×

Announcing: Slashdot Deals - Explore geek apps, games, gadgets and more. (what is this?)

Thank you!

We are sorry to see you leave - Beta is different and we value the time you took to try it out. Before you decide to go, please take a look at some value-adds for Beta and learn more about it. Thank you for reading Slashdot, and for making the site better!

The Mifos Project Makes Software To 'Accelerate Microfinance' (Video)

Roblimo posted about 6 months ago | from the sometimes-little-things-can-help-as-much-as-big-ones dept.

Open Source 39

You think you have problems getting a bank loan? It's much harder for a small-town woman in Uganda or India. But Indian microfinance provider ASOMI has more than 50 branches and over 40,000 clients, and is an active Mifos user. The loans ASOMI makes are absurdly small by U.S. bank (or Indian bank) standards. Ugandans in the same "I just need a little bit of money to start (or expand) my business" predicament can turn to RedMutual Microfinance. And so on around the world, with the bulk of microfinance operators who use open source Mifos concentrated in S. and S.E. Asia and India. "But," you say, "I'm an IT person. I don't want to go into the microfinance business, and one of the little loans (often less than $100) they deal with wouldn't help me." True. But you can become a Mifos Specialist, which Mifos defines as "a consulting firm that provides technical support and consultation for microfinance institutions evaluating and deploying Mifos, and for ongoing use and customization." You won't get rich doing this, but it looks like there's a decent living (by Kenyan or Indonesian standards) in working with Mifos. They can use volunteer help, too. So check out Mifos and see if it has anything to offer you -- or if you have anything to offer Mifos. Either way, you can help poor people in poor countries become entrepreneurs and break the cycle of poverty that holds them down. (Alternate video link)

Sorry! There are no comments related to the filter you selected.

You wont get rich (1)

Anonymous Coward | about 6 months ago | (#46982917)

but you can be damm sure the founders are, and you muppets can help them get richer

Obligatory mis-read-it-at-first... (1)

PsychoSlashDot (207849) | about 6 months ago | (#46982979)

I generally dislike the meme, but I mis-read this as The MILFOS Project.

Re:Obligatory mis-read-it-at-first... (0)

Anonymous Coward | about 6 months ago | (#46983005)

You're just seeing what you want to see.

Re:Obligatory mis-read-it-at-first... (2)

war4peace (1628283) | about 6 months ago | (#46984437)

Close but no cigar. I went with Mofos.

Re:Obligatory mis-read-it-at-first... (1)

larpon (974081) | about 6 months ago | (#46987803)

I mis-read your comment as "Close but no cougar". It's too early in the morning here.

Re:Obligatory mis-read-it-at-first... (1)

war4peace (1628283) | about 6 months ago | (#46987955)

The wood still goes strong in the morning?

It's still debt (2, Interesting)

popo (107611) | about 6 months ago | (#46983069)

Micro finance is indeed capable of a lot of good. But it's also still debt, and still carries with if all the personal (and macroeconomic) evils of debt. Non-performing loans in microfinance are still a major issue despite the claims to the opposite. The public-relations positioning of micro finance as "help for the poor" is a bit laughable as it can just as easily be construed as opportunistic bankers eager for new markets. Does it help society overall? That's questionable. All debt appears to help on a macroeconomic level at the beginning if the credit cycle.

On a larger level, debt is still tomorrow's demand, spent today. The notion that debt will always create a "virtuous circle" of ever increasing growth and demand has been proven wrong repeatedly by the credit cycle of booms and busts. A boom creates as many victims as it does beneficiaries, as rising prices burden those who do not participate in the game of debt.

Are there positive stories of individuals who make use of micro finance to build businesses and lift themselves out of poverty? Yes. But there is also debt which enslaves and burdens. Debt is debt. It's net benefits to society are zero sum, for all but the bankers.

