Microfinancing in the United States?

This week, Alice Liu, an expert in mobile banking in developing country contexts, discussed the increasing importance of technology in providing financial opportunities to developing countries. Traditionally, banks have not provided financial services (i.e. loans) to clients and individuals with little or no cash income. It takes much more work and costs more for banks to manage numerous small loans versus a few large ones. Furthermore, the individuals of these developing countries are often seen as large risks to banks; with little property to claim as collateral in case of default on the loan, there is even less incentive to reach out to these countries. Currently, microfinancing has emerged as a potential solution in providing financial services to developing countries. Through microfinancing companies, low-income individuals are offered small loans and financial services that were refused to them by banks. Great hoppes have been placed on microfinancing and its ability to provide the tools necessary to bring developing countries out of poverty. Jonathon Morduch, the Chair of United Nations Expert Group on Poverty Statistics, stated, “Microfinance stands as one of the most promising and cost-effective tools in the fight against global poverty."
The increasing prominence of technology in society, is a powerful tool in making it viable for financial institutions to expand into more rural and low-income areas. Technology reduces operating costs; there no longer is a need to establish branches in rural areas and instead, can rely on technologies such as phones, ATMs, or a point-of-sale device. Microfinancing has proved to be successful in many developing countries; payment of loans continue to remain high and these small loans have allowed many small business and self-employed individuals to find prosperity in their countries.
The success of microfinancing abroad made me wonder how we can use these business structures domestically as our economy continues to flounder. Currently, with the economic downturn we are seeing a cruel cycle emerge. Individuals with money are not spending it, while those who need money are receiving loans with ridiculously high interest rates. Our country's economy has been built through entrepreneurship and innovation and only through such will our economy return strong. We don't need to create temporary jobs, instead we need to create new job sectors of high-paying jobs. By making loans not accessible to small business owners and entrepreneurs it feels like we are stunting the success of our economy. By introducing microfinancing as a viable option we both create a social business around microlending while simultaneously empowering entrepreneurs to find success with their business ventures.
Washington C.A.S.H. (Washington Community Alliance for Self-Help), a domestic microfinancing institution, has shown that this concept can find success within the United States. Peter Rose, founder of the company, based his company through his observations in Bangladesh where Grameen Bank were providing small loans to groups of poor women. To adapt to the more complex U.S. business environment, Rose, added in-depth business training. As their official website states, "Washington C.A.S.H. empowers aspiring entrepreneurs with limited resources - and unlimited potential." The company offers hands-on education, support and access to loans and capital needed to both start and manage a successful small business and is serving those almost directly in the Washington community. Similar to the microfinancing structure of abroad, loans and assistance are given to primarily women (almost 50%) and minorities who are in the low and very-low income part of the population. 
The program was founded in 1995, and more than a decade later continues to find great success both for those they are serving and the company. Statistics from their site claim that in the 2011 fiscal year, Washing C.A.S.H. has served more than 750 individuals in the Puget Sound region, and more than 1,150 businesses have been started or expanded since inception. The program has made more than $839,000 worth of microloans, a seemingly small number in comparison to the number of individuals they have helped and companies that have emerged from these loans. Through C.A.S.H.'s assistance, on average, clients that have entered their program with a business already in progress have increased their revenue from (on avg.) $15,000 to $70,000 18 months later. The power of small loans along with business-education can be astounding as proved by this company. During this time of economic disparity microfinancing should be considered as a serious option in the United States, creating more incentive for small business owners and entrepreneurs. Americans need to start creating new jobs for themselves, and through microfinancing this can become a more viable and feasible option. 

Online Voting for the 2012 Election?

This week in class Aaron Smith explored the role that technology plays in politics. We spent a significant time discussing the role of Facebook in today's political atmosphere. From personal experience, I do not believe political discussion often takes place in social media sites such as Facebook or Twitter; in fact, I believe that bringing important issues into these spheres almost simplifies the complexity of such issues. However, this could change with the upcoming election; since 2008 (the last presidential election) Facebook has exploded in its prominence and has infiltrated all aspects of society. As TV becomes more obsolete in society, it will be interesting to see how the presidential candidates in the 2012 election use Facebook to assist their campaigns and bring in the vote for the younger population.

