When the concept of microfinance was introduced in South America and most notably Bangladesh in the 1970’s, the concept of loaning money to the working poor to start businesses was inconceivable to the banks of the day. Banks simply saw the poor as “bad credit risks” and quickly dismissed the idea of microcredit as a passing fad that would end in bankruptcy for the institutions making the loans and over indebtedness for the world’s poor. The world is now viewing things a bit differently. Those traditional banks of that time are turning out to be “bad credit risks” themselves and even some investment banks of today are looking at microfinance not as a “fad” but as good business practice.
Today, over 150 million people globally are taking and repaying loans to microcredit organizations around the world. With historic default rates under 2%, microcredit is looking more and more like sound business practice, especially as Europe continues bailing out not only banks but entire countries that haven’t had any luck balancing their budgets and sovereign checkbooks. Americans and Western Europeans alike are finding themselves completely overwhelmed with mortgage and consumer debt and are defaulting on their obligations at a dizzying pace.
The element of microfinance that gives it such a solid standing is that the vast majority of it is NOT in consumer lending but in business loans. Helping the poor start businesses with loans ranging from $50 to a few thousand dollars is just the kick start that the world’s working poor need to get over the hump of poverty and begin a life of taking care of themselves and their families by starting and expanding their small enterprises. The business aspect of this is astonishing… if microfinance lenders are seeing loan paybacks in the 98% range, they can be profitable. This is good for shareholders but even better for the poor. Why? Because they can continue expanding their services through better products, lower interest rates and more branches and staff to service and offer loans.
It is currently estimated that over 1 billion of the world’s poor need a loan and could pay said loan back. And with only 150 million current borrowers, large banks and institutions are seeing “double bottom-line” possibilities. Reaching untapped markets of consumers who pay their loans back is very good business practice. HSBC bank predicts that the need is soaring for microcredit services and that demand is 10 times the current supply.
Microfinance Investment Vehicles are gathering more and more assets to put towards this sound business practice on investing in the poor. With assets over $10 billion USD, there is much room for growth and investment returns range from good to fantastic. Global Microfinance Partners is at the forefront of this emerging investment movement and at the intersection of Impact Investing and helping the poor through this hand-up philosophy. If you want to make a difference with your investment assets, contact us today and join this global movement to change how the world does business and enjoy the possibilities associated with excellent investment returns coupled with impacting the world for good.
Mark Robeson
President
Global Microfinance Partners, LLC
Tel +1 704 332-9390
mark@globalmicrofinancepartners.com
www.globalmicrofinancepartners.com
“Connecting Capital Markets with Village Markets”
Monday, January 9, 2012
Friday, September 23, 2011
Microfinance Commentary 3Q 2011 | Economic Meltdown vs. Microfinance?
CNBC was taking a survey this morning to see if viewers felt the world was plunging into a global Depression. Since 2008 we have heard about a Recession, the “Great” Recession, a “Double-Dip” recession and now the word “Depression” is being thrown around the airwaves. The History Channel has been giving an awful lot of airtime to “The Nostradamus Effect” and other titles of shows using the word “Armageddon.” Ok, we get it. End of the world, global economic meltdown… the sky is falling… we get it.
Banks in Europe are on the verge of collapse, banks in America are taking it on the chin and our own Treasury debt has been downgraded from its historic and never-been-changed AAA rating. Greek default, Spain, Italy… the developed world is not looking so hot right about now. So with credit card defaults approaching 10%, the price of gold skyrocketing and then plunging and skyrocketing again, home foreclosures through the roof… is there anywhere safe to put your money? How about the mattress? Nope… what if your house catches fire? Okay, that’s enough sour grapes for this commentary. Now on to the good news.
The best way to analyze any kind of investment is to view its success rate over a long period of time. The US has never defaulted on its debt i.e. it must be the safest investment in the world, right? At this moment, take a look at this investment idea: Over 35 years, this debt asset class has a default rate of less than 2% with better than average fixed income returns. Its corresponding equity asset class is seeing its average annual returns exceed 20%. What is this iron-clad solid investment? The global poor. Microfinance business loans to the world’s working poor is skyrocketing as lenders and even major investment banks like JP Morgan, Deutsche Bank and Citi want to stabilize their lending portfolios by lending via microloans to people who traditionally pay these loans back like clockwork… the world’s poorest of the poor.
Half of the world’s population lives on less than $2 a day. About 150 million people around the world are current microfinance clients while about 1.1 billion want a loan AND HAVE THE ABILITY TO PAY THE LOAN BACK. Demand for loans is 10x the current supply. But the idea of lending to the poor still seems strange and therefore risky. The clients repay their loans because they want another loan and they work harder than anyone I have ever seen- bar none. They have families to feed, kids to put through school and don’t understand the concept of “default” or “going bankrupt.” They pay their loans back… period.
As global banking continues it’s metamorphosis to stay afloat, the winners will be the ones who see the world’s poor not as a risky and pitiful place to assign capital but as the safest bet of all. Change the world and help the poor… and have a better bank and organization for doing it. This is no longer charity… Microfinance may very well be a powerful cog to help get the global economy moving again.