Re:It's still debt (3, Insightful)

SuperKendall (25149) | about 6 months ago | (#46983135)

Micro finance is indeed capable of a lot of good. But it's also still debt, and still carries with if all the personal (and macroeconomic) evils of debt.

I'll take that evil over the evil of crushing poverty and mental stagnation any day.

Re:It's still debt (2)

CanHasDIY (1672858) | about 6 months ago | (#46983287)

Micro finance is indeed capable of a lot of good. But it's also still debt, and still carries with if all the personal (and macroeconomic) evils of debt.

I'll take that evil over the evil of crushing poverty and mental stagnation any day.

Financing is often a cause of crushing poverty, not a way out of it. That's why my state has been trying for years to shut down payday loan joints and their 400-500 % interest rates.

We'd be better off with a dollar that's actually worth something and decent wages than any amount of financing.

Re:It's still debt (1)

SuperKendall (25149) | about 6 months ago | (#46983517)

Financing is often a cause of crushing poverty, not a way out of it...my state has been trying for years to shut down payday loan joints .

"Often" is a terrible misrepresentation of a useful tool that helps a LOT of people.

Financing can be a problem, but usually small business loans are not that kind as you shed the debt if the business does not work out (especially micro-loans). Don't throw out a civilization with the bathwater.

We'd be better off with a dollar that's actually worth something and decent wages than any amount of financing./em

And how do you intend to have decent wages Mr Anderson, when there are no jobs to begin with... *cue wicked smile*.

If only there were a program to help people create small companies so there could be more jobs that would eventually pay better...

Re:It's still debt (1)

CanHasDIY (1672858) | about 6 months ago | (#46984105)

Financing is often a cause of crushing poverty, not a way out of it...my state has been trying for years to shut down payday loan joints .

"Often" is a terrible misrepresentation of a useful tool that helps a LOT of people.

No, "Always" or even "Most of the time" would be terrible misrepresentations. "Often" is, sadly, fairly accurate, as we get to see every few decades with our modern, bubble-burst-bubble form of economics. On top of that, a lot of people get crushed under payday loan and similar types of predatory debt. Hell, it wasn't a decade ago that shit-tons of American households got hosed by predatory banking practices, a la the "Mortgage Meltdown," and subsequent TARP bailouts.

Financing can be a problem, but usually small business loans are not that kind as you shed the debt if the business does not work out (especially micro-loans). Don't throw out a civilization with the bathwater.

Hyperbole. I never suggested any sort of end to financing, only pointed out that the reality of predatory financing is anathema to your apparent contention that financial devices are an alternative to "crushing poverty," as opposed to being a cause of it, even if the occasion is rare (which it's not).

We'd be better off with a dollar that's actually worth something and decent wages than any amount of financing./em

And how do you intend to have decent wages Mr Anderson, when there are no jobs to begin with... *cue wicked smile*.

If only there were a program to help people create small companies so there could be more jobs that would eventually pay better...

What would be even even better is if the government had a reasonable definition of "small business," so the handful of SBA loans being given out annually don't end up being gobbled up by some multi-million dollar, Fortune 500 company. Here's a Forbes article [forbes.com] that illustrates my point.

Re:It's still debt (0)

Anonymous Coward | about 6 months ago | (#47033849)

if you want to kill of payday loans you need to kill of the need for them, that means wages that actually allow people to put some money aside (so they don't need to borrow with every minor emergency)

Re:It's still debt (4, Interesting)

mcrbids (148650) | about 6 months ago | (#46983295)

Debt is debt. It's net benefits to society are zero sum, for all but the bankers.

Which is pretty much bollocks. Debt is one of the most powerful economic tools ever invented, rivaling money itself. Like any tool, it can be used well, or poorly. It's basically never a zero sum game.

On a larger level, debt is still tomorrow's demand, spent today.

Sorta, but not really. Debt is a type of mutual bet made by the investor/banker and the beneficiary that the value of the assets purchased by the debt will exceed the value of the money the debt reflects. And most of the time, it works out, and everybody wins!

