Microlending philippines

microlending philippines

Kiva.org Fellow Sloane Berrent and Cause Based Microlending in the Philippines

BakitWhy.com was lucky enough to speak with Sloane Berrent regarding her work in the Philippines. Sloane is part of Kiva.org 's Fellowship program and is currently partnered with Ahon sa Hirap, Inc. helping people recieve small business resources through microlending.

Sloane Berrent was born and raised in Pittsburgh, PA and attended the University of Vermont where she received a B.A. in Political Science with a minor in Economics. Post-graduation Sloane worked at Ernst & Young in Boston, MA and then moved to Los Angeles where she worked first in fundraising and development and then in the technology sector at a startup that focused on Web 2.0 technologies to bring people together to support causes and nonprofits.

Sloane is also the Founder of Answer With Action, an LA-based organization that planned and executed volunteer and networking events for socially conscious young professionals as well as The Causemopolitan where she blogs about philanthropy, social entrepreneurship and how to live a cause-filled life. She was Lifestyle Editor of LAist from 2004-2008 and still blogs there in addition to SocialBrite.org. As a "philanthropy matchmaker" Sloane matches individuals and companies to causes. Sloane has spoken about social media for social good, community building and building online audiences and is honored to be a Kiva Fellow serving in the Philippines and diving into the world of microfinance.

Sloane Berrent with Ahon Sa Hirap, Inc. in the Philippines

Could you tell us a bit about KIVA and the world of Microfinance?

Kiva is the leading peer-to-peer based lending nonprofit. Started in 2005 by Jessica Jackley and Matt Flannery, Kiva is way for people to make a loan to an entrepreneur who is in poverty and helps them rise above. Kiva is just a cog in the multi-billion dollar industry that is microfinance and for anyone looking to learn more about microfinance and microlending, I definitely suggest starting with Kiva and seeing the process first-hand.

The main difference, as a supporter, is you’re making a LOAN not a donation (though donations are also accepted towards Kiva’s operating costs). What does this mean? You lend in $25 dollar increments to an Entrepreneur (“Borrower”) in a country in which Kiva has partnered with a Microfinance Institution (“MFI”) and that person receives a loan to help start to grow their business. The Borrower agrees to repay the loan over time and as a member of Kiva, you start to receive parts of your loan back until it is completely repaid. The loan term varies (25, 50, 100 weeks) so it takes time, but Kiva has a 99% repayment rate, which is extraordinary! You can then reinvest your loan into another Entrepreneur or withdraw your money (only a small percentage of people do this, as you’ll see it’s quite addictive)!

Kiva currently has Lenders in over 75 countries supporting Entrepreneurs in more than 50 countries with total loans since 2005 exceeding $75 million. A loan is made on Kiva every 16 seconds, and 99% of all loans on Kiva are funded every month. It’s an incredible model and the buzz and accolades Kiva has received, in my opinion, are well deserved.

Tell us about the Kiva Fellowship program.

The Kiva Fellowship is a 10-week unpaid opportunity to get partnered with a Microfinance Institution (MFI) and be the Kiva representative on the ground helping them with the day-to-say aspects of the partnership and also providing high-level support to the MFI executive staff and to Kiva. It’s highly competitive and I’ve been accepted to the 8th class. It’s truly a group of people that leave me in awe. Peace Corps alumni, economic development and community building, MBAs, hedge fund and management consultants, nonprofit industry folks, people from different countries and all dedicated to the power of microfinance and microlending in general and Kiva specifically. There are 25 people in my class and some Kiva Fellows who extend their stay in the field so at any given time there are about 45 Kiva Fellows in various countries including Kenya, Cambodia, Mongolia, Peru, Nigeria, the Philippines, etc. working with MFI partners.

I’ve been partnered with Ahon sa Hirap, Inc. (ASHI). It’s the oldest replica of the Grameen Bank approach to microlending in the Philippines with 20 branches in 4 provinces. I’ll be splitting my time between the Antique Province on Panay and Rizal on Luzon. The headquarters are in Quezon City, so I’ll also have a chance to explore Manila. Kiva had a mandatory 1-week training in San Francisco in May and there the Kiva Fellows were trained in various aspects of microfinance 101, operational cost analysis, bringing technology to the developing world and given our workplan of deliverables to complete during our field work. If it sounds like a lot, it is!

