Monthly Archives: August 2010

Au revoir Paris!

Well, my internship at UNEP is coming to an end. After three months in Paris, I am returning home to Texas in a few days to complete the final year of my masters program in Global Policy studies. I have worked on a variety of projects aimed at engaging the private sector to voluntarily adopt more sustainable envrionmental practices–practices that not only preserve the environment and its resources, but also often benefit the corporate bottom line and public image.

In my first blog I stated that the goal of my internship was to to gain a better understanding of the processes and mechanisms behind the coordination and development of environmental policy for governments and the international community. I can say I have definitely gained valuable insight into how a United Nations organization operates and
the process of interagency collaboration. I also have an enhanced appreciation of the role business and industry can, does, and will play in addressing some of our greatest global environmental challenges, including loss of biodiversity, sustainable production and consumption, and climate change. In light of the challenges and time-frames of negotiating major international environmental treaties, raising awareness, education and voluntary initiatives may prove the more productive path.

Does microcredit work for the poor?

photo of disbursement

DHF's program partner Multicredit keeps track of every new loan disbursement by taking a photo of the actual handover of the money. This helps promote transparency.

Does microcredit work for the poor?


During my summer internship with DiscoverHope Fund (DHF) in Peru, I have learned a lot about what makes the difference between a microcredit model that works for the poor and one that doesn’t.

First, the mission of the microfinance institution matters. Whether it is for-profit or non-profit, the ultimate objective of the organization must be to help the poor. For example, at DHF, the mission is to “provide an opportunity for women in poverty to create their own prosperity through microcredit, entrepreneurship and training.”

teaching bookkeeping

The village bank promoter teaches the leadership board of a village bank how to keep track of their loan repayments.

Furthermore, the methods the organization employs to meet its goals must match its mission. For example, setting interest rates requires striking a delicate balance between achieving financial sustainability for the loaning institution and keeping interest rates low enough so as not to burden the poor. Our program partner Multicredit offers a monthly interest rate of 2.25%, which is much higher than rates you would find in the U.S., yet much lower than rates in Peru and easily manageable for our loan recipients to repay.

A new loan recipient examines her personalized booklet from Multicredit which she will use to kee track of her loan repayments.

A new loan recipient examines her personalized booklet from Multicredit which she will use to kee track of her loan repayments.

Second, you need an effective screening process for potential loan recipients. At DHF, we make sure women have a clear business plan for how they will use their loan before giving them money. We also try to give women the amount of women they need to expand their business, not the amount they want. For example, during the screening process for one of our new village banks, we interviewed a candidate who couldn’t even calculate her business costs. She told us she sold blankets for $10, but then a moment later told us she spent $12 buying yarn. Giving a loan to a woman who doesn’t understand her own business would be a disservice and an added burden for the poor.

Third, transparency is crucial. Our program partner Multicredit gives us detailed reports of all their monthly activities, and has effective bookkeeping methods for tracking loan disbursement and repayment. We meet on a regular basis to keep lines of communication open. Multicredit even teaches the women how to keep track of their loan repayment themselves with personalized booklets.

Finally, microloans should be complemented with training and other support. This is what DHF calls the “microcredit plus” model. Not only do we provide women with loans, but we also encourage them to have savings accounts, we provide them with business assessment services, and we coordinate classes like sewing,

DHF's newest village bank, Las Azucenas, celebrates their loan disbursement.

DHF's newest village bank, Las Azucenas, celebrates their loan disbursement.

knitting, cooking, and computer literacy that will expand their marketable skills.

This is by no means an in-depth analysis of the subject (if you’re interested, you can find plenty of articles online that analyze whether microcredit really helps the poor). This is just a reflection on some of the features of DHF’s approach to microcredit that I think make it an effective model for truly serving the poor.

India’s Water Conflicts: Politics over Water

Being here for three months working on watershed issues has indirectly led me to other unstable issues here in India. Water conflicts in India are becoming explo­sive and politicians are working hard to sustain them over a long period of time. Practically every state in India, particularly in the south, has at least one or more conflicts over water distribution with its neighbor. Maharashtra, Karnataka and Andhra Pradesh are at loggerheads with each other over the sharing of the Krishna waters; Karnataka, Tamil Nadu, Pondicherry and Kerala are in conflict over the Cauvery; Kerala and Tamil Nadu are fighting over the 113-year old Mullaperiyar dam. The intensity and frequency of these conflicts are increasing. No doubt that it will become worse with the in­creasing uncertainty of climate change.

Despite having negotiated several settlements with Pakistan over water with the help of mediators, it seems as though it is very difficult for Indian states to han­dle internal conflicts over water. One of the reasons is that there is a lack of an efficient frame­work and mediating mechanism for con­flict resolution, both within the govern­ment and civil society. There are a number of common themes among the conflicts over water in India.  For example, it is common for downstream users to distrust upstream dam building and operation, and this kind of conflict exists within states and between regions, at levels ranging from the village to the basin level. The other important aspect is that India’s systems are not oriented towards building trust. In fact, very often, the contrary is the case, especially when such conflicts overlap with state boundaries.

Another issue I see is that there is a lack of a scientific approach to water management. The science and the policy of dealing with water sharing have both considerably advanced in recent times around the world and especially in the United States. Water manage­ment in India does not seem to have advanced as much. As a result of a lack of communication between scientists and policymakers (ala Copenhagen) river flows have fallen below levels and have disappeared in many important fishing communities. India seems to have its own brand of the “rule of capture”. Dam construction technology has led to a construction race that aims at capturing every drop of water that everyone is entitled to. The complexity of climate change adds another serious dimension to the conflict. While the precise change in rainfall is disputed, all climate models agree on the likelihood of the increase of extreme events – extreme surpluses and extreme shortages.