’m working with in Palestine, to finish the following prompt:  I work in microfinance because…

Note that responses from the four branches have been translated from Arabic to English (thanks, Dad) and that the answers are more specific to why they work at Ryada.  Nevertheless, I hope this brings about a deeper understanding of the people often forgot about in discussions of Person-to-Person lending.

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“I want to help the poor.  I want to help the Palestinian people.” Lina Nasr, Admin Assistant, Ryada HQ

“’Microfinance is not a magic ticket out of poverty, but it can help both the loan receiver as well as the loan giver. ‘” Anonymous

“It is the tool for ending poverty.” Alaa Sisalem, Program Director, Ryada HQ

“I love it.” Reem Al-Sheikh, Kiva Coordinator, Ryada HQ

“Micro Finance is a major tool in poverty alleviation, helps in improving the living conditions for the low income people. It also protects the poor by providing them with diversified service they will never be able to afford through any other alternatives such as micro insurance . I love to see a smile on the faces of these needy people who really reached a point they think they lost the hope of everything , the doors are closed in front of them and you support them to continue their dreams and to proof that everybody has the right to dream and have hope.”  Izz Tawil, Operations Manager, Ryada HQ

“For 9 years, I worked in different areas, mostly at NGOs.  They play an important role in helping people, specifically when there is a crisis or the individuals are very poor.  But there is a need for microfinance in our society—it is a sustainable sector that also has a social agenda.”  Nadin Zaghal, Finance & Administration Manager, Ryada HQ

“To improve my income and my family’s income.  I also see it as a successful institution that can guarantee me good and sustainable income.” Hasan Abdat, Loan Officer, Nablus

“[Ryada is] a successful program that provides dignified living and work stability and/or continuation.” Sawsan Azem, Admin Assistant, Nablus

“When an individual successfully performs a job and continues with it , that individual has complete confidence in that work and its goals and it’s banner. I’m totally convinced in Ryada’s goals, where I have been working for the past 5 years, because of its humanitarian and social services.

Theses goals and/or services are providing middle and lower income families opportunities to improve their standard of living and providing better housing and/or new housing via the loan programs.

Also the loans that provide for [business] developments at the same time enhance personal income and with that we can participate in improving the economic condition of our society.

Hard, united work and our perseverance kept us going despite all the circumstances that we went through and our ability to persevere and move forward regardless of it all was an incentive to continue work and improve on it.

Good admin support, and the support that team members give to each other which resemble a united family are important reasons which strengthened our ties to the organization, and contribute to our continuity and improvements.” Alaa Dbari, Site Engineer, Gaza

“To achieve a dignified life for me and my family.  To help families and small business people  to improve their lives.  To have a distinctive role in developing peoples’ lives and their working conditions.  To explore and expand peoples’ experiences and abilities in projects that will pay back in benefits to them and the society.” Yousef Abu Assida, Loan Officer, Nablus branch

“To provide services to the society with regard to projects, housing and others.  To improve conditions.” Gaza branch

“It’s a job I held before.  To improve my financial condition.” Suhair Atari, Admin Assistant, Jenin Branch

“It’s a credible organization with good reputation.  I’m proud to be a part of it. I hope that I can bare the responsibilities put on me and provide my services to the organization.  Ryada gave us a lot and we are obligated to give back to it what we can.” Ramallah branch

“To achieve Ryada’s goals. We aspire to be a well known organization in the market.  To bring financial sustainment to its workers.” Ali Thekri, Branch Manager, Ramallah branch

“1- It serves the Palestinian local society and contributes to its development.

2- It has a long history and service in Palestine.

3- It contributes in reducing high unemployment via borrowers loans.  A place to find work (at Ryada).

4- Contributed in solving part of the housing problem in Palestine. 

5- The internal polices of the institution is fixable and can be changed and improved according to the general situation of the Palestinians.

6- It will be transformed to a Palestinian institution.” Nabil Khyal, Loan Officer, Gaza branch

“When I first started working I did not know the organization,  just like any other member in our society.  Now I’m very proud to be part of it.  Ryada expanded and developed with time and kept on going despite all challenges.  Ryada faced difficulties and stood fast and now it’s a Palestinian institute that achieved what many other institutions failed to achieve. We grew up with it and now it’s part of our life. We give to it and it gives back to us.  

I’m proud to belong to this kind of an institute. For me personally, this is not just talk, I belong to Ryada which is a pioneering institute in every aspect.” Tulkarem branch

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Join the lending team Palestine and help us reach the 100 member mark by year’s end!

Follow Mohammed’s experiences in Palestine on Twitter @moshawaf

Mohammed Al-Shawaf is serving as a Kiva Fellow with Ryada and FATEN, two new field partners based in Ramallah (West Bank).

