Micro Lending / 0% Interest Update

[Bruce]

Not too long ago I posted something about small intrest free loans for up to 10,000p ($250 USD) for the poor to start up or expand a small business. I have been looking and screening applicants to try to put the money where it will do the most and not just some poor family looking for a handout. The first 4 have been approved.

 

There is Felicidad who is 61 and a small food vendor who is a widow and supporting herself and helping her son who is a tricycle driver.

 

Rodelo who is her son and the father of 6 kids (maybe) with the crazy GRO wife always screaming for more money. The smaller boy is autistic and only screams and grunts. Rodelo is going to use the money to buy a used but in good condition tricycle of his own so he does not have to pay 60p a day to rent one.

 

Then we have Enrika who I already posted about who is only asking for 2,000p. She really can not comprehend 10,000p and that amount is of no real use to her and she has no idea what to do with it. But the 2,000p she will use to expand her walking door to door recycling business. Now she can only get scrap cardboard and found bottles. But with the new money, she is planning to buy bottles directly from the individual homes at 50 CENTAVOS and then resell then at 75 CENTAVOS to the recycler.

 

Now, about Centavos and what they are worth...... I am not the one to put it into prespective here so JJ or others jump in and tranlsate this into western thinking please..... She is making a profit of 25 CENTAVOS per bottle. Remember she is walking and has to carry all she buys and walks to the recycler too. If she takes 1 ride on a tricycle, that will set her back 5 pesos. So class... If Enrika makes a profit of 25 centavos per bottle and 1 tricycle ride costs 5 pesos.... how many bottles will Enrika have to buy / resell to pay for that 1 tricycle ride???   

 

In any event, she is very happy! I do not speak any Waray, so I can not get her to understand, but if I could just get her in the US to a busy bar / restaurant's dumpster on a Sunday morning..... Well I think she would die from shock at seeing what that 1 business throws away in beer / wine bottles from 1 Saturday night....

 

And lastly, we have Pedra, also a forum member living in Badian on Cebu. She has no money but for occasional support from 1 of the older child's father and she does washing too. So any internet time she gets is by asking for the remaining time in the local internet cafe after someone pays for an hour but leaves before that hour is up.  

 

She also is looking for Mr. Right... but in all the wrong places... hey, someone should write a song about that.

Edited March 26, 2013 by Bruce

[boring]

Hi Bruce

 

I am an accountant (and love business) with a back office in Manila and main operations in Australia.

 

I love what you are doing here. Can you tell me how you find candidates for the micro lending?

 

I'd be interested in doing something similar in the Manila area.

 

Mark

[JJReyes]

Now, about Centavos and what they are worth...... I am not the one to put it into prespective here so JJ or others jump in and tranlsate this into western thinking please..... She is making a profit of 25 CENTAVOS per bottle. Remember she is walking and has to carry all she buys and walks to the recycler too. If she takes 1 ride on a tricycle, that will set her back 5 pesos. So class... If Enrika makes a profit of 25 centavos per bottle and 1 tricycle ride costs 5 pesos.... how many bottles will Enrika have to buy / resell to pay for that 1 tricycle ride???

 

You need to teach Enrika the concept of franchising. Tricycle drivers have lots of downtime waiting around for customers. Enrika organizes them and arranges for the pick-up. The drivers get 15 centavos a bottle. Her net revenue drops to 10 centavos, but hey, this is a volume business. If the tricycle drivers haul 100 bottles a trip, that's P10 without breaking a sweat. Soon Enrika is a peso millionaire with two hundred persons claiming to be her close blood relative.  

[Thomas]

Hi Bruce

 

I am an accountant (and love business) with a back office in Manila and main operations in Australia.

 

I love what you are doing here. Can you tell me how you find candidates for the micro lending?

 

I'd be interested in doing something similar in the Manila area.

 

Mark

Try to get to know some poor  :)

 

 

(I have found some presumtive candidates. When they manage to reach Internet access (I'm in Sweden) we discuss business ideas to try to make biger chance they get OK results. I prefer if they do something not to many do already. =OTHER than sarisari, tricycle and mobile loads  :)      (Mainly some type of PRODUCING, when they have skill for that themself/ within the family. There are some such where the equipment cost less than 10 000p, manual ones not electric. The most poor have no use of the electric ones anyway, because they have no electricity  :)  Need compleeting with some local research still.  The most active, of them I talk "business" with, have already researched some, thinking of some different business ideas we found out can suit her. (One production and one mix of production/trade. (Or a service, I found she can apply too, but need approval from a Phili company.)