If you have money on the sidelines and are cynical about the current financial markets or simply want to diversify your portfolio, give us a call. And if you want to help the poor while realizing investment returns... contact us right away!
Mark Robeson
President
Global Microfinance Partners, LLC
Tel +1 704 332-9390
mark@globalmicrofinancepartners.com
www.globalmicrofinancepartners.com
“Connecting Capital Markets with Village Markets”
Banks in Europe are on the verge of collapse, banks in America are taking it on the chin and our own Treasury debt has been downgraded from its historic and never-been-changed AAA rating. Greek default, Spain, Italy… the developed world is not looking so hot right about now. So with credit card defaults approaching 10%, the price of gold skyrocketing and then plunging and skyrocketing again, home foreclosures through the roof… is there anywhere safe to put your money? How about the mattress? Nope… what if your house catches fire? Okay, that’s enough sour grapes for this commentary. Now on to the good news.
The best way to analyze any kind of investment is to view its success rate over a long period of time. The US has never defaulted on its debt i.e. it must be the safest investment in the world, right? At this moment, take a look at this investment idea: Over 35 years, this debt asset class has a default rate of less than 2% with better than average fixed income returns. Its corresponding equity asset class is seeing its average annual returns exceed 20%. What is this iron-clad solid investment? The global poor. Microfinance business loans to the world’s working poor is skyrocketing as lenders and even major investment banks like JP Morgan, Deutsche Bank and Citi want to stabilize their lending portfolios by lending via microloans to people who traditionally pay these loans back like clockwork… the world’s poorest of the poor.
Half of the world’s population lives on less than $2 a day. About 150 million people around the world are current microfinance clients while about 1.1 billion want a loan AND HAVE THE ABILITY TO PAY THE LOAN BACK. Demand for loans is 10x the current supply. But the idea of lending to the poor still seems strange and therefore risky. The clients repay their loans because they want another loan and they work harder than anyone I have ever seen- bar none. They have families to feed, kids to put through school and don’t understand the concept of “default” or “going bankrupt.” They pay their loans back… period.
As global banking continues it’s metamorphosis to stay afloat, the winners will be the ones who see the world’s poor not as a risky and pitiful place to assign capital but as the safest bet of all. Change the world and help the poor… and have a better bank and organization for doing it. This is no longer charity… Microfinance may very well be a powerful cog to help get the global economy moving again.
If you have money on the sidelines and are cynical about the current financial markets or simply want to diversify your portfolio, give us a call. And if you want to help the poor while realizing investment returns... contact us right away!
Mark Robeson
President
Global Microfinance Partners, LLC
Tel +1 704 332-9390
mark@globalmicrofinancepartners.com
www.globalmicrofinancepartners.com
“Connecting Capital Markets with Village Markets”
Friday, April 15, 2011
Microfinance Commentary 2Q 2011 | Helping the Poor: Just Charity?
Throughout the Christian Bible and most world religions, caring for the poor is a central theme and more importantly, a command. In the Bible, we are instructed over 2000 times to care for the poor… that is more references toward any one area in life than anything else in the sacred text. So should we give to the poor? Yes. But is there more we can do?
I say the answer is a resounding YES… and so do a growing number of other people around the world. Christians and Muslims, Americans and Europeans, Republicans and Democrats, Conservatives and Liberals. Giving to the poor makes us feel like we are doing something good… and for those of Faith, helping the poor fulfills our marching orders. But what if we actually want to roll back poverty instead of just alleviating its symptoms, like taking some aspirin in the face of a raging cancer? Let’s see what some pioneers in philanthropy and the microfinance movement have to say.
"When we want to help the poor, we usually offer them charity. Most often we use charity to avoid recognizing the problem and finding the solution for it. Charity becomes a way to shrug off our responsibility. But charity is no solution to poverty. Charity only perpetuates poverty by taking the initiative away from the poor. Charity allows us to go ahead with our own lives without worrying about the lives of the poor. Charity appeases our consciences."
-Muhammad Yunus “Banker to the Poor: Micro lending and the Battle Against World Poverty”
Giving a “hand-up” rather than a “hand-out” has become part of the philanthropic lexicon… and thank goodness for that! “If you give a man a fish, he will eat for a day. If you teach a man to fish, he will eat for the rest of his life” is an ancient Chinese proverb that is beginning to sink in with more and more people. Perhaps most importantly, with investors.
“A new study estimates the potential market for investments that seek financial as well as social or environmental returns at $120 Billion. The good news for charities is that most study participants who said they would put money into such investments said they would draw the funds from their investment portfolios rather than the money they set aside for philanthropy.”
-The Chronicle for Philanthropy October 4, 2010
We in the developed world are at a crossroads in philanthropy and investing. Should we keep investing our money in the old stocks, bonds and mutual funds routine? After all, we can use the dividends or income derived from these investments to give to charity, right? Or is it time to turn this traditional investment model on its head by investing our money in poverty alleviation and other socially conscious causes, in some cases realizing greater investment returns on these endeavors than the aforementioned traditional stocks, bonds and mutual funds?