By Prem Thomas, KF9, Philippines

Yesterday I took a trip to a CCT Kiva branch located in Caloocan, about 2 hours north of the head office in Manila. CCT offices often have inspirational posters and signs, but I thought this one was very relevant to Kiva.

Kiva lenders have good character: “They lend money to those in need without interest.”

Here are links to updates on some of the borrowers in Caloocan that have benefited from Kiva loans:

Teresa Barola: video game arcade owner

Genie Tabarangao: sari-sari (general) store owner

Gloria Espayos: news and spice stand operator

Prem Thomas is serving as a Kiva Fellow working with the new field partner Center for Community Transformation Credit Cooperative (CCT) in Manila, Philippines.

To view currently fundraising loans from CCT click here.

You can also join our new lending team here.

By Mohammed Al-Shawaf, KF9 Palestine

Before proceeding, let me first state that this is not a political blog.  I neither have the expertise nor desire to engage in the complex web of conflict–latent or otherwise–that surrounds the major events of the last decade in Palestine.  I will attempt to reference and explain only the events that help me tell the story of the resiliency of the Palestinian microfinance sector and in particular, of Ryada.  I implore those interested in learning more to do just that.  Although it requires a bit of fiddling around, the Google News Timeline is a fine tool that allows you to view major news headlines filtered by keywords and timeframes.

When I was 3, Hurricane Hugo wreaked havoc throughout the Southeast region, enveloping my hometown of Charlotte, NC in its wake.  I can even recall a picture of myself standing next to the shriveled stump of what was once a broad, formidable tree that overlooked my grandma’s house.

Lately, I’ve been thinking about contingency planning. I can’t remember what my family did in anticipation of that storm, but I’m sure it was something.  For homes chronically threatened by hurricane season, preparatory measures are often taken: supply kits are filled, windows are reinforced and sandbags are at the ready.  But what would happen if these homes were just as likely to succumb to blazing fires as they were to hurricane flooding? What if it instead of a natural disaster, a plague swept through the region?  What about a war?

Welcome to Palestinian microfinance where contingency plans are made for crises unimagined.

The disaster preparedness metaphor stems from a talk I had with Izz Tawil, Operations Manager of Ryada.  Izz has worked in microfinance for over 14 years and started in the industry as a loan officer.  During one of our many eye-opening talks, he spoke about the difficulty in planning for a “worst case scenario” because it would presume that he (or anyone else in the industry for that matter) knew what that scenario would look like.

“There’s always a different crisis that arises here and each time it’s new, so you can’t plan for it.  [Over the last decade it's been the] crisis of intifada, then of a new government, then of the salary crisis [as a result of the new government], then Hamas’ takeover in Gaza, then the Gaza war…”

Sector-specific data is hard to come by for this entire period.  But in 2005, the Palestinian Network for Small and Microfinance (Sharakeh) began publishing industry-wide figures that show the extraordinary effect one of these crises–the salary freeze across Palestinian Authority (PA) employees–had on the industry and economy as a whole. 

Following Hamas’ win in parliamentary elections across the West Bank and Gaza in January 2006, western aid to the PA was largely halted.  The freezing of these revenues streams, which previously flowed from the PA’s coffers to the salaries of its 165,000 employees meant that roughly 30% of Palestinians were no longer receiving paychecks.

Although that number in itself is shocking, it is only tells part of the story.  To make the effect of the crisis clear to me, Izz sketched a rudimentary diagram of the Palestinian economy (reproduced below).

"Closed Cash Circle" During Salary Freeze ('06-'07)

Izz refers to the economy as a “closed cash circle” where sectors rely on each other’s transactions for survival.  Although outside revenue streams exist, they are few and very specific.  Traditional revenue generators like tourism and exports are non-factors. Instead, it’s aid and to a lesser extent, remittances from Palestinians living abroad and sending money back to their families.

When the new government was elected, the “aid” spigot went dry.  But political pressure was also placed on banks to stop transferring money into the country.  So turn off the “remittances” stream as well.  The Palestinian economy was now truly a “closed cash circle.”

But as gloomy as this scenario sounds, shouldn’t microfinance, a sector that touts private enterprise and “bottom-up” development, be the one bright spot in this economic malaise?

Recall that if you worked in the government– nearly 1 in 3 Palestinians–you no longer had an income.  The effect on the microfinance sector from this vantage point is direct and unmistakable.  If you had a home improvement loan (from Ryada or any other MFI), monthly payments weren’t anywhere near the top of your priorities.

The indirect effect is less obvious, but no less significant.  Family bonds play an important role in Palestinian life.  So if you could count yourself as fortunate enough to still be receiving an income–in the form of a private salary or as a small business owner–you were obliged to help your brother or your sister or your cousin or any family member less fortunate than you get through the crisis.

