Reflections on ChildFinance

Just in case one more person thinks I was kidnapped by some Amsterdam gremlins, I thought I’d better break the radio silence. It’s been a hectic time ever since I returned from the International ChildFinance Expert’s Meeting in Netherlands. Four days of good energy and learning, where the magic is truly in the people.

My respects for Jeroo and the folks at Aflatoun. What a feat of bringing together the accelerators with convening powers, the mavens of academics, the practitioners of financial education with immese ground experience and just about everyone who has done relevant work in this space. There’s a new exciting movement that is brewing to chart the way forward for financial education and access for children – at the age where habits start forming (from the researchers), and at the time when the marginal rate of investment is the greatest (from the policymakers).

Some quick lingering thoughts -

In some circles, the term financial literacy has become as taboo as entrepreneurship or web 2.0. The new focus is now on financial capability, with the ultimate goal of behavior change, as the result of having received a financial education. Yet, measuring behavior and action (what does it look like?) or involvement in existing financial systems (or a lack of involvement?) may not serve as good indicators of financial capability, especially in less-developed countries. The smartest of the poor deliberately exclude themselves from traditional financial institutions, rejecting savings instruments that offer 6% when inflation is standing at 16%. In fact, there were fascinating insights into what money management looks like in the poorest communities in the world. Recommended reading: Portfolios of the Poor.

Another exciting theme surrounds financial access, and the debate in creating child-friendly banking products with possible certification, ensuring appropriate safety and quality levels bounded by an ethical framework. Talks of easing in control gradually until kids turn 14, removing transaction fees and a minimum balance. No surprise that the bankers were demanding a business case, mirroring the rather tragic move when UK scrapped their Child Trust Funds just a few weeks ago, which I thought was a brilliant scheme when first introduced.

There was a clear dichotomy in the problems faced in the developing vs. developed worlds. At the lower levels of poverty, asset building is non-monetary as people invest in cattle, jewelry or relationships that may offer a better return. Was surprised to learn of the 90% savings rate in one case study, where survival literally depends on the ability to save up meager, irregular and unpredictable incomes – you don’t need to teach them how to save. I made a case that unlike the developed world, entrepreneurship in this instance is no longer a choice, and resonated immensely with the Teach a Man to Fish initiative in Paraguay – a rural education where students learn earned income strategies and graduate with a business. Ironically we have savings problems in developed countries, where you find complete financial inclusion but amateur knowledge on getting involved. It led me to scribble down this framework, revealing the importance of timing and matching financial education, capability and access. An important question raised in the academic track to ponder as well – Are we to claim that money is the equitable currency across the board?

On a side note, (this was not on the agenda but arose out of private discussions). I’ve always resonated with Mohd Yunus’ principles and the microfinance model, but have become a little apprehensive of how it’s evolved. Some MFIs are now a monolithic corporate structure, with funding from commercial banks and private equity firms, set in deregulated environments charging anywhere from 30%-85% interest, with a high repayment rate. This makes for a reliable super-profit machine with returns of over 50% and naturally attracts an overabundance of capital. Disbursement pressure skews responsible action and loan placements. Why does this already sound familiar? Even if we ignore the business case and revisit first principles, shouldn’t we advocate putting savings into business capital instead of just taking out a loan? It’s a myth that most of the poor cannot save.. transferring the control of money to the women sometimes works wonders.

And so I left with even more questions than before, but am ever so excited to get involved in these discussions going forward and hope to shape a product that could fundamentally solve the problem. At the heart, we all believe in the empowerment of children and to treat them as part of the solution. There’s always a fine balance between over-strategizing, and gaining momentum with madly passionate folks who have the gut-level indignation of the status quo. And I guess it’s only fitting to end off with Audrey‘s famous quote of the meeting – Let’s not forget to just let the kids have fun.

What Is Intelligence, Anyway?

(From the autobiography by Dr. Isaac Asimov)

When I was in the army, I received the kind of aptitude test that all soldiers took and, against a normal of 100, scored 160. No one at the base had ever seen a figure like that, and for two hours they made a big fuss over me. (It didn’t mean anything. The next day I was still a buck private with KP – kitchen police – as my highest duty.)

All my life I’ve been registering scores like that, so that I have the complacent feeling that I’m highly intelligent, and I expect other people to think so too. Actually, though, don’t such scores simply mean that I am very good at answering the type of academic questions that are considered worthy of answers by people who make up the intelligence tests – people with intellectual bents similar to mine?

For instance, I had an auto-repair man once, who, on these intelligence tests, could not possibly have scored more than 80, by my estimate. I always took it for granted that I was far more intelligent than he was.

Yet, when anything went wrong with my car I hastened to him with it, watched him anxiously as he explored its vitals, and listened to his pronouncements as though they were divine oracles – and he always fixed my car.

Well, then, suppose my auto-repair man devised questions for an intelligence test. Or suppose a carpenter did, or a farmer, or, indeed, almost anyone but an academician. By every one of those tests, I’d prove myself a moron, and I’d be a moron, too.

In a world where I could not use my academic training and my verbal talents but had to do something intricate or hard, working with my hands, I would do poorly. My intelligence, then, is not absolute but is a function of the society I live in and of the fact that a small subsection of that society has managed to foist itself on the rest as an arbiter of such matters.

Consider my auto-repair man, again. He had a habit of telling me jokes whenever he saw me.

One time he raised his head from under the automobile hood to say: “Doc, a deaf-and-mute guy went into a hardware store to ask for some nails. He put two fingers together on the counter and made hammering motions with the other hand.

“The clerk brought him a hammer. He shook his head and pointed to the two fingers he was hammering. The clerk brought him nails. He picked out the sizes he wanted, and left. Well, doc, the next guy who came in was a blind man. He wanted scissors. How do you suppose he asked for them?”

