Posted by: joshtoro | October 19, 2008

To View My Journal Updates on Entrepreneurs

One of my main tasks during my Kiva Fellowship is to be writing journal updates on the entrepreneurs funded on Kiva’s website.  All of these journals will be added to my What Will You Be Doing? page.  I will just be adding new entries to the bottom of the page whenever I post them on Kiva’s website (usually on Fridays) so the page will soon grow to be pretty long.  Just scroll down to the bottom to enjoy the newest entries!  

I hope they inspire you to start making loans on Kiva’s website!

Posted by: joshtoro | October 19, 2008

Trust as a Foundation


If ever there was a time that underscored the importance of trust in economics, now is it.  Readers of this blog from the United States can attest to the financial ruin that awaits us when banks suffer not only from a deficit of wealth but also a deficit of trust; it turns into a vicious circle with declining returns for all. Likewise, theoretical people stuck in a theoretical game like the Prisoner’s Dilemma favored by political scientists, real people in real marriages, parents sending children to summer camps, etc. can all point to the necessary foundation of Trust for successful relationships and beneficial outcomes.  Bereft of trust, vicious circles of unwanted yet nonetheless bad outcomes await everyone involved in that particular relationship.

It has long been noted that poverty exists as a vicious circle.  Forced to work as children to support their families, children cannot get an education; forced to rent cars/wheelbarrows/storefronts they cannot afford to buy outright, entrepreneurs are stuck in a rut of paying rent but gaining no equity; forced to live in abject living conditions because they cannot afford to move, people get sick more easily and miss work and are condemned to low wages; the circle gets more and more vicious.  One of the goals of microfinance is to help those entrepreneurs escape their particular vicious circle of poverty by offering loans to those people when no traditional banks would do so.

So while the great Indian, Mahatma Gandhi, had his satygrahas or experiments in truth, then we may say the great Bangladeshi, Muhammed Yunus, conducted his experiment in trust when he started microfinance. At its core, microfinance is simply a manipulation of common financial practices to suit the needs of the poor.  Each of the adjustments to traditional financial practice is meant to overcome some market failure or to adapt banking to the realities of poverty.  The most basic of these adjustments is the substitution of reputation for physical collateral.  To cover themselves in case of a borrower’s default on a loan, banks disperse loans only if the borrower provides a substitute item that the bank can claim as ‘payment’ for the loan – collateral.  The poor do not have many items available as collateral; hence, banks balked at loaning to them.   Due to their exclusion from the financial world and their continued lack of physical collateral, Dr. Yunus decided that a ‘banker to the poor’ could use a borrower’s reputation and continued access to credit as a substitute for collateral.  Microfinance builds trust as the cornerstone of its loaning structure as a result.  The poor borrowers meet the trust MFIs initially displayed by lending without requiring collateral, and thus a virtuous circle of continuing trust begins.

Like Dr. Yunus’ Grameen Bank, my host MFI (microfinance institution, aka banker to the poor) relies mainly on group lending to distribute their loans.  The basic framework is this:

A group of women in a neighborhood come together and form a group of eight to ten entrepreneurs; the MFI then offers the group a loan.  Each person receives a pre-agreed portion of the total loan.  The loan cycle lasts either four or six months.  Once a month, the women gather at the MFI branch office in their neighborhood.  People who do not come are fined a small amount.  At these monthly meetings, the women have elected a treasurer, secretary, and president.  They collect all their repayments and pay the MFI a lump sum (the aforementioned absentees can send their repayment with another group member if they wish…if they miss and don’t send their money, they have five days to pay or they are fined 5% of the loan).  The individual portions of the total loan can vary significantly; for example, one group I sat in on had one member with a loan ten times the size of another member.

The actual loan has a fixed interest rate and each monthly repayment is equal repayments of principal, interest, and voluntary savings.  Members have the option at the beginning of the loan to add a fixed percentage to their loan as voluntary savings.  If they select this option, they will pay a little extra each month for the term of the loan and receive it all back at the end.  One interesting manipulation to this model is that at my host MFI, they teach the women how to loan these savings to each other on top of their formal group loan.  Thus, if one woman makes Christmas figurines and she wants even more money in November to prepare for Christmas, she can ask the group members to loan her the group’s savings which she would pay interest on.  Thus, the women not only learn how to pay back loans, they learn how to distribute and manage loans themselves.  Plus, the accumulated interest from these loans from their savings goes back into their group savings, helping all involved.