Enter the developing world miracle that has been microfinance for the last 35 years. But now the old tried and true “sustainable” non-profit model of microfinance is evolving too. Now an entire industry has been born, an industry that is committed to growing larger by the day to reach more and more of the poor to help them escape poverty by helping them help themselves. Microfinance banks around the globe are seeking more borrowers, competing with each other for clients and driving interest rates down. All the while increasing the number of life-changing financial products for the poor. Some call this “philanthro-capitalism.” I just call it just good business sense. Let’s help the poor with a new industry that will grow and grow and grow, not just be “sustainable.”
"So if you want to put your money in microfinance just to feel good, by all means direct it to the non-profit organization that most pulls your heartstrings. But if your objective is to roll back poverty and change the world, don't believe those that have been telling you that returns on your investment are the icing on the cake. It is the cake itself."
-Michael Chu- Professor, Harvard Business School and former CEO of the microfinance organization ACCION
Let’s get to WORK!
Mark Robeson
President
Global Microfinance Partners, LLC
Tel +1 704 332-9390
skype | mark.robeson
www.globalmicrofinancepartners.com
“Connecting Capital Markets with Village Markets”
I say the answer is a resounding YES… and so do a growing number of other people around the world. Christians and Muslims, Americans and Europeans, Republicans and Democrats, Conservatives and Liberals. Giving to the poor makes us feel like we are doing something good… and for those of Faith, helping the poor fulfills our marching orders. But what if we actually want to roll back poverty instead of just alleviating its symptoms, like taking some aspirin in the face of a raging cancer? Let’s see what some pioneers in philanthropy and the microfinance movement have to say.
"When we want to help the poor, we usually offer them charity. Most often we use charity to avoid recognizing the problem and finding the solution for it. Charity becomes a way to shrug off our responsibility. But charity is no solution to poverty. Charity only perpetuates poverty by taking the initiative away from the poor. Charity allows us to go ahead with our own lives without worrying about the lives of the poor. Charity appeases our consciences."
-Muhammad Yunus “Banker to the Poor: Micro lending and the Battle Against World Poverty”
Giving a “hand-up” rather than a “hand-out” has become part of the philanthropic lexicon… and thank goodness for that! “If you give a man a fish, he will eat for a day. If you teach a man to fish, he will eat for the rest of his life” is an ancient Chinese proverb that is beginning to sink in with more and more people. Perhaps most importantly, with investors.
“A new study estimates the potential market for investments that seek financial as well as social or environmental returns at $120 Billion. The good news for charities is that most study participants who said they would put money into such investments said they would draw the funds from their investment portfolios rather than the money they set aside for philanthropy.”
-The Chronicle for Philanthropy October 4, 2010
We in the developed world are at a crossroads in philanthropy and investing. Should we keep investing our money in the old stocks, bonds and mutual funds routine? After all, we can use the dividends or income derived from these investments to give to charity, right? Or is it time to turn this traditional investment model on its head by investing our money in poverty alleviation and other socially conscious causes, in some cases realizing greater investment returns on these endeavors than the aforementioned traditional stocks, bonds and mutual funds?
Enter the developing world miracle that has been microfinance for the last 35 years. But now the old tried and true “sustainable” non-profit model of microfinance is evolving too. Now an entire industry has been born, an industry that is committed to growing larger by the day to reach more and more of the poor to help them escape poverty by helping them help themselves. Microfinance banks around the globe are seeking more borrowers, competing with each other for clients and driving interest rates down. All the while increasing the number of life-changing financial products for the poor. Some call this “philanthro-capitalism.” I just call it just good business sense. Let’s help the poor with a new industry that will grow and grow and grow, not just be “sustainable.”
"So if you want to put your money in microfinance just to feel good, by all means direct it to the non-profit organization that most pulls your heartstrings. But if your objective is to roll back poverty and change the world, don't believe those that have been telling you that returns on your investment are the icing on the cake. It is the cake itself."
-Michael Chu- Professor, Harvard Business School and former CEO of the microfinance organization ACCION
Let’s get to WORK!
Mark Robeson
President
Global Microfinance Partners, LLC
Tel +1 704 332-9390
skype | mark.robeson
www.globalmicrofinancepartners.com
“Connecting Capital Markets with Village Markets”
Wednesday, January 12, 2011
MICROFINANCE: MORE EFFECTIVE AS NON-PROFIT OR FOR-PROFIT? | JAN 2011
A lot of discussion has circulated recently as to whether microfinance should be done in the traditional donor-driven, non-profit model -or- through the investor-driven, for-profit model. If our goal is to extend credit and banking services to the poor around the world by giving them a hand-up rather than a hand-out, who would do it best?
Since Nobel Laureate Muhammed Yunus made that first loan to poor women in a village in Bangladesh in the mid-1970’s (which was the incubus for the now famous Grameen Bank or “Community” Bank), the donor driven model has ruled. Roughly USD $50BB of credit is now circulating throughout the developing world through about 10,000 Microfinance Institutions (MFI’s) that serve 100 million clients. These clients use this capital to start and expand their businesses and they pay their loans back.. on time.. with interest. This model not only helps the poor by extending working capital to them but gives them something far more valuable… dignity.
