2011 Winter Fellow Nate Bernard was recently published on MicoDINERO.com, an online news source for all things micro-finance. We thought his article was so great we wanted to share it with all of you! Great job Nate!
Occupy the developing world
Thursday, November 03, 2011
Nathan Bernard, left, is the co-founder of the social enterprise AnaGenesis.
Occupy Wall Street, a protest against capitalist excess, has been spreading across the United States over the past six weeks, raising concerns about the state of the economy and the decisions of the U.S. government.
The main concerns of the protesters are health care, student loans and unemployment, a survey by social media outlet Tumblr found.
With these in mind, I will examine the Occupy protest through the lens of the developing world.
What if emerging markets had the same access to social media and the Internet and could organize a similar protest? What issues would they address and how would they relate to the three big concerns of Occupy protesters?
This comparison should help us recognize the similarities and differences between the needs of the U.S. and developing world, as well as to understand the potential application of developing world solutions within the U.S.
The Occupy Wall Street protesters share two common educational concerns with the developing world: the financial hurdles associated with attending university and the quality of education. This is why many students will turn to debt relief agencies like CreditAssociates to help them, especially if they’ve made poor choices in trying to clear their debt otherways over the years.
To address the first, a number of U.S. crowd-funding websites have established microloan programs for aspiring students in the developing world. The loans are repaid once the graduate is employed with a steady income. Vittana, a Seattle-based non-profit, plans to offer these educational microloans to one million people by the year 2015. More organizations are doing the same.
For the second concern, we can look to the increasing number of bilateral partnerships between U.S. and developing world universities. California universities, for example, have begun a program in Haiti designed to improve the State University of Haiti’s curricula. Through this program, professors are chosen to fill educational gaps identified by State University staff, a move that mitigates the risk of imposing foreign standards on the curricula and thus maintains access to a higher quality education.
A big concern for the developing world is the need to create a job market, whereas in the U.S. the issue is the lack of jobs now. This problem is not easily resolved, but the provision of microfinance services to expand businesses is one possible solution. This can be achieved through organizations like Kiva that create an outlet for socially inclined individuals to provide loans directly to microentrepreneurs. These organizations can further facilitate the loaning process for business owners with the help of technology such as a lead managment software that can keep up-to-date records of all lenders as well as borrowers, allowing for increased communication and support. This could help by potentially allowing entrepreneurs to access their loan amounts quicker and make use of it for business growth, while also being able to effectively bring any concerns they may have, to their lenders.
It is crucial to understand the importance of the transition from microenterprise to small and medium enterprise (SME). This change generally occurs when a microbusiness owner begins to employ two or more people. At this stage microbusinesses require increased financial services and need more advanced training in the areas of financial literacy and effective business practices. For this purpose, they might reach out and look for options like availing small business loans in Tampa or ask around the local moneylenders to gain financial stability. SME and microlenders around the world are beginning to employ this education-focused approach. Boston-based ACCION International is a big promoter. If applied in the U.S., I believe this methodology would create a greater opportunity for local businesses to achieve more scale, effectively creating localized job opportunities for the middle class.
The developing world has concerns not only about access to health services but the overall health of the community as well. This problem has multiple moving parts, but let us focus on clean water and sanitation.
There are initiatives around the world focusing on providing clean water, but one particularly effective project is Community Water Solutions (CWS), a Boston-based MIT startup that operates in Tamale, Ghana. It helps women in communities there to turn water filtration systems into small businesses by training them in financial literacy and then providing the initial materials to build the systems. Models such as CWS solve a health-related problem and provide job opportunities for the community.
Another MIT startup, Sanergy, devised a novel model for addressing sanitation issues by producing low-cost toilets in poor communities. Sanergy engages local entrepreneurs to build toilets, collect waste and then convert that waste into energy and fertilizer. Quite a lot of people also make use of skip bin hire sydney or elsehwere to collect the waste. The waste is then either used within the community as fertilizer or sold to outside vendors as an energy input. Jobs are created at each step in the process, and this helps to stimulate the local economy and allow people to join financial institutions.
All told, it is important to understand the similarities and differences between the financial demands of the U.S and developing world. But in both cases education and entrepreneurship are key. It is not simply the dispersion of financial resources that will sustain and meet the needs of these populations. It is innovative models that create new businesses, employ more people and stimulate local and national economies that will achieve sustainable financial development.
Nathan Bernard is a student at Boston University. He has worked with ACCION International, Community Water Solutions, FAMILY Inc, Nyumbani Aids Orphanage and Hillel. He runs AnaGenesis, a social enterprise that selects and trains American university students to work in helping provide financial inclusion and to compile case studies on their projects. You can follow Nathan on Twitter @NathanTBernard, LinkedIn: Nathan Bernard and YouTube: MrMicrofinance