So how does this explanation fit with the opening salvo on trust?  The group loan mechanism has a powerful effect on creating trust within neighborhoods.  Last week I spoke with three groups in three different stages of their loans (receiving the loan disbursement, paying back month two of four, and finishing their loan and getting their savings) and they all had the same refrain: We have more trust in each other now than before.  Imagine cross-guaranteeing other people in your neighborhood.  Every month that passes with successful repayments (and in microfinance, this figure is at 96-98%!) is a month of trust built. Also, as mentioned earlier, this is the first time that a financial institution has placed their trust in these women entrepreneurs.  To be able to match that trust with on-time repayments is an honor for these groups (one group in their ninth loan cycle received a cake and a congratulatory speech from the branch manager) and one every woman told me: I am a punctual payer.  This virtuous circle of trust is repeated with larger and larger loan amounts until one day the women can go directly to the traditional banks with equity in their businesses, savings, knowledge of the loan process, and a long (almost always perfect) credit history.

In the classic Prisoner’s Dilemma (two people being questioned: if one rats out the other he gets 5 years while the other gets 15 years; if they both rat each other out, the both get 10 years; if they both hold out, they get out free), an absence of trust in the other person leads to selfish behavior and a less than ideal outcome (10 years each instead of both out free).  This vicious circle can be overcome if somehow, through many iterations of the game trust begins to form between the two prisoners.  Poverty is a veritable maelstrom of vicious circles.  Microfinance offers a mechanism of injecting trust into this Charybdis.  MFIs step into the gap and offer trust in poor entrepreneurs.  Poor entrepreneurs have overwhelming matched this trust to the tune of 96-98% repayment rates.  However, the group mechanism created by Dr Yunus and mimicked in my host MFI stands to build trust outside of mere financial services.  Women from the same neighborhood brought together for loans grow to trust each other in their endeavors.  Now we see poor neighborhoods with trust growing as a firm foundation for their economy.  And if the last month in the United States has shown us anything, it is that Trust is the foundation for economic growth.  Poverty exists in many vicious circles and microfinance is not a cure-all.  I do believe, however, that if a vicious circle infects other areas of life and drags them down with it, then virtuous circles like trust can infect other areas in a similar manner and drag them up with it.  I am a fan of microfinance yes because it is a vehicle for the creation of wealth but more so because it is a vehicle for the creation of trust.

To view fundraising clients of EDAPROSPO on Kiva’s website, please click here

Here are some pictures I took of the three groups I met with last week:

And a video! 

Posted by: joshtoro | October 10, 2008

A Fun(d)raised Dinner in Washington, DC

On Tuesday, September 30th, Sierra Visher and I (Josh Bull) had a fundraising dinner to tell people about our upcoming Kiva Fellowships and raise funds to cover our transportation expenses.  Even prior to the dinner, an anonymous donor contacted us and told us s/he would match whatever we raised at the event up to $1500.  With that astounding offer on the table we did our best to raise awareness of the event among our various networks of friends and acquaintances. 

Sierra has a ‘cozy’ apartment in DC and the event definitely filled her place up.  I had some college friends drive in from various parts of Maryland and Sierra and I both got a few co-workers to come as well.  To celebrate the fact we were both going to Latin America for our Kiva Fellowships, we each made a Latin-inspired dish: a fantastic potato-base corn chowder, homemade salsa, a spicy guacamole dip, and homemade sangria.  A word from the not-so-wise to anyone who attempts to remake these dishes, remember to wash your hands after dicing jalapeños for your guacamole because otherwise it will not be a fun experience if you casually rub your eyes while driving through Dupont Circle in rush-hour J.  With the dinner and the anonymous donor, we were prepared for a good night.

The event went fantastically.  After an hour or so of mingling and meeting each other, I started a presentation on what Kiva does, what a Kiva Fellow does, and what the attendees could do.  One of the best outcomes of the night was the fact that my prepared 30-minute Presentation actually ended up being a 90-minute plus Discussion.  Not many of the attendees had actually heard much about Kiva beyond knowing that Sierra and I have a passion for it.  Questions flew back and forth about how Kiva works, what the implications of certain processes could be, why microfinance is different than regular finance, and many other topics that enlightened, entertained, and evoked new passion for Kiva in everyone.  Rather than feeling like a fundraiser for Sierra and I, people got the sense of it being a house party for Kiva and immediately started talking about how they could and should start having them at various friends’ houses.  So what began as a sharing of our personal passions, ended with a resolve to share our now collective passion for connecting people through loans for the sake of alleviating poverty.  I know for a fact one of them has even become a KivaFriend!