Let's say I need $100,000 to buy new injection molds for my business in order to build a product. Without the $100k loan, the injection molds never get built, and at the end of a year, you have $100k in cash still sitting in the investor's hand.

But if the injection molds get built, and the product sells, you have:

A) The investor no longer has $100k in his/her hand, but they have the debt, now somewhat greater than $100k. (interest)

B) The borrower has $100k in debt, offset by the value of the new injection molds, AND the profits made from the product created with the injection molds.

This scenario is a positive sum game. Personal debt is an entirely different matter.

Like before, you are making a bet with an investor, and it does sometimes work out for the positive, but consumer debts are typically used for things to consume. If you spend it on a house, a house can be built that wouldn't exist otherwise, so it's probably a good deal. If you spend the money on hookers and blow, you truly consume the money and have no assets to "win" on. Now you have interest due on the money, which is economic activity that won't happen. Money spent on interest is then NOT spent on "real" goods, and everybody loses. Even the lender loses some, as the overall economy is damaged, even if this loss much less than they gain in personal interest money.

Re:It's still debt (0)

Anonymous Coward | about 6 months ago | (#46983899)

If you spend the money on hookers and blow, you truly consume the money and have no assets to "win" on. Now you have interest due on the money, which is economic activity that won't happen. Money spent on interest is then NOT spent on "real" goods, and everybody loses. Even the lender loses some, as the overall economy is damaged, even if this loss much less than they gain in personal interest money.

The money goes to the hookers and drug dealers. It isn't destroyed in some grand bonfire. Both participants of the loan suffer as a result of that decision, but the whole economy (not just the lawful economy) does not discriminate on how the currency keeps moving.

Re:It's still debt (1)

Vitriol+Angst (458300) | about 6 months ago | (#46988329)

Hookers and drug dealers actually do more to help our economy than Billionaires on Wall Street. Most hookers don't move their money to offshore tax havens, or support a leverage buyout carpet bagger for public office. For instance; had Allen Greenspan been a pimp instead of in oversight of Wall Street -- we'd be $14 trillion richer as a nation.

We need more hookers and less brokers, more schools and fewer churches -- only then is there hope for America.

Re:It's still debt (1)

popo (107611) | about 6 months ago | (#46986013)

"Sorta, but not really. Debt is a type of mutual bet made by the investor/banker and the beneficiary that the value of the assets purchased by the debt will exceed the value of the money the debt reflects. And most of the time, it works out, and everybody wins!"

Buzz. Wrong. Actually, that's mostly not how it works. But it's a wonderful fantasy. To say that everybody wins, is a dangerous definition of "everybody".

The problem with debt is that pervasive use of debt actually drives up the price of assets and is disastrous for non-debtors, which in turn forces more and more people into the hands of the banks.

In literally every area of he economy where debt is employed, prices inflate and affordability is reduced.

Take education: it is government "affordability" policies and readily available debt that are responsible for soaring costs. Take housing: without debt it would be affordable.

Of course, you could say that homeowners and bankers have both benefited. (If that's your definition of "everybody"). But the availability of debt has destroyed the buying power of any party not willing to more themselves in debt. The pervasive use of debt is what drives prices to levels of unaffordability.

Re:It's still debt (1)

Vitriol+Angst (458300) | about 6 months ago | (#46988331)

So true. Would anyone pay $250,000 for an education if they couldn't take out a loan? It isn't worth that.

Re:It's still debt (1)

Vitriol+Angst (458300) | about 6 months ago | (#46988301)

"Which is pretty much bollocks. Debt is one of the most powerful economic tools ever invented, rivaling money itself"

People who make sense don't get cookies -- people who say the same garbage as come out of corporate think tanks get promoted. The Egyptian empire existed for a couple thousand years without debt. America has had about 4 economic crashes.