However, current demand for microfinance is roughly ten times supply. With a default rate in microfinance over the last 30+ years of LESS THAN 2%, the microfinance sector is getting the attention of some of the largest financial institutions and governments in the world. This includes investments from Deutsche Bank, TIAA-CREF, European pension plans and other institutions that see investing in microfinance as the “new philanthropy” and very good for their corporate bottom-line. Investment returns in the sector astonish even the most hardened Wall Street and Silicon Valley veterans. Debt investments averaging near 7-10% returns coupled with Equity investments targeting and making 20%+ annually make this astonishment a reality. Betting on the poor is most assuredly a good bet.
One year after starting Global Microfinance Partners, I am more convinced than ever that helping the poor help themselves through small loans is the most intelligent and effective way to eliminate global poverty. Grassroots capitalism is taking hold and MFI’s worldwide are switching to for-profit models very quickly. Unhappy to simply sustain themselves through donations, MFI’s now wish to grow larger and serve more and more clients around the world who would otherwise have no access to financial services and business capital. Microfinance investing (or Microfinance 2.0) is the next evolution in an industry that changes lives and give hope to hundreds of millions of the working poor living around the world.
Microfinance Investment Vehicles (MIVs) have been in existence for over 10 years and offer debt vehicles to MFIs as well as making equity investments into the MFIs themselves. While the assets in MIVs range somewhere in the USD $10 billion range, this number is expected to rise exponentially as high net worth individuals, institutions, foundations and endowments see this new asset class as a true “Impact Investment.” Receiving a financial return on money that is ACTIVELY helping the poor through this sector is becoming more and more appealing to investors in this jaded time in the financial markets.
What if your investment portfolio could do good in the world? Not just the dividend and yield they make that you give to charity? These are questions that now have an exciting answers!
Mark Robeson
President
Global Microfinance Partners
Tel +1 704 332-9390
skype | mark.robeson
www.globalmicrofinancepartners.com
mark@globalmicrofinancepartners.com
“Connecting Capital Markets with Village Markets”
Since Nobel Laureate Muhammed Yunus made that first loan to poor women in a village in Bangladesh in the mid-1970’s (which was the incubus for the now famous Grameen Bank or “Community” Bank), the donor driven model has ruled. Roughly USD $50BB of credit is now circulating throughout the developing world through about 10,000 Microfinance Institutions (MFI’s) that serve 100 million clients. These clients use this capital to start and expand their businesses and they pay their loans back.. on time.. with interest. This model not only helps the poor by extending working capital to them but gives them something far more valuable… dignity.
However, current demand for microfinance is roughly ten times supply. With a default rate in microfinance over the last 30+ years of LESS THAN 2%, the microfinance sector is getting the attention of some of the largest financial institutions and governments in the world. This includes investments from Deutsche Bank, TIAA-CREF, European pension plans and other institutions that see investing in microfinance as the “new philanthropy” and very good for their corporate bottom-line. Investment returns in the sector astonish even the most hardened Wall Street and Silicon Valley veterans. Debt investments averaging near 7-10% returns coupled with Equity investments targeting and making 20%+ annually make this astonishment a reality. Betting on the poor is most assuredly a good bet.
One year after starting Global Microfinance Partners, I am more convinced than ever that helping the poor help themselves through small loans is the most intelligent and effective way to eliminate global poverty. Grassroots capitalism is taking hold and MFI’s worldwide are switching to for-profit models very quickly. Unhappy to simply sustain themselves through donations, MFI’s now wish to grow larger and serve more and more clients around the world who would otherwise have no access to financial services and business capital. Microfinance investing (or Microfinance 2.0) is the next evolution in an industry that changes lives and give hope to hundreds of millions of the working poor living around the world.
Microfinance Investment Vehicles (MIVs) have been in existence for over 10 years and offer debt vehicles to MFIs as well as making equity investments into the MFIs themselves. While the assets in MIVs range somewhere in the USD $10 billion range, this number is expected to rise exponentially as high net worth individuals, institutions, foundations and endowments see this new asset class as a true “Impact Investment.” Receiving a financial return on money that is ACTIVELY helping the poor through this sector is becoming more and more appealing to investors in this jaded time in the financial markets.
What if your investment portfolio could do good in the world? Not just the dividend and yield they make that you give to charity? These are questions that now have an exciting answers!
Mark Robeson
President
Global Microfinance Partners
Tel +1 704 332-9390
skype | mark.robeson
www.globalmicrofinancepartners.com
mark@globalmicrofinancepartners.com
“Connecting Capital Markets with Village Markets”
Wednesday, October 6, 2010
Dear Bill and Melinda... my letter to the Gates Foundation
The following is a letter I recently wrote to Bill and Melinda Gates in response to their "call to action" to the world's Billionaires to give away half their fortunes:
Dear Bill and Melinda,
I have enjoyed watching your efforts (along with Warren Buffet’s) over the past year to inspire the “Billionaires Club” to give away half of their wealth to charity. What an incredibly noble and impactful vision! I wish you the best of luck in this worthy endeavor and am happy to see your strategy is working with so many in such a short amount of time.
