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.

Good interview about the Loblaw’s Green Bag Initiative

Pretty good interview outlining the project, benefits and pitfalls. I
have one or two of these bags and they are indeed very practical for
many things, not just groceries. It’s all about branding without the
logo. This project has helped brand Loblaw’s as the green grocer in
Canada, interesting to see how they fare in the future. They seem to
have many other – arguable more important – problems with their
operations.

Anyways, article is here:

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.

Interesting article on P/E Ratios

Here is an interesting article on Graham and Dodd's (Warren Buffet Mentor)
P/E ratio philosophy. They argue the ratio should be taken over a longer
period than the current 12 months. This fits well with Nicholas Taleeb's
philosophy of being fooled by randomness.

Long Term Long Term Long Term.

http://www.iht.com/articles/2007/08/14/business/view.php?page=1

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.