Wokai Adventures

Stories from Inner Mongolia: Meet the Loan Officers

George Scott

The branch office in Youqi is responsible for some 1000+ borrowers, and comprises of the branch director Mrs. Cao, Accountant, Ms Liu and the three loan officers. It is the loan officer’s responsibility to issue the loans and collect in the repayments from their customers, sometimes travelling long distances to their villages in order to do so. The loan officer I’ve been shadowing, Ms. Tu, Tu Ye, travels to a few villages a month so far from Youqi that it’s impossible for her to make the return journey within a day and she has to stay there for the night. Usually the loan officers make a few visits to their customers a day working in the field from Tuesday until Thursday and spending Monday and Friday in the office completing paperwork. Loan officers are paid a salary with commission according to how many loans they make and repayments they receive, and can earn anything from RMB 700 – 1000 a month, which is equivalent to about $110 - $150 per month. Tu Ye herself has around 300 customers most of them in rural areas outside of town. In the summer months she’s able to get around fairly easily on her motorbike, but once winter snow comes and the roads ice over, it becomes impractical and in many places simply too dangerous. Instead she has to make use of what little public transport there is, changing buses many times, or taking taxies, all paid for out of her own pocket.

The first morning I accompanied Tu Ye on her customer visits, it was the morning of the first snow fall. To me this meant the chance to take “artsy” photos of the bleak landscape that had taken on quite a serene beauty after the snow, but to her it meant that there would be no bus services in operation. We had two visits to make that morning, both to centre meetings for groups of rural borrowers, one in a village called Dushi the other in its neighboring village Honqi. Both about a forty minute drive east out of town and since there was now bus service in operation that day, we had no other choice but to take a taxi. Tu Ye has a friend who drives a taxi who was able to drive us. Since the villagers can’t afford the luxury of taking a taxi, they’re villages aren’t regularly served by them so in order to ensure we had a way home, our taxi driver sat patiently outside waiting for us.

An hour and a half later, once Tu Ye had completed her duties, we were back in the taxi on the way into town. Even with the discount, because of the distance, the wait and the snow, in total the day cost Tu Ye RMB 60, only $10, but when you consider she might only make as much $120 that month it’s quite a considerable amount. On the drive back in to town we gave a lift to one of the group leaders, Ms. Du. As we drove through the snow covered grasslands toward town and away from the white mountain peaks behind us I asked her what there was to do at the weekend that might be fun, she laughed at me saying we don’t have a weekend, weekends are only for people living in the city.

Since it was us that ended up picking up the tab, taking a taxi provided a welcome break for Tu Ye. I’m still trying to get my head around the bus services, but it seems to be made of middle and long distance coaches, with only some agreeing to take short distance travelers, others I’m sure would take you if it looked like there was no more potential longer distance travelers around. In the winter, on good days, much of Tu Ye’s time is spent changing between buses on the various routes across the area she covers. She has done well grouping meeting so that villages in close proximity to each other have meetings on the same day, but it’s still hugely time consuming especially when compared to the freedom she has in the summer months on her bike.


The snow covered  village of Dushi , the morning after the first snowfall of the year.

Stories from Inner Mongolia: My first Urben centre meeting

By George Scott, Wokai fellow

The night we arrived in Youqi we met and had dinner with Mrs Cao, the director and Ms. Han, the branch accountant from the Youqi branch of Chifeng Zhaowuda Women Sustainable Development Association (CZWSDA) our partner MFI, and the branch with which I was going to be spending the next month. Having been travelling for much of the last 24 hours, none of us were in the mood for much conversation, but even so I got the feeling that the welcome wasn’t the warm Chinese welcome to which I’d become accustomed. Pleasantries were exchanged and letting the Chinese conversation wash over me I put any such thoughts behind me and tried instead to force a few more mouthfuls of food into an already well over full stomach.