I am also excited to see the two of you traveling the world, pointing out diseases that your foundation is working hard to eradicate: AIDS, Malaria and Polio just to name a few. Someday, these may be diseases we only read about in history books because of your work. A vision to change the world for the better is an amazing thing and I applaud both of you for it! Recently, I have also noticed your foundation beginning to direct funds toward microfinance. While wiping out and eventually totally eradicating diseases is hugely important, I can’t imagine anything more sustainable and noble than trying to wipe out another horrible disease. One which is passed from generation to generation and is the root cause of so many ills in this world: the disease of poverty.
Through microfinance you are helping the poor help themselves. By making small loans in the developing world, you give millions of the poor access to working capital to start and expand their small businesses. These are banking services and credit which have traditionally been denied them by more traditional banking institutions; you are giving them the tools necessary to sustainably feed, clothe and educate their families. One additional and perhaps more overlooked aspect that is not as measurable (but just as powerful) is you are giving the poor both hope and dignity. Better yet, you are helping them discover within themselves their worth as human beings when they are getting a “hand-up” rather than a “hand-out.”
I have personally seen the miracle of microfinance in 8 countries and on 4 continents around the world and continue to be astonished at the amazing work ethic and absolute brilliance of micro-entrepreneurs in some of the poorest nations on earth. From the woman living on the northern coast of Haiti who separates salt from seawater in massive pools (that she dug herself) to sell the salt in the spice market… to the poor Bedouin woman living in the desolate Negev Desert in the south of Israel who opened her own convenience store to sell toiletries and other necessities to the local villagers and herdsmen. Not only are they caring for their families, but when I asked both women what the future held for them, they had big… BIG plans! From the man in Vietnam who used his microloan to buy and raise livestock and vegetables in a garden to sell in the market… that even raises fish in a large pond he dug in the backyard behind his hut to sell for food. To the Rwandan woman who was homeless with 4 children who ate one meal a day and couldn’t send her kids to school… that borrowed USD $50 to buy fish at the river, smoke it in her hut and sell it in the market. Now she feeds her family two meals a day and has them all in school... and has adopted two more children! This is IMPACTFUL!!! They ALL… every single one of them… have the EXACT same look in their eyes and on their faces: DIGNITY. And I am realizing on each trip that if we pity the poor, we rob them of that dignity.
However, things are not where they need to be. For every person in the world who is utilizing a microloan and paying it back (and it is still hard for me to believe that after 35 years of microfinance, the default rate is still BELOW 2 %!) there are 10 other hopeful micro-entrepreneurs who could do the same but still lack access to credit and banking services.
Enter what I have affectionately penned “MICROFINANCE 2.0” (I thought you’d like that, Bill). Microfinance 2.0 is the next evolution in microfinance… moving from the donor-driven world where only USD $40BB has been raised in 35 years and is circulating (and the need is over $300BB) to the world of investments. A world where the capital is engaged to provide funding for micro-entrepreneurs. Enter the new frontier of the MIV.
A MIV is a Microfinance Investment Vehicle, which ranges anywhere from ETF’s to Mutual Funds to Private Equity to Hedge funds of which more than 100 exist today. MIV’s don’t take donations from well-meaning philanthropists but rather they take actual investment dollars and invest that money directly into Microfinance Institutions (MFI) around the world… whether it is through debt issuance or direct equity investment in the MFI’s themselves. This changes the game not only for the poor but for the investors as they receive a nice return on their SRI (Socially Responsible Investment) money; additionally they help the poor help all over the world! A win-win if I’ve ever seen one!
So, Bill and Melinda, please consider setting a great example by investing in MIV’s. Then go on your own “Billionaires Club Road show 2.0” and inspire your fellow club members to INVEST some of their fortune in microfinance! As sustainable as this is, their wealth will GROW while helping eliminate poverty! So that many more generations of their family and their wealth can help and be the end of so many ills in our world…. Today and for years to come!
Warm Regards,
Mark D. Robeson
President
Global Microfinance Partners
www.globalmicrofinancepartners.com
Dear Bill and Melinda,
I have enjoyed watching your efforts (along with Warren Buffet’s) over the past year to inspire the “Billionaires Club” to give away half of their wealth to charity. What an incredibly noble and impactful vision! I wish you the best of luck in this worthy endeavor and am happy to see your strategy is working with so many in such a short amount of time.
I am also excited to see the two of you traveling the world, pointing out diseases that your foundation is working hard to eradicate: AIDS, Malaria and Polio just to name a few. Someday, these may be diseases we only read about in history books because of your work. A vision to change the world for the better is an amazing thing and I applaud both of you for it! Recently, I have also noticed your foundation beginning to direct funds toward microfinance. While wiping out and eventually totally eradicating diseases is hugely important, I can’t imagine anything more sustainable and noble than trying to wipe out another horrible disease. One which is passed from generation to generation and is the root cause of so many ills in this world: the disease of poverty.
Through microfinance you are helping the poor help themselves. By making small loans in the developing world, you give millions of the poor access to working capital to start and expand their small businesses. These are banking services and credit which have traditionally been denied them by more traditional banking institutions; you are giving them the tools necessary to sustainably feed, clothe and educate their families. One additional and perhaps more overlooked aspect that is not as measurable (but just as powerful) is you are giving the poor both hope and dignity. Better yet, you are helping them discover within themselves their worth as human beings when they are getting a “hand-up” rather than a “hand-out.”
