Jonathan Brun

Micro-Finance, the way of the future

Just read this book. Amazing. I cried. It is the way of the future.

Micro-Finance empowers the very poor with small loans to help them overcome their cycle of just having enough money to feed themselves, and not enough to save and invest in their activities or children.

The website www.kiva.org has just got a ton of press in the past few day (oprah, SVN…) (i just gave it more). The site allows you to directly loan small amounts of money to people around the world who are trying to improve their lives. This is taking micro-loans and opening it up even more, make the market more liquid and the community more global.

I have been watching the site for while and they seem to have a good set-up.

What I love about micro-finance is that it is based on the same logic as open-source technologies and collaborative work.

Some of the features are

• Strict rules: repayment in one year with weekly payments
• This is similar to strong rules set by central body of programmers who do open source software
• Easy way to identify delinquencies
• Groups are made of 5 people, the first two must complete half their loan before two more in the group receive theirs.
• This reduces the work of enforcing loans as they pretty much self-enforce themselves. This is much like wikipedia or linux where people in the community weed out the useless individuals without the intervention of the central body
• Anyone can participate – no collateral needed
• Primarily focused towards women – who are more honest and better at managing money (among other things)
• Scalable and applicable anywhere in the world – even the industrialized world
• People get bigger and bigger loans upon completion of their previous loans

Great stuff, really, run out and get the book.

Another Thought on Open-Source

Is regular society a form of knowledge sharing? The difference between general society and open-source is the ease with which you can obtain information.

If we break down Leadbeater‘s assertions on the essential components of successful open-source software we can draw the following parallels:

• Ease of access to information = schools, universities, libraries…
• Central network to create links = rule of law, courts
• Ability to test theories and be accepted by the community = capitalism, supply & demand…

Though we may not realize it, we are all indirectly contributing to the forward movement of society. Ultimately it is not a zero-sum game, meaning that regardless of appearances we are actually making progress.

Even apparent steps backwards – war, genocide, famine – are actually contributing to the forward movement because we learn from our mistakes and better our behaviour (usually).

The access to telephone service is a fundamental factor to economic growth and thus the improvement of society. One of the driving forces behind Africa’s improvement (yes, they are improving) is the cellular telephone. Here we see the number of telephones per 1000 people in relation to Income per capita. There is a very strong trend of increasing GDP per capita with more access to information and communication (telephones). Not the other way around – more telephones with more GDP.

Internet Users with relation to Life expectancy. We see the tremendous growth in access to internet – perhaps the best tool for information transmition – between 1990 and 2004. In the similar vein to telephones, internet is tied to GDP and to other forward movements – democracy, life expectancy, low child mortality…

Everything is connected.

More Open-Source

More action on the open source front. I was watching the movie layer cake and one key line I retained was, “Being good at business is being a good middleman”. That is exactly what the open-source gurus have done. Wikipedia’s Walsh, eBay’s Skoll, Linux’s Torvald, Craigslist’s Craig, Facebook’s Zuckerberg…

Its all about providing tools for other people to do work for you. That is why I see such a great combination between open-source and micro-finance – hence the site Kiva. A great place to lend money – not donate – to help people lift themselves out of poverty. Another fascinating move in society is the similtaneous shift towards capitalism as a poverty alleviation tool and collaboration – the theoretical anithesis to capitalism – for the sharing of ideas and the development of products at low cost.

Here is a great TED talk by Leadbeater on open-source:

Leadbeater has also posted the first 5 chapters of his book for comments, it is a worthwhile read.

Open-Source Life

Open-Source systems are projects where people can build on existing work without the worry of copyright infringement. Open-source projects and online communities have taken off in the past few years. Linux, Wikipedia, and Joomla have driven software and collaborative work, MySpace, Facebook and Youtube have become beehives of cultural activity and World of Warcraft, Dungeons and Dragons and MIR II have formed alternate universes.

These communities have produced important technical products and spurred creativity. Which begs the question: What are the possibilities of applying open-source philosophy to non-technical concerns?

The best News website that has taken this approach is Guerrilla News Network. At the site, anyone can post an article, which is then awarded points by fellow community members; once the article has passed a specified threshold of points, it is published. This method allows for rapid peer-reviews and dissemination trustworthy information. Their system works relatively well. The articles are then subject to comments and discussion.

Can such a system be applied on a broader social level? Can the city of Montréal (4 million people) have a central website where people post initiatives for city authorities, tips to police, resources for fellow citizens to consult, etc etc. Or, is it necessary to allow the internet and its users to discuss topics on specific websites for their respective organizations?

One issue with these communities is reaching critical mass. It takes a certain quanitity of people for a community to remain active. It would therefore take an initiative on the part of the government to set this up. For example, all proposed bills could be posted along with the ability to comment and link. The discussions would have an expiry date where a vote would be taken on the topic, closing the topic – or opening another.

However, the real problem with collaborative work on non-scientific matters, is the difficulty of proving a concept right or wrong. Political ideas and their implementation are always open to interpretation and it is therefore not obvious that an open-source collaborative platform would help launch good initiatives. I do maintain that it would encourage debate and the dissemination of relevant information.

Moderators would be needed and large decisions would still require some form of paper voting. Collaboration and discussion is far more powerful than any army or elite. The EU rose out of the ashes of WWII, discussion brought about the end of slavery (in the UK), and collaboration was essential to scientific progress.

The old format of feeding pre-packaged goods to a stagnant consumer or individual is dead. A good talk by Leadbeater was recently given at the TED conference

TED is a conference where the brightest people in various fields come together to share ideas and demonstrate new technologies. Make sure to look at the presentations by Wade Davis (National Geographic), Robert Wright, Neil Gershenfeld (MIT), Ray Kurzweil, Peter Donnelly, and many many more.

There is substantial proof that students at schools who embrace an open, collaborative environment learn much more. The original school is Summerhill, where kids are encouraged to run projects and utilize resouces from teachers, but are not spoon fed excercises in a typical classroom. There have been pilot projects in Quebec for project-driven curriculum and students do in fact learn much more. Just as humans are inherently good (in a good environment), students have a natural desire to learn when placed in a good environment (see Ted Talk by Gershenfeld).

Another great example of the miscommunication is a study which identifies the right time to intervene with problem children. While it is extremely to change the behavior patterns of a 17 year old, 13, or 10 year old: small changes at the kindergarten (6 years old) level can make a world of difference. A student with poor hearing is likely to feel ostracized from his peers and will compensate with disruptive behaviour (bullying, fighting…), by identifying the problem early and providing a hearing aid, the child will have much fewer problems.

We need to take a step back from emotionally charged issues (poverty, children, health care, military intervention, …) and share ideas amongst many people, not just the politicians. Once we see our options and the research available, then we can start to move forward.

Some friends and I have taken these ideas and developed Strike a Light, a program that provides a platform for teaching students environmental sustainability at school. Without providing the detailed checklist format that is typical of school curriculums, we provide a general outline and the ability to collaborate on projects within a school and between schools. The students can then build on each other, the resources provided and their teachers’ knowledge to create solutions to our resource consumption.

We have just started, but it feels promising, and we hope to work with more schools over the summer to give this program a chance. We are always looking for help, so drop me a line and check out the site.

The future is only possible through collaboration, the concepts of uni-directional information, a teacher in front of a class, an all powerful New York Times editor or traditional patent protection is dying.