The following morning, after a Chinese breakfast of fried noodle, salted vegetables and bouzi, a meat filled dumpling we made the short walk to the branch office. The office is on the third floor of a small soviet-esque building overlooking a small deserted square, and home to the four ladies who work at the branch, Director Cao, Ms Liu and the two loan officers Ms. Han and Ms. Cuo. They have one semi working computer between them and after an embarrassed shuffling of the feet asked if we had or knew of anyone in Beijing who had an old computer they weren’t using and might be willing to donate to a good cause. I made a promise to enquire and being the sucker for four women in need donated my old one, I warned them that having been previously donated to me, it wasn’t in the best condition, but they seemed very grateful all the same. After that brief welcome we were taken to our first an urban centre meeting.

One of the great innovations of microcredit is the ability to make loans unsecured by any conventional form of collateral. This is done by making loans to individuals as members of a group. This way the group of 8-10 members are able to support each other, encouraging and helping the other members of the group to make payments. In some systems if one borrower defaults on their loan, the entire group can be penalized and barred from taking any further loans. More importantly though, it provides support to each of the members. It was a meeting of one of these groups that we were being taken to attend.

Myself, Zhangsheng and a group of borrowers at the tea house centre meeting

The meeting was held in a tea house that served a local form of salted milk tea. Although it might sound and taste strange at first, it is, but once you get used to it, it’s actually very nice and I’ve now had it at breakfast every morning since. The tea house itself was set up using a microloan and inside were a group of 9 ladies who comprised one “peer” group. The meeting is a chance for the group all to catch up as well as for them to make their biweekly repayment as they sit around chatting and sipping on the Mongolian salted milk tea. Two of the women I spoke to were repaying RMB 130 each, about $20, from a loan of a couple of RMB 2000. One lady I spoke to was the head of her village of about 140 people, 45 of whom were already microfinance customers and many of the others were waiting for their opportunity to take out loans. She had already borrowed three times before, using the money to buy and rear dairy cattle. The other ladies used their loans to fund many different enterprises, including small commercial enterprises; shops, restaurants and tea houses, like the one we were in, as well as rearing sheep and cattle.

A pot of Mongolian “pot” tea, complete with butter and milk tofu in the bottom left of the picture.

As a first venture into a meeting I was a little uneasy, especially when I was asked to stand up and give an impromptu speech to the group about what I was doing in Youqi and where I had come from, all in Chinese. I’m not sure whether they all understood but they gave me a small round of applause at the end, which in retrospect I should have taken as a “didn’t understand a word he said, but at least he looked like he was really trying”, instead of the congratulatory appreciation I mistook it for. It was nice to talk to some of the ladies and begin to understand just how microcredit actually works on the ground.

Stories from Inner Mongolia: Where exactly am I?

By George Scott, Wokai exploratory fellow

 

Inner Mongolia is an autonomous region in Northern China. Bordering eight other Provinces within China as well as Russia and Mongolia, it spans almost half of the Chinese Northern border. Inner Mongolia is divided into 12 prefecture-level divisions. Chifeng, the headquarters of our partner Microfinance Institution the Chifeng Zhaowuda Women Sustainable Development Association (CZWSDA), being one of the prefecture-level cities and  located in the South Eastern part of the region, bordering with Hebei Province and Liaoning to it’s south and about a nine hour train ride from Beijing. From what I saw of Chifeng, it’s a modern city with plenty of new builds and a very grand governmental building, which according to Casey, was designed withBerlin’s Reichstag in mind. The large building home also home to the headquarters of CZWSDA, opens onto a vast ceremonial square, the type ubiquitous in the towns and cities across China, no matter what their size.

Youqi is a about a three hour bus journey north across the desert from Chifeng, It has a population of around 50,000, I guess, and is skirted on each side by desert and mountains. It’s a much smaller town then Chifeng and regional headquarters of the CZWSDA, home to two loan officers, the branch accountant, branch director the somewhat stern but lovely, I’ve been assured, Mrs. Cao and now myself.

