Unitus Microcredit Loans

Unitus and Michael and Susan Dell Foundation Invest in Microfinance in India

2006-05-18T17:31:00.000-07:00

Press Release: Unitus and Michael and Susan Dell Foundation Invest in Microfinance in India
Unitus and Michael and Susan Dell Foundation Invest in Microfinance in India

Ujjivan partnership to provide microfinance to 600,000 clients by 2011

Redmond, Wash. (PRWEB) May 18, 2006 — Unitus Equity Fund, L.P. (UEF), a private equity fund formed by Unitus, a nonprofit organization which creates innovative solutions to global poverty, and the Michael & Susan Dell Foundation (MSDF) today announced they will invest in Ujjivan Financial Services Private Limited, a newly-formed microfinance institution (MFI) with a vision to reach the poor in major cities throughout India. The UEF and MSDF join Bellwether Microfinance Fund, which had earlier invested in Ujjivan. The UEF is chartered to make direct equity investments in high-growth MFIs in Asia and Latin America, and will have a 24 percent stake in Ujjivan’s ownership, with MSDF and Bellwether at 13.8 percent and 12.6 percent, respectively. This investment will provide Ujjivan the capital to help reach more than 600,000 borrowers by 2011.

Ujjivan, based in Bangalore, India, is currently focused on providing financial services to the economically active urban poor. Microfinance in India is still mainly a rural phenomenon with only a handful of MFIs providing microfinance services to the urban poor. Ujjivan fills this gap with a mixed product offering targeted at urban, poor women.

Unitus President and CEO Geoff Davis said, “I’m delighted to welcome Ujjivan as Unitus’s ninth global MFI partner. The core strength of Ujjivan lies in its strong, experienced and visionary leadership team, which has over 60 years’ collective experience across commercial banking, microfinance, development and technology. By backing startup MFIs such as Ujjivan, we support innovation in the urban microfinance market. Working with Ujjivan from a very early stage to help them reach their goals will be a challenging but truly rewarding experience for Unitus.”

“Microfinance is a key program area for the foundation in India, and we’re specifically focused on extending the proven success of microfinance in rural areas to urban markets,” said Janet Mountain, executive director of MSDF. “We invested in Ujjivan because of its support of urban micro-entrepreneurs, and we feel confident this effort will help the families of India long term by providing them with the financial means to improve the welfare and education of their children.”

Added Viswanatha Prasad, Fund Manager, Bellwether Microfinance Fund, “Bellwether is delighted to welcome UEF and MSDF as investors in Ujjivan. Our combined resources will strengthen Ujjivan’s capital and capacity, and help Ujjivan realize its vision of creating a better life for a vast section of our community.”

“We are proud to formally join the Unitus and MSDF families, having been involved with them for some time,” said Samit Ghosh, CEO, Ujjivan. “We are at a stage when our business is ready to take off, and with this investment we have the financial and strategic support to grow Ujjivan so we can reach more of India’s poor. Ujjivan means a better life, and that is our true focus. We provide financial services for our customers to enable them to be free of poverty within five years of starting their relationship with us.”

NOTE - You can view the full release on PRWeb here.

About Ujjivan

Ujjivan commenced operations as a non-banking financial company in November 2005. It provides financial services to the economically active poor in India by combining successful models in microfinance with the technologies and efficiencies of modern retail banking. Through in-depth market research, Ujjivan has created a range of diverse financial products for poor urban women in India. While currently focusing on Bangalore, it expects to expand nationally and provide microfinance to more than 600,000 clients by 2011. Additional key Ujjivan investors include K. R. Ramamoorthy, Samit Ghosh, Nucleus Software, Ravi Bahl, Jaithirth Rao, and Ashok Vaswani. For more information about Ujjivan, please visit www.ujjivan.com.

About Unitus

Unitus, Inc. is a nonprofit organization creating innovative solutions to global poverty using a venture capital approach. Unitus dramatically accelerates the growth of microfinance institutions (MFIs) and demonstrates that many MFIs can be run as profitable, large-scale, poverty-focused businesses with links to formal capital markets. As of May 2006, Unitus had nine MFI partners worldwide serving more than 679,000 poor clients. By 2015 Unitus’s MFI partners plan to reach 10 million clients in India alone. Based in Redmond, WA, USA, and Bangalore, India, Unitus relies on innovative financial instruments and the financial resources of like-minded individuals and foundations to fulfill its mission. Unitus received the 2006 Fast Company Social Capitalist Award for taking an innovative, business-minded approach to alleviating global poverty. For more information about Unitus, please visit www.unitus.com.

About the Michael & Susan Dell Foundation

The Michael & Susan Dell Foundation (www.msdf.org) was established in 1999 by the Dell family to improve outcomes for children living in urban poverty. Based in Austin, Texas, the Foundation funds programs that foster and improve education, health and safety for children around the world. With an endowment of more than $1 billion, the Foundation has committed more than $270 million to date for children’s issues in the United States and globally. Because of the proven social impact of microfinance, the Foundation is keenly engaged in bolstering growth-oriented microfinance institutions that have the potential of reaching millions of un-served poor. The centerpiece of MSDF’s initial efforts in microfinance is to catalyze the development of the urban microfinance market in India by providing risk capital to start-up microfinance organizations.

EDITOR’S NOTE: The Michael & Susan Dell Foundation is separate and distinct from the Dell Foundation. In any first reference, please use the ‘Michael & Susan Dell Foundation.’ For second references, ‘the Dell family foundation’ or ‘MSDF’ may be used in lieu of the full Foundation name.

The Bellwether Microfinance Fund

The Bellwether Microfinance Fund was conceived by a small group of experienced Indian microfinance professionals and foreign investors as an Equity-Debt Fund, independently managed and run by professional fund managers. A US $10 million fund, Bellwether is the first fund in India dedicated to investing in the equity and debt of microfinance institutions across the country that are in line with the Fund’s mission and investment philosophy. For more information, please visit www.bellwetherfund.com.

Ujjivan-Samit GhoshCEOUjjivanTel: +91-98860-11249
Unitus-Robert LowryPublic Relations Associate-UnitusTel: +1 (425) 881-2574
Vidya Narasimhan-India Communications Head-UnitusTel: +91-98452-10981
Michael & Susan Dell Foundation-Renee Austin-Senior Vice President Weber ShandwickTel: +1 (816) 505-7888
Bellwether-Viswanatha Prasad-Fund ManagerTel: +91-98480-13035

Mike Murray on Channel 9

2005-10-11T06:37:00.000-07:00

I first learned about Robert Scoble, Microsoft's Technical Evangalist, and his legendary blog, the Scobleizer and Channel 9 at the Businessblogging summit in San Fran. I was thrilled when I heard that he might interview Mike Murray, the Chairman of Unitus and ex-Microsoft exec.

Today, Robert Scoble posted his 23 minute clip of his interview with Mike Murray where Mike shares his vision of being able to alleviate poverty worldwide and the role Unitus plays in that vision.

Thanks to Scoble for the attention and kudos to the Unitus team for landing such a "prime-time" online interview!

The "Official" Unitus Blog

2005-10-06T18:14:00.000-07:00

Well, to tell the truth, I am glad it is here!

David Schappell, the VP of Marketing at Unitus, and the team have launched the official blog for Unitus at:

http://blog.unitus.com/

David states that they plan to include on the blog:

* links to microfinance-oriented articles that we find interesting (to try to save you, the readers, some time)
* Unitus updates, that may or may not warrant press releases
* Audio or video excerpts related to Unitus staff members (conference presentations, etc)

He also states that he believes to have other employees, board members, and advisors contribute to this blog as well.

Best of luck, David. We welcome Unitus to the pool!

Small Fortunes Schedules

2005-10-04T14:45:00.000-07:00

David posted the schedule for the PBS Station in Seattle for Small Fortunes as a comment on my last post.

PBS has a station finder that will take you to the station in your area (by zip code) and then, for most stations, has a link to the station.

Look on the schedule for October 27, 2005 for the evening for the broadcast time so you can mark it on your calender.

Here is the station finder from PBS:

http://www.pbs.org/stationfinder/index.html

This is one beautiful film that will move you deeply and help you understand to promises of microfinance.

Small Fortunes

2005-10-03T23:05:00.000-07:00

In a previous post about the PBS Documentary, Small Fortunes, I mentioned that it would be broadcast at the end of October. We are now seeing some of the major PBS stations listing their schedules and their show times for Small Fortunes.

For example, PBS station powerhouse, WGBH, schedule for Small Fortunes is now published.

Check your local PBS station for listings and make sure you invite your friends and family to watch!

Microfinance

2005-10-03T22:49:00.000-07:00

Microfinance can be defined as financial products designed for consumers that live at or below the poverty line.

These products can include:

Microcredit

MicroInsurance

MicroFranchising

Savings Programs

Leasing Programs

Seasonal Loans

Equity Programs

I think as we find tools that assist in alleviating poverty, we should see how we can embrace them and utilize them.

Unitus Announces $2.7 Million Grant from Omidyar Network

2005-10-01T15:36:00.000-07:00

This is an incredible step forward for Unitus! The grant will enable Unitus to expand operations and hire key staff members in its Redmond, Wash., and Bangalore, India, offices. With the additional support in place, Unitus plans to form partnerships with at least four new microfinance institutions, and to reach an additional 1 million clients by the end of 2006. By 2015, Unitus expects to be helping 10 million clients in India alone work their way out of poverty.

Unitus is so fortunate to have received such a generous grant from Omidyar Network and to have their trust and confidence. Here is some info about who the Omidyar Network from the press release:

Omidyar Network is a mission-based investment group committed to fostering individual self-empowerment on a global scale. Established in June 2004 by Pierre and Pam Omidyar, the Network is founded on the simple core belief that every individual has the power to make a difference. Because we believe issues are best addressed by the people who face them, we focus on the how, not the what. Therefore, we fund citizen-driven models that enable individuals to pursue what matters most to them. The Network seeks out scalable for-profits,nonprofits, and public policy efforts that promote: equal access to information, tools and opportunities; openness and transparency; collaboration around shared interests; and a sense of ownership for participants. To date, we've invested in areas such as microfinance, bottom-up media, open source projects, and transparency in government. Omidyar Network intends for its diverse portfolio to foster individual self-empowerment across the economic, political, and social realms, and to catalyze a new breed of business for which social impact directly drives profitability. We invite you to learn more about us and the organizations we've funded at http://www.omidyar.net

Unitus and ACCION and the Clinton Global Initiative

2005-09-29T22:59:00.000-07:00

Maria Otero (ACCION International) & Geoff Davis (Unitus)

In a recent post, I mentioned the Clinton Global Initiative and how there would be exciting news from the conference that related to Unitus.

Well, in a just published Unitus Newsletter, we learn more about this exciting development.

Here is from the newsletter:

From September 15-17, former President Clinton convened world leaders in New York City for the Clinton Global Initiative. They discussed four main goals: poverty reduction; religious reconciliation; combating climate change; and strengthening governments and economies. Unlike many other conferences, Clinton asked each participant to commit to action in one of these four areas. In his words, "If you don't want to make a commitment, don't come; and if you don't follow through on a commitment, don't come back."

We were up to the task. Together with ACCION, our partner in the Unitus-ACCION Alliance for India, we pledged to provide microfinance services to 15 million of India's working poor by 2015. This commitment was one of only four recognized at the Friday evening plenary session. In fact, President Clinton himself presented the commitment certificate to Unitus Board Vice Chair Elizabeth Funk and ACCION President and CEO Maria Otero!

The meetings were a tremendous success, with participants committing more than $1.25 billion to work toward the Intiative's goals. We are energized by the work ahead of us, and we pledge to not only report back to President Clinton at this time next year, but to keep you informed about our progress every step of the way.

I am very excited and pleased for such great involvement. A big thanks needs to go to Elizabeth Funk and the ACCION team for all their behind the scenes work to get this initiative accepted.

Promote Unitus

2005-09-28T07:29:00.000-07:00

Just as I finished publishing the last post about how to make the ideas of Unitus more viral, Dave Shappell of Unitus emails me with a post about a new "Promote Unitus" page that includes all the html code to make it easy for someone to add a link to Unitus on their website or insert it in their blog. One of the things needed to make an idea viral is to make it easy to promote. This is way easy.

Come on - want to help the cause? Add a link. It is easy. It is quick. It is fun!

Have a Heart - Add a Unitus Link!