What I found most interesting about the discussion is how much it has contrasted with the other topics we have discussed in our course. Unlike science, journalism and education which have openly embraced technology (it can be argued there's an issue of 'too much of a good thing'), in the sphere of politics, technology is approached and used with hesitance and caution. In today's world, politicians run a candidate-based campaign, where their policies and ideas play a secondary role to their overall self-image. Candidates sell themselves, and thus would prefer blemish-free pasts. The Internet however never forgets and thus old pictures from "the college years" are bound to surface for future politicians where they are snapped drinking, smoking and the like. This will likely change the political game in the years to come.

The most interesting lag though with respect to voting is the opportunity to use online voting to cast our votes. The 26th Amendment states "The right of citizens of the United States, who are eighteen years of age or older, to vote shall not be denied or abridged by the United States or by any State on account of age." Online voting would make the process more time-efficient for constituents, more accessible and would likely increase total voter turn-out. The technology is ready and available so why hasn't it been implemented? Nick Handy, Washington state's elections director explains "The hang-up is acceptance by voters. There's a tremendous distrust of anything electronic, and we've got really strong advocacy groups who really want to vote on a piece of paper."

American is deeply rooted in tradition and little initiative has been taken to make online voting available to voters although the advantages appear numerous. The first, is the potential increase of voter turn-out. The number of hours spent online by American individuals continues to increase. The possibility of streamlining the entire voting process (from registration, to information on candidates, to actual voting) could pull in votes from individuals who otherwise would not have taken the time to cast their ballots. Furthermore, if candidates and political strategists send out e-mail reminders on Voting Day that link them directly to where to cast their ballots the whole process could become revolutionized. Early evidence from Australia suggest that online voting drastically increases turnout. In 2007, only 22% of Australian soldiers' ballots were counted, but when a new Internet voting option was introduced, that figure increased to 75%. America is rooted in the notion that every person's voice should be heard, yet little initiative has been taken to use the Internet that could make it even more accessible to everyone.

Another potential advantage of online voting is saving state's money in the long-term sense, a huge benefit currently as our nation's deficit continues to increase at an alarming rate. One statistic reports that Oregon spent $8.2 million on the 2008 primary and general elections. Most of these costs were for printing and postage as Oregon conducts its elections entirely by mail. Switching to online voting could both save the environment (yay!) and save each states millions of dollars which could be better allocated for more pressing needs.

Although it appears advantageous to switch over to a more technologically-driven voting process, there are reasons that such initiatives have not been taken more seriously in the United States. First off, the voting process is truly not that difficult for the majority of voters. Voting ballots are often available in many locations; if one truly cares enough about the issues at hand, the citizen will find the time to go to a voting ballot and cast his or her vote. It may become problematic to make voting accessible via the Internet as there becomes little time commitment to cast a vote; although voting turnout will increase, these votes could come from uneducated individuals, or individuals who don't take these decisions seriously. This becomes most apparent in state and local elections where individuals vote on propositions and acts that could truly affect their daily lives. Voter turn-out is extremely low in such elections because only the people who are truly invested with the issues at hand will take the time out of their busy schedules to vote.

Another issue that arises is accuracy and security online. If this initiative is truly taken forward, serious security measures needs to be taken so that the process ensures that the individual who claims to be voting is the one actually casting the vote. Furthermore, the possibility of results being hacked and altered arises, but these issues can only be addressed once enacted, and seeing how the process pans out in 'the real world'.

So how can we go about essentially 'test-running' online practices? I believe a good place to start is with military abroad. These men and women are risking their lives on a daily basis to protect their country and yet often times their votes are not counted or heard as a result of time delays on absentee ballots.  Taking small steps to ensure that fraud does not occur seems like the most logical approach. Currently, most states are taking a wait-and-see approach; no one wants to be the first to preside over an e-voting disaster. Regardless though, these men and women abroad should have the right to vote and snail mail isn't cutting it anymore. E-voting is not a luxury in this situation, but rather would be a medium through which these individuals receive the rights they deserve. Eventually e-voting will become predominant in our society: right now we are simply playing the waiting game. The question is simply....who will try first? 

