Dr. Kendall Mau's MICROFINANCE TRAVELS

Panama 40 Years Later

It was a glorious week in Panama.  I spent 4 days in my old village, Bella Vista de Guarare, enjoying the company of my adopted family, catching up on 40 years of news, and visiting one of my original credit union projects in the center of town.

When we first started working with the credit union 39 years ago, it had about $5,000 in assets and no manager, just a volunteer Treasurer.  We trained a new manager, the credit and supervisory committees, and the Board of Directors.  I was astounded to see a beautiful new office with air conditioning, the equivalent of any credit union in the States.  I looked over the financial reports and found $16.0M in assets, a solid Balance Sheet and a Profit and Loss Statement to die for.  They are now rated one of the top 3 credit unions in all of Panama.  I should disclose that they have now outgrown the credit union classification and recently change their charter to become a multi-service cooperative.  They can offer wholesale agriculture materials, consumer goods such as appliances, health clinic services, and so forth.  The interest on loans continues to be below 12% (declining balance method.)

Of course food was on my mind.  I stayed in the next door village, at the beach house B&B of a former Peace Corps Volunteer who recently retired and bought the home of her dreams.  Small, with 4 rooms to rent, right on the ocean.  Surrounded by 3 local restaurants that serve the best seafood - fresh shrimps, sea bass, and "patacones" or fried plantains like only the Panamanian can make them.  Better than any French Fries.

The closest regional city, Las Tablas, is still small, but very spiffy.  Clean streets and sidewalks, buildings well maintained and brightly painted, and even a big supermarket in the center of town.  The supermarket has fresh vegetables, the meat section is up to world standards, and a large selection of goods.  All my Panamanian friends are encouraging me to spend more time in Panama - who knows?  I've been suffering from post vacation blues since returning a week ago.

I then spent 4 days in Panama City partaking in all the activities of our reunion.  Close to 100 former Panamanian volunteers showed up.  We did some fine dining, partied at the Miraflores locks as huge ocean-liners went up and down in the giant locks on the way into and out of the Canal.  We had a reception at the US Ambassador's residence to celebrate the swearing in of 46 new volunteers and took in a show of typical Panamanian music and dance.  All in all, it was a super trip and one I'll remember for the rest of my life.  It was a time to renew friendships and to wallow in the success of projects started 40 years ago.

Kiva:  and while I was away, Prisma de Honduras came on-line again with Kiva.  Sorry we didn't hit the June 2008 deadline, but we're listing again as of July 1st.  Thanks to Orbelina our GM and Michelle of Kiva.   

Prisma Honduras and Kiva

Greetings to all our friends from Kiva.  Prisma Honduras will start to list projects again in June 2008.

In our original contract with Kiva, Prisma USA, Prisma Honduras, and Prisma Nicaragua were all involved in the endeavor.  Prisma USA is a Holding Company, with two working divisions - Honduras and Nicaragua.

With the new contract, only Prisma Honduras will be listing projects and has signed a direct contract with Kiva.  Prisma USA and Prisma Nicaragua are no longer involved.

You will notice that our 5-star rating has dropped to 3-stars.  Why?  With the holding company concept, much of the equity and strength of the company is kept stateside and was combined with Honduras and Nicaragua finances to produce a 5-star rating.  In Prisma USA books, that will continue.

However, with the new Kiva contract, Kiva wishes us to report only Honduras' finances and results.  We therefore unbundled Honduras from the consolidated company finances for reporting purposes.  That was one of the main reasons for the lower Kiva rating.   

At any rate, thanks to all our Kiva supporters and friends.  We're happy to be back.

Panama Reunion

Nearly 39 years ago, I arrived in Guarare, Panama, as a newly minted Peace Corps Volunteer to work in credit union development.  Panama was one of the Latin American countries that was included in the Alliance for Progress initiative started under President Kennedy.  Much time, effort, and money, were pumped into credit union development in Panama.  We trained for 13 weeks in language, cultural adaptation, and  cooperative development in Puerto Rico before going into country.

I was assigned to the Western part of Panama on the Pacific Coast.  It's called the Azuero - the area of Panama that has the typical tiled roof adobe houses and much Spanish influence left over.  The main towns were Las Tablas and Guarare.  It's also the driest part of Panama.  How fortunate I was to have been adopted by a local family (the family Diaz) who took care of me and made sure my transition into the Panamanian culture was as easy as possible.  I still remember their daughter teaching me how to dance in preparation for the big 5-day Fiesta de la Mejorana (a 4 or 5-string guitar) in September.  I finally got the hang of dancing the PINDIN or musica foklorica.