How to make Unitus a Viral Concept

2005-09-28T06:36:00.000-07:00

I recently read a post by Seth Godin about what makes an idea viral. He states that to make an idea viral, the idea must be sent and must be received. He makes the following points:

No one "sends" an idea unless:
a. they understand it
b. they want it to spread
c. they believe that spreading it will enhance their power (reputation, income, friendships) or their peace of mind
d. the effort necessary to send the idea is less than the benefits

No one "gets" an idea unless:
a. the first impression demands further investigation
b. they already understand the foundation ideas necessary to get the new idea
c. they trust or respect the sender enough to invest the time

One of the challenges of Unitus is how to make its message so simple that people can "get" it quickly and without a lot of education. Having more people educated about microfinance, will make it easier for the Unitus message to be told. That is why I think that things like the upcoming PBS documentary on Microcredit, called "Small Fortunes" and features, among others, our own Geoff Davis and Mike Murray, will help the cause. It will expose many more to the basics and power of microcredit in helping to alleviate poverty.

So back to the basic thought - how can we help make the ideas of Unitus become viral?

Here are some of my thoughts:

- We have to make the Unitus message very simple
- We need to make the Unitus message intriguing so it leads to further investigation
- We need to have a core of people who understand that message
- We need to make it very easy for people to share that message

How do you think we can make the ideas of Unitus viral?

Clinton Global Initiative

2005-09-23T11:41:00.000-07:00

Last week, the Clinton Global Initiative was held in New York and in coming days, there will be exciting news about Unitus' involvment in the Initiative.

The Clinton Global Initiative is a non-partisan endeavor, bringing together a carefully selected group of the world’s best minds and most distinguished problem solvers to focus on practical, effective measures that can be taken now. These leaders - from a wide variety of political, ideological, religious, ethnic, and geographic backgrounds - include current and former heads of state, top business executives, preeminent scholars, and representatives of key non-governmental organizations. The Clinton Global Initiative coincides with the Millennium Summit of this fall’s U.N. General Assembly.

There were three sessions on Poverty. The three sessions on global poverty focused on "how best to marry our policies and resources to the dynamism of poor communities and the innovation of the market."

Here are summaries of the focus of the three sessions:

“The Critical Moment in the Fight against Poverty”

Speakers' line up (in alphabetical order):
Mr. Kemal Dervis, Administrator, United Nations Development Programme
Dr. Donald Kaberuka, President, African Development Bank
His Excellency Thabo Mbeki, President of the Republic of South Africa
Mr. Javier Solana, Secretary-General of the Council of the European Union
The Honorable Paul Wolfowitz, President, World Bank Group

This session will focus on building new global commitments to increase aid, expand trade, and deepen debt relief. It will examine how aid can be increased and more effectively invested in building the capacity of the poor; it will identify specific policy changes that can unleash the power of trade to reduce poverty; and it will propose additional steps to ease the burden of debt. The Session will also address the fundamentals of a new partnership between the developed and developing worlds—particularly seeking to define ways that the pro-investment climate sought by the developed world can accompany the pro-development investment sought by the developing world.

“A Pro-Poor Investment Strategy”

Speakers' line up (in alphabetical order)
His Excellency Abdullah Abdullah, Minister of Foreign Affairs, the Islamic Republic of Afghanistan
Mr. Ira Magaziner, Chairman, Clinton Foundation Policy Board; Chairman, Clinton Foundation HIV/AIDS Initiative
Ms. Jacqueline Novogratz, Founder and CEO, Acumen Fund
Mr. Pierre Omidyar, Co-Founder and CEO, Omidyar Network; Founder and Chairman, eBay Inc.
Ms. Sonal Shah, Founder, Indicorps
Prof. Muhammad Yunus, Founder and Managing Director, Grameen Bank

This session will focus on how investment strategies can build on the entrepreneurial capital provided by the poor, harnessing the innovation derived from local knowledge and capitalizing on the dynamism of the market. Participants in this session will explore concrete examples of pro-poor business models that have successfully fostered and sustained entrepreneurial initiative; developed and sustained distribution mechanisms; measured long-term results; and lifted entire communities out of poverty. This session will also investigate the displays of political will—and muscle—that were required to break through the usual obstacles to success.

“Scaling Up and Protecting Investments”

Speakers' line up (in alphabetical order)
Mr. Peter Bakker, CEO, TNT N.V.
Dr. Wangari M. Maathai, MP, Founder, The Greenbelt Movement
Prof. Jeffrey D. Sachs, Director, Earth Institute, Columbia University; Director, UN Millennium Project
Mr. Juan Somavia, Director General of the International Labor Organization
The Honorable Gene B. Sperling, Director of the Center for Universal Education, Council on Foreign Relations; Senior Fellow, Center for American Progress
Ms. Patty Stonesifer, Co-Chair and President, Bill and Melinda Gates Foundation

In this session, the focus will shift to how development successes can be brought to achieve maximum impact—in services, environmental protection, job creation, and the fight against HIV/AIDS. The Session will detail examples of successful development initiatives; highlight efforts to build national capacity; and consider how aid and market-based strategies can expand the reach of development efforts.

Keep posted for more news about this event and Unitus' involvement here!

Pic with President Jimmy Carter and Unitus

2005-09-22T01:00:00.000-07:00

From Left to Right:

Mike Murray, Geoff Davis, Jimmy Carter, Geoff Woolley, Warner Woodworth.

I found this photo when I was cruising Warner's website. This photo was taken at Snowbird, Utah right after a Unitus Board trip visiting Pro-Mujer in Mexico.

Warner stated: I feel that Jimmy Carter is without a doubt one of the greatest humanitarians in our country's history.

Warner Woodworth - Unitus Board Member

2005-09-21T00:10:00.000-07:00

Wow.

How does one try to capture who Warner is and what impact on the world he has had with his life?

For example, check out the awards he has accumulated from his service.

Or look at the media interviews and coverage he has been involved with.

Do you want to see what type of teacher Warner is? Consider the student comments that have been made about Warner.

Consider the 700+ Conference Presentations he has given.

Or consider the Non Profit organizations he has formed or helped form:

Enterprise Mentors: International Enterprise Development Foundation--Economic development research and consulting on the informal economy of the Third World, starting in the Philippines (1990); raising $400,000 and organizing a board of directors, setting up a staff to do training and technical assistance in Manila. By the mid 1990s expansions include two other centers in the Philippines, plus start ups in Brazil and Mexico which have led to skill building for the poor, vocational training and mentoring, culminating in the creation of credit unions, worker cooperatives, and hundreds of families enjoying new jobs and a higher living standard. There are five offices in the Philippines, two in Guatemala, three in Mexico, and one each in Brazil, El Salvador, and Peru.

Ouelessebougou-Utah Alliance: Launched economic development effort among seventy-two indigenous villages of 35,000 people in southern Mali, West Africa. Working with a U.S. board, Mali field staff, and graduate students from BYU, U. of U., and Harvard, a development program was designed to create rural, worker-owned cooperatives for women. A village banking system was established to provide access to credit for poor, would-be microentrepreneurs. Training programs in basic business, financial skills, and management were prepared, tested, and refined for use in creating hundreds of new jobs, higher incomes, and dozens of rural cooperatives.

Global Job Creation: Collaborated with students in action research teams to design and implement economic development strategies for the poor in Third World areas of Indonesia, Nigeria, Kenya, Jamaica, as well as in Bulgaria, Russia, the United States (Wyoming, Florida, and Utah Valley), the Navajo Nation, and the Goshute Tribe. New NGOs were created including Chasqui Humanitarian Foundation of the Andes (for Peru), Humanitarian Link (for Kenya), the Liahona Foundation (for Nigeria), the Russian Enterprise Development Foundation, Inc, and H.E.L.P. Honduras economic development in Central America. This was expanded to H.E.L.P. International and change agents were sent to not only Honduras, but El Salvador, Peru and Venezuela. More recently H.E.L.P. has expanded to Bolivia, Brazil, and Guatemala as well.

Unitus: In 1999, business colleagues and I formed this new NGO as a microfinance accelerator. I was the first chairman of the board of trustees and so far we've raised and committed $6.4 million to our partners: Pro Mujer in Mexico and SKS India in Andra Pradesh. This innovative strategy for scaling up microcredit to tens of thousands of poor families is building a global reputation.

Developing Western China: A new strategy was designed to respond to requests for technical assistance from various regions in China - Guangxi, Yunnan, and especially Sichuan provinces. A team from the Marriott School has mounted a major participatory action research project to do economic development among poor ethnic communities.

MicroBusiness Mentors: Local nonprofit social enterprise established to fight poverty and build family sustainability among poor Latinos in Provo, Utah. M&Ms provides microbusiness training, loans to start new microenterprises, and pro bono mentoring/consulting.

Global Change Agents, Inc.: President of a nonprofit capacity-building technical assistance firm providing training, assessment and consulting to NGOs around the world.

Center for Economic Self-Reliance: Culminating 15 years of work to put BYU on the global map, CESR was officially established in late 2002 with $3 million in outside funding. Research, conferences, a journal, and numerous student internships will help build family self-reliance around the world.

I guess the biggest impact that Warner has had is upon the hearts of those who have heard him, been stirred into action from reading his writings, have been inspired by observing his tireless commitment to the poor, and have worked along side him. Time and time again, I meet someone whose life has changed direction as a result of some encounter with Warner.

I had the opportunity to have Warner as my Thesis Chair, when I got my Master's Degree in International Studies about Third World Development. But I had already drunken the kool-aid even before that. Warner has been a mentor and a hero to me for over a decade now. My life is better because of the influence of Warner in my life.

Unitus is fortunate to have your influence, experience, and leadership.

Thanks, Warner.

Geoff Davis Podcasting on 94.9 KUOW

2005-09-20T10:22:00.000-07:00

You can listen to a recent interview with Geoff Davis, President and CEO of Unitus, on Seattle's 94.9 KUOW:

Here is the intro to the interview:

Global poverty is too large of a problem to be solved by any one solution. But several global economists think that microcredit might be a big first step. The idea is to make small loans, usually about a hundred dollars, available to impoverished people who can use the money to start a small business or improve an existing business. A hundred dollars can go a long way in some developing countries toward allowing people a chance to grow their business, reinvest in it, and achieve at least a minimum of financial stability.

Here is the podcast of the interview

MicroFranchising

2005-09-18T20:58:00.000-07:00

I spent Thursday and Friday in Park City at a learning lab sponsored by the BYU Center for Economic Self Reliance on Microfranchising.

Microfranchising is utilizing the franchising model in a scaled down model to help the poor have sound business opportunities.

It is proposed that MicroFranchising would solve the following problems in the effort to the effort to increase economic self-reliance among the poor:

1. Not all entrepreneurs have tools needed for success.

2. Not all people have an entrepreneurial spirit and would be better suited as employees.

3. MicroFranchising is an efficient method for the delivery of services to the poor.

So the concept is - build a very simple business, get the processes down flat, make sure it is a profitable business model, find a way to make it replicatable, and then find a way to roll it out.

Grameen has done this in sorts with their Village Phones:

- Grameen Bank provides microloans to women in rural Bangladesh to purchase a "Village Phone"
- Grameen Telecom administrates the village phones
- Village Phone is available to anyone in the village who wishes to make or receive a call
- Current, more than 55,000 phones are in operation
- Impacts:
1) Franchisees earn a sustainable income
2) Rural Bangladesh is connected to rest of world

This is how it works financially:

- Franchisee is given the phone and equipment (US$220) - must be repaid to Grameen through weekly installments
- Franchisee pays minimum monthly rate (US$3) and then a per-minute
- Users are charge variable per minute rates depending on time and location
- Average net income for franchisee is US$50-100/month

It seems like this could be another tool in the toolchest in how to fight poverty.

Unitus Fund Profile by Microcapital Institute

2005-09-14T21:35:00.000-07:00

Microcaptial Institute calls itself as the premier source of information and research on investment opportunities in commercial microfinance. You can sign up for a free newsletter as well. They did the following profile on Unitus:

Fund Profile
Unitus: Venture Capital for Microfinance

Entrepreneurs in California’s Silicon Valley and places like Redmond, Washington, recognize the important role of venture capital in getting significant enterprises off to a good start. Now some of those entrepreneurs are applying the same principles to microfinance.

While not a for-profit business, Redmond-based Unitus believes strongly that commercial thinking is crucial to make microfinance institutions (MFIs) a success. It wants to act as a venture capital firm for promising lower-tier MFIs – providing funds and expertise to help them grow and fulfill their missions.

Unitus was founded and is partly funded by Mike Murray, a former executive at Apple and Microsoft. Murray is the organization’s chairman, and its CEO is Geoff Davis, who previously formed a microfinance institution in Mexico and was the first employee of Grameen Foundation USA.

