microfinance

It’s 9 a.m., day two of Net Impact.  I grab my compostable coffee cup and head into the session on social intrapreneurship.  The panel focuses on corporate changemakers who work inside businesses to deliver innovative market solutions to the world’s toughest social and environmental challenges.  Among the panelists is Acumen Fund Fellow alumna Jocelyn Wyatt who currently serves as the Head of Social Impact and Business Factors at IDEO, a global design consultancy.

Jocelyn met IDEO during her Acumen Fellowship while visiting VisionSpring in India.  IDEO was interested in bringing in someone to build out the firm’s social impact work, so she wrote her own job description – knowing nothing about design and having never visited the firm itself – was made an offer, and then started the job.

One of her biggest surprises was that she had to figure out her job once she got there.  She was also surprised to discover a thriving group of social entrepreneurs who were already on board at IDEO.  Jocelyn realizes that the biggest asset in being able to make changes in a company is having a team of like-minded people who share the values of bringing services to the poor.  She started an e-mail list called “social impact at IDEO.” After that, she launched a social impact wiki page where people could post resources and social impact projects.  The group then started meeting over Monday lunch hours for strategy meetings and social labs with entrepreneurs in the field.  “Everything really transparent and open,” said Jocelyn.

During a two-week trip in June to the other IDEO offices, Jocelyn put out a call out for people to start social impact initiatives at the local level.  Some have started this, some haven’t.  But, according to Jocelyn, IDEO’s social impact work was able to withstand the current financial difficulties is because it is fully integrated into its normal business operations and because social impact services are priced at market rate.

Unlike Jocelyn, Henry Gonzalez of Morgan Stanley only gets to spend 25 percent of his time on social impact work, but his work as a patient advocate enabled him to found and integrate a Microfinance Institutions Group into the firm’s work.

“Your interests could evolve in the firm – whether you are the cheerleader, taking on your issue as an extracurricular project outside of the 9 to 5 p.m., or whether the firm eventually fully integrates a base of the pyramid strategy into everyday efforts,” said Henry.  “The more you can embed your initiative into the current business practice, the more the social impact work is unstoppable.”

The two intrapreneurs agreed on the importance of name affiliation in their ability to create a social impact movement.  If you’re a new social entrepreneur but don’t have the name backing of Morgan Stanley, SustainAbility or IDEO, you’re not going to get asked to speak at conferences like these, they said.

I like to cook, and I was recently browsing through the 101cookbooks.com site, looking for something do make with some extra zucchini, when I came across this unexpected post: an invitation to join the 101cookbooks.com Kiva lending team.

Suffice to say, I was not expecting to find microfinance shout-outs on a cooking blog. But when I saw this post, I was really struck (again) by the power and reach of Kiva’s model. Kiva just makes it so easy for people to participate in the micro-lending “movement” – anyone can become a lender and forge personal connections to individual loan recipients in the developing world. Not only is it easy to participate, but now it’s apparently getting easier to enlist others, too. The virality is really impressive.

Acumen Fund’s model is obviously different from that of Kiva (small & medium enterprise finance vs. micro-lending to individuals), but we have similar ambitions around engaging large numbers of individuals in our work. How do we give any interested, eager individual a way to participate? How do we create personal connections between the customers of our portfolio companies in India, Pakistan, East Africa and people who live thousands of miles away? How do we build a “movement” around the development-through-enterprise sector in the way that the microfinance movement has sprung up in recent years? How do we translate that “movement” into changes in the way people approach philanthropy and development?

We don’t yet have answers to these questions, but Kiva has at least shown us that there are plenty of people out there who want to try to help solve poverty if you can just give them a way to get involved. Our challenge in creating a “movement” will be to supply easy ways for people to participate so that maybe one day someone else’s search for a simple recipe will change the way she looks at the world.

P.S. If you ever find yourself with an “extra zucchini” problem, I recommend this recipe.

Acumen Fund investee Kashf Foundation is the featured 5 Diamond profile of this month on the MIX Market, a global microfinance information platform on the web. The MIX Market rates Microfinance Institutions (MFIs) on their transparency in reporting, by scoring them on a scale of one to five “diamonds”, with 5 being the highest possible level of accuracy and clarity in financial and operational program reporting. The MIX is seen as a global leader in championing financial transparency, accountability and disclosure standards in microfinance.

Kashf Foundation is one of Pakistan’s fastest growing microfinance institutions, with a mission of financial inclusion and providing women in Pakistan with access to microfinance products and services. Acumen Fund has been investing in Kashf since 2002 and has seen the organization grow to over 300,000 clients, with plans to reach 1 million by 2010. We have been working with Kashf to expand beyond simple microfinance to second generation products like the Home Improvement Loan (HIL). Kashf is a professionally-run organization, with clear financial reporting systems and processes and we are delighted to see them highlighted on MIX Market for transparency. MIX has also rated Kashf as one of the top 25 MFIs in the world for 2007. Kashf President Roshaneh Zafar has also recently been nominated to the World Economic Forum’s Global Agenda Councils on Financial Empowerment and the Gender Gap.

Visit the Kashf Foundation page on the Acumen Fund website to read more about our investment, view stories and a presentation at our office by Kashf Foundation CEO Sadaffe Abid.