Wokai Adventures

Sunshine Village Bank: Balancing Poverty Relief and Profitability in Jilin Province

Hongqing Chen

Hongqing Chen, a Portfolio/Risk Manager, recently joined Wokai’s Seattle Chapter.  This article is a translated version of this story from China.com.cn

On November 13, 2008, a snow storm cleared the air in the town of Qian Guo County, Jilin, in northeastern China.  A peanut farmer named Mr. Song MingJiu woke up very early to travel into town to close his loan.  With peanuts growing about 11.5 acres, Mr. Song had earned a pretty good income.  This fall, he bought a new pickup truck, which caused his his cash flow to become tight, so he decided to take out a loan.  He got it just about 10 days later.  "This is the first time I have ever borrowed from a bank.  I cannot believe how fast the process was," he explained. 

(This photo from Flickr shows a peanut field in Jilin in warmer weather)

The bank that gave Mr. Song a loan is called Sunshine Village Bank.  Several banking veterans, among them vice president Mr. Kong XingZhong, founded it just a year ago. Since the bank is located in the town of Qian Guo County, it is still very inconvenient for faraway villagers. 

To better meet the needs of the local farmers, Mr. Kong visited peasants’ families almost daily. On his notebook, he recorded statistics such as acreage, types of plants, annual revenue, and the amount of debt a farm could carry.  He signed his name to every family note.  “Most loans are micro loans, ranging from RMB1,000 to RMB5,000.  I was afraid to mess up because I visited so many families everyday.” Mr. Kong explained.

To attract deposits, Sunshine Village Bank targets idle funds from retirees.  They sponsor activities with community services to befriend retirees and to provide transportation to the bank.  They make micro loans for start-ups and require little or no collateral.  They also provide short-term loans to meet cash flow needs with flexible collateral such as grain, fertilizer, machinery, or vehicles.  Over just one year, it has attracted over RMB200 million in deposits.  For Mr. Song, Mr. Kong regretted that it took him more than 3 days to obtain the loan due to the trouble of finding a guarantor. 

According to China's Banking Administration Commission, as of 10/31/2008, there are 62 village banks, five lending companies, and 10 countryside credit unions established in China.  There are 35 similar institutions in the process of setting up. 

<end of article>

Through Wokai, you can help to fund rural loans for farmers like Siqin.  So far, the Wokai community has contributed $270 of the $592 that she has requested to invest in a new pig farm. 

Location: Chifeng, China
Industry: Animal Husbandry

My Story: 
I am a herdswoman from Inner Mongolia. This year I am 45 years old. My family had four members and we used to be very happy. My elder son is already married, and my younger son works as central heating laborer. He often leaves home for work and his pay is quite decent.

Last year we were struck with misfortune when my husband became sick with an infectious disease and passed away. All responsibilities for our family business and for caring for our home fell to me alone. We had been raising cows for several years and currently have three cows. It's a huge investment as feeding them for one year can cost up to 20,000 RMB. I am having trouble taking care of this business.

However, the current market price of pork is quite high and the physical and financial investment is not as high as for cows. Therefore, I hope to borrow 4,000 RMB to buy 10 pigs and raise them. The returns on pigs will also be faster than they are for cows.

Click here to contribute to Siqin's loan. 

Obama, Microfinance, and China

Leslie Forman

Leslie is Wokai's Marketing Director.  She is looking forward to January 20, 2009 and she cross-posted this article on Social Actions. 

Yes, there is at least one connection between these three words.  Her name is Nancy Barry. 

A trailblazer in the field of Enterprise Solutions to Poverty, her current work focuses on creating pragmatic ways for large corporations in China, India, Mexico, and Colombia, to create opportunities for the working poor in these countries.  For many years she was the President of Women's World Banking, an international microfinance network. 

I just came across this article from an Indian finance website, describing her role as a close advisor to Barack Obama. 

