My friend Jocelyn Zuckerman (Kenya 1991-93 ) who happens to be in Haiti right now writing about their situation (on a grant from the Carter Center) sent me this ‘heads up’ in the NYTIMES. You can read it at: http://opinionator.blogs.nytimes.com/2011/01/31/when-microcredit-wont-do/
Entitled, “When Microcredit Won’t Do” is written by Tina Rosenberg. Here are a few excerpts that show how the “peace corps connection’ pays off.
Greg Van Kirk was a Peace Corps volunteer in Nebaj, Guatemala, a town of about 10,000 people in a mountainous Mayan region. He was an unusual Peace Corps volunteer, having already had one career as an investment banker. He had worked in structured finance for UBS, helping companies do complex deals to buy, sell or lease airplanes and power plants….
Van Kirk worked with a local mason named Augustín Corrio to build a better stove. Corrio took a standard stove design and rejiggered it in various ways. The best model had cement block legs, a brick chamber surrounding the fire on three sides, a metal sheet over the fire so several pots could be heated at once, and a chimney to take the smoke outside the house. This stove used 60 to 70 percent less wood than an open fire - so even though it costs about $100 it could pay for itself quickly. Buyers could pay in installments. It could be locally produced from basic construction materials.
The problem was how to sell it on a wide scale. No micro-borrower would take out the enormous loan necessary to buy a number of stoves to resell….
Van Kirk thought that consignment was the answer. With consignment, a supplier gives a product to a retailer, who then sells it. After the sale is completed, the retailer reimburses the seller, keeping a commission. The risk is taken not by the retailer, but by the supplier. Van Kirk made a deal with Corrio: Corrio went around to groups of people in Nebaj and surrounding villages to talk about the stove and show pictures. When a family ordered one, Corrio built it right in their house with materials Van Kirk had bought for him. Families paid in installments about equal to the money they saved by buying less wood. As payments came in, he repaid Van Kirk and kept a commission.
The stoves and the consignment model were both successful. Soon Van Kirk and a fellow Peace Corps volunteer, George Glickley, began to train local women to sell the stoves and protective glasses, eye drops and reading glasses supplied by VisionSpring, a nonprofit organization that sells eye glasses to poor people all over the world.
…One of the first entrepreneurs Glickley and Van Kirk trained was Yolanda García. She was a primary school graduate and housewife - she knew the men because Glickley had lived in her family’s house when he was in the Peace Corps. ”
Two examples of where the local, ‘peace corps connection’ worked….you won’t get that ‘up close and personal’ approach with USAID!
Tina Rosenberg won a Pulitzer Prize for her book “The Haunted Land: Facing Europe’s Ghosts After Communism.” She is a former editorial writer for The Times and now a contributing writer for the paper’s Sunday magazine. Her new book, “Join the Club: How Peer Pressure Can Transform the World,” is forthcoming from W.W. Norton.