To illustrate this case, let’s say you owned a retail store that sold cosmetic products. You took out a loan to diversify your product offerings and purchased higher-priced imports.  Once the freeze hit, your brother lost his salary so your disposable income went to support him and his family.  From a business perspective, you also lost 1/3 of your market.  And as for the remainder–those still earning an income from the private sector–they’re facing the same economic conundrum you are.  So what about that loan?

PAR value, or Portfolio at Risk, is one of  the most popular statistics in judging the portfolio quality and performance of microfinance institutions.  The microfinance policy center at the World Bank, CGAP, states that a PAR 30 (meaning the portion of the MFI’s portfolio whose payments are more than 30 days past due) “above 5 or 10% is a sign of trouble…[because] high delinquency makes financial sustainability impossible for an institution.  

In 2006, the Palestinian microfinance sector’s PAR 30 was 47%.

How did it rebound?  And what planning, if any, is being done to mitigate the next crisis?  Stay tuned.

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Join the lending team Palestine and help us reach the 100 member mark by year’s end!

Follow Mohammed’s experiences in Palestine on Twitter @moshawaf

Mohammed Al-Shawaf is serving as a Kiva Fellow with Ryada and FATEN, two new field partners based in Ramallah (West Bank).

By Zal Bilimoria, KF9, Ecuador

Over the past four weeks here in Ecuador, I’ve had the opportunity to see much of the country, starting out in Quito working at Fundacion ESPOIR’s administrative office, and now in Portoviejo near the coast to conduct borrower verifications and write journal updates, among other tasks.  Since Ecuador is a relatively small country (roughly the size of Nevada), it’s easy to travel by plane or bus, usually within 4-6 hours to most major cities. This past weekend Kiva Fellow Kimia Raafat and I made our way to Cuenca for the long holiday weekend, where Dia de los Muertos (“Day of the Dead”) and Cuenca’s Independence Day were being observed. Day of the Dead (this past Monday, Nov 2) is a time of remembrance of loved ones who have passed away and a celebration of their lives (no connection to Halloween), while their Independence Day (Tuesday, Nov 3) marked Cuenca’s liberation from the Spanish Empire nearly 200 years ago. Easily the best weekend yet and the most beautiful city in Ecuador, in my opinion.

Enjoy this video montage of our Cuenca-stic weekend!

Zal Bilimoria is a Kiva Fellow based in Ecuador working for Fundacion ESPOIR. Consider making a loan to the working poor of this South American country.

By Kimia Raafat, KF9 Ecuador

Last week, I blogged about D-MIRO’s influence in the peri-urban zones of Guayaquil.  There is no way to describe the dedicated D-MIRO staff members and the lengths they go to reach those marginalized from the traditional financial system. So I opted to film a sample day! Here is “My Motorcycle Diary”:

Fun Facts about Ecuador:

1. Ecuador’s currency is the US dollar.  In 2000, Ecuador discontinued their 116-year-old currency (the sucre) in order to ”rein in runaway inflation, encourage investment and reverse capital flight”.  Many locals were unhappy about the switch.  The current president, Presidente Correa was a critic of dollarization, but he acknowledges that it would be more harmful to the economy to change back to the sucre. 
2. Until it rains in Cuenca, there are mandatory power outages in Ecuador!  Guayaquil (the city I am working in) currently has power outages everyday from 7 to 11 AM and from 1 pm to 4 pm (luckily D-MIRO has a generator!).  Each zone in the country has similarly scheduled power outages.  This will continue until it rains near Cuenca (a city 150 miles away from Guayaquil).  The dam near Cuenca (“Represa Hidroeléctrica Daniel Palacios”) is responsible for generating the majority of Ecuador’s hydroelectricity. 
3.  Fingerprint identification is preffered.  Many organizations (including D-MIRO) ask hourly employees to clock-in to work using their finger print (see minute 0:43 of video)
4. You never have to think  about what to wear to work.  Ecuador’s labor laws state that all businesses must have a uniform for their employees.  During the lunch hour, groups of co-workers dine together in coordinated business wear.  I have 3 of D-MIRO’s uniform polos!
5. Ecuadorians have major karoake skills.  Rather than coffee shops on every corner, there are karoake bars everywhere!   There are no stages, everyone remains seated at their table while the restaurant manager passes along the microphone. Karoake is an actual art form, the country is filled with potential “American Idol” talent.
6. Smile, you are on camera! The Guayaquil airport has an employee dedicated to filming every person entering the country from an international destination!  When departing Guayaquil’s “terminal terrestre”, the secure bus companies also have employees that walk around filming each passenger.

Kimia Raafat is a Kiva Fellow (KF9) at a new Kiva partner, D-MIRO  in Guayaquil, Ecuador.  If you would like to know more about D-MIRO please visit the Partner page or Lend!