India Training Sessions - Part 1

From tigers prowling through the lush green forests to nomadic tribal groups traipsing through desert plains, India is a land of diversity. Cities of wealth created by information technology (IT) giants and colossal call centers juxtapose slums full of oppression and brutality, recently highlighted in Academy Award Winner, Slumdog Millionaire. In the midst of this billowing economy and rampant poverty are Christian entrepreneurs, seeking to serve God through their professional skills and faith-centered passions.

“No one has ever created a network of Christian business professionals in this country,” stated Michael Brian, Founder of Expera India, a staffing and resource company spanning six large south India cities. Looking to fill this hole, Partnership Facilitator for Partners Worldwide, Greg Matney, recently traveled to this land of contrasts, and hosted business training conferences for hundreds of Christian entrepreneurs in three separate venues. Christians gathered for several days and shared thoughts on Vision/Mission/Values, Business Planning, Business Finances, and how to recruit members for this emerging International Business Affiliate. From the border city of Calcutta to Jabalpur in the heart of India, many shared the same news – There is a lack of training material on Business as Mission, Financing, Accounting, and Marketing. Further, there are no North American partners to walk-alongside and inspire their potential.

“I have been to spiritual seminars and workshops for nearly forty years, and this is the first time we’ve talked about business,” a Pastor looking to start a silk-making factory in central India mentioned. In this training conference, 80 entrepreneurs gathered from 10 regions to discuss how Christians can collaborate in business. Many shared that the intense persecution facing many Christian in the country could subside if the Christian business community made their mark on this ‘tiger economy.’

In order to do so effectively, they are seeking partnerships through Partners Worldwide. This network could quickly expand into a nationwide movement of Christians, if God brings the people with the experiences and passions that will complement these efforts! Nutraceuticals, silk-making, human resources, handicrafts, construction – the list of sectors these Indian Christians need partners for goes on and on!

Please consider working in partnership with Christians in India. You can help the Christian community realize their potential in this growing economy, and at the same time, empower them against intense persecution!

Partners Worldwide India Strategy

A little over a month ago, I arrived in India for the fourth time in my life. The first third trips are full of rich personal memories - with my first trip being to pursue a relationship with Abhineeta, the second to ask for her hand in marriage, and the third was for our wedding. While this fourth trip does not represent any significant personal milestone, it is quite exciting for other reasons. Over the course of 8 weeks, I will be meeting with business and organizational leaders across the country, and assessing how Partners Worldwide can best support the work of entrepreneurs here in India.

To do this effectively, I have chosen target cities to extend my efforts. In these cities, I will be identifying three types of entrepreneurs, who demand three separate types of services. In Bangalore, Delhi, and Hyderabad, I will be identifying the High Impact Entrepreneurs (HIE's). These are the individuals that have needs in excess of $100k for capital, and can or have employed over 100 people. The HIE's will be the engine that drives any Partners Worldwide in associations in India.

Next, I will strategically seek out Small and Medium enterprises (SME's) to join our association. These individuals will come from Calcutta, Jabalpur, and Damoh. An SME also coined "the missing middle' are businesses whose needs have outgrown the traditional microfinance sector, yet these needs are not yet at the capacity to approach a formal banking institution. SME's need strong attention -coaching, mentoring, capital, and training - to lift their business out of the micro level (usually characterized by no legal registration, and no employees outside of one's family), and grow their business to a large competitive player in their city/region. Additionally, Partners Worldwide will target microentrepreneurs from these same 3 cities.

Why target all 3 groups? To establish a culture of mentoring and information-exchange, you have to have businesspeople spanning the spectrum. If facilitated correcty, this can form a dynamic network that resources each other for professional and personal encouragement, specific training, and general business knowledge.

Let the journey begin!

My Last 9 Months

I noticed it has been an exceptionally long time since my last update. Since that point in time, quite a bit has happened in my life - most notably, I got married to the woman of my dreams, Abhineeta Elizabeth Lall (now Matney). Our journey is one for the history books, and our life together just begun!

In May, I traveled to India to be with my fiancee at the wedding of her sister, Lashi Lall, and her fiancee, Josh Howard. Their wedding was an incredible celebration, an extravagant outdoor gathering of thousands of people, with brilliant colors, traditional clothing, Bollywood music and dancing, and spicy food. There were said to be 5,000 people in attendance, and nearly each one came to greet Lashi and Josh in a procession-line during the reception.