Named one of the most powerful women in the world, Nancy M. Barry, 59, the Founder and President of Enterprise Solutions to Poverty and former President of the New York-based Women's World Banking, is no stranger to the limelight. Known to be a close confidant and friend of the Obama family, she is now expected to play a key role in shaping the new US regime's relationship with India and Indians. President-elect Barack Obama's mother, Ann Dunham, worked with her as the first policy change manager of Women's World Banking, from 1992 to 1995. Says Barry: I see in Obama many of the qualities of his mother: the capacity to get to the heart of the matter, the ability to get different factions to work for common cause, and a passion to work together in building economies that work for the majority.

I am so excited to hear that she will be closely involved with the Obama administration.  I first learned of her connection with Obama from this New York Times article, which describes how Obama's mother's globetrotting work in anthropology and microfinance shaped his worldview.  Nancy Barry describes Stanley Ann Dunham as "a very, very big thinker,” who "was not afraid to speak truth to power." 

I met Nancy in October 2007, when she gave a speech at AmCham Shanghai's Corporate Social Responsibility Conference & Awards, which I helped to plan.  Here's a description I wrote from that event: 

In her keynote address, Nancy Barry, of Nancy Barry Associates -- Enterprise Solutions to Poverty, argued that companies should move beyond philanthropy to create enterprise solutions to poverty. Drawing from more than 30 years of experience in emerging economies, she urged the audience to move away from “Random Acts of Kindness” and mobilize core capabilities to connect low-income people with global growth. “The biggest problem,” she said, “is that poor people don’t have enough money.” To address this, she described four key areas of activity: engaging small farmers as suppliers, creating decentralized distribution channels, developing products to increase income, and building enterprise networks.

In China, she has worked with China Mobile, Mengniu (a milk company), Proctor and Gamble, and several other companies.  Here's the presentation she gave at AmCham Shanghai on October 30, 2007.   Download Nancy Barry 10.30.07

I am optimistic about the roles that Enterprise Solutions to Poverty and microfinance may play in Barack Obama's foreign policy decisions. 

*Note (added 1/16): Microfinance Gateway referenced this post here. 

Microfinance Here in Seattle? My Visit to Washington CASH

Hongqing Chen

Hongqing Chen, a Portfolio/Risk Manager, recently joined Wokai’s Seattle Chapter. Click here to see her profile on Wokai.org! 

On a freezing December evening, I braved south Seattle’s icy roads to visit Washington CASH  (Community Alliance for Self-Help),  In my quest to get involved with microfinance, I’d read their two most recent annual reports, and thought, ‘Wow, they are working on a shoestring budget and still making a big difference in many people’s lives!’  So I was especially excited to learn more.

Images courtesy of Washington CASH.

By the entrance sat a group of volunteers, wrapping donated gifts.  I walked down a hallway into a classroom with about 40 people.  They had notebooks and pens ready, and focused closely on the evening’s lesson about personal credit scores. 

Next, I met with Cheryl Sesnon, Washington CASH’s CEO.  Cheryl’s office was more like a teacher’s studio than an office for CEO.  A classic lady, Cheryl wore a warm smile and a red blazer.  She answered my questions about operations, funding cost, loss rate, and future development.  I was surprised to hear her say that Washington CASH had no shortage of money to lend out.  (How nice!  I thought.  Then again, no bank is short of money to lend.  The problem is that they are all afraid to make loans now.)  Knowing that I came to learn how microfinance works and operational details, she emphasized that I needed to be first and foremost focusing on helping borrowers when working as a volunteer here. 

What intrigues me most about Washington CASH is how it adopts the Grameen model.  When a borrower shows up at the door, Washington CASH requires him/her to attend an 8-week long class about basic finance, organization, marketing, and other entrepreneurial skills.  The borrower will then find several classmates to form a group, with a president and treasurer, to help each other to be successful and diligent in repayment of the loans.

I’ve been assigned to work with a group of four borrowers that Cheryl has not yet certified.  The group consists of four borrowers with such interesting businesses: 

- A woman who had just relocated from Texas and needed a loan to pay for virtual office space for her tax service
- A house cleaner using non-toxic products. (She was a returning borrower)
- One person in the personal health enhancement business (Also a returning borrower)
- A photographer who wished to borrow money to buy lighting equipment. 

