SKI Charities

Archive for microfinance – Page 2

Happy 3rd Birthday SKIC! – Zimbabwe Photo Journal

SKIC beneficiary, Mutare, Zimbabwe

SKIC beneficiary, Mutare, Zimbabwe

In October of 2010, Shyam K. Iyer began SKI Charities. Two countries, three projects, and hundreds of beneficiaries later, the organization is now celebrating it’s 3rd birthday. And we are just getting started.

To celebrate the occasion we commissioned a photojournal of our very first project, the SKImfi Microfinance Institute in Mutare, Zimbabwe. To view the portraits of our beneficiaries and team, click here.

As we continue on our journey, please stay in touch:
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A Conversation with Shyam: Inspiration Found in Local Mapuche Craft-Making and Cuisine

Hand-made Mapuche Jewelry

Shyam returned from his most recent trip to Lebu, Chile inspired by the crafts, textiles, and food being created by SKImfi microfinance beneficiaries of indigenous Mapuche heritage. SKI Charities aims to give women a path to start and grow sustainable businesses that encourage them to utilize their culturally-embedded skillset.

Listen in to hear more about the progress we are making in Lebu to preserve the traditional Mapuche culture.

Why Focus on Women?

SKI project manager, Anita, with beneficiaries in Lebu, Chile

SKI Charities founder Shyam has been asked why it is that the charity focuses exclusively on women. When he visits town halls and communities to tell them about SKIC, plenty of men attend. Some of them jokingly (and others more aggressively) ask him, “Why are we not included? Why do you just focus on women? Is this reverse sexism or reverse discrimination?”

Shyam reasons that it is an effort to level the playing field. He tells these men, “We’ve had our opportunity and continue to receive so many chances. You see what our women do, what our mothers, sisters, and daughters do for us. They add to the community. They will add even more to your own life!”

Though SKIC would ultimately love to reach out to beneficiaries regardless of gender, some of the choice to work exclusively with females comes from having to carefully manage its resources. “We want to optimise our reach, in as many socially constructive areas as possible,” Shyam says.

“By no means am I saying that boys don’t deserve the same scholarships or men the same capital. But the communities we work in are very traditional, impoverished communities. Our observation has been that more men control the household finances and more boys than girls are given the opportunity to get an education and are encouraged to strive for something more. So when we think about our broader goal, it’s not about favoring females or choosing sides through microfinance or scholarships, but simply leveling the playing field.”

Shyam also points out that microfinance, in its most successful incarnation, was directed at females. Muhammad Yunus, the Nobel Prize Winner from Bangladesh, pioneered microfinance on a large scale and chose to focus on women. “He did this for a reason,” Shyam says.

“When you empower women, you truly support the entire community, not just an individual. When a woman is empowered and starts to earn wealth, what will she do?  She will grow her business, which will then hire more people, which will in turn support more suppliers. When she makes money, she will put her kids back in school, which of course increases the overall education of a community. And she will start to tithe more consistently to her church, which will further strengthen the community. As she becomes more prominent to society, she becomes respected as a leader and a role model for younger people. It’s all textbook spillover effects. The point I’m trying to make is, if you want finance go further, there are studies and initiatives and our own experience demonstrating that the best way is through women.”

Though the men in Lebu and Mutare are an important part of SKIC – “their support for their wives and daughters is integral to our efforts,” Shyam notes – the goal of the charity is to use the resources available to reach as many people as possible. As women gain more strength in these communities, it becomes more and more clear, through simple observation, that they put their energy and their earnings back into their communities and their families. So while on the surface our mission is directed at individual women, communities at large are the true beneficiaries.

Why Choose Microfinance?

Founder Shyam K. Iyer discusses the basics of SKIC’s SKImfi program.

“The term ‘micro,’ at least to me, connotes community-mindedness. The business efforts of the women we work with aren’t global. They focus on very small economies, on their individual communities, and, if nothing else, SKI Charities is a community-minded organization. We believe that focusing on these small areas in a micro sense supports these women’s own ideas of community and responsibility.” -Shyam K. Iyer

Why choose to help women through microfinance?

This process is about getting more women involved in a system where they can feel confident by building their wealth through self-employment. There are a few other ways of doing that than micro-finance. In my own experience, when I’ve just been given something, I’ve never treated it very dearly or importantly. But when I worked for something, just as these women work with their loans and pay them back, I felt like part of an equal opportunity. When you’re doing microfinance at such a local level, it’s not solely about these women creating their own wealth and creating their own businesses.
There are amazing spillover effects. They often start by paying their kids’ school fees with some of the money they make, which is great in a social sense, as it encourages schools to operate better. Further, the women in SKImfi may hire some of their friends or sisters to work for their business. That’s another spillover effect. And to support their businesses, they buy from other suppliers, who aren’t a direct part of our program but benefit from its existence. The work these women do and the products they provide stimulate the whole community, and SKIC’s goal is to grow and continue to stimulate more and more communities.

Will you give us a bare bones explanation of microfinance?