In June, my family and close friends traveled to India to take part in my special day with Abhineeta. It was a whirlwind of a 10 day trip, starting in Delhi, continuing on to central India - where we had many celebrations at Abhineeta's family's hometown -continued on to Agra to see the Taj Mahal, and completed back in Delhi for the wedding celebration. Unlike Lashi and Josh's celebration, ours was a more intimate gathering of 200 or so people, at the luxurious Taj Mahal Hotel in New Delhi. The ceremony was everything that both of us ever hoped for, Abhineeta walking down the aisle to the Love Theme of Zeffirelli's Romeo and Juliet, my brother and closest friends standing with me - and our exchange of vows to each other in the midst of those that brought us this point in our lives. From our wedding, we traveled back to the United States via Europe - where we had the Honeymoon of a lifetime, a cruise through Spain, Italy, and France.

From our honeymoon, we continued on to Michigan, where we continue to live, study, work, and worship. The past 8 months of marriage have been extremely rewarding, and a time of learning and growing. We thank our family and friends for their friendship and support through all of our life's excitements!

Tumendak Crafts - Philippines Series

All over the world, there are amazing products. Ornate little trinkets, hand stitched shoes, woven tapestry, masks, picture frames, any and everything you can think of. Beautiful items but no market to appreciate them. That is the problem with the developing world. Where else could you buy a hand painted beautiful piece for $20? (except if yours truly put his art in an art shows, I probably couldn't get half of that price...). Is this because a painting from Haiti or the Philippines or Kenya is intrinsically inferior? Absolutely not. Its simply the challenge of a saturated market.

There are nice things, even amazing products everywhere, but in order for hand crafted products to stand out, they have to be exceptional in quality and design. Tumendak Products in the Philippines are one such exception.

When I met Joji, Owner of Tumendak, at her factory on the island of Bacolod in the Philippines, I was immediately impressed. Joji is an integral member of E-BEST's Bacolod Chapter.

Furniture pieces, tables, everything hand crafted, and beautiful. For one of the first times in all of my travels, I believed that this piece could sell itself, it did not have to persuade one's philanthropic side to "support the small entrepreneurs in the Philippines by buying a hand crafted, fair traded, ______". A Tumendak picture frame, business card holder, and letter holder sit on my desk.



Please view the pieces that Joji creates, and let me know if you are interested in purchasing any of them! Joji has an excellent product and design team, but Tumendak needs assistance in creating a catalog and a high profile website to showcase their home products. If you or someone you know are interested in working with Joji, please contact info@partnersworldwide.org

A Whole New E-Best - Philippines Series

I'm continuing on with my series of writings from my experiences around the world. From February 19 to February 27, I was in the Philippines, visiting our partner organization, E-Best (e-bestph.com).

The purpose of the visit was to revitalize E-Best as an organization. One of our North American Affiliates*, Paul Holwerda, traveled with me to the Philippines. We visited several businesses, and had a two day summit meeting, where we brought some of the E-Best businespeople together.

Instead of retelling a story that has already been told, I'm going to post the story which was in our most recent Spring 08 Newsletter. Enjoy!

*NAA, this is the term we use instead of 'volunteer' to promote that our partnership mentality. Thus, our overseas counterpart is not a 'recipient' but truly a partner, which we call the In-Country Business Affiliate (ICBA).















Partnerships
A Distressed Philippine Affiliate Finds Hope for a Promising Future
Many businesses in developing countries struggle to find affordable access to capital. eBEST, a Partners Worldwide Philippine affiliate, developed an exceptional lending model which increased access to capital for small businesses to grow. eBEST had excellent repayment rates on its loans, grew in membership and created hundreds of jobs—a near perfect business model. Over the past year, Partners Worldwide has seen a troubled eBEST decline due to financial improprieties on the behalf of one member who is no longer with the organization. The future of eBEST did not look good.

Paul Holwerda, Partners Worldwide voluntary Team Leader, and Partnership Facilitator Greg Matney traveled to the Philippines in February to more closely assess eBEST’s status, hoping to discern whether the group of committed members desired to revive the organization. "Our meetings were not always positive, and at times the ‘heart-to-heart’ discussions were hard to process for certain individuals. The picture posed by a legal attorney and financial auditor outlined a dire situation, even offering us the option of walking away," reported Matney.