As for the original purpose of the dinner, funds were indeed raised.  Collectively, Sierra and I raised $700 but more importantly a new cadre of people to spread the word about Kiva and the Kiva Fellowship to their own networks.  And, in an act overwhelming his/her own generosity, when informed of our total, the anonymous donor in turn informed us that s/he would still give $1500!  So thank you.  Thank you to those who attended, to those who tried to come, to those who read this posting and sent good vibes our way, and to our incredible anonymous donor who must use a lighter if s/he smokes because s/he is really matchless.

Sierra Visher doesn’t leave for Honduras until November and to placement unknown after that.  I, Josh Bull, have left already and am in my first week at my Kiva fellowship with EDAPROSPO here in Lima, Peru!  In December I will be going to La Paz, Bolivia to work with Emprender. Sierra and I and the rest of the Kiva Fellows will be posting on the Kiva Fellows blog at throughout our Kiva fellowships.  If you like funny or thought-provoking stories and you like Kiva, then this is definitely a site worth checking out…daily.  Thank you for your support for Kiva, Kiva entrepreneurs, and Kiva fellows.  My experience so far has been overwhelmingly positive and some of you in particular are the inspiration for my ‘strangers and friends’ section of The ‘Between’ Week blog.

PS We didn’t have the foresight to take pictures of the dinner (although I we most certainly had the hindsight) but I have attached PowerPoint presentation that served as the springboard for the 90-minute discussion about Kiva to this post.  The picture on the opening slide was actually taken at the very moment Sierra and I had the idea (notice the intense gaze) while at Kiva Fellows Training to throw the fundraising dinner in DC.

Posted by: joshtoro | October 3, 2008

The “Between” Week

My week has been one of experiencing the meaning of the word ‘between’ (Not to be confused with the town of Between, GA which lies exactly between my parent’s house in Atlanta and my most recent house in Athens).  I have experienced and relished the state of being between, which I have conveniently organized into paragraph form for you. Yes, you.

The first state of between was geographical: between Kiva training in San Francisco and the start of my Kiva Fellowship in Peru and Bolivia.  I am one of the first in the 6th Class of Kiva Fellows to go abroad and so had only 10 days to get everything I needed to do done.  In between packing and preparing, I visited friends and family in Athens and Atlanta, Georgia and DC.  From my forays into the realm of geographical betweens, I realized the importance of technology in bridging the distance. 

The second state of between was financial: between donations and loans.  Since Kiva Fellows are unpaid volunteers, we are asked to fund ourselves through networks of friends and family, creative fundraising efforts, and even grants from universities or wherever we worked.  This reality left me in the uncomfortable position of asking for donations to support me support an organization that has as the core of its animating spirit a replacement of donations with loans.  Kiva stresses partnership with the poor rather than paternalism; their mission is to connect people through lending [not donating] for the sake of alleviating poverty.  The tension inherent in any fundraising I would do led me to seek out new ways of fundraising that would capture several shades of that magical word: ‘between’.  If I have already paid for my trip by dwindling my savings to a month or two’s rent in DC when I get back, how can I allow any money I raise to be maximized in between it being raised and my need for it?  If I want to leverage the goodwill of those who support me into supporting Kiva’s mission, what can I create in between the two to create that relationship? Check out my How Can I Get Involved page to find out!

The third state of between was psychological:  between strangers and friends.  The boundaries we sometimes construct between the two are often broken when generosity and kindness emanate in equal parts from both.  For me several acts of generosity and kindness this past week have moved a few people into a new social region between friend and stranger that will lead me to ponder the supposed distinction in the weeks to come.  During my period of initial fundraising for my Kiva fellowship, I made a jump into worlds of both strangers and friends.  And in my interactions with strangers, I received unbelievable support, validation, and comfort.  In particular, one individual became an anonymous donor for a fundraising dinner Sierra (a fellow Kiva fellow) and I threw with our friends.  This donor’s support throughout has consistently been overwhelming and increasingly so (one example, the donor would match whatever we raised at the dinner up to $1500!!! When it turned out that only us and our college friends attended and we fell well short of that, the donor informed us that $1500 would still be given!).  When I try to distinguish the kindness of ‘strangers’ and my friends who came on two day notice with hour-long drives to listen to mine and Sierra’s passion for Kiva in a cramped studio apartment with soup, sangria, and guacamole and give whatever they could, it begins to seem a little ridiculous to split the camps.  I imagine the same might be true for borrowers on Kiva’s website.  Before Kiva’s Field Partners gave them access to Kiva’s world of lenders, it is likely the borrowers had to rely on friends and family to support their small businesses.  Now, I can go to them with pictures of forty individuals- strangers from strange countries- who supported their little business in the outskirts of Lima.  I feel like my experience with fundraising this past week may help me gauge their reaction.  “I understand my friends supporting my passion, but forty strangers?  Why me?”  If their feelings are anything like mine, the range of emotions may just be those invisible tendrils predicated on kindness reaching out between individuals and forming connections where once none stood: the ‘between’ between stranger and friend.