I had a local counterpart, Pipo.  We traveled around 4 provinces in a jeep with a tin cabin to service 14 credit unions.  We provided training for management and staff in accounting and loan operations.  I don't know how much I contributed, but it was fascinating work for a 22-year old fresh out of UC Berkeley.

In June 2008, I'm heading to Panama for a 45-yr celebration of Peace Corps in Panama.  We're expecting a big group of ex-PCVs for a week of catching up, eating, singing, dancing, and hanging out.  I get to return to my village, Bella Vista de Guarare, for a 3-day visit before the reunion in Panama City starts.  I'm again in contact with my adopted family - everyone is still alive and kicking.  Ezequiel, the father, is now 86 years old, his wife Paula is 76, and their 3 children are all around my age.  They are planning a big fiesta for me and I received a call from Panama this morning from Marta, their oldest daughter, who will meet me at the airport in Panama City and make the 5-hour drive back to the village.

I'm staying in a bed and breakfast on the water in the next village called La Enea.  An ex-Peace Corps Volunteer just retired there and opened a B&B.  Haven't seen Bonnie in over 38 years.  There will be other ex-PCVs staying there.

I'm dying to see what happened to the 14 credit unions we worked with.  Are they still operating, did they merge, did they go out of business?  Truly, in my life time, I'm so blessed and fortunate to have this second opportunity and to be still held in high esteem by the Diaz family.  They adopted me for life.

Kiva - almost there again, Part 2

Orbelina and I found our way over to Kiva's headquarters in San Francisco last Thursday.  They are growing like mad to keep up with the demand for their products and services.  They now have 27 full time employees and 300+ volunteers who work together to make the organization zing.  Last year when I was there for a visit, they had just moved into their new office on the second floor of the building.  They now have a 3rd floor.

We met with Michelle to make sure we had fulfilled all Kiva's new requirements necessary for listing projects on the website.  She had flown in from Ecuador the night before and was leaving the next day for vacation.  We are still aiming for the second week of May 2008.  That's when Michelle returns from vacation with her family in Hawaii, and Matt finds a free moment in his busy schedule to sign the final agreement.  Keep you fingers crossed that we get it all synchronized.

Kiva - almost there again

We're closing in on a re-start date - around the second week of May 2008.  Michelle at Kiva has been very busy and on the road - I think Bolivia this time.  Our General Manager from Honduras, Orbelina Valeriano, arrives in San Francisco on Monday for a week of strategic planning meetings with me.

We have an appointment with Michelle on Thursday to tie up all the loose ends.  This will be Orbelina's first time visiting the Kiva head office and meeting the major players.  The new contract has quite a few changes from the original one we signed 2 or 3 years ago when Kiva was just initiating its operations.

Ramon asked if we would be seeing some administrative cost savings this time around.  Unfortunately, I cannot yet answer the question with a definite Yes or No.  We need a few months experience operating under the new contract to see which way the costs will go. 

Back from Washington DC

I just returned from a 10-day business trip to Washington DC where I had meetings with several NGOs and spent 3 days at the University of Maryland Business School.  I hadn't toured the campus in many years.  It has a new Center for Performing Arts (probably the biggest center I've ever seen on a college campus) that literally takes your breath away for its sheer size and multiple theaters within the structure.  There's also a new alumni center with formal gardens, a recreation sports center, and a huge Comcast basketball arena.  The facilities of the business school are probably the most technically advanced in the whole world.  While I wasn't paying attention, the business school moved up to a #5-world ranking (Financial Times) in business research.  Berkeley is rated #8.

I gave two talks on Microfinance as a potential career for business students, and pinpointed for the students areas in finance, marketing, and operations where improvements are needed.  The sharp student who can build expertise in said areas can have a big advantage when trying to enter the field.  I also gave them tips on how to gain expertise and how to use several web resources for finding microfinance jobs throughout the world.  Internships are especially sought by students.

I also participated as a panelist in an ethics evening at the business school.  Over 210 attended.  I was asked to speak about ethics in third world environments.  There were about 110 people in the breakout session.  It was clear that international settings require very flexible interpretations of ethics as what Americans might call corruption may often be considered acceptable in other cultures.

Lastly, I'm working with the assistant dean of undergraduate studies to establish an internship program in Prisma's Honduras Division.  The internships would be reserved for University of Maryland Business School students who are enrolled in the fellows program for global studies and foreign languages.  This would be the first such program for the business school.  The school now takes students on 2-week trips around the world to visit factories and operations in various well known international companies.  This internship is being designed to give them actual working experience in an international setting.

