This post is sooooo late [Over a month late, but still worth posting. Thank goodness].
A quick refresher. Bentley College held a leadership forum at the end of April on the subject of “The Business of Healing our World”. In attendance where social entrepreneurs (e.g. Vikram Akula of SKS Microfinance), CEOs (Jeff Swartz of Timberland, Dean Kamen of DEKA) and scholars (e.g. Jeff Sachs of Columbia University’s Earth Institute).
The following is a recap of the panel discussion featuring Vikram Akula, founder and CEO, SKS Microfinance; Dean Kamen, founder and president, DEKA Research and Development Company; the Rev. Gloria White-Hammond, MD, co-pastor of the Bethel AME Church and co-founder of My Sistersâ€™ Keeper, Sudan; and David J. Refkin, director of sustainable development, TIME, Inc.
Vikram Akula starts off with his well-perfected pitch. The mission of SKS Microfinance is to empower “the poor to become economically self-reliant by providing financial services in a sustainable manner.” When they first started, SKS was just offering collateral free loans. Sivdama landless labourers earning at that time a dollar a day. Had to put their son in bonded labor just to get enough cash to buy grain fro their fam for that year. First year loan for 1000 rupeees about $20, fruit stand. 2nd loan Fruit trees.3rd year fishing netsâ€¦ portfolio diversification, 4th yr all nets for all menâ€™s friend, fruits 5th 25000, $500 fridge, so much fish; 6th and 7th contracts with distributors, 8th 50,0000 $1000, eight people working for her, $12 a day. Indian middle class. Her son is out of bonded labor, out of high school,) [thatâ€™s a darn good narrative. While the currently have about 650,000 borrowers.
At SKS, the spiel that the loan officers give is carefully scripted. The idea is that standarization makes things more efficient and streamlined.
The fatal flaw of microfinance â€¦ (a teaser; cheeky, very cheeky)
Gloria White Hammond – For $33 dollards you can earn the freedom of a girl.
7 women. Intentionally small. Pooled together palm pilots and atm cards for a small village in sudan.
Education girls, fastest shortcut to increasing well-being â€¦ 1000 girls. Going to start building. Because of peace agreement in southern sudan. Folks are comng back. Just want a fraction of oprahâ€™s lunch money. No need for fireplaces.
You couldnâ€™t have peace in sudan until you had peace in the entire country.
What sheâ€™s learned from Samantha powerâ€™s America in the age of genocide. Hear no evil. See no evil. Speak no evil. Do not good.
Mentions Chinaâ€™s enterprises in Sudan and recalcitrance about using economic input to levarage influece in sudan.
David J.Refkin â€“ sustainable business practice
How to turn this into something meaningful at your jobs. 1) understanding your impacts 2) realizing that these are opps, they shouldnâ€™t be waiting to get attacked. There is a better way. Offense, people, offense. Rather than responding to campaigns (and after getting a wake up call of getting attacked by an NGO about 13 years ago). Making sure the people they do business with are doing the right thing as well. Protecting brand, maintaining credibility. Challenges but also opps. Toyota (5,000 a yr, now 18K a month). Time doesnâ€™t own paper plants, etc. supply chain issue, have to influence. 500,000 tons a paper. 5yr they knew that only 5% of landsâ€¦. 2006 80%â€¦ only got to 70%. How, find innovative people that you can work with. Find governors who are interesting. Engage in dialogue. Take to the loggers. Answer their questions, tell them why this is important to them.
Remix: getting folks to recycle their mags. getting 1 in 6 mags recycled. Issue with slick coated paperâ€¦ couldnâ€™t recycle years ago, now canâ€¦ launched add campaignâ€¦
Published a book byâ€¦ measure carbon footprint by time and in styleâ€¦ not thrilled, but got to measure to act.
Did a forestry project in Russia (wood in Russia, paper in finland)â€¦ hard, trying to work with illegal loggers, can . carrot carrot carrot, giving more business to the guys doing well. Reward them for doing well. Time only company that has sustainability report in the publishing industry. Not about greenwashing, gotta show warts and all. Itâ€™s about making change and promoting sustainability.
Sustainability is going to be ingrained in biz. This is hwo weâ€™re going to do the right thing and make it work for our business.
Technologist, physicists, engineer, . No laws of physics as changeable as the laws of man. They are subtle but not cruel. They cannot be revoked.
Stirling â€¦ 2 boxes â€¦ would take any water 1000L a day, 1/3 of the power as a hand held hair dryer. No filters, no membranes.
Other box that will make electricity that will make money out of anything that will burn. Vapor compression distiller. Neat piece of thermodynamics. Stirling â€¦ cycle â€¦ 800 psi working fluid of helium. Fuel cow dung. 30 villages to families that have never had any electricity.