Although not a large town, it's built along a rigid lattice of large four lane roads. I live along side five lane and two bike lane road which runs between the mountains to the northern and southern sides of the town. There are about five junctions along the road, serving to spread the town out to the east and west. There are plenty of shops, made up of a mixture of regular Chinese clothing brands and localshops, restaurants and tea houses. Being winter and already mildly uncomfortable -5 (deg C) the town isn't how I would describe "bustling", but at the same time it hasn't become so cold yet that people are afraid of being outside. The buildings themselves are pretty nondescript and seem to conjurer up images of a rapidly rebuilt postwar Britain, where function over form was the theme of the day and vast swaves (is that a word?) of social housing replaced the individual terraces that had stood before. On the surface it's not the most inspirational of places, but you only have to drive five minutes and you're out in the desert and mountains, which more then make up for any aesthetic shortage in town. I haven't managed to get out there yet, but I'm really looking forward to having the chance.

First Wokai Fellow: George's First Day in Chifeng

It’s been a bit of a long day. Most trains across China are overnight sleepers, leaving, depending on the distance late evening, sending you to your destination bright and refreshed after a good night sleep early the next morning. Zheng Sheng, (Wokai’s director of partnerships) and myself (George) managed to sleep fine, Casey (CEO) and Sherry didn’t. They said something about someone snoring, but I wasn’t really listening, as the sun was just coming up on a perfect morning exposing the arid landscape passing by outside the train.

 

We arrived at Chifeng, a mid-sized city in South East Inner Mongolia at 6am the morning after leaving Beijing 9pm the night before. I’d been told it would be fairly cold, so justifying the cost with my potential comfort and wellbeing for the month and a half I plan to spend up here, I bought the thickest and most covering Columbia jacket I could find, I added to that the warmest socks they had and a very thick set of “long johns”. I spent my first 45min in Inner Mongolia, sweating and very uncomfortable. After I’d acclimatized to the unseasonable warmth we met with Huo Yen Jia, the head of the Chifeng Women’s Institute, the Microfinance Institute (MFI) that Wokai has formed a partnership with in Inner Mongolia. The main aim of the day was to sign a contract consolidating the relationship between our two companies, which went very well. It was actually a fairly understated end to a long and rather amazing process that has started with Wokai’s creation and now sees us finally solidify a partnership our first MFI. I say understated because at the time it felt so. The celebratory meal afterwards wasn’t. The food was fantastic, but it will stay in my mind mainly for the lesson it gave us in the correct etiquette for toasting baijiu. Baijiu, the Chinese rice wine sprit that smells and tastes a little like diesel rags is the traditional drink for toasts across the county. To begin with the host makes a toast to their guests and everyone drinks a shot. This happens once more, after which there’s a free for all with everyone toasting anyone. Pleasantries soon degrade into “drink or I’ll break your legs”, well, not really but it goes on throughout the meal and people begin to get very drunk. You have to remember we’d arrived at 6am on the train and it was only 12.00 noon that we started the meal. We managed to hold our own, Zhang Sheng fairing slightly worst then most, but I’m pretty sure he’s allergic to alcohol so it’s not really fair to say. And, although it was very funny at the time I understand now that it wasn’t very nice to continually make him toast with me.

 

After the meal we moved onto the second part of our journey, the three hour coach trip to Youqi. We had had a car lined up but in our enthusiasm toasting we’d convinced the driver Huo Yen Jai that we could find our own way and would be perfectly comfortable on the coach so that he could drink with us. It was fine and with the soundtrack of North Eastern Er Ren Zhuan (a kind of humorous singing performance involving two people that’s popular in North Eastern China) in the background we started 3 hour journey north into the desert away from ChiFeng to Youqi, which will now be my home for the next month and a half as I spend time with a branch of our new partner Microfinance Institution (MFI). 

Leslie Visits New York Chapter and DonorsChoose.org

Leslie Forman

Leslie will soon join Wokai's core team in Beijing as Marketing Director. 

