Coming to you from 37,000 ft.
After months of preparations and planning I am finally on my way. As I write this the map on the TV screen tells me I am currently over Pueblo, Colorado on the first leg of a three part trip from New York, USA to Phnom Penh, Cambodia. I will be in Phnom Penh for five months as a Kiva Fellow and will be working with Kiva’s partner agency HKL.
While I am very excited to listen and learn from both the staff members at my host MFI, HKL and the borrowers they serve I have a certain amount of trepidation concerning the affect the global recession will have on the local economy. During our Kiva Fellows training a few weeks ago the subject of how microcredit repayment rates would fair in the coming months and years was brought up. Since then, I have been thinking about what this in the context of how it will affect Kiva Borrowers in Cambodia. The first question I had was how are the lives of people selling fish, firewood or growing food connected to bankers in New York and London? While at first this boggled my mind, after thinking about it for a little while, the connection became very clear and very scary.
My train of thought went something like this: a bank in New York lays off a worker … that worker then buys fewer things, (clothes included)…the clothes store that particular banker used to buy from now has less business and has to close a few stores and orders fewer products from its suppliers … its suppliers in Cambodia are getting fewer orders in so they also have to lay off a person … that person’s spouse, who had previously used their small loan to sell fish as a second income is now the sole provider for the family … they can’t afford to payback the loan that they had previously had no problem repaying. Four quick steps and we go from skyscrapers to people like the borrows on Kiva’s website. This interconnectivity, both positive and negative, that our global economy has given each and every person in every country constantly amazes me.
While I am by no means a microcredit expert, I do know that one of the reasons that repayment rates are so high is that many of the loans are a once in a lifetime opportunity for people to lift themselves and their families to a better life. This means that if repayment rates start to slip in the microcredit industry it is not because people are out buying things they shouldn’t, it most likely means that their financial situation has become really bad and that they have no other choice. I think most of us have been in situations where we hit a time of financial trouble, weren’t able to pay all of our obligations on time and needed just a little help until we could make the needed adjustment and get to the light at the end of the tunnel. For many, this help could come in the form of a bank, family, or a second mortgage. Unfortunately, for those who have been borrows at microcredit agencies, this type of help usually is not an option. So in times like these, I want to keep lending on Kiva because the positive effects of $25 loan from New York can be just as easily felt in Cambodia and across the world as the negative effects of a bank in New York.
I look forward to sharing my experiences and all that I learn in the the coming five months!!!
Join HKL’s lender team here and show your love for my host MFI!!!/>