The non-profit currently has partnerships with MFIs in Mexico, India and Kenya, and expects to announce several more in the coming months. Operating expenses and the initial partnerships are funded by large donors, many of whom made money in technology. But in January, Unitus plans to launch a commercial debt-only microfinance investment fund that will be open to accredited individuals and institutions. An equity fund is expected to follow.

Unitus (pronounced as the combination of ‘unite’ and ‘us’) calls itself a “global microfinance accelerator.” The strategy, says Davis, is to partner with smaller MFIs with good growth potential in a promising market, and provide both funding and consulting to help them grow. Strong growth not only allows the partner MFIs to reach more clients, it also helps them become self-sufficient and makes them attractive for further commercial funding.

Unitus believes that for microfinance to do what it is capable of doing, hundreds of MFIs will have to grow to the point where they are serving a client base of more than 100,000 people each. They note that most of the world’s NGO-based MFIs start small and stay small, serving fewer than 2,500 poor borrowers.

Part of what makes Unitus different from many commercial microfinance funds or bank lenders in the sector is the target market. Rather than reaching out to the top 100 or so largest MFIs that are already rated by outside agencies and have commercial or quasi-commercial track records, Davis says the Unitus plan is to “go down-market and help bring them up to the major leagues.”

“We have a combination of tools we use to help the (MFI) partners accelerate” their growth, Davis says, including grants for “capacity building,” equity investments, loan guarantees and lines of credit. And, he adds, “It’s a partnership, not just an investment … we become very involved.”

“Our fundamental mission is for microfinance to reach its potential, and for that we need to move away from the donor and government perspective to a commercial perspective,” Davis says.

Davis says he learned two major lessons running an MFI in partnership with a non-profit in Mexico. First, “It really worked, it had a powerful impact on lives.” And second, small local entrepreneurs “are incredibly smart about what they are doing in terms of market, product and other business principles.”

“This doesn’t need to be a paternalistic approach,” he says of microfinance. “This is just an opportunity.”

So far, Unitus has major investments of both money and expertise in Pro Mujer Mexico, SKS in India and Jamii Bora in Kenya. It provides funding in a combination of grants, equity investments, loans and credit lines. The monetary commitment to SKS, as an example, amounts to nearly $4.7 million.

The microfinance accelerator model seems to be working. SKS has reported more than 200 percent growth in clients served in 2004. Unitus says its first three MFI partners currently serve 160,000 borrowers.

A crucial question for any venture capital investor is the exit strategy – and Unitus has some interesting ideas there as well. It has a 5-7 year timeline for individual MFI investments, and expects to exit investments through public listing of the MFIs, acquisitions, enough improvements in growth and efficiency to allow its investment to be bought out by the MFI, or a community buyout through retirement or mutual fund-type accounts.

Some of those exit strategies may sound far-fetched, but Davis believes that over the next few years, MFIs will grow enough – especially in places like India – to make it likely they can transform into publicly held microfinance companies. Unitus is already working with an investment bank that specializes in emerging markets to make this a reality.

“Things are changing dramatically and very rapidly in the industry,” Davis says. “That gives me great hope, and that pace I think is going to continue.”

Geoff Davis - Awarded one of the 40 under 40 Rising Business Stars

2005-09-14T21:25:00.000-07:00

Here is a nice article about Geoff Davis, the CEO of Unitus. Geoff is one of the "40 under Forty" business leaders that was chosen by the Puget Sound Business Journal, as one of the area's rising business stars, and as having the "underlying ability to lead the community".

I have observed Geoff to be passionate, inspired and very effective as the head honcho of Unitus.

Davis, 33, evolved into his current role as he tried to reconcile what he calls a "love of market dynamics" with an almost genetic understanding of the needs of people in the developing world. His grandfather was one of the first administrators in Southeast Asia for the Peace Corps.

Then there's Davis' yen for scalability. When Davis was 10 he started buying pop for 50 cents a can and selling it for $1 at construction sites. Soon he'd forged a neighborhood youth pop-selling franchise; he supplied the capital and got a percentage. At 12 he organized the neighborhood into a lawn-mowing collective.

Davis tried the corporate world following his undergraduate years, but his heart wasn't in it. "I understood my grandfather's wanting to do good in the world," he said. When he first learned about microlending -- and the reality that half the world's people have no access to affordable capital to help them start small enterprises -- he "was totally smitten with the concept of using business principles to help people."

With his own compass clear, Davis returned to school, earned a master's degree in public policy and developmental economics from Harvard Business School in 2001, and founded Unitus that same summer.

We are proud of you, Geoff. It is well deserved.

Technically, the author of the above article didn't get it exactly right. While Geoff has been an integral part and leader of Unitus, he joined Unitus about 18 months after it had been founded, rather than being one of the founders of Unitus as the article mentioned.

Here is some more background on Geoff:

For the last nine years, Geoff has worked with microfinance programs worldwide, beginning with a program he founded in central Mexico. He was an early employee at Grameen Foundation USA, a global microfinance leader, and has spoken extensively on microcredit, including lectures and speeches at the International Monetary Fund, at Harvard University and on National Public Radio. He is a board member of Pro Mujer Mexico and SKS India, and he is an advisor to the Miracle Wine Fund. Prior to his work in microfinance, Geoff served as director of international business development for a California biomedical firm and was the founder and president of a translation company. Geoff holds a B.A. in international relations from Brigham Young University and a master's degree in development economics and public policy from Harvard University.

Unitus and ACCION - Two of the World's Leading Microfinance Organizations

2005-09-14T14:24:00.000-07:00

Well (blush). Thanks for the recognition.

India Daily has an article about the recent announcement about the Unitus / ACCION alliance in India. The title of the article is:

Microfinance giants form strategic alliance in India

and starts out the article by stating:

Two of the world's leading microfinance organisations, ACCION Internatinal and Unitus, on Thursday announced creation of the Unitus-ACCION Alliance for India, a strategic partnership designed to help develop a large-scale and profitable microfinance industry.

One, it is an honor to be recognized in such estimed company as ACCION. Two, we know there are lots of other world-class organizations engaged in this important work, and three, it is nice to know that Unitus is getting recognition for the innovative organization that it is.

Peer to Peer Lending

2005-09-11T20:26:00.000-07:00

A friend showed me this site the other day - Zopa.com - which is a P2P lending group with no bank in the middle. You can be either a lender (and you get the interest paid) or a borrower.

Here is part of Zopa's pitch:

Zopa though lets people who have spare money to lend it directly to people, like them, who want to borrow it. No bank in the middle, no huge overheads, no unethical investments.

To minimise any risk, the money each lender puts in is spread amongst at least 50 borrowers (and likewise each borrower gets their money from a number of different lenders).

Zopa is, therefore, for people who want to be a part of something new. Who want to join a community of like-minded individuals and lend to them and borrow from them in a trusting but secure way.

Zopa is for people who are looking for a better rate of return. Zopa’s interest rates aren’t squeezed by middlemen (the banks) because there are no middlemen - that’s the Zopa idea.

To me, it seems to be part of the democratization process. We are seeing democratization of media, where the media is no longer centrally controlled, we are seeing the p2p adoption of the music industry. Here is another step in that process - peer to peer lending.

There seems to be some interesting parallels to Microlending. Microcredit takes banking to the lender (instead of the lender going to the bank). Microcredit doesn't require collateralization, it uses social collateral as a payback motivator. Zopa uses things like your eBay rank as part of your credit score.

Interesting concept. I think it will catch on.

Unitus-ACCION Alliance for India

2005-09-08T22:15:00.000-07:00

This had been in planning for a while and was finally announce publically today. This is very exciting. ACCION is such an outstanding organization. Look at what the joint goal is:

Providing access to microfinance services to 15 million of India’s working poor by 2015

What will be ACCION's role?

ACCION will assist commercial entities such as banks and finance companies in extending microfinance products and services and providing technical assistance and training.

What will be Unitus' role?

Unitus will identify high-potential NGO microfinance institutions and speed their growth through grants, capacity-building consulting, and capital investments.

The alliance will provide a permanent and sustainable approach for the continuous development of microfinance services throughout the country. It really is a unique alliance of two very progressive and effective organizations.

Here is the letter I received today:

Dear Tim,

We are extremely excited to announce today the Unitus-ACCION Alliance for India. Through this partnership, Unitus and ACCION International have established a joint goal of providing access to microfinance services to 15 million of India’s working poor by 2015.

You may already be familiar with ACCION International, a leading microfinance organization with more than 35 years of industry leadership. If not, we invite you to learn about ACCION (and subscribe to their e-newsletter) on their Web site:

www.accion.org

As far as we know, this alliance is the first time two microfinance organizations have partnered in a large-scale, on-the-ground relationship covering all aspects of microfinance—a relationship that will move the microfinance industry forward not just in a few villages, but across the entire nation of India.

This partnership taps the strengths of both ACCION and Unitus by bringing the commercial world to microfinance (ACCION’s role), and transforming NGOs so that they can operate in the commercial world (Unitus’s role).

To learn more about this partnership, please visit the Unitus Web site:

www.unitus.com

As always, we appreciate your support.

- The Unitus Team

Here is the Press Release.

Economic Self-Reliance

2005-09-04T19:12:00.000-07:00

I am on the board of the Center for Economic Self-Reliance at the Marriott School of Management at Brigham Young University. One of the things that the center has been working on is how do you define Economic Self-Reliance. The center is defining self-reliance as:

Sufficient Resource Generation (Surplus)
+ Provident Living
= Economic Self-Reliance

These definitions work for both those in the developing world as well as the developed world.

Sufficient Resource Generation means the ability to generate enough income to take care of you and your family's needs.

Provident Living means that you don't spend more than you make. It means reducing your risks so you and your family are not exposed. It means being prepared for disasters and rainy days.

Non-profit organizations focus on different types of interventions to assist those who are seeking to become economically self-reliant.

Microcredit works hard on creating sufficient resource generating ability by allowing those who don't have access to capital that resource so they can increase their income generation. Other things could include getting more education so you can increase your earning power, excelling at work so you get promoted or earn more money, or successfully starting a new business.

Provident living includes things like growing a garden, bottling food, having sufficient insurance, staying out of debt, having sufficent savings, having food storage, living a healthy life style, etc.

There are disruptor events such as Hurricane Katrina or a drought or an epidemic or even a personal health crisis that interrupt people's ability to generate income. Many non-profit organizations focus on relieving the suffering from these disruptor events. These NGOs perform a critical service in helping masses get back to a place where many of them can begin to take care of themselves once the crisis has passed and they have been assisted in getting back on their feet. Many of those suffering from Hurricane Katrina, given the opportunity, and with the proper outside assistance, will be able to, at some time, begin to sustain themselves and their family and begin to rebuild again.

Organizations such as Unitus, Accion, Finca, and Grameen work on those who are trapped in a situation, where they are denied, for some reason, the opportunity to be self-sufficient. They have the desire and the will, but because of lack of access to capital, they are unable to generate enough income in the economy that they live in to properly support themselves and their family. This is a more long-term approach, not necessarily focused on a current disaster or crisis. The hope and belief is, that if more people can move away from the poverty line, that when a disruptor event happens, that they will be prepared enough to survive the event and not find themselves unable to rebound.

The Suffering from Katrina

2005-09-03T10:11:00.000-07:00

I have been moved by the trials and suffering of those who faced the catastrophe of Katrina this last week. It is heartbreaking to see people without food and water, and the impact that this has on the elderly, the sick, and the very young. Without adequate support infrastructure and resources, the weak become the most vunerable. It is heartwarming to see the response from around the country of people, cities, and states opening up to help those who are suffering.

We are aware of the suffering in part because of the images and stories we learn about from the media. There seems to be a natural response among many when they hear these stories, that they are eager to help, either through a donation or some form of assistance.

We saw terrible suffering and misery from a week without adequate food and water. Can you imagine what the suffering and misery must be when these conditions are encountered on a long term basis? I have noticed that the media and people have compared the tradegy in the South to Third-World conditions. We have been moved to help, asking, how can these conditions be allowed to exist here in the United States?

I wonder how we, as members of this human family, allow misery and suffering like we have seen this past week, occur on a daily basis in different parts of the world. For these people, there is no Coast Guard ready to pluck them from their suffering, no National Guard arriving like the calvary, and busing them to a more humane environment.

Mohammad Yunus emphatically states that poverty can be eliminated in our lifetime, if there was only the global will to eradicate it. We can plug the levies that allow the flood of misery and suffering in. We can rescue our fellow man from their dire straits of overwhelming poverty. There are people who are willing to help rescue themselves if they were given the means to do so. If there were enough people committing to do whatever we can, we can end this global suffering.