Like we discussed in our spring blog post, Microfinance 101, it’s basically a bank for people who have very little to no income, probably no collateral, definitely not a formal job, maybe not even an informal job.
Think about people who do have all of those things. They go to a bank; they present their resumes, their background, and they ask for a loan to do whatever they have a plan to do. Then they get the loan with the expectation that they’ll pay it back. Through microfinance, we deal with people who don’t have that track-record, resume or anything else to support their need of a loan.
We support these women with loans that are very small, based on the expectation that they never got the chance to put that story together. The key to this is that they have the same potential as those who are privileged enough to go to their local banks. So they get a very small microloan from SKIC, and they are expected to pay it back just like you or I would have to go to a bank to pay it back.

A Conversation with Shyam: Where We Are and Where We’re Going

For our fourth SKI Charities podcast, founder Shyam K. Iyer sits down to discuss why he chose to begin the charity in Mutare, Zimbabwe. He goes on to talk about how he chose the second charity site (Lebu, Chile) and what the similarities are between the two.

Listen in on the discussion, and hear Shyam’s thoughts on potential future locations for SKIC!

Why Zimbabwe?

When he first began SKIC, Shyam was asked countless times why he didn’t start it in India: “You’re of Indian origin, everybody is already there – why not go there too?” And that’s exactly why he didn’t. Shyam reasoned that, while there is plenty of demand in India, there’s also plenty of supply. He wanted to go somewhere where the supply was not meeting the demand, a place where he could truly help.

The place on his mind was Zimbabwe. In going to the London School of Economics, Shyam became good friends with a number of people from Zimbabwe, which was where he first became familiar with some of the country’s characteristics. “There’s a huge Zimbabwean contingent in London, mainly because of the political problems in their home country. But also because it’s a culture that values education and entrepreneurism a great deal. I learned all of this by studying in London with a number of people from Zimbabwe – and I was always impressed by them as students, and as people.”

Zimbabwe earned a special place in Shyam’s heart then, but it wasn’t until later that he thought to make it such a big part of the charity – and of his life. His previous job required him to do a lot of work in southern Africa and through that he got back in touch with his close friends whom he had met in London. They told him not the believe the headlines about Zimbabwe and encouraged him to go there. Shyam had always told them,

“I’m happy to do something positive, but where can we, with our limited resources, make the greatest impact? Whether financial resources or intellectual resources or energy, we want the most bang for buck. That’s the way to maximize your impact. So I went to Zimbabwe because I had a feeling we could make a positive and unique impact there. And that’s exactly what I found; these are people who are English speaking; they’ll get an education if it bankrupts them, very smart entrepreneurs, very globalized. They understood what it takes to make something from nothing.”

When Shyam made his initial visits, he realized how isolated Zimbabwe was – the entire world had turned their back on them because of an old ossified governing elite, who had no idea what was happening at the grassroots level. And the people were punished for the transgressions of that elite. “I knew that it would be the perfect place for us to go working, at least for us to do our development work,” says Shyam.

Shyam deliberated about how to engage Zimbabwe. He wanted to help and they needed help – but how? He realized that microfinance was the ideal approach because it was a concept that tapped into their entrepreneurial spirit, and their community-mindedness as well. Shyam notes,

“They are very focused on local business, local economy, creating value locally. But it also was sensitive towards their pride. Zimbabwe people are very proud. Since their independence in 1980 until about 2000, they led Africa in literacy, economic productivity, and were revered as the breadbasket of Africa. They’ve always been productive people. They’re very proud of their culture and of their history. So I knew that they did not just want to be handed out money. I knew they wanted to be treated as equals, as members of the global community, because there was every reason saying that they were going to break out of this funk very soon. Micro-finance was so ideal for their situation. ”

He continues, “In Zimbabwe, as far as I could tell, we were the only people providing microfinance on a not-for-profit basis in the entire country. At least from a point of view of being registered as a proper not-for-profit. There are plenty of people making loans for profit, and there are people doing it informally in a not so organized way. When we started in 2010, nobody else was doing this.”

And so Shyam found his place – one where there was demand, but not much supply. And one in which the people didn’t want to be handed money, but wanted to work for it. Three years later, and SKImfi participants continue to astound Shyam with their innovation, drive, and entrepreneurial skills

Microfinance 101: What is it?

Encyclopedia Britannica will tell you that microfinance is “a means of extending credit, usually in the form of small loans with no collateral, to nontraditional borrowers such as the poor in rural or undeveloped areas.” It was a concept institutionalized in 1976 by Bangladeshi economist Muhammad Yunus and adopted by SKI Charities founder, Shyam K. Iyer.

Shyam describes microfinance as “basically a bank for people who have little to no income, probably no collateral, definitely not a formal job maybe not even an informal job.” Microfinance enables those who don’t have a track record or resume to get small microloans. In general, “it’s impossible for them to get a loan from anybody else,” Shyam contends.

Treating otherwise disenfranchised individuals as mainstream clients who could obtain a loan if they so desire is SKI Charities’ way of empowering their participants. It is not only a way of leveling the playing field but also of spurring entrepreneurship, self-initiative, and responsibility in rural and/or impoverished communities. “We treat them on an equal level, just like you or I going to a bank,” says Shyam. They pay an interest rate, just like anyone else, but work with more manageable sums of money and with a shorter timeframe. SKI Charities beneficiaries have an average of three months to pay back their loans.

SKI Charities is “not in the business of providing aid, we’re providing people with access to finance. We’re able to provide low cost finance to them and then we’re able to help them run their businesses. Like any businessperson!”