There are three volunteers assigned to the group (two young ladies who had been long-term volunteers, and me.) Each borrower filled out a questionnaire with their business ideas, and what they had learned so far through Washington CASH. 

Hopefully our group will be certified in the next session!  I am so excited to learn more about how microfinance really works on an individual level. 

From Mortgage Banking to Microfinance: My Journey

Hongqing Chen

Hongqing Chen, a Portfolio/Risk Manager, recently joined Wokai’s Seattle Chapter. Click here to see her profile on Wokai.org!

My ten-year experiment began in 1998, when stepped out of the ivory tower of academia.  I had been teaching Financial Markets and Institutions.  Our guest speakers told such incredible stories from the frontlines of the finance world, which really inspired me and my students.  I decided to leave teaching to pocket war stories, and then move on to something different in 2008.  So at the beginning of 2008, I started to think about the next step in my career.

Have I collected enough war stories!?  Over the past ten years, I have witnessed the collapse of a hot small mortgage banking company due to credit crisis in 1998, the recession of 1999, the burst of internet bubble, the growth and bust of housing bubble, and now, the financial industry’s ongoing meltdown, and the biggest banking failure in the US history (that knocked me and my colleagues out of stability!)

What a coincidence!   Or maybe it is part of grand design by the superior being.  Whatever the reason, as WaMu (my employer) fought to stay alive, I began to think hard about what to do next.  Over lunch in May 2008, my good friend and colleague Rahul Sen stated that he would jump at the opportunity to work for a finance firm focusing on green technology or microfinance. 

A light bulb went on in my head.  That’s it!  I’d found my answer.  I realized that I could devote my energy and knowledge to microfinance without worrying about getting paid or not.

I started brainstorming, networking, and web surfing about microfinance, and came across the Bill and Melinda Gates Foundation, Unitus Equity Fund, the Grameen Foundation, Kiva, and Wokai, as well as Washington CASH and Community Capital and micro finance program at Seattle University.  A whole new world has been unveiled to me!  I look forward to sharing these stories with you. 

Stories from Inner Mongolia: Monthly Repayments on Long-Term Investments?

George Scott

George spent about a month in Chifeng, Inner Mongolia, as the first Wokai Fellow.

In most of the villages I visited in Chifeng, the most common forms of agriculture are herding animals and raising crops. It’s a hard life that I think most of us wouldn’t take well to. Rising every morning before the sun at 4 or 5am and working through until going to bed at around 9pm. The benefit of a microloan is that it makes this life a little easier, allowing the loan recipient to produce a little more in order to sell a little more so that they can afford a little more comfort in their lives; improving the quality of their housing or paying for their children’s education. But whilst these benefits are plain to see, could more be done to structure the rural loan to suit the rural borrowers even better? 

CZSWDA's rural loans are structured to be repaid over 12 months. The first repayment is made 30 days after the loan has been issued and then repayments are due every two weeks until the loan's completion. For urban borrowers or borrowers who use their loan to fund an enterprise that produces a regular cash flow this is not a problem. In one village I visited called Masatala, the predominant form of agriculture was dairy farming. Each household owned a few heads of cattle, and work was shared between the whole village. The microloans they took were used to buy animal feed for the winter or even calves to extend their herd. The cows are milked twice a day, 365 days a year, so the regular cash flow the dairy cows generate is ideal for making the repayments on their microloan.

In other villages I’ve visited I’ve visited it has more often then not been the case, since households raise crops during the summer, as well as livestock. These methods of farming don’t provide as regular a cash flow as that provided by dairy cows. You could think of it as a very slow maturing investment which after the initial outlay -- planting crops or buying a small pig -- won’t generate any cash flow until maturity, when the crops are harvested or the large pig is sold at market. But, since the first repayment of a rural microloan is due only 30 days after the initial loan given, I think this creates a disconnect between the loan repayments and cash flow the loan is supposed to help generate.

If the loan proceeds don't immediately generate cash flow, the loan repayments can easily become a huge burden to the recipient, as it forces her to take on extra work, or sell extra stock just to be able to make the loan repayments. Instead of improving her daily life, a loan ill-matched with the life of the borrower can actually increase the financial pressure that is put on the borrower. This is of course not the case for everyone (some families may have larger stocks, especially if they have previously taken a loan and thus anticipated this issue). But, for a borrower in their first loan term this may be too much.