Economic Times of India mentions Unitus

2005-08-30T16:51:00.000-07:00

Robert, at Unitus, sent me a link to the following article in The Economic Times of India called:

Little drops make ocean: Microfin is big biz now

The article gives an analysis of ongoing investment and contributions that are flowing into the Microfinance industry in India, from both internal and external sources. Here is a portion of the article:

What is more significant, perhaps, is the entry of private debt-equity funds. US-based Unitus, a microfinance accelerator with a venture capital approach, has already committed to SKS, BSS, Grameen Koota in Karnataka and Bandhan in West Bengal. The $10-million Bellwether Microfinance, jointly promoted by Gray Ghost Microfinance Fund, the Hivos-Triodos Fund and the former CEO of Bank of America Arun Duggal, is investing in equity and debt of MFIs. There are also the loan guarantee funds of the Grameen Foundation and Deutsche Bank.

Nice Post from Dave McClure

2005-08-29T07:51:00.000-07:00

As I mentioned in an earlier post, I will try to highlight posts about Unitus that I come across. I saw a sweet post from the estimed Dave McClure of Master of 500 Hats. (Dave has since moved his post from Blogger to Typepad and his new blog is here.)

Not only did Dave write a nice post, but he hosted a dinner among his friends in Silicon Valley to spread the word about Unitus. He also was very generous with his donation. Thanks Dave!

Here's his post:

Last night I had the pleasure of co-hosting a dinner presentation for ~50 forward-thinking friends in the Silicon Valley entrepreneur community to learn more about the microfinance revolution, and about the incredible global impact it's having on eradicating poverty in developing economies.

After a brief welcome & intro by yours truly, a presentation on microfinance was given by Unitus CEO Geoff Davis (ex-Grameen Foundation pioneer) and Chairman Mike Murray (ex-Microsoft VP). Briefly, Unitus is a "venture accelerator" that helps identify, fund, and grow promising microfinance institutions ("MFIs") around the world. They're a terrific organization, and they're helping MFIs in India, Africa, and Latin America do some amazing things.

It was a great opportunity to get a bunch of old friends together, and explain how this new industry can really make a significant & substantial difference in people's lives. At the same time, Unitus presents some attractive investment alternatives for those who'd like to see their donation dollars put to work in a more focused, market-measured way.

And finally, it was a fun opportunity for me to get passionately excited about something not so technology-related, and to help spread the word about what Unitus is doing... my pleasure :)

A profile of Mike Murray by Global Giving Matters

2005-08-28T21:14:00.000-07:00

An excellent and very comprehensive article was written by Global Giving Matters about Mike Murray, the Chairman of the Board of Unitus. Take the time to read the article...it will give you a sense of the character and passion Mike has to serve humanity.

For the full article, go here.

Here are some excerpts:

About Mike's view of Philantropy:

...what propelled Mr. Murray, who lives in Redmond, in his current direction began much earlier. Mr. Murray grew up in Klamath Falls, Oregon. His father and grandfather owned a creamery and from a young age he helped out in all aspects of the business, learning early on to appreciate the virtues and rewards of hard work. He has always been a staunch believer in a market-driven economy bolstered by a democratic system of government, and bases much of his philanthropic philosophy on the theme of self-help and initiative rather than hand-outs.

Yet he also learned about charity: his father and grandfather made it a habit to visit ill employees and bring gifts to poor rural farmers. A religious underpinning pervades Mr. Murray's philosophy, and he has always "tithed" ten percent of his gross income to his church. The Murrays place great value in the worth of an individual -- wherever that individual may live. And Mr. Murray's personal motto is "Look up, lift up."

About the origins of Unitus:

...a phone call from a man in Utah who had heard of Mr. Murray, with an invitation to attend a daylong brainstorming session with a group of people "to discuss what we could do about world poverty." This meeting became the basis for Unitus, an anti-poverty investment initiative. The name is a combination of "Unite" and "Us." "Without unity we won't be able to find lasting solutions to complex world issues. At the root of many second- and third-level problems is the crushing force of personal poverty. Unitus offers an innovative approach to the challenge of large-scale poverty alleviation," Mr. Murray explains.

About the formation of Unitus' strategy and the Influence of Mohammad Yunus:

In early 2000, Mohammed Yunus invited a number of Unitus board members to Bangladesh for a behind-the-scenes look of how Grameen had evolved over 25 years. By then, Grameen had reached 40,000 villages. The replication potential was powerful. Seeing microfinance in action -- including learning what worked and what had not -- left Mr. Murray and his Unitus partners convinced that this was the area where they could have the most impact. This led to an in-depth analysis of the structure of the worldwide microfinance "industry", with an intent to identify opportunities for strategic, long-term leverage. "We wanted to learn all that we could so that we could create a 'second generation' model for the expansion of microfinance as a poverty alleviation tool," says Mr. Murray.

A great description of what makes Unitus unique:

What makes Unitus unique microfinance practitioners is its singular focus as a "microfinance accelerator." This is a term coined by the founders to describe a combination of large-scale funding and impactful consulting services that enable existing microfinance institutions to expand their services quickly and efficiently so that more poor people who want to pull themselves out of poverty have resources to do so.

Mr. Murray says he would be delighted to see other organizations adopt the role of microfinance accelerator. There are some 3,000 microfinance institutions around the world; at least ninety percent serve no more than 2,500 clients. "Microfinance is an award-winning concept, but it's failing to meet its potential. Only a handful of MFIs serve over 100,000 clients. We believe that we've created a methodology that will allow some of the most promising smaller MFIs to greatly accelerate their growth in clients."

In seeking which groups to support, Unitus automatically excludes larger ones with a strong track record, such as Grameen and BancoSol, which serve over 100,000 customers. These larger organizations already receive funding from mainstream grantmakers and the formal financial markets. Rather, Unitus identifies smaller MFIs with real growth potential based on strong leadership and management practices, a good location and a solid infrastructure. Unitus identifies high-potential MFIs using a thorough due diligence review of over 60 criteria. Those scoring highest become candidates for funding from Unitus with Unitus having the explicit aim of helping these groups to scale up. Once a partner organization has achieved accelerated growth and financial self-sufficiency, Unitus will move on to other partners.

Since Unitus is just two years old, much of the discussion is still in the future tense. To date Unitus has funded just one project so far, Pro Mujer Mexico (www.promujer.org), with $1.9 million dollars, including $1.5 million for loans and the balance for capacity building. A second partnership has recently been established with an MFI in India, SKS (Swayam Krishi Sangam -- www.sksindia.com), which has the potential to serve 200,000 to 300,000 women in the next five year. SKS was founded by Vikram Akula, an Indian economist who was raised and educated in the US but who relocated to India some years ago to pursue a commitment to economic development in his birth country.

To Mike Murray, Philantrophy is a Verb...

"Philanthropy to me is a verb," says Mr. Murray. "I feel compelled to give. I want to be involved in efforts that help create permanent improvements in people's lives. And I want to be involved in efforts that promote self-reliance. I suppose that the roots of this go all the way back to the creamery. There were no slackers. We all had to work hard in order to make the business go. And twenty years in the computer industry coupled with my more important roles as father, husband and church member have deepened my understanding. If we can pay a small part in improving the quality of life for a few of our brothers and sisters, then a bit of hope is kindled. And when we have hope, we are able to listen, and love."

A mention from Global Giving Roundup about Unitus

2005-08-28T21:08:00.000-07:00

Global Giving Matters is a newsletter on best practices and innovations in individual and family philanthropy and social investment. It is produced jointly by Synergos and the World Economic Forum (WEF) for members of WEF and the Global Philanthropists Circle (GPC).

Here is what the Global Giving Roundup said about Unitus:

Unitus (www.unitus.com), a nonprofit organization that helps microfinance institutions (MFIs) grow to scale, has announced a $1.2 million investment in an innovative partnership with Jamii Bora, an MFI that serves some of Kenyas poore'st populations. "Jamii Bora is one of the most exciting MFIs we've seen on any continent. They offer microcredit loans, extremely low-cost healthcare insurance, alcoholism rehabilitation, and even housing mortgages for former slum dwellers," said Geoff Davis, Unitus CEO. Unitus, co-founded by Mike Murray, a former Microsoft executive and member of the Synergos Global Philanthropists Circle, carefully selects the highest potential MFIs in developing countries and partners with them to accelerate their growth and help them become self-sustaining banks for the poor. Unitus estimates that Kenyan MFIs currently reach only about 5 percent of the potential market, leaving four million prospective clients without access to financial services. The partnership, which aims to help Jamii Bora grow from 70,000 to over 500,000 clients, includes a $1 million line of credit and a $200,000 grant for staff training, and advanced computer systems to support their planned expansion.

Jamii Bora was launched when 50 street beggars pleaded with Ingrid Munro, an African-based UN housing expert, to help them improve their lives. Many of those helped by Jamii Bora come from Nairobi's Mathare and Soweto slums; the Kenyan MFI is unusual in that its staff is composed almost exclusively of previous borrowers with a firm understanding of clients' needs. Unitus has partnered with MFIs in India and Mexico, helping them double the number of families they serve.

Joseph Grenny - Unitus Board Member

2005-08-27T22:44:00.000-07:00

I first met Joseph with Todd Manwaring and Warner Woodworth. It must have been 1999. I had known Warner for years, but this was the first time I had met Todd and Joseph. They wanted my advice about a non-profit that they were putting together and Warner brought them to me. As I threw out advice, I found that Joseph and Todd had already considered everything that I had thought of and it seemed to me that they knew more about the topic than I did.

A few months later, we connected up again and Joseph told me about their plans to run a cooperative in Kenya to help the unemployed. I was fascinated by the idea and wound up helping fund part of the venture and visiting Kenya a while later with Joseph and his wife. My in-laws volunteered to spend almost a year in Nairobi to try to help get the cooperative off the ground. It was there in Kenya that I first saw the skill and talent of Joseph in helping people find a middle ground.

During this time, Warner brought Todd, Joseph, and I to a meeting where we met, among other people, Bob Gay, Mike Murray, and Louis Pope. It was from this initial meeting in early 2000, that Unitus took its formation. One of the things that I really remember from that meeting was how deep the conviction each of these people had in trying to make a difference. I remember that there were 2 things that we agreed upon early on, which were:

1. We wanted to do something big - globally. We didn't want to get tied down in some corner.
2. We wanted to maximize leverage. Have our resources have the biggest impact that they could have.

As I think of what Unitus has evolved into, I am pretty impressed at how those early two objectives are being achieved. I give props to Mike Murray for helping the organization have that obsessive focus to stay the course.

I got to know Joseph much better after this, with him becoming a beloved friend and a trusted confidant.

Joseph is also incredibly successful. Joseph (with his partners at VitalSmarts) have written two New York Times bestseller Crucial Conversations: Tools for Talking When Stakes are High, and his newest release, Crucial Confrontations: Tools for Resolving Broken Promises, Violated Expectations, and Bad Behavior.

Joseph is an exceptional speaker (see a clip of one of his seminars here), speaking at keynote speeches around the country. He is also a very successful consultant. Over the past 20 years he has been an advisor to CEOs and senior executives on more than a dozen major change initiatives – including one with Lockheed Martin Aeronautics whose CEO credited Joseph’s work with enabling their winning of the $200 billion Joint Strike Fighter program.

I know I consider myself fortunate and I think Unitus does as well to have an association with Joseph Grenny. If you have a chance to meet Joseph, you find yourself rolling on the floor with laughter, but you will also sense the incredible love that Joseph exhibits for you.

Unitus Job Openings

2005-08-27T22:14:00.000-07:00

If you want to work for a world class organization as well as do something meaningful with your life, consider one of the following job openings with Unitus:

Current Employment Opportunities (these change, so check the site for current offerings)

Positions based in Redmond, WA

Administration:
• Bookkeeper

CEO Office:
• Assistant to the President & CEO

Investment Services:
• Investment Director
• Investment Associate

MFI Services:
• General Counsel and MFI Transformation Manager
• MFI Capacity Services Manager
• MFI Services Analyst

Positions based in Bangalore, India

• Capacity Services Facilitator – India
• Financial Services Advisor – India
• Microfinance and Financial Analyst – India

You can apply here.

Unitus Opens India Microfinance Center

2005-08-27T09:39:00.000-07:00

This is the third of recent announcements from Unitus about further developments in India. While Unitus is a Global Microfinance Accelerator, India is a core piece of the strategy, because of the concentration of the world's poor there.

This is very exciting to see Unitus growing so that it will have a base established in India.