I'm also preparing the process to try to become a "cell" to the aid organistion, which Bruce talk about. Some snail mails needed in steps to make compleete documents, slowed down some by I "live in the middle of nowhere"  :)  geting snail mails only once per week.)

[MacBubba]

Can you tell me how you find candidates for the micro lending? I'd be interested in doing something similar in the Manila area.

 

Is it you that lives in the Eastwood area?  If so, there is a depressed area called Libis that is close by.

[boring]

What I meant was is there some sort of central organisation/charity that I can go to that does this type of work?

 

I don't have time to randomly walk around trying to find good cases for micro financing :)

 

I can look out of my office window into a slum area, but that doesn't mean I'm going to go knocking on doors trying to find people who will put the money to good use in a business. 

 

I could probably find candidates through word of mouth, but not sure how efficient that would be...

[Bruce]

Here is the issue... there are millions of poor looking for a handout. Not really a canidate. It is labor intensive to find a canidate / family who are not drunks or in debt past their eyeballs. The money is for starting or expanding a small business. Not a handout to pay their past due bills.

 

When I originally posted about this a few weeks ago, it was for members who already know possible canidates so they are prescreened... Less labor that way and then forum member is like an on site auditor to help them with any questions.

 

The original charity that does this only works through OTHER charites such as mine and do not deal with the applicants directly.

 

giversleague.org is their website.   

Edited March 27, 2013 by Bruce

[Bruce]

You need to teach Enrika the concept of franchising. Tricycle drivers have lots of downtime waiting around for customers. Enrika organizes them and arranges for the pick-up. The drivers get 15 centavos a bottle. Her net revenue drops to 10 centavos, but hey, this is a volume business. If the tricycle drivers haul 100 bottles a trip, that's P10 without breaking a sweat. Soon Enrika is a peso millionaire with two hundred persons claiming to be her close blood relative.

 

I see 2 issues here..... 1 is that these drivers all know where the recycle place is and pass it several times a day in their travels. I doubt they would be willing to do anything for Enrika.

 

The other issue is that is .... the teaching of Enrika 'anything'....... You know there is a warning on your hair dryer not to immerse in water or use while in the bath or similar stupid acts. That warning is not meant for you or me. Somehow we already know such things. No ned to tell us the obvious.

 

But that warning and others like it are meant for people like Enrika. However they can't read or understand the warning anyway!

 

Enrika was actually overwhelmed at the thought of 10,000p loan. Her brain went into vapor lock mode. She is comfortable at 2,000p. I do not think pushing her or expecting more from her will result in anything positive. So I accept her for what she is and support her at a level she is comfortable with.

[Thomas]

What I meant was is there some sort of central organisation/charity that I can go to that does this type of work?

 

I don't have time to randomly walk around trying to find good cases for micro financing :)

 

I can look out of my office window into a slum area, but that doesn't mean I'm going to go knocking on doors trying to find people who will put the money to good use in a business. 

 

I could probably find candidates through word of mouth, but not sure how efficient that would be...

E g aren't several people trying to sell things to you?    :)

If you have some skill in judging people, then you can find candidates by them, seeing who can have potential to earn better if they get some start capital. Then get to know them to check if your first thought was corect and if they don't have someone destroying to much in her family. 

 

(Some easier in villages, where it isn't so crowded.)

[boring]

What I meant was is there some sort of central organisation/charity that I can go to that does this type of work?

 

I don't have time to randomly walk around trying to find good cases for micro financing :)

 

I can look out of my office window into a slum area, but that doesn't mean I'm going to go knocking on doors trying to find people who will put the money to good use in a business. 

 

I could probably find candidates through word of mouth, but not sure how efficient that would be...

E g aren't several people trying to sell things to you?     :)

If you have some skill in judging people, then you can find candidates by them, seeing who can have potential to earn better if they get some start capital. Then get to know them to check if your first thought was corect and if they don't have someone destroying to much in her family. 

 

(Some easier in villages, where it isn't so crowded.)

Edited March 27, 2013 by boring