I have personally seen the miracle of microfinance in 8 countries and on 4 continents around the world and continue to be astonished at the amazing work ethic and absolute brilliance of micro-entrepreneurs in some of the poorest nations on earth. From the woman living on the northern coast of Haiti who separates salt from seawater in massive pools (that she dug herself) to sell the salt in the spice market… to the poor Bedouin woman living in the desolate Negev Desert in the south of Israel who opened her own convenience store to sell toiletries and other necessities to the local villagers and herdsmen. Not only are they caring for their families, but when I asked both women what the future held for them, they had big… BIG plans! From the man in Vietnam who used his microloan to buy and raise livestock and vegetables in a garden to sell in the market… that even raises fish in a large pond he dug in the backyard behind his hut to sell for food. To the Rwandan woman who was homeless with 4 children who ate one meal a day and couldn’t send her kids to school… that borrowed USD $50 to buy fish at the river, smoke it in her hut and sell it in the market. Now she feeds her family two meals a day and has them all in school... and has adopted two more children! This is IMPACTFUL!!! They ALL… every single one of them… have the EXACT same look in their eyes and on their faces: DIGNITY. And I am realizing on each trip that if we pity the poor, we rob them of that dignity.
However, things are not where they need to be. For every person in the world who is utilizing a microloan and paying it back (and it is still hard for me to believe that after 35 years of microfinance, the default rate is still BELOW 2 %!) there are 10 other hopeful micro-entrepreneurs who could do the same but still lack access to credit and banking services.
Enter what I have affectionately penned “MICROFINANCE 2.0” (I thought you’d like that, Bill). Microfinance 2.0 is the next evolution in microfinance… moving from the donor-driven world where only USD $40BB has been raised in 35 years and is circulating (and the need is over $300BB) to the world of investments. A world where the capital is engaged to provide funding for micro-entrepreneurs. Enter the new frontier of the MIV.
A MIV is a Microfinance Investment Vehicle, which ranges anywhere from ETF’s to Mutual Funds to Private Equity to Hedge funds of which more than 100 exist today. MIV’s don’t take donations from well-meaning philanthropists but rather they take actual investment dollars and invest that money directly into Microfinance Institutions (MFI) around the world… whether it is through debt issuance or direct equity investment in the MFI’s themselves. This changes the game not only for the poor but for the investors as they receive a nice return on their SRI (Socially Responsible Investment) money; additionally they help the poor help all over the world! A win-win if I’ve ever seen one!
So, Bill and Melinda, please consider setting a great example by investing in MIV’s. Then go on your own “Billionaires Club Road show 2.0” and inspire your fellow club members to INVEST some of their fortune in microfinance! As sustainable as this is, their wealth will GROW while helping eliminate poverty! So that many more generations of their family and their wealth can help and be the end of so many ills in our world…. Today and for years to come!
Warm Regards,
Mark D. Robeson
President
Global Microfinance Partners
www.globalmicrofinancepartners.com
Monday, March 29, 2010
SHORT Green | LONG Microfinance
“Those who forget their past are doomed to repeat it.” –George Santayana
I am reading Michael Lewis’ newest novel “The Big Short.” In it, he spells out what happened to drive this country into recession and blow up the housing market through sub-prime mortgages… but through the eyes (or one eye, in Michael Burry’s case) of those that either made it happen or placed bets that it WOULD happen. And man, are there some characters in there! Brad Pitt has apparently already bought the movie rights… so stay tuned to a theatre near you. And the bond trader from my former employer Deutsche Bank may be the funniest character of all!
So it makes me wonder… will this happen again? Will there be another “dot-com” or “subprime” boom? Will dumb institutional investors from Dusseldorf (read the book) buy the “sure thing” of betting on the American Dream of home ownership… even for the unemployed and irresponsible? Probably. No, scratch that. DEFINITELY. Look no further than the current “green investment” movement.
Now, please don't misunderstand me. I think clean tech and green tech and windmills and solar panels and all that stuff is great and very innovative and will lower CO2 emissions and lower the impact of our carbon footprint and all that. Anything that is going to create power in a cleaner more efficient way, well, I’m all for it... after all... fossil fuels suck, right? But what I have fun observing is how this is the absolute sexiest thing to invest in right now. The “investment du jour” if you will. And isn’t that what happened a little over 10 years ago with the internet? Names like “pets.com” and anything else with a “.com” after it's name had dump trucks back up to their silicon valley headquarters to flood them with cash. And did the dot-coms actually produce anything or make any profit? Nope. Not at all. Did they make money for investors? Yep, yep and YEP! I used to have fun pulling up the quotes of these ridiculous stocks when I was a stockbroker and marvel at the negative P/E ratios… but watch the stock… literally watch them in real-time… skyrocket in value for the first 10 minutes just after CNBC's Joe Kernan said it was a good idea to invest in www.youmustbekiddingme.com. Seems like I remember it being about 10.15am every morning. Ah… the power of the sexy investment idea! Oh… and did I buy them? Yep!