"However, through continued meetings in Bacolod and the Summit Meeting in Los Banos, we found hope. As one devoted member stated, ‘I know there is light at the end of the tunnel for eBEST.’ "

"I was extremely encouraged by the outcome, and it looks like eBEST has a promising future." Paul Holwerda

After days of healthy and positive discussion, the committed eBEST members decided to form a new board, register as a cooperative that can perform the functions of saving and lending, and work toward restoring the business development fund for its depositors and lenders. "We had twenty-five member businesses sign on to form the new eBEST, and I’m confident more will come. Ruel Luna, the new Operations Officer, is an outstanding individual with strong integrity," commented Holwerda, the Partners Worldwide Team Leader. "I was extremely encouraged by the outcome, and by God’s grace eBEST will once again become an important business organization making a difference by creating jobs in the Philippines."

Cambodia Fellowship Gathering, April 19

Myself with Congressman Pete Hoekstra, Ranking Republican Member of the House Intelligence Committee

After my most recent trip to Asia, I was asked to present at an annual New Years Celebration gathering of Cambodians living in western Michigan. The event brought together hundreds of Cambodians, from those that have been in the United States for years, to those who immigrated just a month ago!

The evening was full of fun, traditional dances, great food, lively music, and insightful presentations!

I was one of three speakers at the event. The first speaker was Congressman Pete Hoekstra. Congressman Hoekstra has served since 1992, and is now the Ranking Member of the Intelligence Committee. I had the opportunity to share with Pete about Partners Worldwide's work in Kenya and Haiti. His brother is one of our volunteers in Kenya, which allowed us to have a good discussion on the recent instability in the nation. Pete mentioned to me that it is challenging to regain civility and stability in a country, once it has been lost. I was encouraged to hear that he had been spending a good amount of time researching on Kenya, and their current situation. For more information on Congressman Hoekstra, see http://en.wikipedia.org/wiki/Pete_Hoekstra.

The second speaker was Professor Leonard De Rooy from Calvin College. Professor De Rooy spoke about Calvin College's involvement with a Christian university in Cambodia. Calvin sends a group of students every January to explore Cambodia, and work on planning the university.

I was the last speaker, and I spoke after an amazing meal of traditional Cambodian food! I shared my personal experience in Cambodia, as well as my assessment of the business environments. Lastly, I shared on the opportunities for involvement in our work in Cambodia.
I was encouraged to have several Cambodians and Americans come up to me afterwards and express their interest in either traveling to Cambodia with our organization, intern with our organization, or form a church partnership with Partners Worldwide!

Chicago Microfinance Conference, April 18

On Friday, I attended the Chicago Microfinance Conference at the University of Chicago Gleacher Center, located magnificently on Michigan Avenue, just off of the Chicago River.
http://www.chicagomicrofinance.com/

The topic of the conference was Competition and Collaboration, and the purpose of the gathering is to "bring together practitioners, academics and emerging industry leaders to advance the strategic debate of the future of microfinance." The organization was represented by reputable universities:

Kellogg School of Management, UCLA, University of North Carolina, University of Chicago IRIS Center - University of Maryland

Think Tanks and Policy Groups:
The Mix, Boulder Institute of Microfinance

Some of the world's largest organizations that implement and financially support microfinance around the world:

Grameen Foundation, Opportunity International, ACCION International, ShoreBank, Green Microfinance, International Finance Corporation, Blue Orchard

You may be surprised that Morgan Stanley, Oracle, AIG, IBM, and other global corporations were in attendance. Why, you may ask, thats exactly what I'd like to try and explain. Before I begin, though, I'd like to inform my readers on some terminology that I've found commonplace in discussions on microfinance and global development.

Terms:

The Bottom of the Pyramid
http://en.wikipedia.org/wiki/Bottom_of_the_pyramid
In economics, the bottom of the pyramid is the largest, but poorest socio-economic group. In global terms, this is the four billion people who live on less than $2 per day, typically in developing countries. The phrase “bottom of the pyramid” is used in particular by people developing new models of doing business that deliberately target that demographic, often using new technology.

Social Entrepreneur
http://en.wikipedia.org/wiki/Social_entrepreneurship
Someone who recognizes a social problem and uses entrepreneurialship principles to organize, create, and manage a venture to make social change... A social entrepreneur assesses success in terms of the impact s/he has on society. While social entrepreneurs often work through nonprofits and citizen groups, many work in the private and governmental sectors.

Patient Capital
http://www.sustainabilitydictionary.com/p/patient_capital.php
Investment strategies that provide social and environmental returns in addition to financial returns with an emphasis on returns over the long-term. While a longer investment horizon and/or a smaller financial return may be inherent in individual patient capital investments, neither of these conditions are required of patient capital investments.