Indulgently, I lifted by right hand and made scissoring motions with my first two fingers. Whereupon my auto-repair man laughed raucously and said, “Why, you dumb jerk, He used his voice and asked for them.”

Then he said smugly, “I’ve been trying that on all my customers today.” “Did you catch many?” I asked. “Quite a few,” he said, “but I knew for sure I’d catch you.”

“Why is that?” I asked. “Because you’re so god-damned educated, doc, I knew you couldn’t be very smart.”

And I have an uneasy feeling he had something there.

The art of giving – learning to receive

This post is dedicated to a dear friend who’s embarking on new found wisdom :)
You’ve inspired me greatly.

For the longest time, I refused to let people buy me any meals, and sweat over the small stuff. I hated having to ask for help, brushed off compliments or returned them with sarcasm, and never enjoyed the presents that were given to me (I was brought up at home to keep gifts until they were really needed or to give them away, boy did I understand delayed gratification!). I didn’t know where all these were coming from, until a wise friend pointed it out – I had problems receiving.

My world has changed since then, and that simple revelation has opened my heart to a keener sense of appreciating the beauty of unconditional giving, and receiving, which cannot exist without each other. I could list down all the lessons I’ve learned along this journey, but there are two beautiful stories I’d rather recount from Nipun Mehta, founder of CharityFocus. His response to how he gets by being a full-time volunteer left an indelible mark on me -

“When you give wholeheartedly, the community takes care of you.”

1. The Toy Story

It was Christmas day when the doorbell rang. A homeless man stood outside in the icy cold winter with a hungry child and begged for some food. As the father went to pack some food, he told his son also to give away one of his new toys from under the Christmas tree.

Without hesitation, his son chose his least favorite toy and brought it to his father – “No son, I want you to give away your favorite toy.” You can then imagine the tantrum that ensued. Between tears and sobs, his son eventually picked up his favorite toy and walked to the door with heavy footsteps, as his father took his place back at the dinner table.

It was a long time later, but as if his father had known, his son came running back with much enthusiasm -”Dad! That was so cool! Can we do that again?”

This story struck me on so many levels – It demonstrates the truest sense of giving, the great release of letting go of something most dear to you, and something else in which I cannot rationalize that makes the process incredibly addictive.

2. The couple most madly in love

This man had achieved success in conventional terms and had everything he ever wanted – the riches, the houses, the cars, the clubs and parties, and the private jet. As a fun little act of kindness, he decided that every time he went to his favorite high-end restaurant in downtown New York, he would pick up the tab for another table with a couple that’s the most madly in love. The rule of the game was that he had to be completely anonymous, and would retract his offer if he was found out. The waiters in the restaurant became familiar with his habit, and loved spotting couples who were most romantic, and then receiving the joy of presenting them with their bill of a nearly a thousand dollars, all paid for by some anonymous stranger.

One day, upon looking at the bill, one woman started bawling.. and didn’t stop for the next 15 minutes. Getting worried, and not wanting customers to be seen crying in the restaurant, the waiters urged this man to make an exception and introduce himself. After long contemplation, he got up from his seat and walked over to the couple.

The couple thanked him profusely and he learned exactly why the woman was so overwhelmed – it was their first year anniversary, and both husband and wife were volunteers for kids with special needs. They had saved up an entire year for this meal at the restaurant, and their gratitude simply knew no bounds.

Can you say who is receiving or giving more in this instance? I’ve come to realize that there there are too many things that don’t deserve a price tag, that one act of convenience for someone can go a long way for others, and there is simply no point calculating or being picky with repayment but to simply, just simply, pass it on.

How one man is quietly writing the history of professional cycling

This is Nick’s dream.

He is training the first black team to win the Tour de France – the third largest sporting event in the world, but with no African presence all these years because equipment and training are too costly. He fell in love with professional cycling as a young boy, and tells me that people are slowly losing respect for the sport with all the recent doping cases. And like in Golf, Tennis, and the American President candidature, there is no better time to give the sport his opinion, a shakeup and simply some perspective.

It started 4 years ago, visiting Eldoret, the heart of where all the marathon winners are born. They have the physique, the mindset, and the hunger to win. He finds these talents in the rural villages in Kenya, and gives them bicycles to train.

I could listen to his anecdotes forever. We discussed the inflection points of leadership – and his came during the civil war. His team was literally seeking to kill each other as they pledged allegiances to their own tribes, and he flew back in the midst of crisis to unite them together. He described how one of his training sessions was disrupted when one of his athletes received an urgent call, pulled out his machete and ran all the way back to his fields because a robber was stealing his sheep. And jokes about how he worries every time his athletes leave camp to go back to their wives because nine months later, they might be having a baby and drop out. I begged him to tell me he was recording all these moments which was probably an unnecessary question, of course, there’s the movie that’s on it’s way.

So now you have a Singaporean who’s writing the history of competitive cycling.. getting the media attention in America and Europe, but we hear nothing of this in our own country. Why? Because it is not yet a success story, and I’m quite sure this will change the moment they hit Tour de France. If I were running a newspaper that was honestly concerned about my community, this is exactly the kind of story, at this stage of an endeavor that I know they need the most support, not when it’s all over.

I met Nick through another young entrepreneur, both with very international backgrounds which explains their trail blazing attitude. It’s a common story when you put such folks together with a mission that’s larger-than-life. You automatically hear the accompanying war stories of trying to garner support in our home country, as much as we’d like to align ourselves and give back. We concluded that Singapore is great for playing to be good, but we never play to win. Is this really cultural?

I haven’t lost all hope though, and it is up to our generation to change this.

Inside a school for suicide bombers