A Challenge: Investors Needed

Hey folks,

I have a request. I have found an individual in need who I believe is worthy of some support - an investment, not a donation. I know you're not bleeding money and I don't exactly have an income right now. So I think I have figured out a way to help this individual without either of us breaking the bank. If you're intrigued, read on.

As I told you before, my research has taken me into the slums of Dhaka, specifically the Korail slum (remember the video I showed you earlier of my commute to BRAC?). I have spent five days over the past week with Anis (on the right in the pic), who I told you briefly about in the last post about the slums. I first met Anis on a short walk down my road to dinner. Initially I ignored him, as I do most rickshaw pullers who are usually overly attracted to my white skin and perceived deep pockets. His happy nature and relatively good English, which is a rarity for the typical uneducated rickshaw puller, got the better of me and I gave in to a short ride. He waited for me while I ate, and seeing the opportunity, I asked if he might be my guide into the slum the next day. My investigation went as planned at first, as I learned all about the background of the slums.

But the conversation gradually shifted to Anis as I learned more about him and his family. He is earning roughly 220 Taka ($3) a day riding his rickshaw, and uses this money to support himself and his wife, and weekly support to his mother, brother, and sister. He will graduate Class 12 (he studies for an hour or so at midnight after a 12 hour day of rickshaw riding), which is more education than most people have in the slum, with decent English to boot. From everything that my Bengali translator and I can tell, he is an extremely humble and courteous person with enormous potential. He doesn't seem to be type of slum dweller I often see clamoring for a handout.

I say he has potential because he still doesn't have an opportunity. His dream is to move back to his village and open up a print/copy/scan computer business. He says there isn't one within 2 km of the village. However, currently he is living "hand to mouth" as he explains it and has no savings. BRAC is not willing to give his wife a loan because they think she is too young. So in the meantime, he is stuck riding a rickshaw, which he rents at a cost of 80 Taka out of the 300 Taka he earns per day. With a baby on the way, I can easily see him slipping into the same poverty trap that I've seen so often.

So here's the plan:

1) We provide a non-interest loan for Anis to purchase two rickshaws. He rides one and rents the other one out, increasing his income.

2) I have drawn out a payment plan that Anis and I have decided on. It is personalized to fit him, with installment amounts adjusted for his upcoming baby, increased studying time for his final exams, etc. It also includes some wiggle room for unexpected difficulties.

3) The money is collected weekly by a friend I have in Dhaka. Twice every year he transfers it to another friend in Dhaka who makes regular trips between the US and Bangladesh (currently you can't send money out of Bangladesh). Once the money comes to me in the US, it is disbursed to investors.

4) You get your money back, and once his rickshaws are paid off, he is free to take another loan from me (and you, perhaps) to pay for his computer lessons, or further down the road, to start his business.

5) In the meantime, I have introduced him to several of my friends and adults in the BRAC community and others who can help him identify support for computer classes or any other education or guidance in which he is interested.

You probably have some questions:

How can I invest? Go to my website and mail a check to my home address (no fees) or pay via PayPal at the Donate button. No PayPal account is needed. Please donate at least $10. Otherwise, mailing a bunch of small checks of $1 or $5 would get to be expensive with postage.

What is the investment needed?

$333 (23,000 Taka). I will put up a counter on the site.

Is this microcredit?

Sort of.

What is different?

It's a non-interest loan, and we are flexible.

Have you already bought him the rickshaws?

Yes, because I am leaving the country any day now, and don't have the time to wait for all the funding. Things are moving very fast. I have faith you will come through, and if not, then the loan is on me.

Why are we able to give a non-interest loan?

Because we know him well enough (I think, at least), know his intentions, and know that by owning instead of renting, he can earn more money. The high interest on even BRAC or Grameen loans is usually the most common reason poor people are afraid to take loans from them.

When is he scheduled to pay off the loan and what if he misses a payment?

He is scheduled to pay it off in 23 months - July 2011. If he misses a payment, we simply won’t decrease the principle that he owes on the loan, and his expected pay off date will be moved back. We are currently working on the details, and trying to determine how long he can postpone paying off his loan before it is considered null and void and all support is cut off.

What if he just doesn't pay, and it turns out he tricked us?

When we proposed this deal with him, we told him that if he pays back, we will continue to be his contacts and his support - for the computer classes, for his future business. If he doesn't pay back, then we cut off all support. Remember, he did say that the reason he didn't own his rickshaw is because BRAC didn't believe his wife's age and wouldn't give them a loan. All he's missing is a loan, and we're giving him one interest free!! How short-sighted would he be to just take the rickshaw and run if he knew that there was more support waiting?

What happens to my money if he doesn’t pay back?

Well then, we consider the rickshaw a donation. You’re out the $10 or $20 you donated, and we all gain a little better understanding of the poor and their motives.

When will I get my money back (if he does pay back)?

There will be two pay out dates, once when he reaches 50% paid off, and the other when all is paid off.

Get the comments going. I'd love to hear your comments, critiques, or questions.

Best,

Rob