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We're taking a few days away from research, writing, blogs and all the rest.  Back in 2009.  Until then...

It's the holiday season in the United States, which means many bloggers are talking about gifts, giving, philanthropy and the state of the world.  All this gift-blogging got me thinking about one of my favorite gifts (to give and to receive) - Kiva gift certificates.  If you need to pick up a last minute stocking stuffer, you could do a lot worse.  (Don't know Kiva?  We've written about them before, including interviews with founders Matt and Jessica, as well as a comparison between them and MicroPlace, a P2P microfinance competitor.)

There's another way to give Kiva, but it won't fit in a stocking: you can give yourself.  That's right: if you're looking to get involved in microfinance very personally, Kiva has a Fellowship program that allows volunteers to spend anywhere from 10 weeks to a year working for a microfinance organization.  According to their web site:

The Kiva Fellows Program offers individuals a rare opportunity to travel abroad and witness firsthand the impact and realities of microfinance, by working directly with a host microfinance institution (MFI). The Kiva Fellow is an unpaid, volunteer based position designed to increase Kiva's impact and to offer participants a unique insider experience. Past participants have found the fellowship to be a great first step in a career in microfinance or international development.

All the details are available on their web site.  I've been keeping my eye on the Kiva Fellows program for the past few months, especially as the financial crisis unfolded here in New York.  I wondered, what are all these newly-unemployed finance pros going to do with their time?  Maybe some of them are going to want to give back - but how?  A Kiva Fellowship is a good place to start.

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Position: Research Associate / Consultant

Location: Home based with two missions to New York

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A couple of friends of mine have already asked me "So what if a couple of banks go bankrupt? Who cares about bad mortgages? What is all the big deal about?" It is hard to explain in few words why the financial sector is so vital in modern economies, when countries are as strongly connected by trade ties as it is currently the case.

Probably the best way to explain its importance is by thinking of the economy as a machine and the financial sector as a lubricant. The financial sector's role is to efficiently allocate capital from savers to investors.  Financial markets lubricate the rest of the economy's productive activities.  Thanks to this lubrication, the economy is able to "work harder" and make fuller use of all the cogs in its machinery. If financial markets stop functioning, then the machine would not be able to work as efficiently as before, because it would lack the lubrication needed to keep full speed. This is in a nutshell why Washington has bailed out the financial sector, without even thinking about it, but appears much less willing to help the collapsing US automobile manufactures.

A second important aspect to take into account of financial markets is that banks are strongly connected to each other. If GM closes down tomorrow, other surviving businesses, such as Toyota, will probably benefit. However, in financial markets, if one financial agent, for example a bank, suffers, due to the interdependencies in the system, many other banks will suffer too. If one bank fails, other banks will tend to fail as well. This domino effect is something characteristic of industries with businesses which are tightly connected with each other and strongly dependent of each other's actions.

As financial markets have grown increasingly global, the allocation of capital from savers to investors has become global. As a consequence of the US financial crisis, BoP markets will probably suffer in the coming year.

It is important to note that BoP markets had already absorbed a strong shock with the food and fuel price rises in the last 2/3 years. In my post on June 2008, I estimated that the percentage of income spent on food might increase from 58% (as calculated by The Next 4 Billion) to 75% - 80%. The World Bank has estimated that as a consequence of such price rises the population of people living in extreme poverty in East Asia, the Middle East and South Asia has increased by 1%, at least 100 million people.

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I recently read an article titled Negroponte - missionary not manufacturer, in which the author makes the argument that, well, Nicholas Negroponte - founder and Chairman of the One Laptop Per Child project - is a missionary, not a manufacturer. I think this is a very interesting point and caused me to ponder the definition of success.

Negroponte has been pilloried in the press, blogosphere and by analysts around the world, and even to an extent by me. You can see this in a three part blog posting that I wrote that starts here.

While some of the criticism may be valid, if you actually change the perspective of how you view his role ... from someone that is trying to manufacture and sell millions of laptops, to someone that has a vision of a computer as a key tool for accelerating learning and technology adoption, then his cause would be seen in a different light. And that is exactly why the world embraced him in 2005 when he first introduced his OLPC project.

In my view, Negroponte's legacy should be about his role as the pioneer that established the value of computer access to under-privileged students in under-served markets.

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Guest blogger David Auerbach works on strategic growth projects for Endeavor, a global organization that supports high-impact entrepreneurs.  He is a 2003 graduate of Yale University.

By David Auerbach

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Position: Consultant

Location: Nyanza Province, Kenya

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Editor's note: Guest video blogger Karthik Janakiraman is an Acumen Fund Fellow.  This year, Karthik is working with Global Easy Water Products (GEWP), an company in India providing poor farmers with access to affordable micro-drip irrigation solutions.  He will develop a production, inventory and logistics plan, while also building and refining GEWP's export strategy. 