For the past few days, I have been in New York, learning as much as I can about how Wokai functions here, as research for the detailed marketing plan that I am preparing.  I have really enjoyed meeting the New York team.  Thank you Meghan for sharing your experiences with the chapter's overall development, and Sandy for stepping up as the chapter's new president, and Anthony for insights into Wokai's local strategy, and Ji for your ideas about how overseas Chinese connect with their families back home. 

My main impression is that Wokai's major organizational challenge is figuring out how to involve incredibly busy professionals.  The expertise and contacts and enthusiasm that these financiers bring to the table is what makes Wokai so much stronger.  However, anyone that's still at the office at 11pm on a regular basis doesn't have much time to volunteer.  What we need is a strong, centralized marketing plan, with very specific assignments that can be managed over Google Docs.  For example, each person on the New York marketing team could be assigned to contact one blogger per week, with a specific video and message, from a list of ten bloggers that focus on, say, nonprofit marketing techniques. 

Today I learned so much more from Cesar Bocanegra, Executive Vice President for Operations at DonorsChoose.org.  This online marketplace allows public school teachers to post classroom needs for donors to fund.  I'd like to share four of my favorite parts of their system.  Click on any graphic to see that portion of their site: 

1. Graphics. This is for donors:

 

And this is for teachers:

Lesson for Wokai: We need some great visuals.  Any artists reading want to try their hand at a picture like this?  Feel free to send it to me at leslie.forman <at> wokai.org! 

2. Mustaches for Kids.  Guys grow mustaches, create their own fundraising pages, and get their friends to donate in their honor.  They have a competition for the sweetest mustache at the end.  This is particularly awesome because it's fun and targets young men: a demographic that's not usually known for its fundraising.

 

Lesson for Wokai: We need to make fundraising FUN!

3. Double Your Impact.  On certain projects, this logo indicates that a foundation or company has offered to match all individual gifts.  These institutions can specifically match projects that fit with their missions

 

Lesson for Wokai: Matching gifts, aligned with the type of project, could be very effective motivating factors for donors! 

4. Operations and Organization.  Cesar showed me the system through which they make sure they properly send out all requested supplies, and thank all of their donors with packets containing pictures and letters from the teacher and students.  He let me put together one package that they send to the teachers.  Following the detailed diagrams on the wall, I used the disposable camera to take two pictures of the label describing the project Books for Boys.  I then placed the labels and postage in the designated positions, and stuffed one envelope inside the other, and placed it in the designated box, for shipment to the teacher.  This is a job that can be done by any staff member or volunteer.  An assembly line! 

Lesson for Wokai: With our widespread chapter network, detailed processes really can be helpful for maximum effectiveness and efficiency. 

There are so many more ideas I could write here.  Thank you so much Cesar for taking time out of your busy day to meet with me! 

Courtney talks entrepreneurship at Stanford

Courtney

For those of you in the area, feel free stop by Stanford for my talk on Wokai: Past, Present and Future. I plan to go over the challenges Wokai has faced & overcome in the past as well as where we plan to take Wokai over the next ten years. I have never given this discussion before and am very much looking forward to hearing candid feeback and questions.

Thanks ASES for hosting and thanks Wokai supporter Khanh Le for organizing!

Courtney visits Seattle Chapter

Courtney    

Its always fun to visit our Wokai Chapters because each has a very different yet still very similar feel. The Seattle Chapter is our policeman. They make sure we are doing everything above belt and in a timely manner. No shinannigans on Ketty's watch! They are also our caring mother. They nuture us. They make sure we are planning ahead and doing well in school. Without Seattle, I am sure we would not be as far as we are today. They have really stregthened our organization.

Another cool thing about Seattle is their integration with the academic and non-profit community - which is very unique to our primarily banking and consultant New York and San Francisco Chapters. In Seattle, we have Geri who is writing her dissertation on China Microfinance; Beibei who is a China native about to graduate from University of Washington with a degree in Economics; and Wistar Kay who manages all aspects of the Pacific Health Summit at National Bureau of Asian Research. She is very involved in non-profit communtiy and initiatives that support women's upward mobility.