It was a good trip and I thank all my hosts for their hospitality and graciousness. 

Condolences to David Satterthwaite

My condolences to my business partner David Satterthwaite and his family on the death of his beloved mother in Los Angeles.  She passed away 3 weeks ago and today was her memorial service.  He is supported and surrounded by his wife Maria, his father, and numerous friends and other relatives.  I wish them peace and the best of memories.  Kendall

Kiva Contract Signed - Ready to Go

Thanks to our Honduran Division General Manager, Orbelina Valeriano, and Michelle of Kiva, the new contract has been signed.  It's been a long recertification process.  We should be up and running within the next 2 weeks.

I'm having Orbelina come up to the San Francisco Bay Area the last week of April 2008, to do some strategic planning, visit Kiva headquarters in San Francisco to get all her questions answered face-to-face by the great personnel of Kiva, and help me design an internship program for students at the University of Maryland Business School.  She'll also take a few days of vacation at the end of the working sessions.

The last time she was here 3 years ago, I took her down to Monterey for lunch and to experience life as only the beautiful Monterey Bay with its active aquatic life and fishing boats offers.  We had a seafood lunch on the wharf at a very good restaurant while the sea lions were swimming and sunbathing right before our eyes.  Quite a tourist attraction.  Of course Orbelina has made me promise to take her back and to buy her some more freshly made Carmel corn and salt water taffy!

On the way down, we also have to stop by the Giant Artichoke Restaurant in Castroville, CA, - the artichoke capital of the world.  The best French fried artichokes hearts around, fresh, not frozen.

If we still have time on the last weekend, I also promised her a visit to the famous mineral water and mud bathes in Calistoga - right in the middle of Napa Valley wine country.  Truly like an old cowboy town with down home mud baths and massages.  One of the pleasures of living in Northern California.

We're off to a great start in 2008.  Loan demand continues to be extremely high, and we look forward to the backing and participation of Kiva investors as well as the local banks and micro-credit funds operating in Honduras.  We'll soon be opening a new and our 6th branch office in one of the busiest, poorest, and most densely populated peripheral urban sections of Tegucigalpla.

Kiva Restart Update

Here's an update on our re-entry into Kiva.  The Honduras Division is filling out the information for the MIX.  It should be completed by the beginning of next week.  Once we get listed, we can sign the contract with Kiva.

We were not able to list on the MIX in the beginning because we operated as a holding company with the US office and divisions in Nicaragua and Honduras.  We even signed up with Kiva as a holding company.  You may have noticed that Kiva's website could only handle Nicaragua statistics although the bulk of the loans were coming from Honduras.  We'll now correct this with only Honduras reporting.  As I said in an earlier listing, the US holding company and Nicaragua will not be part of the new contract between Kiva and Prisma Honduras.  This simplifies the reporting to the MIX.

Thanks to Sam, Ramon, Fred, Jill, Diane & Charlie, Colette, and others for their encouraging words welcoming us back.  We're looking forward to it.

Tax Time and Speaking Engagements

March is slipping by quickly.  I've been closing the books for 4 different companies with which I'm associated.  Three down, one to go - that would be Prisma Microfinance, Inc.  I hope to get that finished by the end of this week.

Meanwhile, I've received some gracious notes from Kiva friends asking about our re-entry.  An update:  we just received the new Spanish version of the contract.  Our General Manager of Honduras, Orbelina Valeriano, has asked me to read through the document and give her comments before she signs it.  I'll get that done tomorrow.  We'll be touching April 2008 before we come on-line again.  At any rate, the staff in Honduras is excited and ready to get started.

I'm heading to the University of Maryland the first week of April 2008 to speak to business school students about microfinance.  One group of MBA students just got back from a visit to Africa where they were turned on to microfinance.  I'm going to have an in-depth discussion with them about how to enter the field and the pertinent education requirements.  Another group of undergraduates wants to learn about the industry and how microfinance could possibly be a new career field to consider.

Lastly, I'm sitting on an ethics panel for international business to talk about macro-issues such as trying to lower interest rates for the whole industry without subsidies and making sure the poorest of the poor are also being served.  Then we'll cover micro-issues such as bribery, handling personnel, and loans to friends and political persons of power.

Another project I'll be putting into motion with the business school - an internship in Honduras for undergraduate students.  They'll actually work in the division as junior credit clerks, improve their Spanish, have a great time working with our local staff, and get out into the field to meet the borrowers.  We're looking for students who are in their junior or senior year of study with 3 or 4 years of high school and college Spanish.