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>View discussions about this entry Country: United States
Organization: NamasteDirect
Year initiative/program began: - 2008
Field of work - Banking/Financial Services
Service / Activity focus (If "other" please explain in entry form) - Equity Financing
Year organization founded (yyyy) - 2005
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Project URL: http://www.namaste-direct.org
Positioning in the Mosaic of solutions
What is your signature innovation, your new idea, in one sentence? - NamasteDirect has developed a scalable model combining microcredit loans and capacity building for women entrepreneurs, whereby they are afforded a holistic opportunity to move themselves out of poverty.
Describe what makes your idea unique—different from all others in the field. - Our new model is 100% borrower focused, based on requests directly from the borrowers. We intend to better prepare and support borrowers to succeed in their business ventures by providing basic and advanced business education with continuous mentoring from a business adviser throughout the loan cycle and vocational training, the subject of which will be determined by the borrower. We have created a measurement system for evaluating our program that also includes both quantitative and qualitative factors. We want to measure the success of our borrowers as well as the processes we use. This means we will be shifting our focus from OUTPUTS (for example, the number of borrowers we fund) to OUTCOMES (the successes of borrowers that can be reasonably attributed to our efforts.
How do you implement your innovation and apply it to the challenge/problem you are addressing? - The methodology used to implement our model is a combination of advising, coaching and consulting on business planning and execution, classroom and hands-on demonstrations for vocational training, and participatory life skills discussions. The credit group and special interest groups will be the platform. We are hiring only local Guatemalan businesspeople to assess, coach, and advise the borrowers in order to be culturally sensitive when asking personal questions.
Do you have any existing partnerships, and if so, how did you create them? - NamasteDirect works with well managed, established microfinance institutions in Guatemala and Mexico. Our partnerships with FAPE, Care, Friendship Bridge, and AlSol were all created through personal contacts in the field, extensive research, observation, and negotiations.
In which sector do these partners work? (Check all that apply) - Citizen sector (nonprofits, NGOs)
Provide one sentence describing your impact/intended impact. - We will measure the successes of our borrowers, both financially and personally, that can reasonably be attributed to our efforts.
Please list any other measures of the impact of your innovation. - In addition to serving as a mentor and adviser, the team of Business Advisers will conduct an extensive assessment of each borrower. The assessment will take place pre-credit, after completing the first loan cycle, and again following completion of the second loan cycle.
We have created evaluation tools based on the Grameen Poverty Assessment and also on credit reports used by banks. The assessment covers items to measure poverty level, such as the home, education, and nutrition. What makes our assessment unique is that we intend to track the health of the business, including profit and loss, household and business expenses and more. We intend to not only track the exit from poverty, but also the growth of each borrower's business.
How many people does your innovation serve or plan to serve? Exactly who will benefit from your innovation? - The first phase of our new model will include 400 women in three distinct regions in Guatemala. In addition to the 400 borrowers, the families and communities will be impacted by an influx of capital.
How is your initiative financed (or how do you expect your initiative will be financed)? - We are financed primarily through private donations: 43% from general contributions, 19% from the board of directors, and 38% from grants.
If known, provide information on your finances and organization: -
Our 2008 budget is $600,000 What are the main financial barriers and how do you plan to address them? - The main financial barrier is attracting both new and repeat donors. We are hoping to capitalize on the unique focus of our new program to build a niche in the funding marketplace.
Aside from financial sustainability, how do you plan to grow the initiative? - The ultimate goal of the Namaste Business Training Model is to develop the local talent and expertise. The borrowers will become mentors and trainers in their communities, creating additional sources of income.
What was the motivation or defining moment that led to the creation of this innovation? Tell us the story. - In January, 2008, the President, Founder, and two Board members traveled to Guatemala on a fact finding mission. They conducted over 100 personal, intensive interviews with NamasteDirect borrowers. The results of the surveys were illuminating and revealed both the extreme need and demand for innovative tools to assist in poverty alleviation. The borrowers requested more money-making opportunities, business training, capital for business expansion, and new repayment schedules. They also revealed that the current "one size fits all" model of microcredit is not appropriate for everyone. The results of this mission led NamasteDirect to develop our new model of poverty alleviation through microcredit and training.
Please provide a personal bio of the social innovator behind this initiative. - Note this may be used in Changemakers marketing material. Please upload a photo of the project innovator or innovation at the bottom of the page. IN 1973, Bob Graham, a successful California businessman and CPA, visited Guatemala as part of the California Agricultural Leadership program. Struck by the plight of the poor farming families he met, he decided on the spot that someday he would try to help suffering people such as these.
A decade later in 1984, Bob founded the Katalysis Partnership and launched Bob’s “50–50 at 50” plan: at age 50 he began to devote 50% of his time and 50% of his resources to service to others. Subsequently, thousands of people have led their families out of poverty. Twenty years later, Bob continues be deeply involved with this work, volunteering his time to NamasteDirect, a successor non-profit to the Katalysis Partnership. Bob and his associates are continuing to link donors to the poorest borrowers through NamasteDirect. a) Please identify the individuals that your innovation benefits (Please check all that apply) - Producers, Consumers
b) Do you help the people you serve to buy goods or services using financial innovation? If so, how? - The business mentors work closely with the borrowers to evaluate their personal finances. They focus on the basics of income, expenses, profit, and loss. The business education modules teach the fundamental business principles, including planning, marketing, and finances. Combined, these lessons will help provide more disposable income to purchase goods and services.
c) Do you help the people you serve to sell goods or services using financial innovation? If so, how? - A major component of the Namaste Business Training Program is teaching the borrowers new and innovative ways to sell their goods and services. We have determined that microcredit and an increase in capital has been insufficient in our clients' financial growth.
Contact Information:
Jennifer Williams
Development Director NamasteDirect (NGO) Discussions about this entry
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Thank you for your suggestions Dan! We agree completely with your comments and we have experienced the departure from the social mission in Guatemala specifically. It's costly, timely, and can be ineffective if done incorrectly. I have updated our profile to explain more clearly how we intend to analyze the outcomes of our work.
While NamasteDirect’s focus on social performance and client centred microfinance is admirable, I find myself searching for more detail in this entry. As microfinance becomes more commercial, many in the industry worry that profit will come at the expense of development and service. Thus, measuring social performance has become a major issue. I believe that it would be very helpful if NamasteDirect gave more details and specifics on what tools they use to analyze the effect they have on their clients.
You can find excellent information and debate on this subject on Microfinance Gateway Social Performance Resource Center:
http://www.microfinancegateway.org/resource_centers/socialperformance
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