During my time in Chifeng, the borrowers often mentioned the length of this initial period, asking me to make it long enough for them to generate some income. I had to tell them that it wasn’t exactly in my hands but I would see what I could do. As far as I see it, this mismatch between cash flow and loan repayments is a huge detriment to microfinance’s objective, because it compounds the pressures of an already hard life with the added financial pressure of extra loan repayments.

Perhaps it could be avoided by having a staggered loan repayment period which effectively postpones the initial repayment by a period of time consistent with the generation of cash flow from the type of enterprise in which that group of borrowers specifically engage. Arguments against this staggered or seasonal loan are that that it may lead to a lack of discipline amongst other borrowers; Once borrowers hear that others of their peers aren’t required to make regular repayments they might be reluctant to do so themselves. Another is that an increase in the range of loans offered could lead to confusion amongst the regional loan officers, making it harder for them to keep track of repayments which may lead to increased rate of delinquency.

Whether these are valid practical obstacles, or an easy excuse, indicative of inflexibility and an unwillingness to adapt is not for me to say, but in keeping with microfinance’s ethos of poverty alleviation I would hope that there is enough innovation and flexibility in the industry to ensure right is always done by those who are in need. 

P.S.  The issues I mention here have been discussed extensively in the international microfinance community.  For an interesting discussion about the distinction between the promise of microfinance and its typical impact, I invite you to read "The Micromagic of Microfinance" from the Wilson Quarterly.  To read about a scientific test of various repayment schedules and their effects on microfinance borrowers in India, I recommend "Is Microfinance Too Rigid?"

I look forward to hearing your feedback on these important issues. 

Happy Holidays!

"Investing" and Philanthropy: Is it possible to invest in Wokai?

Leslie Forman

Leslie recently moved from San Francisco to Beijing to serve as Wokai's Marketing Director.

Over the past few days I've had a very interesting exchange with Sean Stannard-Stockton, a wealth manager who writes the blog Tactical Philanthropy.  He defines tactical philanthropy as "the practice of transforming philanthropic strategy into reality" and he poses many interesting questions about the "the people, trends, technologies, strategies and tactics that are shaping the new definition of philanthropy." 

I have been particularly intrigued by his use of the word "invest" when referring to philanthropy, and I asked the following question on his blog: 

I really appreciate the way you use the language of investment to talk about philanthropy, and I think the long-term outlook is very important, but I have a question about messaging.

Whenever I use the word “invest” when talking about Wokai, the China microfinance non-profit with which I work, the person’s next question is always, “So, what’s the return?” I’ve answered this question several ways:

1. Highlighting the long-term impact on China’s society

2. Explaining the way in which contributions made to fund loans for entrepreneurs in rural China can be recycled (once the original borrower repays the loan)

These answers rarely seem to satisfy the person I’m speaking with. I think it’s because many of these people either work in finance or are active investors, and the word “invest” activates a completely different part of the brain than a word like “donate” or “contribute.”

I’m wondering if you have experienced a similar cycle of questions in your own work, and how you have approached them. One of my favorite posts of yours was the one about the distinction between spending and investing, but I’m starting to think that this language might be more prevalent among people who talk about philanthropy every day than among the wider population of potential contributors.

He wrote a full blog post in response, explaining his definition of the word "invest."  Here's an excerpt from it:

The word “investing” is correctly used in philanthropy if a donation is designed to build an organization. It is also appropriate if it is structured as a loan or donation to an individual that is expected create future benefits. Wokai’s donor/investors are making an investment. But the “return” is accruing to the people receiving the loans.

There's also a great comment on this post from Jeff Trexler, a professor of social entrepreneurship at Pace University, who says:

This is an important discussion. As we see with the way Obama and others have framed government expenditures on infrastructure, the investment metaphor can be an effective rhetorical tool for building support for public benefit activities. The same goes for what Sean describes in his answer to Leslie’s question.