Beibei set up a talk last Saturday evening. I intoroduced China Microfinance and how Wokai fits into China Microfinance at that meeting. We had a good turn out of about 25 people from both academic and professional backgrounds. One great question that I wanted to share with you was the following:

Q: Where will China Microfinance be in 2025? What will the landscape look like?

A: I think China Microfinance will always have both government and non-government forces involved. I think the same players will be there but in different form. NGO microfinance institutions will still be targeting the poorest of the poor. China Post will open microfinance branched in its branches. China Development Bank, HSBC, and Citigroup will be involved in small-to-medium sized enterprose loans - microfinance, but with larger loan sizes.  RCCs will still be involved (and inefficient) in their microfinance services. Some private commercial microfinance operations will exist in the form of microcredit companies, offering microloans to impoverish individuals in rural and urban areas.

Thanks Seattle for a great weekend!

On the left, Ketty Loeb, Seattle Chapter president, and me on the right just before giving a talk on China Microfinance at Univeristy of Washington.

Ketty and I speaking with attendees after the event about how they can get involved with our Wokai Fellows Program that allows individuals to spend 3 months in rural China with one of our Field Partners.

 

Is it a Dollar or a Fishing Pole? Microfinance in the Development Tackle Box

Geri Mason

Geri Mason is a visiting professor of economics at the University of Puget Sound, and a PhD candidate in economics at the University of Hawaii at Manoa. The topic of her dissertation is microfinance in rural China; she has been studying microfinance for over three years, and has visited microfinance projects in China as part of her research. Geri is a guest expert on our blog, as well as a research volunteer for Wokai and a member of the Wokai Seattle Chapter.

Give a man a fish, feed him for a day; teach a man to fish, feed him for his lifetime; give a man/woman a micro loan, enable him/her to start a business fishing or selling/repairing fishing tackle.

That’s not how I remember that proverb going…Just as this is a new twist on an old adage, so is microfinance on an old game. For decades, wealthy nations have wondered: How do we help the countries who cannot seem to reach our level of wealth and complexity? Infrastructure projects have been tried, health and education services coordinated, and blind aid dollars channeled -- What next?

(Enter: Microfinance, stage left.)

Microfinance is not a new idea. Forms of it have been sprouting across the globe since the days when Germany was a land of poor farmers and selfish elites. In those days, farmers would rally together and form Rotating Savings and Credit Associations (ROSCAs) that would allow them to pool their money once a month in order for one member to purchase a large asset. Savings services were not available to them, and it was difficult to save at home. Each member would take a turn receiving the cash for investment or consumption. Now boasting a strong economy and technological advancement, Germany today operates under a modern financial system rivaling most European countries, and the U.S. and Canada’s. But the roots of its financial system were not so different from the microfinance industry we see budding in currently developing countries today.

I am not putting forth microfinance as a panacea for economic development; simply as a sustainable supplement to top-down development. When Germany (and many of its fellow developed nations) went through its growing pains, its population was tiny compared to the populations of China, India, and many African nations today. The poor waited for their turn, for development to trickle down to them and improve their world, too. Today’s populations are too large to wait for the trickle down effect of macro development. The health of the entire economy is vital to development, but there isn’t enough aid to help the ever-growing numbers of the extremely poor through pure donation. The money must be put to more active use. Sustainable use. Microfinance institutions distribute loans, collect repayments, and distribute new loans, essentially from the same initial funds. Each dollar goes farther. It is not consumed once, but used as a tool, and reused again as a tool would be. As with other development programs, people are still reached one at a time; but we are getting down the line faster, and the results are having a more lasting effect.

Do you see that dollar bill in your wallet as part of a latte, or a tool to be used by microfinance institutions in China to alleviate poverty?