Invention vs. innovating. Make stuff do stuff, fun. Getting people to use it in a meaningful way. These 2 boxes: $50m
50% of all chronic (?) disease is water related. Must verify this fact. â€¦ schistosomiasis. 50% of global population have never used electricity.
Water and power, top down and municipal things. Power companies, transmission lines very tough for very isolated communities. Need a new way. Gotta stop assuming that 18th century tech is going to solve these problems. Gotta use . grameen phone not needing subsidies from â€¦ . called iqbal quadir â€¦ what if I could give you a box that would do for water
Going to take a sabbatical from my sabbaticalâ€¦ 3 entrepreneurs. Mr Exxon (the cow dung ), mr con ed (who runs th ebox) an dmr GE (who cells the LEDs)
Each village had one fridge, â€¦
If you could build those machines for $1000, you could microfinance that and sell it â€¦
(US pharmaco pia standard for injectable water). In village (could make water for under a penny a liter). Very very cool. The price has come down A LOT. Hurray!
Vikram: What is the fundamental flaw: microfinance for all the success it has locally is not able to scale to large numbers. We have 3 billion people, living on $2 a day. Only reaching to 15% of need. Ifit was a telco, youâ€™d write off the industry as underperforming. Microfinanciers give themselves a pat on the back and hand out awards.
Barriers: problems of capital Ã ngos that really on grants
Capacity Ã small mfi, small villages, most only get to 10,000 clients
Cost Ã high cost, lots and lots of 100 dollar loans with repayments of 1-2 dollars a day a week
Donâ€™t have the people power and the issues. She saidâ€¦ am I not poor too. Do I now deserve to get a chance to get my family out of poverty. SKS how do you design a mfi so that you donâ€™t have to say no to
Accessing capital: donâ€™t be an ngo, pursue a profit model, that way you can access commercial capital. 24% return on equity. Sequoia capital (also invested in yahoo)
Capacity: finding â€¦ from the business world. Standardization baby. How does starbucks rollout. SKS does 60K new customers a month. Best practices from business
They EXTENSIVELY use tech to overcome costs. Introduced an automated â€¦ using cell phone based tech, leap frog some of the landline constraints.
Dean: tech when properly applied can be a terrific amplifier for the things that people do. They trouble is it can amplifier everything (the good and the bad). Monty pythonâ€¦ I have a plan, it doesnâ€™t work, Iâ€™m going to stick to it. Why is mmicrofinance flourishing when it is on th emargins. (so many large institutions are battleships). Leverage in the very very near future â€¦
Be will reduce by 50% the number of people who donâ€™t have access to water. For at least the next 15 years, at least 50% will still be dying. What will they say. Nothing they will be dead. â€¦ you couldnâ€™t get away with that â€¦
$1000 box, serve
1 billion dollars. How is it sustainableâ€¦ not top down, bottom upâ€¦ making a million job (or 3)â€¦ if we believe in capitalism why do wecheck out brain at the door when it come sot helping the poor. Letâ€™s make the grameen phone fo rwater and power. Institutionalize thatâ€¦ 15 yr plans for that never happen on budget and we never seem to get what we wants.
Question: how to fund, and how to profit from this investment
They did not design, conceive, tool up, develop cell phones. They didnâ€™t have â€¦
In his model there are a not few 100 million people who need â€¦ $30 million â€¦ every he knows would happily pay $1000 to do that â€¦ Iâ€™m going to have to spend 2 yrs to design and buildâ€¦ the incremental thousands are easy to get (like venture, the first money is hard to get then it gets easier). They need to find another use for these boxes so someone else will pay for design and dev or there needs to be a another way to do development.
Most people at leat subconsciously believe that we have all these technologies because we are rich. No no no we are rich because we have all these technologies.
Poor folks are looking for opps. There is a way to givev a helping hand and get a financial return
Shorebank in Chicago, calvert has a social investment fund. Compartamos just went public, kiva for online lending. Institutional things $100m endowment gift to tufts from omidyar ?â€¦ has to go into microfinance. Very very cool
Q for Gloria
As a pediatrician how has that background influenced your experience in sudan and how would that â€¦.
She was impressed with the integrity of the slave redemption work and the level of resilieance tha tpeople had. Lydia polgreen? Indices of hope of cultures that expereicnes great calamity. Highest indices in Africa â€¦ see new news out of Africa. One of the reasons that â€¦ so much of the news that comes out is so bad. She goes to list some of the good news that is coming out â€¦.(plug for wedia). People perservere and believe that there is going to be a better way.
Q despite all of the innovative programsâ€¦ at what point do they tell themselves that they are simply not doing enoughâ€¦ how far should a company like time go
They are starting to see othe rcos in their industry who would ask why they are spending time on these issuesâ€¦ journey without a destination (constant improvementâ€¦ find the Japanese word)â€¦ announcing a project in Canadaâ€¦ measuring whether birds are reproducing in various types of forestry regimesâ€¦
Programs and initiatives are very important steps in this direction (sustainability)