Philanthrocapitalism
http://www.alliancemagazine.org/free/html/mar07e.html
It is a new way of doing philanthropy, which mirrors the way that business is done in the for-profit capitalist world.

Moving forward, allow me to explain what is happening with the microfinance industry, the challenges, and the opportunities.

The microfinance industry has been said to have a demand of $300 Billion dollars, and during the conference one speaker said that that estimate was understated. There is not a $300B supply; there is not a fraction of that. Its not interesting, though, to acknowledge that we're not meeting that demand, but what is interesting is seeing who the new players are. Yes - Morgan Stanley and AIG are interested in microfinance. There is a growing interest in banks, hedge funds, and equity groups to invest in the bottom of the pyramid. The reason is not simply to "do good", but equally, to make a profit. Unfortunately in microfinance, there is not a massive fortune to reap, but meager returns. Corporations and organizations have stated a 5% (at best) return after the cost of operations. What is the largest issue facing microfinancing today? Scaling up.

Small banks in developing countries simply cannot make enough $100 loans to cover their cost of operations, and ensure a profit that cause global financial institutions take notice. There are two logical answers to reducing the cost per transaction, either make fewer, larger transactions OR scale up. Since microfinance is in one sense a philanthropic effort, and in another a capitalistic one (see: philanthrocapitalism), the first option of making larger loans may not be adequate. The reason being that if an MFI (microfinance institution) gives larger loans, then in one sense, they become a bank, they are no longer serving the "poorest of the poor." In my opinion, that is not an issue, banks giving loans of $1,000-$5,000 instead of $100-$500 are growing with their entrepreneurs, and hopefully with the country at large. I would rather see MFI's graduate to banks, and make room for new MFI's, than MFI's stay MFI's and graduate their entrepreneurs to banks. BUT - since not all are along the same mindset, then our only option is to "scale up."

Scaling up is the concept that encompasses C.K. Prahalad's "Fortune at the Bottom of the Pyramid." This is the hope for the developing world - that their microfinance institutions, their business can amass a large enough customer base that sustains their operations. It is definitely the minority of MFI's that have achieved this scale, but those that have the scale and the reporting systems in place can now approach large Western investors.

The future of the microfinance industry is still uncertain, but it is my hope that more Western investors will be attracted, for both the financial and social gains. If you forget the social gains, you are a bank. If you forget the financial gains, you are a not-for-profit, and not sustainable. Microfinance must live at the nexus between the two.

Popsicles for Sale

If I told you I met with woman in Port au Prince, Haiti that sold popsicles out of her home, what would you have in mind?

Was it a woman with her children, carrying large buckets of water, mixing food colored sugar water, pouring the concoction into ice-cube trays, plopping a wooden stick in the end, and throwing them into a freezer? If so - we were both wrong....very wrong.

Imagine this.

The break of dawn, 600 women and men crowding a home with empty coolers, shoving, and pushing to get to the front of the line - almost as if Bono was on stage.

The vendors know that they won't get all the popsicles they want, but they know they'll sell all that they can purchase from the 'popsicle lady', Madam LeFevre.




















You would do this to if you received 40% commission.

Imagine this.

100,000 popsicles per day. 2 water process treatment systems. 14 HUGE freezers. One 225 Kilowatt Generator and one 300 Kilowatt Generator that guzzles 140 gallons of fuel (at $6 a gallon) every day.










This place was incredible. Still operating at of her home, Madam LeFevre's 'popsicle stand' was busting at the seems. Men operated a basic packaging tool that heated and sealed the liquid into tubes at a rate of 2 per second. Others stirred oars in tubs or salt water to freeze the popsicles faster. "If this heating and sealing of the tubes could be twice as fast, we could sell twice as many," I was told by the entrepreneur that started this venture.

She has the market.

Now she needs to find out how to sustain it. Her raw materials come from the Dominican Republic, her machinery cannot be found in Haiti. Running generators as she does, 24 hours a day, calls for incessant repairs. Madam LeFevre knows that if she starts another factory, it will be successful, the only thing she needs is capital. If this business modernizes their production system, and finds the necessary equipment, they will be a huge market force in Haiti.

Do you or does someone you know have the expertise to help? Find out more by emailing info@partnersworldwide.org.

Compassionate Banking - Haiti Series

Is there such a thing as compassionate banking? And if so, what does it mean? Does it mean that you get warm chocolate chip cookies with your loan? Or does it mean that instead of someone threatening to break your legs for not repaying, they will just pat your back, and ask you to 'try harder next time'? Or does it mean that instead of giving you the country's average interest rate of 36% per year, they lower it to 12?

