One of my favorite charities is Opportunity International, a global non-profit that in the past 27 years has put in place an incredible network of overseas banks and NGO partnerships to provide small loans (aka “micro-finance”) to poverty-stricken families starting small businesses. These occur in Africa, Asia, and Latin America primarily.
A lot of small loans moving the needle
According to Opportunity’s SVP of Resource Development, Dave Knibbe, 1.3 million individual loans (each on average about $150 or so in size) were given out to “clients” in 2009. That’s a LOT of entrepreneurs getting funding at a micro level…enough to move the needle in a small community, given the loans are appropriated on a group basis (usually 20-30 families cross-collateralizing each others’ loans as a group and paying small interest weekly) Opportunity claims a 96+% repayment rate on these micro loans…and the loan money is then available for the next family and the next and the next….
Opportunity reports that there are some 2 billion people in the world today living with under $2/day in wages or income. The organization is on a mission to affect 1 billion people through it’s financial operations in the coming years.
Seeing the work – in Latin America
My recent trip to see Opportunity’s work took me (along with daughter, Kayla), to Colombia. We visited deeply impoverished sites outside the capital, Bogota, and the coastal city of Cartagena. Our week-long visit with other families who give to Opportunity, consisted of visits to the local bank/NGO offices to meet “loan officers” and regional managers and then out to visit “clients”, most of whom ate living in unbelievable conditions…photos of the trip are posted HERE.
What drives creativity?
This is my 3rd trip to see this innovative organization in action – and these trips are ALWAYS uplifting…because it turns out that the street barracks of Cartagena, Colombia — or the villages of Malawi, Africa or the inner city in Manila, Philippines — are full of highly motivated and creative entrepreneurs. They create businesses ranging from pottery to vegetable stands to leather goods to beauty salons…
These Entrepreneurs are a whole lot different from those that I’ve deal with for the past 20 years in the Silicon Valley. The education they have may not be what it is in the Silicon Valley, but the drive is is more focused and never-ending.
By our U.S. standards these are very basic businesses with basic business models. What amazes me is the differences in motivation. It got me thinking about 3 types of entrepreneurs…the typical American entrepreneur I’ve engaged with either seems to be focused on social needs or conquest/wealth generation. For example, I know a lot of young entrepreneurs who have engaged with Web 2.0 and developed unique social applications – it was their way of providing something back to the world to allow us all to be more social. Some of these companies haven’t created great wealth, but they’ve connected people like never before. Most of the entrepreneurs I’ve dealt with are after wealth creation or simply proving they can build something (“out for the kill”). Looking at Abraham Maslow‘s theory on hierarchy of human needs (see purple band above), these two sets of entrepreneurs fill needs for Social growth or Esteem.
The Opportunity entrepreneur (90% are woman, ages 25-55), in contrast, is driven by the need to feed her family personal hunger, desire for shelter, desire for safety – and or desire to see her children have a better life. Most are driven by all three. Farther down on Maslow’s hierchy they are. There’s quite a bit of motivation involved when your food shelter and clothing depends upon it. The result is quite a bit of human ingenuity…finding solutions to getting around the system, using I call it true hunger-driven creativity.
At the top of the Pyramid
The third type of entrepreneur, an area that I am exploring in detail with my own career these days, is what I call the “social entrepreneur”. These are typically those that have started a non-profit, or even a foundation, to serve others or a for-profit with a triple-bottom line. These are sometimes successful entrepreneurs who have decided to give something back to others. Examples include Bill George, Bill & Melinda Gates, Bob Buford (author of HalfTime). Their Life work is focused on the top of the pyramid, self-actualization – typically in giving to others.
Although I teach a course at UC Berkeley about all the impressive ways that entrepreneurs use their creativity – in all aspects of business – I’m truly amazed when I visit and interact with hunger-driven entrepreneurs.
Of the 3 types of entrepreneurs, can you guess who shows the most gratitude?