Plus the example given is a very simplistic example of banking. Before our 2008 economic crash -- Financial Services accounted for 40% of all profits. Making money on "financial devices" and not on actually making things was the most profitable endeavor. Because of the ability for banks to factor and leverage, they kept bundling Credit Default Swaps with insurance and used them as deposits to bet again. This used to be illegal before Sarbanes-Oxley got destroyed.

We have inflation because the government borrows in the form of Federal Notes from the Federal Reserve (a group of banks). This makes a lot of sense because paying 3% to an organization year over year for doing something we could have just done ourselves makes a lot of sense -- because people who think this way get a cookie.

Everyone with their head up their ass gets a pat on the head.

Read the "Web of Debt" and understand that debt-based economics always fails. We have history to prove it. It seems all the people who are enamored with unfettered capitalism only look between 1940 and 1980 as if all the rest of our history were invisible.

Re:It's still debt (1)

dinfinity (2300094) | about 6 months ago | (#46988825)

The Egyptian empire existed for a couple thousand years without debt

I'm pretty sure it's not a very good idea to use an economy that relied heavily on slavery as a positive example.
http://en.wikipedia.org/wiki/S... [wikipedia.org]

Re:It's still debt (1)

tlhIngan (30335) | about 6 months ago | (#46989823)

People who make sense don't get cookies -- people who say the same garbage as come out of corporate think tanks get promoted. The Egyptian empire existed for a couple thousand years without debt. America has had about 4 economic crashes.

You do realize that according to some, debt predates money. As in, in the barter economy, I give you a goat now, and I expect you to repay me in loaves of bread.

But the current form of debt and money has been around to before the Roman empire, which has lasted a pretty damn long time.

The problem is you're applying micro-economics to macro-economics, and that doesn't work. It's why we have both micro and macro economics - both work similarly, but differently.

It's also why tying a fiscal supply to a limited good (e.g., gold) is futile because history has shown economic crashes when said limited good happened to be scarcer.

Debt, when carefully used, is a very powerful economic tool. Businesses regularly engage in debt because to not do so can cripple a company if it needed immediate liquid cash. It's why this last fiscal collapse was called a "liquidity crisis" - when a company needed liquidity, it couldn't get it and ended up going out of business because it couldn't get the necsssary cashflow. (Basically, a company ties up its liquid money making investments - people, equipment, stock, etc, and when it comes due to needing liquid cash, it often borrows against these assets (which aren't liquid) for a short term loan. But when no one wants to make the loan, the company is forced to liquidate, which means giving up future growth to make today's rent).

Even today economists have generally agreed that one of the major causes of the Great Depression was the lack of spending making the whole situation far worse than it had to be and it was only through war debt spending (i.e., WWII) that really got the country out of it.

The really big problem these days is inadequate fiscal education, coupled with way-to-easy credit. Things like risk vs. return, cashflow, budgeting, investments (all kinds - stocks, bonds, forex, etc), taxes, and even basic economic theory are not being taught today. Stuff that used to get taught during courses in Home Economics - practical day to day skills required in running a household. This lack of knowledge is really what's causing problems,

Simplistic reasoning - Credit cards are bad. But they aren't, really - they're a GREAT way to build up a credit rating, as long as you have impulse control, avoid instant gratification (both can be taught and learned, but aren't), and are great as a revolving account for spending, provided it actually revolves and you don't carry a balance. The problem is, it's way too misused because things like impulse control and delayed gratification aren't taught and learned.

"You're rich, I don't have to pay you back" (1)

davide marney (231845) | about 6 months ago | (#46983903)

I tried out funding a micro finance loan, but was never paid back; the borrower basically said, "Everybody in America is rich, I don't need to pay you back." A friend of mine who worked for many years in East Africa said such feelings are very widespread. Take care; if people don't pay you back, they aren't really getting the point of financing growth, and will therefore stay stuck in poverty. It's not that I lost a lot of money (a few thousands), but I lost the relationship I could have built.