Tech(Knowledge)y is Power

This week Jody Ranck, Director of Thought Leadership, Policy and Advocacy at the MHealth Alliance came to us and shared some insight about using the availability of cell phone around the world to provide better health care to developing countries. 

Currently, both the private and public sectors in developing countries are struggling with providing adequate health care to the people. The issue of health care, similar to that of education, is one that is convoluted and complicated, with each action affecting multiple sectors in the country. It is difficult to single out on particular issue that is the root of the problem: it is a result of economic and political issues as well as poor planning and implementation. Even once a program is implemented, there is the difficulty of availability, accessibility and affordability. 

One issue that many developing countries are trying to cope with is the 'brain drain' phenomenon: physicians and nurses in from developing countries are being recruited by Western countries. With more opportunities available these doctors leave their own countries, further exasperating the health care and economic situation in third world countries. First off, by losing these doctors, the country has lost an important investment (it takes up to $150,000 to train doctors) and then they are also losing useful and essential skills that could help bring these developing countries out of poverty. I feel it is important to note that developing countries have the skills and access to the knowledge to properly train and teach health professional, the problem now lies in creating incentive for these doctors to remain in their home countries.

This is where technology comes into the picture to 'bridge the gap'. In his lecture, Mr. Ranck discussed the possibility of using technology to provide countries with necessary health care and knowledge. With the widespread availability and use of cell phones throughout the globe, a doctor could receive picture texts to help identify a disease or problem, and readily respond with a diagnosis and assistance via SMS text. I believe that this is an important and potentially vital temporary solution, however, not a long-term solution. I do not believe that technology and text-message diagnosis can ever replace a person-to-person interaction and assistance from a doctor. As we've already seen here in America, the availability of 'medical' assistance on the Internet has led to a society of hypochondriacs and self-medication. Even the slightest pain or discomfort leads us to Google search our symptoms and before we know it we're convinced we are dying of Jumping Frenchman's Disease. Also, as was brought up in lecture, without a doctor to regulate drug use, there becomes the potential issue of drug abuse in these developing countries. So, the real issue lies in how we use technology to bring the country up-to-par to developed countries such as the U.K., U.S.A. and Canada (where many doctors from poorer countries migrate to) so that the health professionals remain in their home country. 

So, this essentially becomes a socio-economic issue; but this once again is interlinked with the health care and the situation can be eased with technology. I think that the MHealth Alliance is on the right track with their Maternal-Newborn mHealth Initiative. The problem of maternal mortality is an issue that is holding back many developing countries; there are millions of children without mothers (who have died as a result of childbirth) to raise and care for them. Then there becomes the issue of an age gap within the population, with many young children and the elderly; and it is the adult population necessary to create a stable and productive economy. The Maternal-Newborn mHealth Initiative (MMI) main goal is in providing information during pregnancy and post-pregnancy via cell phones to reduce mother and infant mortality. If this program can continue and strength such that complications are addressed at a fast enough rate to reduce the mortality rate, and then provide information to mothers to ensure that their infants are being raised in a healthy manner, in the long-term it could assist in strengthening the population needed to rectify the socio-economic situation of developing countries. Like most problems that exist in developed countries, the time frame for results to become apparent will probably be a few decades. 

However, with a stronger adult population, the economy could begin to strengthen, creating a greater incentive for the professionals to remain, than seek better opportunities abroad.  I think that technology could be a great supplement to assist in moving developed countries forward, however, I also believe that it is important that these initiatives are kept in mind as temporary solutions. I do not believe it will be beneficial in the long-term to push initiatives that move healthcare in developed countries to be completely via technology; that will only create more incentive for the educated to leave their country, instead of staying and trying to create a stronger economy at home on par with developed countries. 

