Wharton Class of 2015!

http://www.wharton.upenn.edu/undergrad/

This Or That?

We may not even realize how often we make decisions every day. We weigh options and choose the best of them. Seems pretty, ordinary right? Well, in formal economics terms, you are actually considering the marginal benefits (what is the additional gain of X?) and marginal costs (what is the additional cost of X?) of that particular act. See, you think like an economist without even knowing it!

Sure, you may think that you only weigh MBs and MCs when you are shopping at a grocery store (giant marshmallows or cookies?), but actually you are doing marginal analysis in all aspects of your life.

Consider Situation A (one that my friend recently encountered): Should I take my Calculus textbook home today?

Friend: "Ugh, my book is heavy and I had cross-country practice today. I'm too sore to lug this book home. But, if I don't, I'll have to carry it home tomorrow with my Physics textbook too." (insert friend's annoyed face here)

In economics speak, her marginal cost was the extra physical strength and work she needed to carry the book today and her marginal benefit was a fewer number of books to carry home the next day. If her MC > MB, would she have taken her book? No. If her MB > MC, would she have taken her book? Yes. Ah, but what if she decided that her MC = MB? She could have chosen an alternative.

Did you ever think that economics could apply to life and not just to numbers? Well, in fact, it can! That's how economics came to be a social science: combining numbers, terminology, and qualitative analysis with psychology, anthropology, and sociology. This blending of the two disciples perhaps is one of the elements of economics that traces back to its very core and makes it applicable to the majority of our world's population in a relatively systematic way.

A Milestone

Hi everyone! I have recently made my 100th loan on Kiva! I helped the Sartawi Group in Bolivia achieve its dream of financial self-sufficiency. The group will buy merchandise to expand their businesses and could benefit from Pro Mujer's other programs such as business training. Here is my portfolio distribution available on my Lender Page.

Question: How do you suggest I celebrate?

The Yunus Series: Banker to the Poor

Banker to the Poor -- this is the book that educated millions about microfinance and the Grameen Bank. Written by Dr. Muhammad Yunus, the book describes Yunus' journey to creating the Grameen Bank and how the Bank has developed since its founding. 

Early Life

Born in present-day Bangladesh, Dr. Yunus was surrounded by a large Muslim family and grew up in a time of political strife as India and Pakistan gained independence from Britain. His education led to him to a Fulbright Scholarship to study in the USA. Living in the USA for a few years after getting his Ph.D in economics, he supported the Bangladeshi War of Liberation. Upon returning to Bangladesh, Dr. Yunus witnessed a great famine in 1974 and created a program to help relieve the famine's devastating effects in the university where he taught economics. By promoting a sustainable farming project, he saw the potential of farmers to become prosperous, but saw a greater need to help the poorest of the poor break out of the cycle of poverty.

The Beginnings of Grameen

Dr. Yunus' initial projects were completely at the grassroots level as he visited villagers in Jobra, Bangladesh, observed their lifestyle, talked to them, and thought about how to best help them. He noticed how difficult reaching out to women was as women are supposed to be shielded from the outside world as per Muslim custom. Tempted to give them money, Dr. Yunus knew that handing them money would certainly not help their situation in the long run. On an impulse, he loaned a bit of money to a local villager in the hopes of receiving of his money back when she would use it to improve her business. This experience is what motivated him to develop the concept of microlending. Dr. Yunus consulted banks and lawyers, trying to get someone to buy into an idea of a bank for the poor (hence the title of the book!) but his obstacles never seized to block his vision. Nobody believed that the poor had the potential to learn, grow a business, or even manage expenses. According to the naysayers, such skills were far beyond the abilities of the villagers Dr. Yunus spoke to. Working to develop a program with the government led to compromises on Yunus' side and on the government's side. The bank was finally formed as a branch of the state bank but operated on its own terms for the most part. His team consisted mostly of students and when the bank began to prosper, it expanded to other villages and tried out various projects. After several years of struggling, the bank was finally fully formed and functional. 

Grameen's Principles 

From the start, Dr. Yunus knew that women needed to be empowered not only in his community, but also in the global community. Grameen makes its women entrepreneurs more confident about managing money so they won't just give the money to their husbands out of fear. Grameen also ensures that entrepreneurs are well-supported by their community when taking a loan by holding meetings in the villages where entrepreneurs can talk about their loans and businesses. When entrepreneurs face natural disasters or other unpredictable events, the bank doesn't take the money away, it simply makes the loan easier to pay off, fitting the entrepreneur's needs. As entrepreneurs become more prosperous, they can also acquire shares of the bank, making them active participants in their nation's economy. 