Here is the announcement:

Unitus (http://www.unitus.com), an innovative nonprofit organization that helps alleviate poverty by accelerating the growth of microfinance institutions (MFIs) worldwide, today announced the launch of the Unitus India Microfinance Center, in Bangalore. The Center serves as the hub for Unitus's Indian microfinance operations. In addition to supporting Unitus's three existing MFI partners in India: SKS, ASA-GV and BSS, the Center will support future MFI partners and will serve as a resource for broader microfinance industry collaboration. Unitus has set the ambitious goal of bringing microfinance services to more than 10 million of India's working poor by 2015.

"Unitus works worldwide but has a specific focus on India, given the large number of poor people, industry-leading MFIs, and favorable banking and regulatory environments," said Geoff Davis, Unitus President and CEO. "We foresee at least half of our work occurring in India and expect this Center's team to help catalyze the creation of a large-scale, profitable Indian microfinance industry, leading to massive poverty alleviation throughout the country."

For more than 30 years, microfinance - including microcredit loans as small as $50 - has empowered millions of poor people worldwide to improve their lives by helping them grow their small businesses and increase their families' financial security. But, despite a long, successful history, microfinance services still only reach an estimated 16 percent of the 500 million people who could use them. The microfinance field's challenge is to scale this high-potential industry to fill the enormous supply shortfall. Unitus was created to help transform this opportunity into reality.

"Poverty in India is so pervasive and opportunities for creating permanent solutions through microfinance are so great, that we believe we have a unique opportunity to work with investors, technical capacity-builders and leading microfinance organizations to reach our goals in India, and even collectively double or triple our 10 million-client goal," said Sandeep Farias, Unitus India Country Director.

About Unitus
Unitus is a global microfinance accelerator, acting as a social venture capital investor for the microfinance industry. Unitus identifies the highest-potential microfinance institutions (MFIs) in developing countries and then helps accelerate their growth through capital investments and capacity-building consulting, thus empowering them to help exponentially more poor people worldwide. In doing so, Unitus aims to demonstrate that MFIs can be run as profitable, large-scale, poverty-focused businesses with links to local capital markets. Based in Redmond, Washington, USA, Unitus is a nonprofit organization that relies on innovative financial instruments, and the financial resources of like-minded individuals and foundations, to fulfill its mission.

Unitus Announces Sixth Microfinance Partner, Grameen Koota, in India

2005-08-27T08:55:00.000-07:00

Here is another recent press release, about another new Unitus partner. The role of Unitus is to accelerate microfinance growth, helping existing MFIs grow faster, reach sustainablity, and serve more poor. The way that is done is by provide additional capital (either through equity or debt) and strengthening the MFI's ability to handle the growth. This might come in the form of technical assistance, training for the staff, or assistance with the internal IS systems or processes.

Here is the article:

Wednesday July 27, 4:00 pm ET
$1.1 Million Investment Will Bring Poverty-Alleviating Microfinance Services to 500,000 Clients by 2009

REDMOND, Wash., July 27 /PRNewswire/ -- Unitus (www.unitus.com) today announced a $1.1 million investment in microfinance institution (MFI) Grameen Koota (GK) (www.grameenkoota.org) in Bangalore, Karnataka, India. The MFI partnership will help GK grow from serving 22,000 to 500,000 clients by 2009. Unitus will provide up to $1 million in catalytic debt and a $100,000 grant for investment in human resources development and implementation of improved management information systems.
"Grameen Koota excels at the on-the-ground work of bringing life-changing microfinance services to India's poor," said Unitus President and CEO Geoff Davis. "By helping accelerate Grameen Koota's growth, together we'll reach 500,000 clients at a rate that defies industry norms."

Unitus chose GK because of their exceptional leadership team, urban expansion plans, and demonstrated success serving Karnataka's working poor.

"Our estimates show that if they had access, almost three and a half million poor in Karnataka could leverage microfinance services to enhance their income and help feed their families, send their children to school, and obtain proper health care," said GK's Founder and CEO, Ms. Vinatha Reddy. "With Unitus's involvement, we plan to address that demand."

For more than 30 years, microfinance -- including microcredit loans as small as $50 -- has empowered millions of poor people worldwide to improve their lives by helping them expand their small businesses and increase their families' financial security. But despite these successes, MFIs still only reach an estimated 16 percent of the 500 million people who could use their services. The primary challenge for microfinance is to scale this high-potential industry to meet the enormous demand. Unitus was created to help transform this opportunity into reality.

About Unitus

Unitus is a global microfinance accelerator, acting as a social venture capital investor for the microfinance industry. Unitus identifies the highest-potential microfinance institutions (MFIs) in developing countries and helps accelerate their growth through capital investments and capacity-building consulting, thus empowering them to help exponentially more poor people worldwide. In doing so, Unitus aims to demonstrate that MFIs can be run as profitable, large-scale, poverty-focused businesses with links to local capital markets. As of June 2005, Unitus has seven MFI partners worldwide serving more than 399,000 poor clients. Based in Redmond, Washington, USA, and with offices in Bangalore, India, Unitus is a nonprofit organization that relies on innovative financial instruments, and the financial resources of like-minded individuals and foundations, to fulfill its mission.

About Grameen Koota

Grameen Koota (GK) offers microfinance services to help poor women in Karnataka's rural areas and urban slums work themselves and their families out of poverty. GK works to empower women, create livelihood opportunities, reduce vulnerability of the poor, and provide credit to the unorganized sector. Since GK launched their microfinance program in 1999 they have grown to serve more than 23,500 clients as of June 2005.

Unitus Expands Across India With Bandhan Partnership

2005-08-27T08:42:00.000-07:00

This was a recent press release by Unitus. India has become a major focus for Unitus, with 500 million poor there. Bandhan, working in the West Bengal state, is a great organization and we are excited to be working with them reach 1 million poor through loans by 2009.

Here is the press release:

Wednesday July 27, 4:00 pm ET
Microfinance Partnership Will Empower 1 Million of India's Poor by 2009

REDMOND, Wash., July 27 /PRNewswire/ -- Unitus (www.unitus.com), an innovative nonprofit organization that helps alleviate poverty by accelerating the growth of microfinance institutions (MFIs) worldwide, today announced a microfinance partnership with Bandhan in Kolkata, West Bengal, India. Through the partnership, Unitus will provide capacity-building consulting, $1.1 million in catalytic debt, and a $100,000 grant for management information systems and human resources, all targeted at helping Bandhan grow from 52,000 to 1 million poor clients by 2009.

"We are privileged to work each day to help the world's very best microfinance institutions become even better," said Unitus President and CEO Geoff Davis. "Bandhan clearly fits this group -- their growth to date, loan methodology, board of directors and operating systems are all world-class. In fact, during the months we were discussing the partnership, they increased their access to an additional 20,000 poor individuals!"

Bandhan operates in West Bengal, one of India's poorest states, using an individual lending methodology that differs from the group lending methodology used in most of India. This methodology helps them serve their clients in a highly personalized, efficient manner. Bandhan also serves very poor rural borrowers while achieving branch profitability, another industry-leading accomplishment. Only 14 percent of the poor people in West Bengal who could use microfinance services to improve their lives currently have access. Bandhan hopes to help fill that gap.

"With Unitus's assistance, we are excited to pursue our aggressive growth targets. Together we will be able to scale to new heights!" exclaimed Mr. Ghosh, Bandhan's founder and Executive Director.

Despite a long, successful history, MFIs still only reach an estimated 16 percent of the 500 million people who could use their services. The microfinance field's challenge is to scale this high-potential industry to fill the enormous supply shortfall. Unitus was created to help transform this opportunity into reality. During 2004, existing Unitus MFI partners doubled the total number of clients served, growth rarely seen in the microfinance industry. Bandhan joins Unitus alongside MFI partners ASA-GV, BSS, Grameen Koota, and SKS in India, Pro Mujer in Mexico, and Jamii Bora Trust in Kenya.

About Unitus

Unitus is a global microfinance accelerator, acting as a social venture capital investor for the microfinance industry. Unitus identifies the highest-potential microfinance institutions (MFIs) in developing countries and helps accelerate their growth through capital investments and capacity-building consulting, thus empowering them to help exponentially more poor people worldwide. In doing so, Unitus aims to demonstrate that MFIs can be run as profitable, large-scale, poverty-focused businesses with links to local capital markets. As of June 2005, Unitus has seven MFI partners worldwide serving more than 399,000 poor clients. Based in Redmond, Washington, USA, and with offices in Bangalore, India, Unitus is a nonprofit organization that relies on innovative financial instruments, and the financial resources of like-minded individuals and foundations, to fulfill its mission.

About Bandhan

Bandhan -- meaning "togetherness" -- offers a variety of microfinance services including microcredit loans, savings, and loan repayment insurance to poor women in both rural and urban areas in India's West Bengal state. Beyond microfinance, Bandhan provides services in micro entrepreneurship, health, education, and disaster management to the disadvantaged community of the society, specially women and children, to help break the vicious circle of poverty.

Contact:
David Schappell
425-881-2793
dschappell@unitus.com

2005-08-26T00:06:00.000-07:00

Matt Whitaker is the other producer of "Small Fortunes", as well as the writer and director. He was director of another successful show in PBS, this one a series, called Ancestors.

This is from the PBS site about Matt:

Matt Whitaker was raised in a tiny town in Northern California, the youngest of seven children. Being the baby of the family, he was able to avoid any need to choose a "responsible" profession, and therefore decided to study film. Much to everyone's surprise, including his own, people began to pay him to make movies (can you imagine?).

Short Interview With Sterling Van Wagenen

2005-08-25T23:40:00.000-07:00

This is an excerpt of an interview with Sterling Van Wagenen, one of the producers (Matt Whitaker the other) of Small Fortunes. Sterling gives props to Mike Murray and Warner Woodworth, both of the Unitus board for his inspiration.

Questions for Sterling Van Wagenen, producer of Small Fortunes: Microcredit and the Future of Poverty, that will premiere at the launch of the Year of Microcredit 2005 at UN Headquarters in New York on 18 November 2004.

1. To produce this film on the history of microfinance and the transformation of how people look at poverty and poor people, you traveled all over the world to places like India, Bangladesh, the Philippines and Kenya. Is there one interview that stands out as the most memorable?

Two, actually. Our interview with Mohammed Yunus, founder of the Grameen Bank, was memorable because of Yunus’ remarkable optimism in the face of extraordinarily difficult conditions in Bangladesh. His unshakable belief in the value and capacity of individuals, no matter how poor or “disadvantaged” was inspiring. Stanley Fischer of Citigroup was memorable because of his remarkable combination of pragmatism and compassion—qualities one rarely finds balanced so well in very successful business executives.

2. What inspired you to tackle this subject?

The work of Mike Murray, CEO of Unitus, a Microcredit accelerator, and Warner Woodworth at the Center for Economic Self-Reliance at Brigham Young University. Both men are thinking outside the box in terms of how to address poverty in ways that take the realities of human nature into account. If capitalism really is the best economic system, it should be able to address the problems of the world’s poor people more effectively than charitable giving. Microcredit seems like a credible answer to that challenge.

Sterling Van Wagenen is a former director of UCF’s film program. He is the co-founder of the Sundance Film Festival. and has produced, directed and written many films. He co-produced “The Trip to Bountiful,” which won an Academy Award for best actress for Geraldine Page and a nomination for best adapted screenplay.

For more on the premiere at the UN and about Van Wagenen, go here.

Word of Blog

2005-08-25T23:00:00.000-07:00

David Schappel referred this to me, so I thought I would try it out:

Heard the Word of Blog?

Word of Blog is a new and free service that helps you spread the word about things you like, events you care about and worthy causes you want to support.

Bloggers: You can pick and choose any of the ads appearing on this site and display them into your blog or website. Simply copy the HTML code appearing below the ad and paste it where you wish it to appear. The ads have been formatted to fit into most blog columns.

Organizations: If you want to post an ad on this site so that bloggers can start spreading the “word of blog” about you, please go to the “Submit Ad” section.

It is great to see that Unitus is the most viewed ad!

Banker to the Poor: Micro-Lending and the Battle Against World Poverty by Mohammad Yunus

2005-08-23T07:48:00.000-07:00

Banker to the Poor: Micro-Lending and the Battle Against World Poverty by Mohammad Yunus.

This is a very powerful book about Mohammad Yunus' story and his insights on how poverty can be solved. I was very inspired when I read it.

I found this excellent synopsis of the book by Nikhil. If you don't have time to read the book, take a moment to read the review.

A pic with Mohammad Yunus, Founder of Grameen

2005-08-23T07:04:00.000-07:00

I was cleaning out some of my old photo files online and found this photo from several years ago with Mohammad Yunus and myself when he visited Salt Lake City for a Results function. He was so kind to spend a few minutes with Joseph Grenny and myself and our spouses. When we had visited Bangledesh, he really opened up his organization to us and was very generous with his time and counsel.