What do you hope to accomplish during your stay in the Philippines?

There are three main goals I have. The first is to successfully complete my workplan for Kiva. My workplan includes daily interaction with the ASHI staff, and so my second goal is to transfer as much information as I can to them about how to sustainably run the Kiva program and really maximize the benefits of Kiva. The third goal is to soak up all that the Philippines has to offer and learn as much about the culture that I can! It’s such a unique and wonderful experience to be here on the ground level watching microfinance in action but also for someone like me, who loves people, this is an awesome opportunity to really interact with Pilipinos in their homes and walk away with an insider’s perspective.

What exactly is micro-lending and how can people here in America help people overseas?

Microfinance at its core is providing financial services to the poor. This means the opportunity to take out loans and the opportunity to save. Many people in poverty around the world have nothing to put down for collateral to apply for a traditional loan. They might not have identification, adequate financials or the means to even travel to a city with banks and traditional lending arms. For many in poverty, this means taking a loan from a local loan shark with exorbitant interest rates and no guarantee that the loan won’t be recalled on a moment’s notice. The cycle of poverty isn’t broken. Microfinance often comes with social missions and an aim to impact families and improve societies, which is why many microfinance institutions lend exclusively to women. Many studies have shown that empowering women in developing countries can improve the state of entire communities.

Microlending therefore is the act of giving small loans to borrowers through an MFI. An MFI has various means of funding, Kiva is just one piece, other funds come in through government grants, international aid organizations, and private foundations.

While the model was starting in developing countries, there is no saying that the impoverished of developed countries don’t need that basic help and assistance. This is why Kiva recently launched a U.S. program in conjunction with Accion U.S.A. to offer loans in America too.

What people in America can do is realize this is a LOAN not a DONATION. It’s the act of teaching and providing tools to an entrepreneur to start or grow their business, and in turn, be able to provide a better way of life for their family. If you make a loan on Kiva, which has a 99% repayment rate, when the loan is repaid, you could take your money out and pocket it. But the process is addicting! When I get money back from one entrepreneur, I can’t wait to lend to another. The repayment cycle might take a full year, but it’s exciting to see the money come in increments and know that the entrepreneurs I’ve picked are doing well with their businesses.

How is micro-lending with KIVA different from companies that offer remittance services?

Making a loan on Kiva is so easy! Their model was built around taking out the barriers most people face in trying to get through to the checkout page. So that’s really the first thing. On the back-end there are lot of people and processes in place to continue to make Kiva transparent and sustainable, but for the average user, it’s quick and simple and engaging. You really can see who your loan goes to.

What made you choose to go to the Philippines? Do you have any personal ties to the country?

The Kiva Fellows interview process is a rigorous one. At the end, you get accepted without knowing your exact country, but having a basic breakdown on the places you might end up. In my list, I had the Philippines in my Top 3. Kiva just launched in the Philippines last year so it was a priority placement for them to have Fellows in the field here.

It’s funny because when I first put the Philippines in my Top 3, I figured given my wide circle I must know someone who was Pilipino and would be able to help me out should I get placed there. Once I received my placement, it was like the floodgates opened! It seems I have Pilipinos all over my life! Two interns of mine from a previous job are Pilipino, 4 friends I know in Los Angeles, friends of friends were introduced to me on Twitter, Facebook, LinkedIn, a friend was married to a Pilipino, another is engaged to one. Everyone knew someone who was not only Pilipino but so PROUD of their heritage and willing to help me in any way I needed with information, contact names, places to go, places not to go. It’s been really incredible.

As someone who has never been to the Philippines, what have you done to prepare yourself for your trip and are you looking forward to the most?

Really I found my network provided me so much information! I would say to anyone needing to research a place, look around. So many of us operate on a global basis and I think when we are doing something for the right reasons, like this Fellowship, people are just willing to help you.