However, handled less adeptly the language of investment can actually be self-defeating. One conspicuous example of this is the recent trend toward re-framing donor appeals as IPOs. Read certain “prospectuses” and you’ll find ROI variably described as self-esteem, smiles, feeling good and so forth.

This may seem clever, but if you’re trying to impress someone with a substantive background in securities it’s not a good way to go. It makes the IPO-and the charity–seem glib and superficial, more like children playing Wall Street than a serious engagement with social investment.

Personally I sometimes feel a bit like a child playing Wall Street, as my background isn't in finance and investing.  I think it would be silly to call our fundraising campaign (which is 75% of the way to our end-of-year goal!) an IPO.  However, I do think that a long-term commitment to Wokai -- of time, money, or expertise -- definitely can be called an investment.  And we definitely could be more specific about our ROI, not by describing smiles and self-esteem, but by measuring the changes generated throughout the communities in which we work. 

What do you think about this?  Do you consider your philanthropic efforts to be spending, donating, or investing?  I'm really interested in hearing your feedback. 

Hope for China's Earthquake Survivors, Trash Collectors, Autistic Children, and Blind Orphans

Leslie Forman

Leslie recently moved from San Francisco to Beijing to serve as Wokai's Marketing Director. 

I just received a copy of the Social Venture Group's latest newsletter, which features Wokai on its front page!  Social Venture Group "advises foundations, corporations, and individuals in making informed giving decisions for maximum social impact in China."  I met SVG's Managing Director, Grace Chiang, last year in Shanghai, and she has assembled a great team to spotlight China's most effective non-profit organizations. 

Here it is: 
Download Svg_newsletter_v1_i5_Dec_2008_EN

It features fascinating stories about:
- Sichuan's progress in recovering from the May 12 earthquake
- A shelter for Shanghai's homeless trash collectors
- A school for autistic children
- A day in the life of blind orphans in Beijing

I hope you find it as interesting as I did.  The SVG team has also recently started blogging in both English and Chinese at http://chinaphilanthropy.typepad.com/

Influential Chinese Fraternity Awards Grant to Wokai

Alice  Wu

Alice volunteers with Wokai as the San Francisco Bay Area Chapter President.  You can reach her at [email protected].

Last week, after an unforgettable trip in New York, I took a late flight back to the Bay Area. After landing at SFO shortly after midnight, I turned on my Blackberry and my cell phone.  There they were, two messages waiting to be opened... 

Since I joined Wokai, I have gotten used to receiving emails after dark in San Francisco, as Casey and Naomi start work in Beijing. That night, Casey sent me an email showing concerns about the slowing online fundraising campaign.  As I was thinking about what to say to Casey, I opened the second message. This one was from Myron Lee, a friend of Wokai. It reads, "Got some good news for you. I need to talk to you tonight!"  

He told me FF fraternity's San Francisco lodge will donate $2,500 to Wokai from their community service fund. This was a complete surprise, so my first reaction wasn't "Thank you" but "How did this happen?"  Myron said the brothers selected Wokai from a list of 11 non-profit organizations through online voting.   By the time Myron told me the good news, I was standing in SFO's empty food court. I sat down, thanked him, and then hit "reply" to Casey's email, subject line – Good News.

This good news is particularly meaningful to us because last year this time, when I first joined Wokai, Courtney took me to the fraternity's 2007 holiday party to give a presentation on Wokai. (Exactly one year ago we posted about that party here.  One year later, most of the fraternity members are no longer strangers; they have been reading our emails and watching us grow.  Some have come to our local events to show support.  Myron Lee, who is their Service Director, has been acting as our chapter's unofficial Public Relations Advisor.  This gift was a pleasant surprise but was not from pure luck.  I know exactly how we got it.  This was a result of our volunteers' efforts over the past year.

To all the Wokai volunteers -- Every little thing we say or do counts. We work hard to earn our donors' trust and respect, but after the donations come in, that's when the real hard work begins. Casey's recent entry  If you want to become big, should you think big or think small?  is a nice read. I think this FF story gives some validation showing that "Think Big, Act Small" may be the way to go.  We recognize that there are countless compelling causes out there that deserve attention and donations, but what makes Wokai unique is that our small acts touch people who think big.

