Posts filed under 'MFM - MicroFinance Marketplace'

What Tom Sawyer Knew

Norman Rockwell's idyllic Tom Sawyer Painting the Fence If Tom Sawyer had put on his Banker’s Hat rather than his Entrepreneur’s Hat that fateful, fictional day in Hannibal, Aunt Polly’s fence would never have gotten painted.

(Can’t recall the details of Twain’s mythic tale, here’s a reprint.)

We’re not against developing creative instruments for micro-level lending and equity investment. They have a place in the MicroFinance Marketplace. But it is, after all, a marketplace and not a hallowed hall. A marketplace can be as exciting as a three-ring circus or as boring and constrained as a Victorian men’s club. We choose to put our creative juices into the circus side of things.

Consider that we live in a world where:

A Better World Is a Fence to be Painted

Considering these and related trends, there is no reason that we cannot create a story-rich, game-like on-line experience — NED On-line if you will — where tens of thousands of people are willing to pay, say $20/month, for the sheer joy and excitement of participation in this active, vibrant global on-line community. A place where everyday activity in this virtual world has a Matrix-like impact creating a better world in the Real World.

This membership subscription is not a loan nor an investment. It is a fee for experience, for access, for having a voice in what goes on in this ever-growing, ever-evolving on-line global community.

Once you are a member, it will be up to you to decide how to ‘invest’ your Better World Tokens. Perhaps you’ll purchase two shares of goat wool futures of a herd in Uganda. Later, you’ll lock in an hour of loom time craft futures of a New Mexico weaver.

You don’t do this with an expectation of below market return rates on repayment of a loan to the shepherd. Nor do you do it to own an equity share in Acme Weavers of New Mexico, Inc. You do this to be a stakeholder in the process that brings this wool to market, to have a voice in what the weaver makes, and to what Impact Point the sale of that wool and the weaver’s sweater will be directed. You’ll do it to get to know and care about the shepherd and the weaver as you shift your focus from the wool and sweater of a product-focused supply chain to a people-centered investment-production-consumption cycle.

Claus Kormannshaus' Tom Sawyer Painting the Better World Fence Next month, you’ll increase your share in wool futures of the goat herd, and lock in 20 board-feet of lumber to be produced by a sustainable forestry co-op in Maine. Your purchases from the NED On-line marketplace over the last few weeks have been rewarded with a stack of additional Better World Tokens that you apply to a community development project to raise a wind turbine in an Aceh fishing village.

Within three months you’ve parlayed your participation tokens into a growing account such that your Impact Quotient has landed you on the Top 10 Rookies of the Month list at NED On-line. You set your sites for Hall of Impact Fame recognition within a year. Even if you miss your personal goal, you’ve had a heck of a creative, fun time helping to make a better world.

Now multiply this hypothetical NED On-line player/character community member by many thousands. With an addictive “serious play” environment and an effective reward system for impactful participation, imagine how many miles of Better World Fence we can paint if we can just learn to think like Tom Sawyer.

–Sohodojo Jim and Timlynn–

1 comment December 29th, 2005

Hawala Microfinance and Entrepreneurial Community Ecosystems

Peter Rees said:

You’re looking at a Hawala system, plus.

Hi Peter… great link! Absolutely, that is one of many names and a dominant form for this kind of system. The ‘plus’ aspect, as you are probably suggesting, is the Internet-based software platform to enable the reach and transparency of such a system to support trusted peer-to-peer agreements on a global scale.

To get our thinking out of the formal loan and security ‘banking instrument’ thoughtspace, we’ve used a reference to ‘investors’ (NED inprosumers) purchasing such things as ‘Loom Time Craft Futures’. The idea is to get out of the realm of ownership and into the realm of participation. You might, for example, want to purchase such craft-making futures in order to have a voice in what ‘links’ can be included in the Impact (supply) Chain that moves a product from producer to consumer. Here, the Impact Point ‘links’ can be various fund-raising campaigns on any number of interpersonal or community dimensions. Under such a dynamic collaborative marketplace, the investor’s expected return could take on any number of spendable forms of ‘currency’ to ‘fund’ further participation/voice in the entrepreneurial communiy ecosystem.

–Sohodojo Jim and Timlynn–

Add comment December 8th, 2005

Creativity in Microfinance

John Berger said:

From a US perspective a membership club would probably not be a complete legal solution. From the SEC site [snip]…

John,

An MFM Membership Club does not have to be, nor will it likely be, an Investment Club. The type of club you cite is one that buys and sells regulated securities. It is, in effect, a buyer’s co-op for traditional stock and thereby falls under the regulations you cite. There are, however, a number of many centuries old culturally-based traditions for peer-based, family-based, community-based, person-to-person investment and informal banking that can certainly play a role in the MFM business model.

