African students can now enroll in the First Center for Microfinance, a joint program with the Frankfurt School of Finance and Management and Université Protestante au Congo that began in January 2010.
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As a summary: This discussion shares my brief thought about how a new generation of Managers and Leaders can combine the American spirit of charity with the African sense of time in order to do the right “Microfinace” thing and do it right for Africa’s poor following the global financial crisis.
Management consultant and social ecologist Peter Drucker once said that “Management is doing things right, and Leadership is doing the right things.” I believe that Leaders inspire and Managers implement. Leaders are able to envision the evolving interests of different stakeholders in an enterprise and organize these interests so that they align in a way that moves the whole enterprise forward. Managers are then able to breakdown the leader’s vision into actionable steps.
Leaders and Managers are both essential in a world where economic deprivation anywhere can harm economic security everywhere. Consider this statement by Martin Luther King Jr. “Injustice anywhere is a threat to justice everywhere.” Microfinance, defined as a provision of credit and other financial services to the poor, can help Leaders and Managers promote economic fairness.
The global financial crisis (beginning in 2007) increased the challenges of microfinance in Africa. Leaders now face more challenges in identifying the interests of different stakeholders in a microfinance venture in Africa; and Managers now face more challenges in figuring out how to measure the progress of the venture. So here’s a thought: How can Leaders and Managers move microfinance in Africa measurably forward? Perhaps, Leaders can inspire the American spirit of charity to maintain the “financing” component of the microfinance enterprise, and then Managers can use the African sense of time to measure the “micro” component of the enterprise.
According to a report by the Organisation for Economic Co-operation and Development (OECD) in 2009, the United States of America is the most charitable country, giving the highest amounts of money (in absolute terms) at $28.67 billion [USD].
And according to a report by Dr. Orville Boyd Jenkins, time flows backwards under the African view of time. Time is a component of an event or activity; it is not something in and of itself.
One implication of the African view of time is that the more business activities a poor African entrepreneur (i.e. micro-credit debtor) takes on, the more time he/she uses. This is because time is measured in the number of completed activities. In effect, if the same entrepreneur were to be sitting on just one business activity, he/she would actually be conserving time – time would not be passing, it would instead be waiting for the entrepreneur to complete more business activities.
As it relates to microfinance ventures, there are several business implications and practical applications of the African view of time. I’ll leave it to more intelligent minds (maybe a new generation of Managers) to reconcile the African view of time with concerns about loan repayment and debt interest. My discussion here is simply a thought.
Notably, in the decades of debate we’re all likely to have about the causes and effects of the global financial crisis, it may be worthwhile for us – all of us – to settle on one moment of clarity. In that moment of clarity, I hope we can all recognize that the global financial crisis had a negative impact on charity. (Former President of the United States Bill Clinton referred to this impact as the “cramping” of charity). The loss of trillions of dollars in wealth across the world during the financial crisis can easily translate into less giving by the “haves” of the world to the “have-nots” for many years to come. Maybe a new generation of Leaders can inspire us to keep giving… and maybe our gifts can evolve from unaccountable aid to measurable investment.
Microfinance in Africa was especially vulnerable to the global financial crisis. A 2009 survey conducted by the British Centre for the Study of Financial Innovation (CSFI) and sponsored by the World Bank revealed that bad debts, insufficient liquidity, and lack of refinancing options hampered many micro-lenders in Africa. A huge “bubble” growth in the microfinance industry and the increasing competition from mainstream banks led numerous micro-financiers to issue loans without sufficient supervision. It seems like the very human mistakes that were made on Wall Street also traveled to the village streets of Africa.
Moving forward is something we can all do together. We need people who can do the right thing and do it right. I welcome the new generation of Managers and Leaders.
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