To all the FF brothers -- Thank you again for your generous donation and support. This $2,500 is worth $2,500 in monetary value but it comes at a very important time and has encouraged our entire organization.  At our chapter's monthly meeting last Sunday, your donation motivated all 25 of us and reminded us that our efforts will be recognized. We know you have other choices to donate to, and we want to prove that you made the right choice.

 

 

(From left to right: John, FF Fraternity's Treasurer, Courtney, Myron, and me. Notice it’s the same spot as in last year’s picture)

Last Saturday night, Courtney and I attended FF's holiday party to receive the check. Rick Chong, the Chairman of the Fraternity's San Francisco Lodge, told me that most of the FF brothers are well established in their professional fields. Juggling between career and family obligations, it is easier for them to donate money instead of time.

There is a Chinese saying – 有錢出錢  有力出力 -- If you have money, donate money. If you have time, donate time. 

Your money, paired with Wokai volunteers' time, is going to lift those villagers out of poverty, one loan at a time.

 * About FF Fraternity-- Founded in 1910, FF Fraternity is a global brotherhood of academics, professionals and entrepreneurs. FF Fraternity has evolved into one of the most active and influential Chinese fraternal organizations in the U.S.  The strength of the non-profit and non-political organization comes from its highly qualified members and their determination to build on their mission of "Fellowship and Service." Currently, there are active Lodges in Ann Arbor, Boston, Hong Kong, Honolulu, Los Angeles, New York, Philadelphia, San Francisco, Singapore, and Washington D.C.

The Stock Market Goes Social

Jessica Lee

Jessica Lee volunteers in her free time with Wokai’s San Francisco Bay Area Chapter as Business Strategy Associate. She recently graduated from Stanford University and now works for a startup company in Mountain View. She likes to think that she is a budding social entrepreneur! Write to her at [email protected].

In just ten minutes, I lost $400,000 dollars, and it hurt. No, I wasn’t on the NASDAQ – I was trading on the Social Stock Exchange, bidding and asking prices for the stocks of social businesses. This one guy managed to walk away with $4 million dollars. I was impressed! But to his dismay and my delight, we were not real social investors yet, and a social stock market was only a figment of our imaginations, thanks to the simulation game we were both players in. I know…phew, right?

The Wharton Social Stock Exchange is a simulation game that was designed for this year’s Net Impact Conference, which took place in November at the Wharton School of the University of Pennsylvania. (The three-day conference drew a diverse group of participants – business school students and professionals from both the private and public sectors – to discuss how to leverage business for good.) The 20 or so players in my session were all placed in front of computers and given stock profiles (including company description and stock ticker), dividend charts, and an initial allocation of stocks and cash. Using an interactive real-time trading platform, investments were valued and trades were made based on a company’s social (not just financial) performance. As popup windows brought social news updates (e.g., ethical sourcing, environmental practices) to us players, the room filled with pauses and then clicks, interrupted with the occasional sighs of frustration and relief. People were getting competitive.

The goal of the simulation exercise is to allow players to test out for themselves Muhammad Yunus’s proposed social stock market theory. In his book Creating a World Without Poverty, Yunus talks about how, as social businesses become more prevalent, financial institutions will open up and adapt to meet their financing needs. We will see more social venture capital funds, social mutual funds…all culminating in the rise of a separate stock market for social businesses only. Definitely hard to believe, given the current state of international markets, but going on a slight tangent now…

(start of tangent)

…What is a social business anyway? A social business is like a profit-maximizing business (PMB) in the sense that it is financially sustainable through the products and/or services that it offers. However, unlike PMBs, a social business’s ultimate goal is to achieve social impact – measured for instance by the lives it touches. Any profits turned are reinvested into the business, as opposed to being passed along to investors (no dividends). Thus, a social business operates on a non-loss and non-dividend basis. Why should social businesses exist? I like Yunus’s explanation and the logic that it represents: free markets are good --> then why have they failed the poor? --> because they are based on a single-track concept of capitalism that assumes that the pursuit of profit maximization leads to happiness --> but this is wrong, humans are multi-dimensional --> not all businesses need to serve profit alone…