Before joining Acumen Fund, Karthik was a Senior Engineering Manager at Applied Materials in Santa Clara, California, responsible for new product development. He has been awarded five patents in the area of semiconductor design. Karthik holds a Master of Science degree in Mechanical Engineering from the University of Michigan.

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Following is the second of a Two-Part Series written by guest blogger Ryan Gunderson after a recent trip to rural Zambia.

Ryan is a business professional with Medtronic, the world's leading medical technology company.  He earned a bachelor's degree from Brigham Young University and an MBA from the University of Michigan's Ross School of Business. He writes about sustainable, scalable solutions to end global poverty on his blog Riches For Good and is actively pursuing his goal to help 1 million people out of poverty during his lifetime.

By Ryan Gunderson

I met Blessings and Francis in October 2008 when I visited the church they both attend in Lusaka, Zambia.  Although some 90 people were in attendance, Blessings and Francis stood out to me for the obvious reason that they were the only two speakers in the main meeting that day. Before Sunday school I introduced myself to all who were present, and I told them I was traveling with a non-governmental organization (NGO) and would be visiting rural farmers in Zambia to help them increase their incomes. 

Intrigued by the purpose of my trip, Francis invited me to his house after church, and I gladly accepted.  Blessings separately invited me to his house; the three of us traveled to Francis' house, where we spoke for about an hour.  I'm pictured below with Blessings (suit) and Francis, and several members of Francis' family.

I shared my goal to help 1 million people out of poverty and asked Blessings and Francis for any suggestions.  They each shared their opinion that many people have ideas for small businesses, but they lack startup capital.  They said that microcredit exists in Zambia but is not widely available.  College loans are also non-existent. After our brief discussion at Francis' house, Francis and Blessings invited me to attend an activity at church the following Friday.  I accepted and looked forward to seeing them again.

While traveling in the countryside during the week, I was busy meeting farmers, as outlined in my previous post.  But in the evenings, as I wrote in my journal, I often thought of Francis and Blessings and wondered how I could help.  They didn't specifically ask me for help.  They didn't need to.  Their circumstances were enough. They are both from Zambia, both are intelligent and articulate, both were full-time volunteer missionaries for two years, and both moved to South Africa after their missions to seek employment.  Additionally, both returned to Zambia within the past year due to family deaths and have struggled financially in an economy with at least 50 percent unemployment.

I reconnected with Blessings and Francis around noon on Friday.  Neither had eaten lunch, and they willingly accepted my offer to treat them.  Over lunch, Blessings humbly told me that he had been thinking a lot about our conversation from Sunday, and he decided to postpone starting a garage door installation company so he could help me lift people out of poverty.  I was overcome with emotion, to the point of tears, and I told him that the way for me to get started on my goal was to help him and Francis to pull themselves out of poverty. 

I told them that once I had helped them, they would be in a position to help others.  I also explained that I have a long-term time horizon and that my best option may entail helping few people at first but building up the capacity to help many more later.  I asked Blessings and Francis to walk me through alternatives for how I might help them.

Their first suggestion was that I help them buy a bus, which would provide employment opportunities as well as cash flows that could be invested in a microfinance institution, which would of course make loans to others.  We discussed the startup costs and cash flows of the opportunity.  I then asked Blessings to tell me more about his garage door installation idea.  He told me that he had given up on the idea for now since it would help only him. 

I asked "couldn't Francis help you install doors?  If you do well, you'll employ others and will earn enough money that you can provide greater opportunities for yourself and others."  He glowed as he discussed his planned garage door business.  He explained that he gained a year of experience working for a garage door installation business in Johannesburg, South Africa, where he marketed and installed doors.  As we spoke, it was clear that he had a real passion for this business opportunity, as well as an entrepreneurial drive.

After we attended an activity at church that afternoon, I hired a taxi and asked Blessings to show me around some of the neighborhoods that will demand garage doors.  This was important, because to this point I had not yet seen any upscale houses and therefore was not convinced there was a demand for the product Blessings so eagerly wanted to supply. 

Blessings had the taxi driver lead me to four different construction sites.  The first had a modest need for six garage doors.  The second had only two.  But the third and fourth each had 20 or more houses under construction, with room to expand, and all units had a place for a covered garage, which would be ideally suited for a garage door. 

Below is a picture from the first large neighborhood, clearly showing a covered garage with an opening for a door.  A second picture shows Blessings and Francis at a second large neighborhood where they hope to earn business.

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Attending the "VI Inter-American Conference on CSR: The Business of Inclusion" in Cartagena was a great opportunity to draw a parallel between the nascent BoP/ Development through Enterprise movement in Latin America and the one in the English-speaking world, which I've had the chance to dive deeper into in the course of this year.

Following is a brief summary of my impressions and three main takeaways from the conference.

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