I also created some Google Alerts for Philippines and my MFI. I have a search on TweetDeck for the Philippines and connected with many of the most popular people on Twitter from there. I bought a tour book on the Philippines; I read about the history, I looked at Wikipedia and other online resources. I was so busy with other Kiva tasks before departure, but usually international travel would also include reading books from a signature author from that country and listening to some music from there as well.

What inspires you to lead such a cause-based life?

It’s just who I am. What makes someone a doctor or an accountant? It took me a long time to realize that this burning desire in me to give back wasn’t something that could just be satiated on weekends volunteering. I also realized that what I enjoyed most was inspiring other people to find ways to give back too. I know so many people really want to give back but they just don’t know where to start. I hear that all the time, and that’s ok! Realizing you even want to give back is the start. That’s a step further than most. The next is to identify what interests you and be realistic about the commitments you can give, either financially or with your time. It was a light bulb to realize I could help people find where and how to start giving back. I don’t have the answers, only you can know how you want to give back and only you can actually accomplish those goals. But I can help point you in the right direction, and that makes me very happy and very fulfilled.

How do you decide what causes to support? What are the most important ones to you?

Hard question! It’s like asking a mother to pick her favorite child! Well, let me start by saying I’ve thought about this a lot. How do we decide what causes are more important than others? All I can say, is there are issues that touch us, based on our experiences, friends, family, and so I start there. I then make decisions about giving annually and check in with myself throughout the year to see how I’m doing, if I’m comfortable with my level of giving both monetarily and with my time. I’ve determined what I call my “signature nonprofits” or ones that I put above the others and prioritize in my life. Heal the Bay, which provides education and advocacy around the Santa Monica Bay in Los Angeles. Step Up Women’s Network, a national membership organization for women that provides services for low-income girls from education, to health, to college preparatory while providing networking and mentoring opportunities for professional women. The third is Kiva! In addition, I sit on the Board of Directors for a Theater nonprofit in Los Angeles, Echo Theater Company, one of the few in LA to commission their own productions and thus supporting local writers and actors. I also support the places I went to school, so this includes making annual donations to my middle school, high school and college.

I am most passionate about women and girls and those are two subjects that resonate here in America and globally. Economic development and providing opportunities for women is something I will always fight for.

I’m definitely the kind of person who gives to friends who are supporting causes, so if I have a friend doing a walk, run, fundraiser of some kind, I’m going to support them. From $5, $10, $25, on up, any donation to a friend’s fundraiser helps them reach their goal and I’m happy to help.

Last, after spending two months in New Orleans this past spring working on rebuilding efforts, I would be remiss not to mention that a donation to New Orleans is a donation to the future of America. We cannot forget the tragedies that happened on American soil, even when the bright lights of the media shine elsewhere. Hurricane Katrina was almost four years ago and yet there is so much to be done there. If anyone wants to support a specific type of nonprofit there, let me know and I will find it for you!

The competition and requirements to become a KIVA Fellow are very rigorous. What advice would you give to someone who wants to participate in this program?

Apply! I think it would be incredible to have someone from the BakitWhy community with a tie to the Philippines serve in the Philippines! If you want to participate, look closely at the requirements. It’s not easy work we’re doing, Internet isn’t great, there often isn’t hot water or reliable transportation and it’s unpaid. That said, the rewards are too many to count! Plus, you are becoming part of an alumni network of rising superstars in the world of microfinance, economic development and community building. I look around at the Kiva Fellows and am truly humbled by them, incredible people with one amazing background and story after another.

What’s your favorite Pilipino food?

Well it’s not Balut! Why does the Balut Man sound so much like the Ice Cream Man? It’s just cruel! And it’s not chicken feet, the sound of crunching I haven’t adjusted to yet. But everything else I love! Really! I love Sinigang (with pork or fish). I’ve eaten every meal in my two weeks here, save two, at either the home of an ASHI staff member or borrower or at a branch office. So I’ve barely seen a menu but I know that everything is so fresh, I’m enjoying the hospitality and home-cooked meals immensely.

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