What was the defining moment that led you to this innovation?
Unión MicroFinanza and Microloan Coffee began a little less than two years ago in a coffee shop, where a PhD candidate and I were discussing how mathematics could change the world. Our coffee shop conversations centered on microfinance, giving small, collateral free loans to people who are too poor to access traditional economic services. It is hypothesized that social capital, the value in the bonds between people in small groups, is the mechanism responsible for loan repayment when collateral is not a factor. Though social capital is rather ambiguously defined, most theorists believe that advanced mathematics may hold the key to understanding this concept better. Two months and countless hours later after the coffee shop discussion, a team of 25 University of Michigan Students traveled to La Unión, Honduras – population 7,000 – to conduct a three month study of the surrounding communities. The goal of this survey was to collect information about the relationships between people and how these relationships affect how communities work together. Microfinance relies on these relationships to help discern who is responsible enough to repay loans, monitor people who have taken out loans, and enforce repayment when clients are delinquent.
At the end of three months, the team left La Unión but we had plans to return and start Unión MicroFinanza. Finding that La Unión farmers grew high quality coffee and in need of funding to continue our work in La Unión, we decided to try to sell bags of coffee during Christmas. After one week, we had managed to sell all of our coffee. People were excited to have the opportunity to empower communities in La Unión while also purchasing high quality coffee. From this we found that with a good product and good marketing we could support La Union farmers with their own coffee. Now Microloan Coffee and agricultural microloans form an innovative cycle which provides a sustainable solution to poverty in La Unión.
Tell us about the person—the social innovator—behind this idea.
Union MicroFinanza and Microloan Coffee has never been the product of one single mind. Instead, the organization, and the principles and ideas that guide it are a product of a team of people that are passionately dedicated to what we do. This has resulted in many incredible and innovative ideas and methods, including the organization itself and Microloan Coffee.
The core group consists of Derek Stafford: Derek is a Ph.D Candidate at the University of Michigan in the Complex Systems Department. He is the mastermind behind math and research that is the foundation to the organization.
I, Andrew Boyd, have been traveling to this area of Honduras since 2005. I always wanted to start microfinance in the area. I had the passion. The rest of the team has helped me make it a reality. I first shipped coffee to the US in December 2009 as a small fundraiser. From the success of this, the team began brainstorming and we came up with the concept of Microloan coffee.
Patrick Hughes is the head of our operations in Honduras. Long before this all began he loved coffee. He has a great palate for it and is very passionate about it. He has refined it into a product of outstanding quality as well as working closely with farmers in Honduras on a daily basis to improve their methods.
Michael De Wit and Dan Schwartz joined us in the first initial research stage as summer volunteers. They could not leave and have become and integral part of the organization. Michael also has a passion for coffee.
Bret Abel and Laura VandenBosch: Bret has designed both our websites and Laura has designed our coffee label and other marketing materials. Both do everything without asking for a penny.
How did you first hear about Changemakers?
If through another source, please provide the information