Blog Archives

Leverage your network with partnerships

February 20, 2012
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Many entrepreneurs face the trade off on where to spend their time.  Where is value added the most?  Should I spend time at this meet and greet event, hoping to grow my network, or spend the time buried back in the office with the team perfecting our product and discussing strategy?

Social entrepreneurs often enter a space where experience, competitors, and new entrants are sparse.  The level of documented intellectual property and lack of industry veterans to seek out makes succeeding even more difficult.  Yet these resources are critical to gaining tracking in the market and ensuring your idea lives to see the next day.

Triple Pundit wrote  a great piece on shifting more to collaboration between NGOs and businesses.  If values are aligned, – which is no standard clause; value misalignment can be the most critical downfall to partnerships  - the complementary skillsets can mean more impact. Read more »

Lean Startup Methodology for Social Enterprise

February 13, 2012
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As many entrepreneurs are familiar with, one of the must-reads when starting a business is the book The Lean Startup by Eric Ries.  It’s a useful read no matter what sized organization you’re with, and the principles that the book are founded upon can be applied anywhere.

I won’t go too much into the application of the Lean Startup Methodology in the social enterprise realm (as an aside, check out Social Earth for a good take on that).  However, I think that some of the principles that a startup can learn from can be applied when looking at the social enterprise industry or even sub-sets of industries.

Validated Learning Cycles (VLCs),  a term that is used to describe the rapid development cycles of building, measuring, and learning from your product, is typically done in isolation during your initial stages.   The energy put into spreading your product and gathering user feedback is tremendous.  But, what happens to the feedback that you’ve gained? Read more »

A test for your passion

February 6, 2012
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“Find a job that you love and you’ll never work a day in your life”

- Confucius

When you’re passionate about your work or your hobby, the ‘work’ becomes less of a drag, and you’re eager to learn and produce more.  But what if that very passion gets tested by an outsider?

Sharing your work/passion with others is a critical part to evolving the idea and making sure it is as strong as possible.   No one can develop the perfect idea or product in a vacuum without seeking – and more importantly – incorporating feedback.  Hearing someone’s reaction about your passion can be a very humbling experience.

Read more »

Introducing Microfinance Monday

January 30, 2012
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Today marks the last Monday of January and the first monthly Microfinance Monday on Rising Pyramid.  Each last Monday of the month, we’ll take a look at the growth and trends emerging from the microfinance industry.  We plan to offer a holistic and balanced look into an industry poised for a critical year.  Enjoy!

Time for Microfinance to Retool

As venture capitalists maintain their distance from MFIs and large for-profit organizations continue to report poor results, it is clear that now is the lull in the industry lifecycle where MFIs must go back, retool, and change the way  business is done while investors take a sideline role.

Microfinance’s reputation in the past few years alone has pushed the industry to its bounds and essentially made it too sexy too fast.  The rewards and opportunities that microfinance presented were overblown from both the investor and consumer side.  As bold MFIs drank the kool-aid, the IPOs began to trickle out, met with great surprise, trepidation, but spurred on by hopeful confidence. Read more »

Don’t be afraid to be (slightly) wrong

January 23, 2012
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If you pick up a book about entrepreneurship, chances are one of the nuggets of advice you’ll read is to swallow your fear of failure, and just “try, try, try”.

The point of the suggestion is to not fall into “analysis paralysis” and focuse too much on making the perfect product. Get your efforts out there, and get them judged sooner, so that you can make adjustments and incorporate feedback to improve your product.

But what happens if your first product attempt flops and customers wont give you a second chance? As Bryan wrote last week, trust is an important factor when working between organizations. But trust between the producer and end-user is just as critical. Read more »

Making Poverty Reduction Personal

January 16, 2012
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For American readers, do you remember those charity cardboard boxes you would get in grade school that you had to assemble in order to deposit donations to the poor?  The instructions on the side of the box alluded to the fact that by every coin you dropped in, you were helping a home.