MF successes supporting data? (2, Informative)

Anonymous Coward | about 6 months ago | (#46983095)

I've been researching microfinance and microlending for a couple of years during the early stages of my PhD program in a related field, and have been unable to find peer-reviewed research supporting claims that microfinance initiatives create positive outcomes for their recipients. There is certainly anecdotal evidence, but little to no hard data in the hundreds of papers and articles I've read on the subject. That's not to say I'm opposed to the efforts of such lenders.

However, I am a little concerned that the aim/objective is almost always to create entrepreneurs out of the poor. I have also seen very little evidence to support this emphasis as the primary objective of said lenders.

Re:MF successes supporting data? (1)

hughbar (579555) | about 6 months ago | (#46987399)

I'll declare interest, I work on an open source, mutual social credit system: https://sourceforge.net/projec... [sourceforge.net] so I'm not neutral. But microfinance usually has high interest rates and is 'owned' by large aid organisations that have their private agendas.

Debt money is created by private institutions from thin air and 'ought' either to be based on existing deposits [full reserve banking which would 'slow' everything, not a bad thing] or money creation should be in the hands and governed by the 'users'. So I don't believe that microfinance is the 'answer' and can't find evidence either.

So, where can I invest? (1)

scubamage (727538) | about 6 months ago | (#46983101)

Seriously, that's what I'd like to know. Kiva allowed you to donate, but you couldn't make a profit off the loans you provided. So, what about this? Can I back a loan and earn interest off of it? I love the idea of this if it could be turned into an 'everyone wins' situation - i make money, the business person starts a business and makes money, the broker in the middle makes money.

Re:So, where can I invest? (0)

Anonymous Coward | about 6 months ago | (#46983723)

Microplace did allow you to collect a small amount of interest (1-3%) but they recent stopped doing new loans and will only be around until the current ones terms are completed before shutting down entirely.

We never learn (0)

jmd (14060) | about 6 months ago | (#46983181)

I made a loan or two through Kiva and then one day it dawned on me that all this sort of microfinance does is enslave unsuspecting people to debt slavery.

Kiva was charging 18% interest then. Capitalism is much like some evangelical religions.... it needs to spread. Often times like a virus instead of a force for good.

Re:We never learn (1)

scubamage (727538) | about 6 months ago | (#46983611)

I wanted to try Kiva, but I had no interest in seeing a lot of risk and no benefit. They didn't provide any interest to you for lending your money, but you assumed risk if the person you loaned to didn't pay them back. Has that changed?

Bankruptcy laws (2)

NapalmV (1934294) | about 6 months ago | (#46983239)

What are the bankruptcy laws there? If the project goes wrong (like in poor crop due to inclement/extreme weather), can they declare insolvency, or do they have to commit suicide to clear the family from debt?

Re:Bankruptcy laws (0)

Anonymous Coward | about 6 months ago | (#46984547)

Very deadly...

http://www.businessinsider.com... [businessinsider.com]

The outfit named in this post is also funded by Pierre Omidyar, ebay banker and Glen Grewald fanboi.

Uber = car sharing as Micro finance = money sharing

Yay markets!

I am enjoying the fact that Slashot isn't even trying to hide it's silicon valley oligarch sponsorship anymore.

Re:Bankruptcy laws (0)

Anonymous Coward | about 6 months ago | (#46985341)

I vote for debtors prison...or send them all to Australia.

Microfinance Doesn't Work (0)

Anonymous Coward | about 6 months ago | (#46983245)

There's little data that evidences microfinance reducing overall poverty. Most of the evidence says it does NOT increase a community's wealth.

It moderately helps families. But most of the people receiving microfinancing just trade jobs--so their overall wealth doesn't increase much.

It does have a positive effect on the gender paradigm in a community, because having a group of entrepreneurial women (who are usually the ones receiving money, by a large margin) changes perspectives on the role of women.

If you want to help a whole community emerge from poverty, microfinancing won't help much. You need traditional financing, with much larger loans. But that won't happen without property and commercial reforms, because banks don't want to be involved in your business (it's exceedingly labor intensive and inefficient to oversee another business), and prefer securing collateral, in the form of legal property (real property, contracts, etc).