The Bank Expands

The question of sustainability is always associated with microfinance. How do we know that once an entrepreneur pays back her loan, she doesn't end up back in poverty? How do we know that she leads a better life? To resolve this question, the Grameen Bank developed several programs to ensure that people benefit in the long run. Grameen Shikkha provides student loans so the children of entrepreneurs can get a good education. Other programs provide housing loans, telephones, cellphones, electricity, and healthcare clinics that ensure that entrepreneurs lead prosperous lives. Since the Grameen Bank was formed, its microfinance model has been used all around the world. As of June 2010, the bank has more than 2,000 branches and has helped millions of people achieve financial self-sufficiency. In 2006, Dr. Yunus and the Grameen Bank were awarded the Nobel Peace Prize for helping to alleviate poverty through microfinance. 

Trust me, this book will make you want to make a difference. Since this brief summary is in no way exhaustive (but hopefully enticed you to read the book), I really do encourage you to read Banker to the Poor! If you are interested in buying the book, I ask that you buy it through iShop4Microfinance -- 4% of your purchase goes to microfinance organizations such as Acumen Fund, Grameen Bank, and Kiva! 

Comment below to let me know what you thought of the book! 

Works Cited

Yunus, Muhammad. Banker to the Poor. New York: Public Affairs, 2007. 

              Print.

The Intern

My internship has been amazing so far! I constantly meet new people and the office is wonderfully friendly! I love being part of a community that is dedicated to microfinance and making an impact in the world. The atmosphere is inspiring and motivates me to do so much more than I ever thought I could. If you ever have the opportunity of viewing the inside of a company or organization you are interested in, I encourage you to soak everything in! Your perspective on the work the organization does and on your life is sure to change!

More updates to come from this Kiva Intern!

Summer Reading List

Summer Reading. While some may groan upon hearing those two words, I am excited to dive into the set of books (which are different from my academic summer books) I have set aside to read over the summer. I have added a few others which might interest anyone, especially after the amazing responses to my Women At Work post. These are all great books and I suggest you read which ever ones intrigue you!

Jobs, Careers, Professional Aspirations...

or whatever you want to call them. Labor is one of the things that keeps our economy alive. While the unemployment rate recently dropped to less than 10%, according to the Bureau of Labor Statistics, the unemployment rate for teenagers is still around 25%. That number will rise with the influx of high school and college grads entering the work force unless more long term jobs are created soon. At the moment, your best shot at a career would to be focus on the STEM professions -- or a job based on science, technology, engineering, and mathematics. Universities and high schools are aiming to emphasize such STEM classes as the demand for technology-based experts seems to only increase. Schools are therefore not only emphasizing STEM classes to their students but also desiring teachers with degrees in the STEM professions. Before the recession, more STEM majors were employed than those with a non-STEM degree, so try to imagine how many would be needed now! For more info about STEM careers, click here. For the case study on STEM careers done by the government before the recession, visit here. 


Are you a high-schooler looking for a job or just considering future career options? Check out: http://www.bls.gov/k12/index.htm


Question: Are you a high schooler or college student considering a STEM career? How has this post influenced your decision?

Miss Economist on Kiva Blog!

Hey everyone!


Kiva recently wrote a blog post about me! You can visit it here: http://www.kiva.org/blog/2010/03/25/lender-profile-young-lender-making.html.

Thanks to the Kiva staff for their support!


:) Miss Economist

Miss Economist on TV

One day our grandchildren will go to museums to see what poverty was like.

Dr. Muhammad Yunus, Nobel Peace Prize Winner

To help achieve Dr. Yunus' dream, I have been actively spreading micro-lending's message and  was recently interviewed for Desi USA TV on Comcast a few weeks ago! Here's the interview:




- Miss Economist

Women at Work

The Bright Side
Many of you might have heard that women are on the brink of becoming 50% of the workforce. Personally, I believe that this is truly a social milestone in the world's history. Women have finally been able to break through social barriers and make up half of the working class. Better technology, an increasingly egalitarian society, contraceptives, and access to higher education have opened millions of doors to women around the world. Ever since the world economy changed from the days of the hunter-gatherers, men were dominating the work force because of the demand for physical labor in agriculture (female physical labor ≠ male physical labor at that time). But, as our economy increasingly shifts to the service side, women have a better say in the labor market (potential of female brain = potential of male brain).


The Not-So-Bright Side
Now all that sounds wonderful, but wait, there's a catch. All this female empowerment comes at a price. Higher positions on the corporate ladder still prove elusive to the majority of women because a more lucrative job often requires more demanding work hours. If you are a mother of three children, more work hours don't exactly fit into your schedule, now do they? So here's the problem, many women are forced to choose between two options: a successful career and motherhood. Many fear that as women yearn for higher positions, their families will be neglected and the quality time will decrease. 


The Solutions!
More and more companies have embraced working at home and have made work a more family-flexible environment. While only a few countries have extended child care opportunities, other countries can certainly follow their example and set aside a larger percentage of taxes to having schools offer after-school activities. As society adjusts to this milestone, big companies must also as well. 


Question of the Post: How do you think companies can better adapt to this social milestone?

Meeting the KIVA Team!