So now the pile-on is in full-swing and the makings of a nice unhealthy “green bubble” are on the horizon. Money managers are scrambling to add green funds to their investment platforms. Everybody wants to flood this sector with cash (man, I am getting a head rush from the déjà-vous to this story). Not only that… but shouldn't we all be singing “kumbaya” because our investment is helping the environment?! Not so fast. Without a little due diligence you won't be able to separate Microsoft from pets.com. But if you are with the herd mentality, you’ll just want IN! Due diligence be damned… full speed ahead!
I may be calling this early, but I’m calling it. We are headed into yet another bubble… and this one is green. The green innovation movement won’t go away… and thank goodness for that. In fact, competition among green firms will help make the environment cleaner and things will be done more efficiently. And I'm loving capitalism once again! But this is the beginning of a green investment bubble, without a doubt. I’m no pessimist… but this just seems obvious to me. Doesn’t it to you?
If you’ve read my blogs in the past you know my passion for microfinance. Not only is this sector filled with companies (MFI’s) that are profitable by helping the poor around the world by helping them start small businesses… but it’s still in its infancy as far as an investment "movement" goes. JPMorgan recently started an index to track MFI’s and it is continuing to post excellent returns. That's because MFI's make money by helping their clients make money and feed their families. Now THAT'S innovation!
Michael Lewis also wrote a book a few years back called “The New New Thing” about the coming of age of the internet. A guy named Steve Clark decided to start a company called Netscape in the early nineties to harness what was then an academic (and military) idea for people to talk to one another… into a commercial enterprise. And thus the internet was born to the rest of us. I am hoping Mr. Lewis writes his next novel and titles it “The New New NEW Thing” about the coming age of social investing that actually helps the poor out of poverty through investing in microfinance. Will there be a microfinance bubble in 2018? Hmmmmm…….. let’s take just one thing at a time, okay?
www.globalmicrofinanceparters.com
I am reading Michael Lewis’ newest novel “The Big Short.” In it, he spells out what happened to drive this country into recession and blow up the housing market through sub-prime mortgages… but through the eyes (or one eye, in Michael Burry’s case) of those that either made it happen or placed bets that it WOULD happen. And man, are there some characters in there! Brad Pitt has apparently already bought the movie rights… so stay tuned to a theatre near you. And the bond trader from my former employer Deutsche Bank may be the funniest character of all!
So it makes me wonder… will this happen again? Will there be another “dot-com” or “subprime” boom? Will dumb institutional investors from Dusseldorf (read the book) buy the “sure thing” of betting on the American Dream of home ownership… even for the unemployed and irresponsible? Probably. No, scratch that. DEFINITELY. Look no further than the current “green investment” movement.
Now, please don't misunderstand me. I think clean tech and green tech and windmills and solar panels and all that stuff is great and very innovative and will lower CO2 emissions and lower the impact of our carbon footprint and all that. Anything that is going to create power in a cleaner more efficient way, well, I’m all for it... after all... fossil fuels suck, right? But what I have fun observing is how this is the absolute sexiest thing to invest in right now. The “investment du jour” if you will. And isn’t that what happened a little over 10 years ago with the internet? Names like “pets.com” and anything else with a “.com” after it's name had dump trucks back up to their silicon valley headquarters to flood them with cash. And did the dot-coms actually produce anything or make any profit? Nope. Not at all. Did they make money for investors? Yep, yep and YEP! I used to have fun pulling up the quotes of these ridiculous stocks when I was a stockbroker and marvel at the negative P/E ratios… but watch the stock… literally watch them in real-time… skyrocket in value for the first 10 minutes just after CNBC's Joe Kernan said it was a good idea to invest in www.youmustbekiddingme.com. Seems like I remember it being about 10.15am every morning. Ah… the power of the sexy investment idea! Oh… and did I buy them? Yep!
So now the pile-on is in full-swing and the makings of a nice unhealthy “green bubble” are on the horizon. Money managers are scrambling to add green funds to their investment platforms. Everybody wants to flood this sector with cash (man, I am getting a head rush from the déjà-vous to this story). Not only that… but shouldn't we all be singing “kumbaya” because our investment is helping the environment?! Not so fast. Without a little due diligence you won't be able to separate Microsoft from pets.com. But if you are with the herd mentality, you’ll just want IN! Due diligence be damned… full speed ahead!
I may be calling this early, but I’m calling it. We are headed into yet another bubble… and this one is green. The green innovation movement won’t go away… and thank goodness for that. In fact, competition among green firms will help make the environment cleaner and things will be done more efficiently. And I'm loving capitalism once again! But this is the beginning of a green investment bubble, without a doubt. I’m no pessimist… but this just seems obvious to me. Doesn’t it to you?
If you’ve read my blogs in the past you know my passion for microfinance. Not only is this sector filled with companies (MFI’s) that are profitable by helping the poor around the world by helping them start small businesses… but it’s still in its infancy as far as an investment "movement" goes. JPMorgan recently started an index to track MFI’s and it is continuing to post excellent returns. That's because MFI's make money by helping their clients make money and feed their families. Now THAT'S innovation!