(end of tangent)

Back to social stock markets, and why they are so important to the growth and development of social businesses. I’m a firm believer in incentives. As with PMBs, the budding entrepreneurs and CEOs of social businesses will catch onto bigger problems and come up with better solutions only when the financial and investor communities are ready to become more involved. Other benefits Yunus highlights include:

1.      Increased liquidity for shareholders to choose their social investments

2.      Heightened public scrutiny to avoid potential deception and fraud

3.      Greater exposure to social businesses to attract more capital into the new market

Shifting more to Wokai, my reaction to the Wharton Social Stock Exchange simulation game and Yunus’ social stark market idea in terms of Wokai is threefold:

Wokai is not a social business yet. As an early stage nonprofit, Wokai is not yet at the point where it can be called a social business, mainly because it is not making money from the services it is offering. Will this change in the future? I don’t know. Perhaps Wokai may decide to charge a reasonable partnership fee to local microfinance institutions (MFIs) – not a bad idea, since studies show that people value things more when they pay for them. Another potential source of revenue may come from ads. As a web-based solution, Wokai will at some point face the decision of whether or not to monetize its page. There are trade-offs here, and I trust that Wokai will be sensitive to the needs of its users whatever it decides. Then again, maybe Wokai will choose to remain a nonprofit. Every organization has a different role to play. Right now it looks as if Wokai’s is to enable other social businesses (MFIs and microenterprises) as a nonprofit.

Social impact is hard to measure. Seriously, how do you go about putting a number on the impact that a small loan has on a Wokai borrower’s life? One of my borrowers, her name is Wu Ren. She borrowed $450 to purchase 30,000 bushels of animal feed for her cattle and sheep business. In her own words, her goal is to lift herself and her family out of poverty. How do you quantify the return on investment of that loan? Yes, there’s the financial return that can be easily identified, but measuring health improvements, educational opportunities, and human dignity is another story.  If and when the social stock market takes off, social businesses must be ready (numbers and all!) to be evaluated by their social returns.

Games are fun. They just are. For example, people can hunt mice for hours. It’s the escape that they bring, catapulting you into another sphere of experience. The Wharton simulation game inspired me to begin thinking of ways that Wokai can create its own simulation game to educate people on what the heck microfinance is. I know whenever I tell my friends and family about Wokai and microfinance, I get bombarded with questions. And rightly so! In microfinance, there are so many players involved in the value chain, including the government as is the case with China. Why not create a game where players can interact with each other as contributors and borrowers, as well as with MFIs and governments? The game could also introduce a virtual credit system as the trading currency. These are just thoughts, but based on the Wharton game, I’ve come to realize that games can be fun and intellectually enlightening.

          

So, as Yunus predicts, heads up that you might start seeing The Social Wall Street Journal reporting that so and so social business did such and such, increasing its share price from 10.00 to 12.50. Or that two complementary social businesses merged, increasing their share values in the eyes of social investors. And don’t be surprised if you see the Social Dow Jones Index alongside the other indexes. I’m telling you, it may seem like a far-fetched vision, but it’s only a matter of time. I think I’ll change my Facebook status to, Jessica is waiting for the stock market to go social. 

The Future of Wokai.org: Our Product Roadmap

Larry Sun

Larry is Wokai's Product and Technology Director.

To start this entry, I would like to thank you, the Wokai supporters, for making Wokai what it is today.

My name is Larry Sun. By day, I wear a Google t-shirt and lead a team of 4 engineers; by night, I put on my Wokai cape and work as Wokai's Product and Technology Director.  In other words, I work with entire Wokai team to focus our effort on the features that will streamline the loan process to further Wokai's mission. What does this mean for you? A scalable system that reduces the manual steps and cost of giving out loans and collecting repayments, which in turn, will spread the seed of Wokai in every corner of China.

As the individual who leads the product development and engineering practices, I would like to shed some light on our 2009 product plans and the engineering practices that will take us there.