A million small businesses don't do much. You need larger, medium-sized businesses which can employ many more people other than the proprietors. And the business needs to have good long-term prospects (a prerequisite of which is strong financial backing), so that employees' incomes can stabilize. But you can't have any of that without a legal and political situation amenable to business. That means less corruption, uniform and consistent regulations, strong property rights, and access to much larger loans.

And, ideally, you want real property to be as equally distributed as possible. In most impoverished countries very few people own their land or have clear title. They're either squatters, or the property rights are uncertain and not transferable with any degree of confidence. Without any property to secure a loan, you can't get big loans. So businesses seek out concessions from government for financing, which leads to all kinds of trouble.

Re:Microfinance Doesn't Work (1)

Anonymous Coward | about 6 months ago | (#46983399)

I should point out, also, that one of the reasons America became so prosperous early on was widespread property ownership. Not only did we have numerous land grant programs (big and small) from before the founding of the country up to the 20th century, but through the law of adverse possession weak titles became strong titles. Squatters could enjoy legal title in due time, providing them real assets, and not just a subsistence living.

Singapore understands this. Its public housing program is designed to give legal title to government built housing. This shifts wealth from the rich to the poor and middle class. The majority of Singaporeans live in government-built housing. And there's no stigma, largely because they're not beholden to the government after the 5-year waiting period.

I think that's an excellent model for not only developing countries, but also America itself, now that our land grant days are behind us. If you want to improve overall wealth and reduce income equality (two different, non-exclusive outcomes), you need to distribute real property. With property to secure a loan, a group of individuals won't need microfinancing hand-me-outs.

Re:Microfinance Doesn't Work (0)

Anonymous Coward | about 6 months ago | (#46983673)

"The majority of Singaporeans live in government-built housing. ... they're not beholden to the government"

Unpossible.

Help them help you (1)

guruevi (827432) | about 6 months ago | (#46983317)

Great feel-good job, you won't make much money, they won't either so we'll all be poor together. Income equalization. Why does the company not invest in such talent? Don't they want to make their customers successful? Off course not, micro finance is just the new way of doing donations for Africa of the 80's and 90's - 80% of it sticks in the company's pocket, and 20% are bribes to local officials.

Poverty Metaphors (1)

handy_vandal (606174) | about 6 months ago | (#46983367)

"... become entrepreneurs and break the cycle of poverty that holds them down."

The phrase "cycle of poverty" -- while meaningful, and sad -- is a tired metaphor.

Successful entrepreneurs are more like excited electrons, jumping to a higher orbital shell.

Re:Poverty Metaphors (1)

pushing-robot (1037830) | about 6 months ago | (#46983769)

"Cycle of poverty" is not a metaphor.

Also, successful entrepreneurs are more like a creamy Alfredo sauce with just a hint of garlic.

"Cycle of poverty" is not a metaphor (1)

handy_vandal (606174) | about 6 months ago | (#46985035)

Agreed, "cycle of poverty" is a descriptive phrase, not a metaphor. Poor writing on my part; thank you for calling me out.

I like the excited electron model of entrepreneurship, because electron-entrepreneur commonly de-excite and fall back to lower orbital shells.

By the same token, I can see how many restaurateur-entrepreneurs achieve creamy Alfredo-sauceness with just a hint of garlic, yet some revert to bread and water.

And view a talk of Hans Rosling to get motivated! (1)

Fotis Georgatos (3006465) | about 6 months ago | (#46983933)

In case you are in position to help as the article suggests and, you just need a little kick to get you in action, watch this one: http://www.gapminder.org/news/... [gapminder.org]

MILFs in Open Source (0)

Anonymous Coward | about 6 months ago | (#46986649)

Finally. That's what computer geeks need.

Check for New Comments
Slashdot Login

Need an Account?

Forgot your password?