This is not about flying below the Patriot Act’s radar, it’s about extending the reach of person-to-person agreements and exchange. There is no reason that a person-to-person exchange network cannot scale. Remember, the world surely grew to significant scale long before there was institutionalized banking and regulated securities.

–Sohodojo Jim and Timlynn–

Add comment December 8th, 2005

It’s a Small World After All

Christina (Kirabo the Gift Mom) Jordan said:

On structure:

[snip]… After many months of revisiting the issues, he suggests that a Membership Club is the simplest legal structure that can enable a group of private citizens to invest as a group in virtually any way they choose. [snip]…I love imagining that small clubs /church groups/ employee groups/ online communities would be able to connect with, build a sense of community with and invest in specific communities in other parts of the world.

I am supposing the MFM would be a club of clubs… a kind of premier membership advantage to be granted to investee group members.

MEGA-BINGO - It’s a Small World After All!

Absolutely. 200%. Christina, the vision you described above is what we call the Small Is Good World, a world of Empowered Individuals working together in a global community of self-help peer relations that gives satisfaction on many personal and community levels.

This is why the second ‘M‘ in MFM (Micro-Finance Marketplace) is so important. MFM should not become an institution or heavyweight organization. MFM needs to be a lightweight marketplace.

MFM will very likely be realized as an Entrepreneurial Community Ecosystem that is brought to life by software and enabled by the Internet. Sound familiar? What is eBay? It’s a good idea (AKA a business model), a bunch of clever software that implements that good idea, and remarkably few non-market participants (AKA back-office employees) that make the marketplace work.

By creating a dynamic marketplace for the interplay of Membership Clubs, the MFM becomes a vital engine for NED (and beyond) commerce.

We believe (although we are not accountants and lawyers), that by being an enabler/marketplace for a myriad of “Better World Hook-ups” that the MFM avoids most, if not all, of the gotchas that would kick in if the MFM were to own/control significant resources/capital moving internationally. By enabling the Small Is Good World to efficiently create person-to-person agreements/exchanges, we would do a great service by reducing the bottleneck of conventional organizations and organization-centric thinking.

–Sohodojo Jim and Timlynn–

Add comment December 8th, 2005

‘Investment’ as a Fee for Experience/Voice not Ownership

Hello All,

It is great to see so many voices involved in this important conversation.

As you may know, Sohodojo is a major advocate/voice for the emerging Small Is Good World. This is the world of Empowered Individuals. The Small Is Good World is all about individuals working together. It is not organization-centric.

We strongly believe that the success of MFM will be found by emphasizing person-to-person relationships rather than relying on or imitating the structure or behavior patterns of organizations and institutions. We also strongly believe that, at least initially, investing rather than lending will be the most effective means of establishing lasting person-to-person relationships through the MFM. Shared risk and reward puts us together in a situation where active, peer-to-peer involvement is encouraged.

Being an arms’ length banker/lender is boring. How many of us grew up saying, “When I grow up, I want to be a banker!” Okay, some did, but not many! :-) And, in some subtle ways, the banker/borrower relationship perpetuates colonial superior/subordinate relations.

Investing is different. If we were to invest in WE Center Bead Production Futures, we have a shared risk through that investment. This creates an incentive to see that the venture we’ve invested in succeeds. We have ’skin in the game’. We are much more likely to take an active role in helping to market and sell the results of that production. If we are merely a lender/banker, all we care about is awaiting repayment.

We look forward to working together to develop the MFM into a powerful marketplace for personal and community development.

–Sohodojo Timlynn and Jim–

Add comment December 7th, 2005

Creatively Funding MicroAid Subscriptions

Christina (Kirabo the Gift Mom) Jordan said:

Yes, the microaid system is interesting, but it’s too expensive. Last time I looked, the monthly bill was well out of our reach.

Monica Nankoma with her Sohodojo Idea Incubator Come on, Christina… borrow Monica’s Idea Incubator for a few minutes and get those creative juices going. ;-)
The basic MicroAid platform costs little more than a bare-bones web hosting account. Plus, who pays retail these days!? You talk with Toby and work out a mutually rewarding arrangement.

What you are not taking into account is how much work and how long it would take you to create something that could handle the opportunity-presentation, micro-finance, and fine-grained project results tracking that is available with the MicroAid platform.

Keep in mind, too, that it is often the sponsoring/investor group or organization that antes up the service fee, not the recipients/project-manager that pays.

Our mutual buddies at GlobalGiving are sponsoring some of the projects being managed using MicroAid. The PUSPEM Foundation’s use of MicroAid is a prime example. Here’s one of PUSPEM’s projects featured at GlobalGiving. Let’s revive our talk with Dennis Whittle about getting GlobalGiving involved in the Small Is Good World.

The MFM project has to take into account how much time, energy, and money it would cost to design and develop the software that is readily available with a MicroAid subscription. This is not an off-the-shelf or roll-your-own in an afternoon server platform.