Apart from the cookies, I do struggle with the answer to these questions. What does it mean to be a Christian, in banking, or as we call in smaller countries, microfinance? I find this interesting because my belief has actually changed in the past year.

During my time in Kenya, I thought that the answer to being compassionate was absolutely in charging a lower interest rate. Instead of charging the high, 'usurious' rates that keep a poor country poor, a compassionate financier would charge only a fraction of the rate. It was during my trip to Haiti that this notion was strongly questioned.

"Your organization better expect to be giving loans to many people for many of years, or you will spoil the market," I was told when I asked if Partners Worldwide should offer loans at 12% per annum, roughly 33 - 50% of the average microfinance loan.

Now, I understand. I understand that these rates are not always 'usurious', but they are high for a reason. Large multinational banks are now doing business with low income people in low income countries. I do not believe that these companies are evil for offering collateral-free loans at 36%, but rather they are correctly assessing their risks. See, compassion should never be a synonym for indolence, or the the lack of diligence. In order to intentionally choose to be compassionate, you need to first properly asses the risk. Second, you need to make the conscious decision to act in disregard to the market. Third, you need to weigh the cost of disrupting the market with the benefit of helping the individual entrepreneur. Then, and only then, can one compassionately choose to give a sub-market interest rate.

In Haiti, Partners Worldwide works through a microfinance partner, SKDE. SKDE has 509 members, and offers an interest rate that changes, depending on the type of business you do. This is an exemplary model, that I wish more microfinance groups would adopt.

If you are in the buying and selling industry - for example - you purchase 100 pound bags of rice - you break them into 5 20 pound bags of rice - you receive a loan at 3% per month or 36% per annum.

If you are in production - for example - you purchase material, dye, and thread - and you ADD VALUE to the raw materials by making clothing - you receive a loan at 2% per month.

Developing countries need producers, not traders. Buying and selling doesn't create wealth, it just changes whose hand the dollar is in. Production is where its at. Production changes economies.

This is a little bit of a time warp, because I'm writing about January 24, 2008, BUT, I was just recently planning to return to Haiti. I had to cancel my trip due to the current riots over rising food prices. When the President spoke to his people about what to do - he said -

''Subsidizing imported goods is not the solution,'' Préval told the people. ``Today, we are paying the price for more than 20 years of bad political decisions. I'd rather today, we subsidize national production.''

Both Préval supporters and critics voiced discontent at the lack of immediate action coming out of his speech. Many said it was long overdue and did not go far enough to quell the demands of protesters who have been calling for Préval's government to resign.

''It was time for him to speak about national production, but he did not speak about what he is going to do about tomorrow,'' said Pierre Leger, President of the Chamber of Commerce for the Southern Department, where protests first erupted last week.

Yes, production is where its at. Thats why Partners Worldwide partners with those in
value-added production business. As you have seen through my writings, though, and will continue to see, production in emerging economies may just be one of the hardest feats in the world to accomplish.

Ok, back to our main topic, then what is compassionate banking? I'll let you know when I find out...

Energy Drinks... Haiti Series

When I say Energy Drinks, what do you think of?
Most will probably think of Gatorade or Powerade.
A few of you will think of the more recent phenomenon of Red Bull, Monster, Rock Star, etc....

Would any of you think of wine?
In Haiti, wine is thought of as an energy drink of sorts. Our Haitian partner, Serge Ferris, has created Vigoro! A 12 ounce bottle of wine with a strong man flexing his muscles (that he obviously got from drinking his wine!). His wine (on the far left) closely resembles Campeon, a Dominican Republic favorite (middle). This less than $1 drink is a sugary wine that probably wouldn't be marketed to the fitness clubs in the US, but every market is different!

I asked Serge Ferris, what do you use to make your wine?

Whatever fruit is in season. Grapefruit, sugar cane, citrus fruits, etc...

Well - where to you get your bottles?

Wherever they are available. I'll have people collect them, and we'll recycle.

Where do you ferment your fruits and make your wine?

Just here, in my backyard.

Serge Ferris is another example of an extremely resourceful entrepreneur. He creates wines, spirits, but also has his hands in other projects like corrugated aluminum. Serge is looking for assistance in advice on Imports/Exports and Marketing/Branding of his product.

One of our business partners from the United States recently helped Ferris obtain information about putting bar codes on all of his products.




















If you would like more information on Serge, or you would like to offer your expertise, please contact info@partnersworldwide.org