Michael Lewis also wrote a book a few years back called “The New New Thing” about the coming of age of the internet. A guy named Steve Clark decided to start a company called Netscape in the early nineties to harness what was then an academic (and military) idea for people to talk to one another… into a commercial enterprise. And thus the internet was born to the rest of us. I am hoping Mr. Lewis writes his next novel and titles it “The New New NEW Thing” about the coming age of social investing that actually helps the poor out of poverty through investing in microfinance. Will there be a microfinance bubble in 2018? Hmmmmm…….. let’s take just one thing at a time, okay?
www.globalmicrofinanceparters.com
Saturday, February 6, 2010
CLT | The Epicenter of Microfinance in the coming global movement
Charlotte, North Carolina, USA. A sleepy southern town in 1980 became the 2nd largest banking center in the United States by the year 2000. Second only to New York... arguably the largest financial center the world has ever known. But Charlotte attracted brilliant minds, hard working bankers and philanthropic minded citizens over the 20 years that shaped it into the financial powerhouse that it is today.
In the early 1990's, Silicon Vally, CA (San Jose Metro) quickly became the epicenter of all that was dot-com. If you came up with a reason to do any kind of commerce on the new tool that was the world wide web, Silicon Valley was the Nirvana of that new economy. You started a dot-com, then dump trucks of money from venture capitalists were lining up outside of your door to dump as much money as they could find to pour into your new dot-com idea. Literally, if you could think of an idea to make money on this new tool for commerce, you were in business... literally. Climbing walls, champagne brunches and 24/7 ping pong for twenty-something nerds became normal and something to aspire to.
Now the world has changed... once again. Dot coms are no longer the "cool" investment... instead dot-coms are how the world works. Now boring and the way things are. Then, sub-prime mortgages took charge. Soon after, Al Gore wrote "An Inconvenient Truth" and the "Green" movement was born. Throughout the 2000's every asset manager, energy company and liberal minded American had to be involved in saving the Environment. Billions of dollars poured into this socially responsible investment movement. Imagine that.
So... in steps microfinance in the 2010's. The next "new, new thing." But this time, something sustainable and long-lasting and something that helps billions... BILLIONS of people out of poverty. And a fortune to made by ending poverty. Crazy, huh? VC capital chased the dot-coms, the sub-primes and the green movement. And now VC money is looking for returns and some financial responsibility after watching the busts of the aforementioned "movements."
During the explosion of the financial services boom of 1990-2010, Charlotte became a banking center. A really big, surprising and exciting center for banking talent. Today, as Bank of America and Wells Fargo face the demons of the financial panic of 2008, there are thousands of brilliant financial minds that are out of work. Enter microfinance. From disaster comes opportunity. According to HSBC bank, current demand for microfinance in the developing world is ten times the current supply... what to do, what to do!?
It is my humble opinion that Charlotte is the epicenter of the coming global microfinance movement. VC money will follow so the more prepared you are for the coming dump-trucks to help solve poverty globally, the more prepared you will be to be not only a wonderful philanthropist but a very wealthy one overnight, for sure. Just watch. No, seriously, JUST WATCH. Or get started today: www.globalmicrofinancepartners.com
In the early 1990's, Silicon Vally, CA (San Jose Metro) quickly became the epicenter of all that was dot-com. If you came up with a reason to do any kind of commerce on the new tool that was the world wide web, Silicon Valley was the Nirvana of that new economy. You started a dot-com, then dump trucks of money from venture capitalists were lining up outside of your door to dump as much money as they could find to pour into your new dot-com idea. Literally, if you could think of an idea to make money on this new tool for commerce, you were in business... literally. Climbing walls, champagne brunches and 24/7 ping pong for twenty-something nerds became normal and something to aspire to.
Now the world has changed... once again. Dot coms are no longer the "cool" investment... instead dot-coms are how the world works. Now boring and the way things are. Then, sub-prime mortgages took charge. Soon after, Al Gore wrote "An Inconvenient Truth" and the "Green" movement was born. Throughout the 2000's every asset manager, energy company and liberal minded American had to be involved in saving the Environment. Billions of dollars poured into this socially responsible investment movement. Imagine that.
So... in steps microfinance in the 2010's. The next "new, new thing." But this time, something sustainable and long-lasting and something that helps billions... BILLIONS of people out of poverty. And a fortune to made by ending poverty. Crazy, huh? VC capital chased the dot-coms, the sub-primes and the green movement. And now VC money is looking for returns and some financial responsibility after watching the busts of the aforementioned "movements."
During the explosion of the financial services boom of 1990-2010, Charlotte became a banking center. A really big, surprising and exciting center for banking talent. Today, as Bank of America and Wells Fargo face the demons of the financial panic of 2008, there are thousands of brilliant financial minds that are out of work. Enter microfinance. From disaster comes opportunity. According to HSBC bank, current demand for microfinance in the developing world is ten times the current supply... what to do, what to do!?
It is my humble opinion that Charlotte is the epicenter of the coming global microfinance movement. VC money will follow so the more prepared you are for the coming dump-trucks to help solve poverty globally, the more prepared you will be to be not only a wonderful philanthropist but a very wealthy one overnight, for sure. Just watch. No, seriously, JUST WATCH. Or get started today: www.globalmicrofinancepartners.com
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