We learned in training that Kiva fellows are to act as bridges between several groups of people: we will connect lenders and borrowers by posting pictures and journal updates and we will connect Kiva with their Field Partners by helping the latter utilize the former.   If my experiences of between during my ‘between’ week are any indication, this position of being in between is one I am going to enjoy immensely in the weeks to come.  Perhaps it is only fitting that this blog entry was written in the air between Washington, DC and Lima, Peru.  May the experience of between invigorate rather than dismay.


This post is dedicated to the ampersand, that wonderful little symbol that no one really knows what it is nor what it truly represents (though some may claim it means ‘And’), only that its presence signifies a ‘between’: a distance bridged, a connection formed, an object once separate now joined to another.  

Posted by: joshtoro | August 6, 2008

Phil & the Jittery Joes Tasting Room

Phil had the idea of turning a corner of the coffee roasting warehouse into a Tasting Room
Phil had the idea of turning a corner of the coffee roasting warehouse into a Tasting Room

Phil sits behind his counter ready to serve the FRESHEST coffee in town

Phil sits behind his counter ready to serve the FRESHEST coffee in town

This is where I will post the sample journal entry I used for my Kiva Fellows application.  It will be so much better than this place-holder entry that you’ll be wanting to refresh this webpage every two minutes just so you can read it again.

It will talk about how Phil had this great idea of turning an unused corner of the Jittery Joes Roasting Company into a coffeehouse that serves coffee straight from the roaster.  His idea turned into a business last year and has been a steady success since day one.  Avid coffeedrinkers were already coming to visit the warehouse to observe the local coffee roaster while the Jittery Joes cycling team often stopped by after practices to visit their main sponsor.  Having a natural base of frequent customers who drank a lot of coffee assured him of success.  His business savvy also shone through when he let real estate agents for a new condominium development use a table in his store as an office and staging area for potential new tenants.  This strategy introduced his story to hundreds of new people who will soon live less than a block away from his store.  Phil temps as an apprentice roaster for Jittery Joes and this relationship allows him to buy only the coffee he sells.  The rest of the freshly roasted coffee is packaged for wholesale.  The new condominium development, Jittery Joes coffee’s expanding reach in the Southeast (they just got picked up by WholeFoods), and most importantly, Phil’ business acumen make the Jittery Joes Tasting Room sure to become an entrepreneur success story.

Posted by: joshtoro | August 6, 2008

Posted: Trespassers Welcome

That should be the sign hanging underneath every blog because, really, blogs are like an open invitation to read your diary.

Lucky for me, my diary is written to an imaginary audience populated by people just like you.

So welcome. Welcome to my blog. I hope that these first few sentences prove enticing enough to read to the middle and even the end of this entry. You (collectively and singularly) are reading this blog because somehow or another, you have entered into the ´friend´ status with Josh Bull or because you enjoy reading about what he does or maybe because you accidentally typed in a 22 character web address that just happened to read .

About once a week starting in the second half of August, I’ll post a new entry full of witty insights, carefully constructed anecdotes, general introspections and extrospections, tangents into economic and political histories of various countries and the implications for today, and anachronistic filler talk like milking the cow or how to build a log cabin.  The blog is entitled PseudoMemories & VeriDreams- Josh Bull & Kiva Borrowers for two simple reasons.  The first is that my personal blog is PseudoMemories, so named because my postings are usually PseudoMemories from that exotic land between memories and imagination, past and future, reality and hope, dreams and waking life- in sum, where I live day-to-day.  Kiva Borrowers, however, deserve the title VeriDreams.  If they had a blog, it would be about their entrepreneurial hard work turning their dreams into reality (Veri being the Latin root for true).  Loans of small amounts of money from you and I via Kiva assist them in this process.  Thus, this blog will document the story of what happens when the two sides, PseudoMemories and VeriDreams, meet.

Now to end with a fantastic concluding sentence that’ll leave you hanging on the edge of your seats for what will come nex….

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