Education for Tomorrow

Education and education reform are probably one of the most complex and convoluted issues both at a domestic and at the global level. The root of the problem lies in the difficulty of defining what education is. In the dictionary education is defined as "a : the action or process of educating or of being educated; also : a stage of such a process"; but what does that even mean? Have you received a 'good' education if it has led to a high-paying job? Or maybe a 'good' education guides you to a job where you feel most fulfilled or happy? Can education even be defined in one scope, or is it ever-evolving? Fifty years ago many people who knew a lot of (useless) trivia were seen as smart: to know so much trivia it usually involved being well-read and informed. However, now with the world wide web at our fingertips, fun facts aren't that impressive. And with the explosion of technology is education being able to use these new tools to further better or lives (personally on a financial level and/or as a community on a social level).

Regardless of how you view education, one aspect cannot be argued: technology has become a useful tool in the education system as it has infiltrated our society at an unprecedented speed. My brother received his first Mac laptop at the age of 8, while I, the older sister/junior in high school, was left to work with the family's two-year-old iMac desktop. I couldn't get a laptop until I went to college (what? Really Mom and Dad, that's not fair...). My brother attended the same elementary school that I had, eight years before, but things had definitely changed. Every student now has access to his own laptop (each classroom is equipped with 30 laptops), and each individual student has the option to bring his own laptop if he or she has one. My brother is learning a new set of skills that were not taught to me as a child, even though our age difference is less than a decade.

However, at the same time, I feel like the American youth are also losing a vital skill that were once so crucial to our economy. This was first reflected when I decided to look through my brother's 5th grade yearbook. Mine had been filled with "HAGS" (a.k.a have a great summer) or longer notes from close friends where we chronicled our 'life-changing' (jokes) adventures from elementary school. Even people I wasn't really friends with had written a sentence or two, regardless of how generic it sounded. My brother's yearbook, on the other hand, looked like a sign-in sheet. It was simply filled with signatures from all his friends and classmates. Maybe it was a boy thing? But when I asked him about it, he was confused by the concept. Write in a book? Silly. No one did that.

With the accessibility to laptops, cell phones, iPods and iPads, American youth are consistently 'plugged in'. With the introduction of laptops into classrooms as permanent fixtures, there is even less person-to-person contact. There is less need to be confrontational or interact with the thousands of people that surround us on a day-to-day basis. We can cancel plans by sending a text and e-mail our supervisors with some excuse about being 'sick' when in fact we're ridiculously hungover. Another interesting phenomenon among people in their mid-20s is a 'fear of the phone'. Every environment I've worked in, I've always had the 'I hate calling people' conversation with my co-workers (the most DREADED assignment for all of us). We'd rather alphabetize your files from the last 50 years than have to make a phone call. We aren't used to confronting people, or having to adhere to proper phone etiquette. We like to get to our point, in 160 characters or less. That's why e-mail was created, right?

Our economy is a service economy; we don't produce things but instead offer services that include attention, advice, experience and discussion. But with the younger generation losing vital skills that were once essential to provide service, it will be interesting how these educational changes will affect and evolve our economy. One example that we have already seen of this effect is with respect to medical self-diagnosis using the internet. Similarly, people also online shop (which appears easier and more convenient) than going to actual stores. With the current generation participating in less and less face-to-face interaction it will be interesting to see how these services will be provided.

In my opinion, introducing laptops into the classroom at a domestic level is something that should be discouraged, simply because children are receiving enough reinforcement using computers and technology outside of the classroom. Children in America receive their first iPods, cell phones and other gadgets before they even reach kindergarten; I'm even Facebook friends with my 6-year-old camper. Because of the excessive knowledge of computers that American youth have, introducing a 1 to 1 laptop curriculum in the classroom is more detrimental and distracting than useful. 

On the other hand, however, at a global level, a whole new stream of questions about a 1 to 1 laptop program arises. In developing countries, it may be that a 'good' education is easier to define: the government wants to provide the children with the skills necessary to assist the country in becoming on par with developed countries. Providing a laptop to children in developing countries has the possibility of opening many doors and opportunities that were not once available to them. As many research has shown, young children have the ability to navigate and learn how to use computers with minimal to no instruction from adults. A laptop should be available to these children in a classroom setting as an aide to the teacher, and could become the textbooks, books and other instruction that were once not available to them, all in a portable, lightweight gadget.