With just a bit of creativity and determination, we believe you would find that the expense of a MicroAid subscription would stop being a barrier, and you could move the MFM project ahead at full steam right away.

We’ll ping Toby and see if he can drop by and tell us some of the creative ways folks have found to fund their MicroAid subscriptions.

–Sohodojo Jim and Timlynn–

Add comment December 6th, 2005

The Case for Using the MicroAid ASP Service

Hey Cristina! :-)
At the risk of redundancy (the following is also posted here), we want to encourage you folks to give serious consideration to spawning your Internet platform as an extension of the MicroAid platform. The fine-grained opportunity identification, micro-funding, and detailed results tracking is a non-trivial software development challenge. Not only does MicroAid already have much of what you are looking for, they also have valuable experience with the management and legal challenges of making such an idea work.

Here is our note from the Tiered Investments discussion…

Mark Grimes said:

[snip]… but could not find anyplace where a normal consumer (ala myself) can put small funds in an invesment instrument, and make the world a better place thru microfinance (and educate consumers at the same time).

Small Is Good World Working Group
at the Skoll World Forum
The Small Is Good World Working Group at the Skoll World Forum
(l. to r.) Michael Chertok, Timlynn Babitsky, Toby Beresford, Christina Kirabo Jordan, Jim Salmons, and Pam McLean

Hi Mark,

We have a post under development that ties this topic and the Big Picture NED discussion together. We will post a cross-link to that here soon. In the meantime in response to your comment above, we encourage you to explore partnering with our good buddies, Toby and Richard Beresford and their U.K.-based social enterprise, MicroAid.net. The Beresfords, along with us and Christina, are founding members of the Small Is Good World Working Group which has been pursuing a change insurgency agenda over at Social Edge.

Father Richard is located in Indonesia and has decades of U.N.-based international development experience. Technogeek son Toby is in the U.K. where he is evolving the MicroAid platform as well as working on MicroAid’s a social change strategy by developing community self-support tools for marginalized communities in the U.K.

Micro-projects at PUSPEM.Microaid.net You can get an idea of what we think about the Beresfords and MicroAid in this article, MicroAid - International Aid In the Small Is Good World.

The main MicroAid web site currently focuses on the self-support tools for community organizing. However, MicroAid started as a person-to-person international aid service which is most evident on the example, Pusat Studi Pengembangan Masyarakat - PUSPEM Foundation. Here is an example fundable micro-project, Business Development for Small Canteen in Pasar Manggis. And here is a list of the micro-projects currently under development and seeking support.

Our upcoming post will dig more into the connection between microfinance and NED-style consumerism. As these ideas converge, we’ll invite Toby and Richard into the conversation as they are wonderful people with much to contribute to these topics and to the NED agenda.

–Sohodojo Timlynn and Jim–

Add comment December 3rd, 2005

Introducing the Small Is Good World Working Group

Mark Grimes said:

[snip]… but could not find anyplace where a normal consumer (ala myself) can put small funds in an invesment instrument, and make the world a better place thru microfinance (and educate consumers at the same time).

Small Is Good World Working Group
at the Skoll World Forum
The Small Is Good World Working Group at the Skoll World Forum
(l. to r.) Michael Chertok, Timlynn Babitsky, Toby Beresford, Christina Kirabo Jordan, Jim Salmons, and Pam McLean

Hi Mark,

We have a post under development that ties this topic and the Big Picture NED discussion together. We will post a cross-link to that here soon. In the meantime in response to your comment above, we encourage you to explore partnering with our good buddies, Toby and Richard Beresford and their U.K.-based social enterprise, MicroAid.net. The Beresfords, along with us and Christina, are founding members of the Small Is Good World Working Group which has been pursuing a change insurgency agenda over at Social Edge.

Father Richard is located in Indonesia and has decades of U.N.-based international development experience. Technogeek son Toby is in the U.K. where he is evolving the MicroAid platform as well as working on MicroAid’s a social change strategy by developing community self-support tools for marginalized communities in the U.K.

Micro-projects at PUSPEM.Microaid.net You can get an idea of what we think about the Beresfords and MicroAid in this article, MicroAid - International Aid In the Small Is Good World.

The main MicroAid web site currently focuses on the self-support tools for community organizing. However, MicroAid started as a person-to-person international aid service which is most evident on the example, Pusat Studi Pengembangan Masyarakat - PUSPEM Foundation. Here is an example fundable micro-project, Business Development for Small Canteen in Pasar Manggis. And here is a list of the micro-projects currently under development and seeking support.

Our upcoming post will dig more into the connection between microfinance and NED-style consumerism. As these ideas converge, we’ll invite Toby and Richard into the conversation as they are wonderful people with much to contribute to these topics and to the NED agenda.

–Sohodojo Timlynn and Jim–

Add comment December 3rd, 2005


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