He is one of my heros of individuals who have made a difference.

p.s. - I am wearing a shirt that was woven and sewn by one of the Grameen borrowers. It is very comfortable!

Blogs that mention Unitus

2005-08-21T22:10:00.000-07:00

I did a search on technorati on Unitus and found some of these blogs that mention Unitus:

Huat Chye's Weblog

Huat Chye tells about running a speed dating event and contributing the proceeds to Unitus. I like what he said about why they chose to contribute to Unitus:

We had to select a new charitable cause, since no major nonprofit was still raising money for tsunami relief, and the natural choice was Unitus, an innovative Redmond organization that Mike and I have long admired (he’s even done pro bono consulting-type work for them).

Dave Schappell's Weblog

Dave is currently the VP of Marketing at Unitus. This post was about a visit to one of Unitus's partners, Pro Mujer in Mexico and his impressions of the impact of Microcredit before joining the industry.

Walking the Blog

Here is what John H. Kim posted about Unitus:

Unitus is involved in a promising subfield of social entrepreneurship called microfinance, essentially lending to the underserved in developing countries to promote private enterprise and self-empowerment. The high repayment and low default rates are quite amazing when you consider how poor and impoverished the loan recipients are in the urban slums or rural villages of the third world. Many get by on what is the equivalent of a few dollars a month. But the dignity that microlending instills in them produces the desire to make something of the loan and motivates them to stick to the repayment schedule. Amazing.

Thanks John.

Scott Loftesness

Scott tells about what he learned about Unitus at a group dinner. This is what he posted:

Unitus is all about assisting existing and successful microfinance institutions (MFI's) in developing countries accelerate their impact. MFI's lend small amounts to the self-employed poor in these countries to provide them the capital to get them on a path out of the poverty trap.

The numbers are compelling - of the roughly 6 billion people on this planet, half of them live in poverty on less than $2 per day. Microcredit loans are the fuel that helps these self-employed poor bootstrap themselves up the economic ladder.

Unitus is focused on helping MFI's accelerate their impact, providing them the resources (financial, technical and expertise) required to do so. By enabling the MFI's to accelerate their success, their impact on the self-employed poor is amplified. It's a beautiful idea.

The last post I will mention comes from:

BottomofPyramid

This is really just a mention about Unitus in an article about taking Financial Services to the Poor. Here is the mention:

A major boost to sustainable microfinance can be made by reviewing the limits for foreign investment in Micro Finance NBFCs. This may encourage socially conscious foreign investors to invest in young MFIs with NBFC status and provide a strong impetus to growth and scalability of the entire sector. The SKS Micro Finance deal with Unitus and TMSV LLC attracting US$ 0.5 Million as equity is possibly the most significant equity investment from foreign social venture capital funds and is an evidence of global interest in the Indian MFI Sector.

If I come across more posts, I will try to list them

BloggerCorps to the Rescue!

2005-08-21T18:41:00.000-07:00

I just posted on BloggerCorps for help getting the local PBS Stations to show the film "Small Fortunes". If you arrived here from the Corps, drop a comment to let me know.

I appreciate your help!

BloggerCorps is a wide-ranging group comprised mainly of bloggers, activists, and tech organizations who work with non-profits.

Encourage PBS to Show "Small Fortunes"

2005-08-21T16:36:00.000-07:00

I just got this email from Unitus about some concerns that local PBS stations won't decide to show the "Small Fortunes" documentary about microcredit. PBS is broadcasting the show nationally, but local stations have the choice to show it or not. We need as many people as possible to contact their local PBS station to let them know they want to see this extremely touching and powerful film.

Do you have a second to contact your local PBS Station and let them know that you want them to show "Small Fortunes" on October 27, 2005 at 10:00pm EST? The info how to contact PBS is below.

Thanks for your help! This film will spread awareness and touch many hearts to support this effective tool in the fight against the scourge of poverty!

A portion of Small Fortunes premiered at the launch of the United Nations International Year of Microcredit 2005 in November of 2004. To view this 20 minute video (QuickTime only) click here.

Here is the Unitus email:

Dear Tim,

We are extremely excited about the nationwide PBS premier of Small Fortunes: Microcredit and the Future of Poverty scheduled for Thursday, October 27, at 10 PM EST. Small Fortunes is a one-hour documentary describing microfinance's impact on global poverty. It features interviews with industry experts including Unitus staff and Board members, and Unitus MFI partners such as SKS in India.

Although PBS has included the documentary in its national broadcast schedule, local stations can opt out of airing the program or shift it to another time, and they are making those decisions now. Thus, we encourage you to contact your local PBS station today to tell them about your interest in microfinance and ask them to broadcast Small Fortunes on October 27. Positive and personalized emails and phone calls are most effective; mass produced mailings are not.

To locate the PBS station in your area, please visit:

www.pbs.org/stationfinder

We appreciate your support!

- The Unitus Team

From Tearing Down Big Brother in "1984" to Helping the Poor Around the World in 2005

2005-08-20T21:20:00.000-07:00

On a interesting side note - Mike Murray is the Chairman of the Board for Unitus; dedicating his life to helping others. Earlier in his life, Mike was a senior executive at Microsoft and before that, at Apple. Mike Murray played a key role as the Macintosh marketing manager and was a key figure in the creation of the Award-winning commercial, "1984" for the MacIntosh launch, played once during the 1984 SuperBowl, and voted as the greatest commercial of all time. For more of the story, click here

To see the commercial, 1984, go here: http://www.uriah.com/apple-qt/1984.html

Small Fortunes - Microcredit and the Future of Poverty

2005-08-20T14:03:00.000-07:00

On October 27, 2005 at 10pm EST, there is a nationwide PBS premier of Small Fortunes: Microcredit and the Future of Poverty. Small Fortunes is a one-hour documentary describing microfinance's impact on global poverty.

It is a beautiful documentary. The film crew was in India filming when I made my trip there with Unitus and they caught the incredible feel of the villages and even more important, caught the dignity and the intelligence of the borrowers.

I was really moved by the documentary when I saw the preview earlier this year. I loved the narrator's voice and the stories of the borrowers. I thought they did a good job of explaining the basics of Microcredit and had interviews with most of the pioneers of Microcredit, including Mohammed Yunus of Grameen, John Hatch of Finca, Maria Otero of Accion, and several other leaders in the field.

I thought the cinemotography was gorgeous. I wouldn't be surprised if it got some award.

Mike Murray, the Chairman of the Board of Unitus, as well as Geoff Davis, the President of Unitus are both interviewed.

Since it was produced by BYU-TV, they showed it locally here on the local BYU PBS station last week. My friend Carol watched it and this is what she said in an email to me:

"Tim, I was incredibly touched as I watched the program last night. Sterling Van Wagenen is a family friend and also produced the “Faith of an Observer” documentary about Hugh Nibley in 1983.

I woke up this morning wondering how I can help."

I am not sure the best way to answer Carol. The easiest way to help is with money. Microcredit needs access to money so they can make loans to the poor. The average loan is between $50-$100, so a donation of $2500 can usually fund loans for close to 50 borrowers. That still amazes me - $2500 can can the lives of 50 people. And when you think that there might be close to 5 people in a family of each borrower, the reach of that $2,500 could be as high as 250 people.

I know Unitus is interested in those that can make sizeable contributions, but they also welcome those that can make a donation of $2500 per year. If you want to make a donation to help the poor, click here.

I will think about other ways that Carol, on a limited budget, might be able to help and post some of those ideas later.

I hope you will take the chance to watch or Tivo "Small Fortunes". I think it could change your life.

Unitus Trip Report - A visit with Mohammed Yunus

2005-05-16T12:14:00.000-07:00

Here is my lengthy report on the visit of the Unitus board's visit to Bangladesh that occured in 2001. Much of this information comes from notes I took from a series of meetings held with Dr. Mohammed Yunus and the senior management team of Grameen.

For more information on Unitus, please visit http://www.unitus.com/

January 10, 2001

Dhaka, Bangladesh

We have had an inspiring time the last few days meeting with the Grameen organization and with Dr. Mohammed Yunus, it's founder.

Grameen was formed in 1976 as Dr. Yunus sought to find solutions to the poor in his country. He was one of the pioneers of microcredit, the concept of providing small loans to the poor for income generating activities.

Grameen today has 2.4 million people borrowing loans. They are in 40,212 villages throughout Bangladesh. They have loaned money for the construction of 502,587 homes. Close to 95% of the borrowers are women and they have research that shows that the women that borrow have lower divorce rates and stronger families than those who do not borrow. Over 2 million of the borrower's children are attending school, including high school and now several hundred attending college.

Grameen has loaned out more than $3.2 billion in micro-credit loans. A few years ago, the average loan was $38, today the average loan is $150 and they are projecting that in the future, the average loan will be over several thousand dollars. If someone continued to progress with Grameen and showed solid credit history, they say that they will handle any loan that member
needs.

Grameen talks that a basic right of a human is to live with honor and dignity. To be able to sustain one's life and the life of your family is part of that honor and dignity. To be dependant on another takes away that honor. Charity does not create honor or dignity. They believe an
individual must be able to create a sufficient income to achieve sustainability.

Grameen has a view that for most of human history, the norm was self-employment. Only recently has wage base employment become prevalent. Grameen is focusing on how to create an environment that enables the creation of income and they see that where wage based employment is not existent, that self-employment is the only option.

I had thought that Grameen was only a micro-credit organization, but I was way too narrow in my view of Grameen. Dr. Yunus said that if they found a better way to help the poor get out of poverty tomorrow, they would abandon micro-credit and adopt the new methodology. His commitment is to the poor, not to the methodology.

Micro-credit was the vehicle that really grew the membership in Grameen, but as they have had 25 years of experience in working with the poor, they have developed over 30 different companies and organizations that help or serve the poor. But in each case, the new organization created has to show viability - that is, if it is a for-profit company, it must show the ability
to generate a profit and if it a non-profit company, it must show the ability to cover costs - they all have to operate upon a basis of sustainability - thus no dependency on donors or governments.

I will explain about a few of these spin-off companies, but first I will explain a little more about Grameen Bank.

Grameen Bank is owned 93% by the borrowers. Each borrower can buy 1 share of the bank for about $2. Of the 2.4 million borrowers, 2 million own shares in the bank. The other 7% of the bank is owned by the Central Bank of Bangladesh, who provided the capital in the early years of the bank.

Their belief is the current poverty cycle goes like this:

Low income means no savings
No savings means no investment
No investment means lower income.

Grameen believes that it can be like this:

Low income with access to credit
Access to credit means investment
Investment means higher income
Higher income means small savings
Small savings means more access to credit
More access to credit means higher income
Higher income means better nutrition, education, health and lifestyle

A borrower joins the bank as one of 5 from a village. Together they make a contract that they will all pay back the loan. If one does not pay back, the others in the group must pay for them. People use the loans for a variety of purposes, including buying a milk cow, buying feed to fatten a cow that they will take to the market, to stock a fish pond, to buy chickens to harvest their eggs, sell their chicks, or to sell the chickens. Over the years, Grameen has developed numerous loan packages for a variety of purposes. Some are seasonal - with payments tied to the growing season, some are tied to market timing, payable when the cow is sold, etc.

The loans are made to the borrowers at 20% interest rate. This compares to their other option for capital - the money lenders or loan sharks, which loan at 100%+ interest rates. These loans to individuals are made by branches and one branch will have 2000 to 2,500 borrowers.

1 group has 5 borrowers
1 center has 8 groups
1 branch has 60 centers

Grameen Bank loans money to the branches at 12%. The branch has 8% to cover its costs of the field workers who go out to visit the centers. One field worker will work with about 400 borrowers or 10 centers and will visit 2 centers a day so each center is visited each week. When a center meets, all 8 groups (or 40 borrowers) attend. Each branch that will have 5 or 6 field
worker and a branch manager and I believe 1 administrative staff.

Each branch does a daily profit and loss statement, so they know exactly where they stand. Once a month they are given comparatives so they know where they stand compared to the other branches.

10 Branches are overseen by one Area Office.
10 Area Offices are overseen by one Zonal Office.

The Zonal offices are overseen by Headquarters. The branches have to pay for the staff of the Area Offices and the Zonal Offices from their 8% they make on their spread. Both Area and Zonal offices only comprise of 2 or 3 people at the most.