Then came those television commercials that opted for the ‘in-your-face’ method of thrusting horribly poverty-stricken scenarios into your living room (most likely as you stuffed your face with TV dinners). They attempted to bring the images of poverty close to home in the hopes that this would drive more donations – potentially out of guilt.  As a gift for donating, you would receive a packet in the (snail) mail providing you details on your recipient.  Yet, it still felt disconnected. Read more »

What lies ahead for microfinance in 2012

January 9, 2012
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As 2012 begins, much of the same negative rhetoric is surrounding microfinance institutions, but it seems that the industry is responding slowly but surely with much needed regulation and unity.

As the year goes on, I don’t anticipate these negative examples going completely away. As it becomes more commonplace for these examples to be revealed, more and more stories of usuary and MFI abuse will start to filter out. While it can be easy to view it as a black eye on the microfinance industry, I anticipate this will continue to fuel the call for more increased regulation and greater transparency into the industry. Read more »

Behavior Change: the biggest challenge facing social entrepreneurs

January 2, 2012
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Manufacturing solar powered lanterns? Easy.

Developing a mobile wallet for farmers who don’t even have motorized vehicles? Simple.

Turning human waste into cheap energy? Yawn.

Getting people of all different backgrounds and socio-economic standings to change not only their beliefs but their behavior on a daily basis? Woah. Now there’s a challenge.

With the intellectual, academic, financial, and scientific firepower behind social enterprise, 2012 is going to be yet another large step forward in the development of incredibly helpful products to help the BoP in the fight against poverty.

Yet even with the most efficient, cost-effective, sustainable, and beneficial products available, the largest challenge facing poverty alleviation is the behavioral shift across the entire pyramid. Read more »

Growing Pains in the Microfinance World

December 12, 2011
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The micofinance identity crisis continues.

Pressure from all ends of the value chain continues to mount, further tightening the vice on the future of microfinance. Vishal Mehta, Co-founder and Partner of Lok Capital recently summarized investor sentiment by saying that, “the sector is not at all attractive unlike a year ago.”

As Lok Capital, a venture capital firm with investments in MFIs, is raising their red flag, SKS Microfinance is raising the upper limit of Foreign Institutional Investment in orer to shore up a balance sheet that has taken a beating over the past year.

While an infusion of capital might provide shareholders with some temporary comfort, larger issues in desperate need of resolution loom in the near future.

Yaseen Anwar, Governor of the State Bank of Pakistan recently spoke at the 5th Pakistan Microfinance Country Forum about the future of microfinance in Pakistan. His speech, while in depth, seemed to highlight the needs of everything from regulation reform to alternative delivery channels to financil literacy courses.

Further, with the harsh government-imposed restrictions placed on micro loans in Andhra Pradesh, a recent report has shown that in the absense of proper micro loan availability, borrowers are turning to non-traditional methods for credit.

In 59% of the sessions, respondents unanimously said that they had taken loans from money lenders in the absence of MFI credit. Daily finance companies—informal money lending entities—were the preferred choice of borrowers in 29% of the sessions.

This sense of confusion and uncertainty from investors through to borrowers are major growing pains that will need resolution sooner rather than later. A majority of borrowers in Andhra Pradesh have even stated that they would be willing to “repay loans if MFIs can disburse fresh credit”.

Things are not all in a disarray, however. International standardized regulations appear to be heading the way of MFIs.

The International Finance Corporation (IFC), a member of the World Bank group, is working with other institutions to promote global standards for corporate governance. 30 development finance institutions (DFIs) have agreed to adopt a set of standards based in part of IFC’s Corporate Governance Methodology.

The longer that regulation and consumer protection continue to be issues that are unmet in the microfinance industry, investors will stay at bay. These growing pains, while not indicative of a troubled industry, must be addressed through a collaboration of international organizations, governmental regulators, and MFI information-sharing. While I believe the industry is on the right path, the time to act is now.

- Chris

Organized Chaos? It works

December 5, 2011
By

I’m currently traveling through India, and one of the most interesting things to me is how traffic operates.  Coming from the US, at first glance it appears that everything is chaotic and without order.  Upon closer examination, it’s so much more.

Cars, buses, bikes, bicycles, rickshaws, pedestrians all finding a way to dodge each other and get to their destination safely.  It’s wild – but it works.

Enforcing strict rules such as adhering to lanes, crossing only at crosswalks, and stopping completely at traffic lights seem counter productive and might only serve to add more to the congestion. Read more »

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