I recently met part of the Kiva community at a social on Wednesday to celebrate the 10th class of Kiva Fellows in San Francisco! Having the opportunity to meet the minds behind Kiva was purely inspiring. As Kiva advocates congregating, we all felt the family-oriented atmosphere. Talking to people as invested (no pun intended) in Kiva as much as I am was an indescribable experience! I also want to thank all the Kiva Fellows and the Kiva Team for their work! They are liaisons who increase the peer-to-peer connection between the entrepreneurs and lenders like me!

Me and Mr. Premal Shah -- President of Kiva.org

Me and Ms. Chelsa Bocci -- Community Marketing Director of Kiva.org

So Much to Celebrate!

Hey everyone! I have a lot to celebrate in this post!


My 50th loan on Kiva: The initial amount of money I had loaned to female entrepreneurs around the world has been fully repaid! One complete cycle of loans has been completed! You can check out my Kiva page @ www.kiva.org/lender/saloni. Thanks to everyone who has supported Cherish, my small handicraft business from which the profits are directed to my personal Kiva account! I can't wait to help so many other women around the world achieve economic independence and better their lives! The number of people a single person can help with as little as $25 still astounds me every day. :)


My 2000th hit and 10th follower on my Miss Economist Blog: Thank you to everyone who has been reading this blog! All this wouldn't be possible without the diligent readership of the hundreds who have visited this blog! Keep reading and making those wonderful comments!


Stay tuned in a few days for a new post on an article I read!


-Miss Economist

Kiva Update for the New Year!

Happy 2010! I just reviewed my 2009 Kiva microlending portfolio, here's an update!   www.kiva.org/lender/saloni

As a high school student, I contribute to Kiva to help woman attain financial stability in developing countries. I also use the principles of economics to spread the risk of my lending portfolio. Using the profits from my own non-profit handicraft business and occasional birthday gifts, I have helped 43 women thus far. I focus on women with low socioeconomic status and need less than a $1000 loan. I lend the repaid money to other entrepreneurs, creating a perpetual cycle of giving and receiving.

Highlights of my Kiva portfolio

Ø  100% of loans to women

Ø  Does not fund loans that promote gambling or alcoholism

Ø  43 loans funded in 18 countries

Ø  Smaller amount for each loan to spread the risk and help more women

Ø  Favors Kiva MFIs with a 4 or 5 star rating to minimize the risk of defaulted loans

Ø  Focus on entrepreneurs from countries with low per capita income

Ø  63% of loans funded in countries with less than 5,000 USD per capita income

Ø  77% of my loans on Kiva request less than 1,000 USD

Ø  100% of my loans as of Spring 2009 are dedicated to Maria Shriver’s Womens Conference Team

Ø  My loans make up 4% of all of Maria Shriver’s Womens Conference Team loans

Why I loan only to women in poor countries

A loan is not only money, but also an opportunity. By helping women with an entrepreneurial drive, I have helped them live out their dreams of financial independence and self-sufficiency. The synergetic combination of women and entrepreneurship can change Third World societies in unimaginable ways. Considering the social, economic, and political obstacles disadvantaged women have encountered throughout history, empowering women is necessary now more than ever in a world that is still ravaged by wars and populated by the impoverished. With loans as small as $125, these entrepreneurs can make ends meet on their own terms. If you give a woman a fish, you feed her for a day. If you give her a loan, you give her a fishing pole, a stand at a local market, food for her family for life, and a perpetual boost for their nation’s economy. A woman is not only an anchor for her family, but also for humanity.

How I reduce the risk of loans being defaulted

By understanding basic economics and the fundamentals of finance, I have learned how to make smart and small investments and how to disperse the risk of losing my money by funding several entrepreneurs. Favoring quantity over quality, I lend smaller amounts to many entrepreneurs rather than committing hundreds of dollars to a certain individual. By lending to entrepreneurs whose field partner risk rating is 4-5 stars, I spread the risk of losing money on a loan. By dispersing my loans geographically, I further reduce the risk of loans being defaulted because a country’s socioeconomic circumstances could dramatically change, affecting an entrepreneur’s repayment. According to Reuters UK, women are also more fiscally responsible.

What I have learned in terms of economics, business, and humanitarianism

By examining business plans, evaluating repayment terms, and judging the risk of a loan, I have learned much about making smart investments with humanitarian intentions. I discuss this learning as well as issues such as recession and poverty in my blog, Miss Economist (see links below). The bigger lesson I have learned is the importance of philanthropy. By helping those in less fortunate circumstances, I have realized how empowering women can change the world.

My next steps

Now that I have established 43 loans, I aim to not only continue funding more businesswomen but also to communicate the benefits of microlending to the youth and women of the world. By promoting philanthropy and humanitarianism, I will spread the message of microlending and empower women. In addition, I hope to pursue a degree in economics from a prestigious university such as Stanford or University of Chicago and use those skills in the real world. 

If you can help in any way, please let me know!