Grameen loans the money at 12% but they are borrowing from the market at 9 or 10%. They use the 2% to cover the Headquarter's expense. Grameen has 12,500 employees with 10,000 of them being field workers. Not one of the field workers have cars so they have to walk to the two centers every day, on average 8 - 10 kilometers apart, so they estimate that they walk 57,000
kilometers per day cumulatively!

So, what is their impact? Most Micro-credit organizations can only give their payback rate (97%) of their loans, but Grameen has created 10 indicators of success that they have created to determine if someone has crossed the poverty line.

These indicators include such things as if all school age children are in school, if they have access to clean water, if they have a house with a tin roof, if they have and use a latrine, etc.

Several years ago, a researcher named David Gibbons studied one branch for 18 months. Among these 2,500 borrowers he found that 50% of them had achieved the 10 indicators - had crossed the poverty line. 20% of them were very close to crossing - had achieved many of the indicators but not all, and that 18% had actually worsened.

He indicated that the 18% that had worsened did so for primarily 3 reasons:

1. Health. Most had someone in their family who had a severe health
condition that consumed any resources they had.
2. Marriage Dowry - Another cause was a daughter getting married and
according to custom here (which Grameen is fighting against) the family has
to give huge dower or a daughter can't be married.
3. Natural Disaster - Some natural disaster wiped them out.

As a result of this study, Grameen decided to look at making heath care plans available to its members to lessen the impact of health issues on their financial status. As a result of looking at this, Grameen created Grameen Well-fare, a non-profit institution focused on health and
scholarships.

Grameen received 140 million dollars in low interest loans and grants from US Foundations and other International Development entities. Grameen Bank put that money into the Grameen Well-Fare and then borrowed the money back and is paying Well-Fare the interest. It is from the interest that health care and scholarships are offered to Grameen members.

One of the most surprising things was the incredible entrepreneurial energy of this organization. As needs arose among their borrowers, new programs developed to serve them. Those programs that were successful and were viable were developed and spun out into new companies.

The first company spun out was Grameen Housing. Grameen found that having a house increased family stability and protected the income generation activities during the multiple natural disasters that sweep through Bangladesh. When they started, they would build the houses for the family for a loan of $500. Later, as more and more families got houses, Grameen
optimized the plans and now families can get a loan for $150 to buy the materials and build a home with their plans. Today over 500,000 families have built homes.

Grameen's criteria for a new company to exist is that it has to be a viable company. It is a stand-alone company and none have received money from Grameen Bank. Grameen has created a Grameen Fund, that is essentially a venture capital organization and they invest in these new ventures, but will often bring in partners to joint venture with them. Mohammed Yunus is the Chairman of the Board of all of these companies. To date there are over 30
companies that have spun out of Grameen, all with the Grameen name.

The most successful Grameen spin off has been Grameen Leasing. They found that there were a number of requests for larger loans that really made more sense to be a lease rather than a loan. To receive a lease, you had to be a borrower for over 10 years and have solid credit history. Some of the leases were for things like trucks that they would lease and the income they
could generate would be greater than the monthly payments they would make.

Leases have become a very popular way for borrowers to move up the income generation ladder. Borrowers are getting leases on large irrigation pumps, on fishing trawlers, on hand looms, etc. The creativity and entrepreneurship of the borrowers is astounding. Some borrowers have taken the irrigation pumps during the rainy season (when they are not needed) and convert them into a vehicle engine and rent out their motorized wagons for hire. Another leased a mobile generator. Each village in the area had a market at night, selling goods. The villagers used kerosene lamps or candles to create light to sell their wares. This man took his mobile generator to each village each day and would run a light bulb to each vendor's booth that was willing to pay a little for the light and created a profitable business.

One of the most interesting spin-offs has been Grameen Phone. Grameen Phone partnered with a Norwegian and Japanese company and obtained a cellular phone license from the Government. To get a landline, it takes two years and is very costly. So Grameen Phone is selling cell phones throughout the country and growing very rapidly. They anticipate that it will soon go public. Before they go public, Grameen Phone will sell all its portion of shares to the borrowers to Grameen Bank at pre-valued shares and then allow them to hold and own the appreciated shares over their life.

One of the most innovative concepts in Grameen Phone has been the "Telephone Lady".

Grameen Bank provides a loan to one borrower in a village. This lady uses the loan to pay for a cell phone and she then resells minutes to people in the village. Her cost is 4 cents a minute and she sells it at 8 cents a minute. Villagers are calling their families in other villages, their relatives in the cities or their relatives that are working overseas. It is a tremendously successful program.

It is Dr. Yunus' vision that after they get a cell phone into every village, that they get a computer into every village. He sees low cost computer training and educational opportunities, additional income-generating opportunities, and enhanced community ties, as well as future potential not yet imagined. There is a tremendous railway network and several years ago,
fiber optic cable was run throughout the country along the railway to improve signaling and reduce train collisions. A large majority of those villages lie close to the railways and that bandwidth could easily be tapped.

Another spin-off company has been the Grameen Business Promotion Company. One of the most popular loans has been for chicken production. Before, borrowers would use the loan to buy chicks and let them run wild and feed them each day in the front yard and take them to market when they were mature. Grameen noticed how many borrowers were doing this and decided to see if they could help increase the income generation of these borrowers. They developed a plan of caged chickens with regulated feed schedules and precise timing and their market value of their chickens dramatically increased, increasing the income of the borrowers. Next they saw that they could provide valuable market information and help get their chickens to a market where they could maximize their value.

Another spin-off company is Grameen Shakti (Energy) which is focusing on low-cost alternative energy sources, such as solar, wind, bio-gas and others. In Bangladesh, only 16% have electricity. Their most popular product is a solar unit - a 75-watt unit costs about $500 and can power 4 light bulbs and a black and white TV each night. They are selling these to both borrowers and non-borrowers and are selling about 200 units a month. The unit has both a solar panel and a battery. Some are using it so they can work later in their shop or can study at night. Some are renting out part of their power to their neighbors - being the neighborhood power plant.

Grameen has stressed accountability and self-sufficiency to the borrowers, but has also practiced it as an organization. A few years ago, there was a tremendous need among the villagers because of a deficiency of Vitamin A. UNICEF came in and offered Grameen Bank several million dollars of free Vitamin A to distribute to the borrowers. Grameen turned them down. They were worried that if they took the Vitamin A and gave it to the borrowers,
that the borrowers would get use to getting their source of Vitamin A as a hand out and in a few years as new staff or new programs were put in place with UNICEF, that the source of Vitamin A might end. So, Grameen created a program that every borrower should have a garden year round and made it part of their culture and program. They also bought garden seeds in bulk, made their own seed packets and sold them to the borrowers for 1 penny, covering Grameen's cost. Within a year, the issues of Vitamin A deficiency has virtually disappeared - the borrowers were self-sufficient in taking care of their needs and Grameen had provided goods and services to them in a viable manner.

This practice of having a garden became part of what is known as the 16 Decisions. These are decisions or statements that are recited at each weekly meeting of the borrowers. They are intended to change society and cultural norms that are damaging to a family's well-being or are habits and practices that they want to encourage.

The sixteen decisions include things like I will build and use a latrine, I will get water from well water, I will make sure my children (boys and girls) can be educated, I will not give dowry nor accept dowry in marriage of my children, I will not have more children than I can support, I will
have a garden and eat all the vegetables I can from it and sell the surplus, etc.

Grameen has received tremendous interest from people around the world and lots of requests to replicate their model. For this, they have set up Grameen Trust. Grameen Trust is the replicator incubator for the rest of the world. If someone wants to start up a micro credit organization, they can come to Grameen Trust and go through a 13-day program that they call
Grameen Dialogue. They do this 3-5 times a year and they take 20-25 applicants each time. These applicants come and spend a few days at a village and get a great understanding of how Grameen works at the village level. They then go back to Dhaka and prepare a proposal. That proposal is then presented to the groups of peers who critique and challenge the proposal. After that, Grameen Trust evaluates the revised proposals and select 30-40% of the participants as proposals they will fund.

They then will grant $15,000 to $60,000 to get the proposal for Micro credit started. They have currently funded 106 replication projects in 36 countries. Grameen Trust also provides training in the mechanics of micro credit such as how to be a field worker or branch manager or area office manager.

Another company, Grameen Communications, has taken all the forms for daily reports, loan documentation, etc. and has computerized them and these software packages are available for other Non-profits to buy.

My thoughts about Dr. Mohammed Yunus.

I felt like I was sitting in the presence of a Gandhi or a Martin Luther King - a visionary that was changing the world. Not only the millions in Bangladesh, but the millions that were impacted by the Grameen replication projects that are in 36 different countries, by his influence on world
leaders and organizations. He has received Queen Sofia of Spain (she used one of the phones from the "Telephone Lady" to call King Carlos back in Spain). Bill and Hillary Clinton, as well as Prince Charles have been here to visit. While we were visiting, a Japanese TV crew was filming part of our discussions for a documentary. CNN will be coming to film a segment in a few weeks. He is counseling Vicente Fox, the new President of Mexico. He is a regular speaker at the World Bank and the UN. He received India's highest award by their Government, the Gandhi award. Warner Woodworth facilitated his reception of an honorary doctorate from BYU in 1998 and he
was the commencement speaker then and was introduced to the First Presidency of The Church of Jesus Christ of Latter-Day Saints.

He is extremely charismatic, engaging and spoke with a great deal of clarity and was a tremendous teacher. He was willing to listen intently to questions asked of him and responded in such a clear and understandable way, that I would say to myself, "Of course, it is obvious that it should be done this way," but knowing that it took tremendous intelligence and a great deal
of thought about all the possible consequences of some action to come to that "obvious" choice. He was also very engaging, using humor often, frankly talking about his mistakes and obstacles and treating all of us with great respect.

Here was an Professor of Economics that had turned into the head of a $3.2 billion bank, that ran an organization of 12,500 employees, was the chairman of the board of 30 different companies and organizations, spending 2-3 hours with us each day and never having us feel that we were a burden or wasting his time. I think much of it was that he was appreciative to Warner Woodworth for all of Warner's support over the years and was being respectful to Warner. I also feel that he was intrigued by this group of businessmen that was involved with humanitarian work. I think we were different from other groups that he receives - governmental groups, other NGOs, - a lot of people from the humanitarian world, but that would have little appreciation for the business discipline he has infused in every aspect of the organization.

His is a tremendous businessman. He understands his customers better than any organization I have ever seen. Each branch manager writes a report on each group each month. These reports all get sent to the main office. There, each board member has to read so many branch reports each month. Many of their new ideas come from their. They say they know where crime is
increasing, where crops are good, where health is a problem. They have a better handle on the state of the citizens of Bangladesh than the government could ever have.

He keeps controls better than any business I have ever seen. Every branch has a daily report that they fill out and it generates a daily profit and loss sheet and every field worker knows if he is viable or not - meaning, is he bringing in more revenue to the branch that what he is costing them.

This rigid accountability goes all the way up to the top throughout the entire organization. Besides a daily P&L, each branch manager is given monthly comparatives of the other branches, so he always knows where he stands.

He is a tremendous entrepreneur. He has feedback channels built into his organization so good ideas can flourish. He allows for a safe atmosphere of experimenting. He said, don't tell me about your idea - go try it, don't tell anyone what you are doing and if it works, then tell us about it. I
would easy nominate him for Entrepreneur of the Year.

He is tremendously pragmatic. If something doesn't work, he leaves it and try's something different. He will abandon methodology and theory for something that works.

He is a tremendous leader. You can tell his driving passion is to help the poor and their families. The values that he states are reflected throughout the organization. Honor, dignity, self-reliance, hard work, unity, and love are all preached and practiced. He had spent time in the trenches along with all the other senior staff we met.

I could easily see Mohammed Yunus being the recipient of the Nobel Peace Prize someday. It was an experience I will greatly cherish.

Tim Stay
Unitus Board Member

A Magical Loan Closing

2005-03-24T09:40:00.000-08:00

By Tim Stay

I wrote this in January of 2004 after returning from a expedition to India for Unitus. I am a co-founder of Unitus and currently serve on the Unitus Board. Unitus is a Global Microfinance Accelerator, helping Microfinance institutions grow faster as they serve the poor, primarily through the use of microcredit loans.

A Magical Loan Closing
Under a Full-Moon in India

January 12, 2004

I had never witnessed a financial transaction quite like this one. It was a warm magical evening, right at twilight, and a big full moon was rising over the central Indian plains above us. We sat on the dusty ground, barefoot, observing the wondrous scene before us. We had removed our shoes as a sign of respect before entering into the circle on a small patch of open land and we sat down to watch these women pass their test and finalize the organization of their group, in preparation of completing their financial transaction.

