My wife and I went to that conference on poverty (really, it’s a microcredit conference mostly) at BYU in November, and it was amazing of course.
The best result was that we met wonderful people and were able to ask questions, hear about current issues in microcredit, get advice on how to proceed, and look for a partner for our group. We met Louis Pope, whom we liked a lot, who is one of the founders of Yehu Microfinance.
Yehu microfinance – an excellent delivery system for our money
Yehu is a microcredit bank that is run locally but has operations, staff and banks in Kenya. That is a goodie for us – we can work with someone local, funnel money through them, and they also execute on the delivery of the lending as well. sort of a one-stop shop (usually you work thru a mediator who then works with someone in the field).
We met the director, Troy Holmberg, for lunch and discussed partnering. Troy is great and satisfied our questions. Yehu has a good repayment rate, a great track record, its financials are very transparent (spreadsheets are on their website) and is endorsed by BYU.
Yehu is developing a reporting system for feedback on loans given, so we will have complete accountability to see where our money goes. they estimate a system in place for this by end of first Q 2008. That coincides with our goal. Our goal of $3,000 is exactly what they need to start a new bank, or “centre”. A village gets a centre, where villagers can borrow money to start meeting their needs. In effect, we are “adopting” villages.
Why Kenya?
We will operate in Kenya simply because Yehu is, and we find them a worthy partner. We don’t really care where we operate – the U.S., South America, Asia, Africa … people are people no matter where they are. But by getting out of the U.S., we stretch our money further, and help more people.
Microfranchises
One of the many encouraging things about Yehu is that they are helping pioneer a concept in microcredit called microfinance. Mindy and I learned about this at the conference. The thought is that a weakness of microcredit is that a borrower may start a business and have weaker prospect of obtaining customers than could be optimal, whereas if the borrower borrows money to buy into a true franchise, then they have ownership in an income business which provides clients, distribution, caps competition etc. Love it!
Yehu is microfranchising a coconut business, where borrowers can produce coconut oil. Pure coconut oil is in demand in many markets. No decision has been made in how we will participate in this, but chances are we will first do traditional lending thru starting a bank in a village.
Without sounding corny, this really has been a “journey.” We started having no clue at all what we were doing, and now are halfway toward a goal of funding a bank for a village that provides the poorest people on earth credit so that they can change their life. Wow. It doesn’t solve all poverty, but it does for some people, and will build.