Product Development:
As indicated by the "BETA" label that appears on our logo, the Wokai platform is a work in progress. At Wokai, we will never be satisfied with what we have accomplished.  We strive to provide more value to our borrowers and foster a welcoming community for everyone in the loan process, whether you are a borrower, contributor, or field partner. We have achieved a small portion of our vision in the first version of our platform. Our small team has worked diligently to deliver a complex system in a short amount of time. Looking ahead, I see that we will mainly focus on two aspects of the platform in 2009.

Loan Pipeline:
This functionality is Wokai's core competency; it is what Wokai is all about. The more effective and efficient we make our pipeline, the easier for our borrowers, contributors, field partners, and  supporters to see the fruits of your trust and the rewards of your selfless investment. Reflecting the importance of this aspect of the platform, we will spend most of our efforts in the first 2 quarters of 2009 building a robust pipeline.

User Interface Improvement:
You may be concerned that we will overlook our user interface and not adequately address some of the concerns you have about our appearance. As Casey has mentioned before, we have not ignored the large amount of feedback we've received in the last 2 months. I have personally looked into every piece of feedback with the development team, and prioritized the changes that you would like to see. However, we will shift our focus to the Loan Pipeline in the early part of 2009. What this means is that we will look at the most critical feedback of the user interface and selectively improve our appearance.

You may wonder why we have decided to do so. Let me take a minute to explain. The majority of us are fans of Apple products and Google search. Two reasons that these two companies have succeeded in obtaining our liking, I believe, are the focus of the product development and the user-driven development approaches. These two qualities guide what we will do at Wokai as well our efforts to take our platform to the next level. Being able to make loans and collect repayments are the most important functionalities of Wokai platform,; we will relentlessly invest in this area just as Apple did in building simplistic but highly intuitive products, and Google did in Search. In addition, we will invest in features that will enable a dialogue instead of monologue.  You have heard from us through multiple channels; it is time to let you be part of Wokai and own the future of Wokai. We believe that the success we can achieve in China's micro-finance field takes more than one player. We need your support and kind donations to build an ecosystem that will change China.

Engineering Practices
Basically I can summarize our engineering practices into three words "number, number, and number". What does it mean? We prioritize our engineering efforts based on the analysis of user traffic, such as what you clicked, what you did not click, etc. Although these don't seem very important individually, by tallying all of the explicit and implicit feedback, we will be able to enhance our system with efficiency and answer your most pressing needs.

Although we are a start-up, we make security, performance, and site usability our top priorities. Making improvement in these three areas, we can enhance Wokai platform to scale to support more borrowers, gain the trust of additional donors, and make your experience more enjoyable.

Security & Privacy
You trust us to manage your money and information; in turn, it is our responsibility to make our platform secure and your information private. That's why you see us managing the transaction with Google Checkout and asking you for your preference for sharing or hiding your profile. In addition, we will frequently conduct security audits of our system to make sure that new improvements will not result in security vulnerabilities or leaks of your private information.

Performance
You might have experienced some frustration of waiting for pages to finish loading. So did I! For example, we will enhance our synchronous rendering of Google Maps to non-blocking rendering with XmlHttpRequest. By saving fraction of a second here and there, we will make our platform more responsive and make your browsing experience significantly better.

Usability
We started enhancing the navigation, coloring scheme and updating our contents as soon as we launched in early November. We consider the work important if we can reduce your navigation to the information you care the most from two clicks to one. In order to determine what to do, we have been examining the user traffic to see what section you spent the most time in, links you clicked the most, etc. If you sit right next to me when I am looking at the reports at night, you will often hear my "wows" and "ohs." What you're telling me contradicts my initial assumptions. You have been teaching us how to do our jobs better every step of the way.

I hope that you have enjoyed this post as much as I enjoyed writing and sharing with you. At the end of this post, I would like to thank our development team who built this amazing platform. In addition, I would like to thank you, the entire Wokai team, and our partners. The current website you see is the result of the collaboration among you, Wokai founders, chapter volunteers, full-time staff, college interns, and our partners in so many areas.

Please come back to us frequently, we will illustrate our progress and show you our platform is reaching more poor in China. Lastly, please visit http://www.wokai.org and make a difference in a borrower's life.