We sat in front of a house in a little village of several thousand outside of a little town called Medak, which was several hours away from Hyderabad in central India. The house was a simple structure, made of hand-cut stone, with water buffalo dung used as plaster to patch the holes and smooth the walls. The roof was a thatched roof of reeds and grasses. There was no electricity in the home and we had small lanterns and the light of the full moon to illuminate the scene before us.

The five women sitting facing us were completing the fifth day of training in order to borrow small loans from SKS, an Indian Microfinance Institution, which had received funds from Unitus, the group we were with. An officer from this microcredit bank had traveled the 10 kilometers along a small dirt road to meet with these borrowers to test their readiness to enter into a loan with SKS.

Testing the comprehension of illiterate women of a financial transaction

The testing consisted of several steps before the loan transaction could be completed. One of the first steps was that each woman had to sign her name. Nervously each woman came forward to show she could sign her name. Later, when it was time to finalize the transaction, she would have to sign the loan documents as well. We didn’t think it was that big of a deal, until it was later explained to us that none of the five had ever written their name before. It was especially meaningful to later enter into one of their homes and find their name written over and over again in chalk on her mud floor as she had learned and practiced writing her name.

Next, one of the five began to recite their pledge to the bank. As she spoke each pledge, the other four would repeat in unison the pledge. This pledge would be recited at the beginning of every meeting they would hold with the bank. In the pledge, they promised to attend each weekly meeting without fail, to pay back the loans in weekly installments, to help the needy in their group, to abide by all the rules of the group and to use the loans to uplift their family’s economy.

The SKS Branch Manager who was conducting this testing sat on the ground facing of the five women. She got out five pebbles from a bag and laid them on the ground in front of her and told the women that the pebbles represented each of them. Over the next few minutes she rearranged the pebbles into different groupings as she asked them a series of questions. She would ask questions and the group in unison would answer back. It was almost musical to hear the questions and the beautiful voices of the women responding back.

Sandia, the Branch Manager, asked them a series of questions that included the following:

Who do the stones represent?
“They represent our group,” was the answer.

What does the group want to do?
We want to borrow money.

Even though each of you will get money from your loans, who is responsible for paying it back?
All of us are responsible.

What if one person doesn’t make their weekly payment?
The rest of us have to pay for her.

What happens if the group doesn’t have the money to cover their missing payment?
The group can borrow funds from their group savings account to cover it.

What does this group need to do each week?
We need to meet with the loan officer and make our weekly installment payments.

What happens at these meetings?
We make our principle payment, we make our interest payment and we make our savings deposit.

What is required for this group to be successful?
We must trust each other, support each other and keep our commitments.

Understanding Principle and Interest

Sandia then took out a thousand rupees (about $20) and placed it in front of one of the women. She asked this woman, who couldn’t read or write, to show how much she needed to pay back each week for a 50 week loan. As I struggled in my mind with the mental math, this woman quickly laid out 28 rupees for her weekly payment. The loan officer asked her to separate the payment into three groups, the principle payment, the interest payment, and the weekly saving requirement. She quickly separated the money into three piles. In the first pile were 20 rupees to be paid as a weekly installment on the principle. (20 rupees x 50 weekly payments = 1000 rupees). The second pile had 3 rupees (3 rupees x 50 weekly payments = 150 rupees, which equals about a 15% straight interest rate or about 28% effective rate). In the third pile were 5 rupees for the required savings deposit, which would total 250 rupees by the end of the 50 week payment cycle.

SKS requires each borrower to have a mandatory savings account. If these funds are never used, they receive the money back at the end of the payment cycle. In their group lending methodology, if a member of the group cannot meet their weekly payment, then the other four members of the group need to cover her repayment. If the group wants to, they can borrow money from their savings account to cover that amount. They can never borrow more that 50% of their savings account balance. They also must repay their savings account loan, but it is only principle repayment, as no interest is charged on their own money.

Sandia takes the 1,000 rupees and then makes a new pile in front of another woman. This time the amount is for 5,000 rupees. The woman quickly makes 3 piles to show her weekly payment. One pile for principle of 100 rupees, one pile for 15 rupees for interest, and one pile for 5 rupees for the savings requirement. Sandia repeats this test varying the amount of the loan with each of the women. Most are able to quickly do the math and show the weekly payments, but one struggles with getting the right amount, and the other women in this borrowing group quickly jump in and help show her the right amount.

Social Collateral

This is one of the fundamental principles of microcredit. Some have called it Social Collateral. Unlike a traditional bank, where the loan is secured by some asset, micro-credit loans are given without any collateralization of assets. While specific methodologies vary, most Microfinance Institutions (MFIs) loan money to a group and rely upon the group dynamics, this social collateral, to help ensure repayment. Several factors seem to take place. One is that the poor have seldom had anyone ever trust them before and they are determined to show that they are worthy of this trust. Another is that the other members of their groups are their neighbors and friends that they have to live with the rest of their lives and they don’t want to upset the goodwill between each other. These groups are self-selected and so it is unlikely that a person that is not trusted would be invited to be part of a group. If a member of a group shows to be untrustworthy, the group can replace her and bring another member into the group. They also know that 100% repayment is required for the group to get subsequent and larger loans. The resulting repayment rate is astonishing, varying between 95-100% repayment across the industry.

When we first became acquainted with SKS and they told us that their repayment rate was 100%, we were skeptical. But as we did our thorough and complete due diligence of their accounting, their processes and their IS systems, we began to believe the numbers. What we found is that most of the time, the individuals made their weekly repayments on-time and without any problems. However, there were some times when payments were missed by the individuals. When this occurred, their missing payments were required to be covered by the group. If the group could not cover the missing payment, the group could borrow from their mandatory savings account and make the missing payment. Even still there was one more safety net to ensure that the payment was made.

Each group consisted of 5 women. SKS organized their weekly meeting to consist of a meeting with 8 groups all-together, which formed a center. So a center meeting would have 40 women in attendance, with each group making their weekly repayment and receiving new loans if they had requested them. Each group of women elected a group leader and the group leader handled all the transactions with the loan officer. The 8 group leaders elected a center leader and that center leader would conduct the meetings and verify the proceedings. In the event that a group could not cover the missing payment of one or more of its members, the center was then required to cover the missing amount.

The center meeting we later attended was held under a huge tamarind tree in the village. This tree was one of the sacred trees of the village and important community meetings and village decision were made under this tree, adding to the seriousness of their center meeting.

With the combination of the group covering the missing repayment, being able to tap into their savings account if they needed, and having the backstop of the center covering anything else, we came to believe that SKS actually did have 100% repayment on the loans that they made.

Debunking the Myth that the Poor are not Credit Worthy

Microcredit refutes the myth that the poor are not credit-worthy. Microcredit fills a gap in the financial markets making capital available to a segment of the market that does not have access to capital or only has access to very expensive capital. In the MFI industry, you will see effective interest rates that range from 20-60% depending upon the local economy and competitive interest rates. In the case of the 28% interest rate that SKS charges, it is similar to the interest rate charged on credit cards in India and is certainly much less that the rates of 50-150% that the local money lenders offer.

As I watched these women demonstrate their understanding of principle and interest, I wondered if these loans would actually make a difference in the lives of these women. Later I asked what they would be using their loans for. One woman was going to borrow 8,000 rupees (about $200 US) to purchase a buffalo. Each week she would have to pay 189 rupees (160 rupees in principle, 24 rupees for interest, and 5 rupees for savings). With her buffalo, she would be able to get about 6 liters of milk per day that she could sell. She could get on average about 12 rupees per liter, so she would get around 72 rupees per day or 504 rupees per week. The buffalo could graze on the country side for free so there was no food cost. After paying her loan payment, her weekly profit for the buffalo was 315 rupees per week or 45 rupees per day. Considering that by working in the fields for a landlord or local farmer that she could earn around 25 rupees ($0.50 US) per day, her buffalo loan increased her daily income by more than 180%.

Over the years there have been countless well-meaning development projects. Some have been great successes, but others have been miserable failures, especially when you consider the huge sums of money that have been thrown at these problems. Some have focused on increasing nutrition. Some on increasing access to medical care, others on creating access to clean water supplies and appropriate sanitation facilities. Microcredit focuses on increasing income for the individual and studies have shown that increasing income allows the individual to improve their nutrition, their educational opportunities, the quality of their water supply and the accessibility to medical care, and it is done in a sustainable fashion. If a whole region can increase the income per capita, then more macro-level development issues can start to be addressed and programs maintained.

I realized that I had about $200 in my pocket. For the amount of money that I had in my pocket, I saw that I could change someone’s life. And I could do it in a way where they maintained their dignity, independence and self-reliance and avoided the dependency of the dole.

Whose Money is it?

Before Sandia executed the loan documents with the women, she did one more test. She took the three piles of principle, interest and savings that one of the women had made and asked the group about each pile of money.

She picked up the principle pile and asked several questions:

What is this money?
It is the principle payment, was the answer in unison
What is this payment used for?
It is to payback the loan.

She picked up the second pile.

What is this money?
It is the interest payment.
What is this payment for?
To cover the cost of the loan.
Whose money is this?
It is SKS’s money.
What does SKS use the money for?
To pay for the cost of the loan officers and to make new loans.

She picked up the third pile.

What is this money?
It is the savings deposit.
Whose money is this?
It is our money.
Who can use this money?
We can borrow this money if we need to.
How much can you borrow?
We can only borrow up to 50% of the savings.

Breaking the Chains of Poverty on a Global Basis

As the MFI industry has grown up over the last 25 years, billions of dollars have been lent and repaid in millions of small loans around the world in transactions just like the one we were observing. In some countries, millions of the poor are benefiting from the access to capital as a means to improve their lives and break the vicious chains of poverty. We are seeing MFIs become very sophisticated in their use of the world’s financial services as they seek for cheaper and cheaper sources of capital that they can lend and most exciting of all, we see many of these MFIs reach sustainability. This means that these MFIs do not require more and more donations from charitable individuals and institutions, but that they can become self-reliant and become mature enough fiscally to access the financial markets at competitive rates for their source of capital. And even more exciting, it that these organizations will be able to recycle their capital over and over, without it being depleted, and more and more poor will be able to be assisted.

Unitus, the Seattle-based nonprofit group that we are part of, believes that microcredit can actually alleviate poverty on a large scale. We believe that millions and millions on the earth can be freed from this overwhelming bondage of poverty. We see our role to identify the best MFIs out there in the world that have the right management teams, the right processes and accountability systems, and the right vision of the future and then help them accelerate their growth and ability to serve more of the poor. We help with making grants to help build their infrastructure, management, and systems. We help by making loans at low interest rates. We help with making equity investments to make them more attractive to local financial institutions, and we help with corporate governance issues and with networking opportunities. And we help access and create new financial instruments that can be utilized by the MFIs.

We believe that SKS can reach 300,000 borrowers by 2008 with the help of Unitus. If you assume that each borrower is part of a family of at least 4 people, that is over 1 million people being helped out of poverty. We believe that Unitus can help reach tens of millions of poor over the next decade with other MFIs and we believe that will help change the world.

Lessons I learned in India

It was time for the execution of the loan documents. As I watched each woman come forward to tentatively sign her name to the document, and receive her account booklet that would be filled out each week, I realized that these women probably understood the responsibilities of borrowing this money far better that I did when I took out my first loan. They understood the concept of principle and interest, they understood the consequences of not repaying the loan and they understood that good credit history would determine their ability to access capital in the future. I didn’t know all of that when I took my first loan and I realized that I haven’t taught these principles well to my kids. Suddenly I was humbled to realize that I had been taught a great lesson by these illiterate women sitting on the dusty Indian ground on this warm moonlit night.

A few days later, I stood at the Gandhi museum in New Delhi. As I followed his life from a successful lawyer with a profitable and comfortable lifestyle and saw him take a series of steps where he became more and more selfless and more and more caring of the poor and the downtrodden, I saw how his circle of influence grew and grew until I saw how this small man dressed in simple home-spun clothes brought about independence for his country through his philosophy of non-violence and through the devotion of his mind and soul. Next to a memorial of his death was a quote from Gandhi that struck me to the core.

Above the case holding the blood-stained garments he was wearing on the day he was assassinated, was this quote by Gandhi:

“My life is my message.”

I stood there and asked myself, “What is my message? When my life is over, what message will be told? Will it be one of wealth and comfort or will it be one of devotion and service? Will the world be better because of my presence? Will I have been able to help reduce the suffering and misery in this world or will I have added to it?”

This is why I am part of Unitus I believe I can help be part of something that can change the world. I want this to be part of my life, because I want part of my message to be that I helped in an effort that relieved suffering for millions and millions of people.