Mike Murray - What the guy who wrote shrimp and weenies memo is doing now

give a man fish and you feed him for a day, teach him to fish and you feed him for a life time(授人以鱼不如授之以渔), money can not solve such a complex problems, and to hold down employees wages is very dangerous(lost passion), there are must be volunteers in a company who can do this job well, such as  Bill & Melinda Gates foundation  they understand above proverb well.

True, but give a man a match and he'll be warm for a minute - light a man on fire, and he'll be warm for the rest of his life.

I definitely think this video was a good investment of my time, and its inspiring to see people like this helping the world.

I must say though that to all the young people I highly recommend that at your younger ages focus on learning and growing yourself. If you invest too much of your time and effort when you are younger into saving the world you wont have time to grow yourself, and will never be in a truly powerful position to help others like this man can because he earned a lot of money and got plenty of contacts working at Microsoft.

As for giving to the world vs. your local community I think most people should have a 80/20 mentality. Give 80% of your time to the people closest to you and give 20% to those who are far away. Again I believe in this since if you let your community evolve and help those close to you, those people and you over time will constantly have to give less internally and will have more power to output externally. If you focus too much externally when things are broken at home you risk having issues arise around you that will prevent you from giving externally completely in the future.

I for one try to practice what I preach by giving time and money to my community through my volunteer work with the police department and various giving’s. Occasionally I will donate to larger world wide organizations to help fund relief work and that is in my opinion a great way to work.

To close this out I do want to add one thing, the man is right, geeks are really natural problem solvers.

the another way to hold down the cost is to break the unimportant team likes Visual C++ team, and move it to more cheap employees country likes China, of course MS should keep their important team likes Visual Basic and .Net team in US.

C++ is unimportant?  Apparently, not according to the most recent TIOBE ratings:

Position	(Position)	Programming Language	Ratings	(Ratings)	Status
1		Java	21.871%	+4.82%	A
2		C	18.773%	+0.60%	A
3		C++	11.820%	-3.75%	A
4		PHP	9.671%	+2.25%	A
5		Perl	7.449%	-1.37%	A
6		(Visual) Basic	6.896%	-2.86%	A
7		C#	3.462%	+1.82%	A

I think Mike is talking about better bandaids---even better than what the International Monetary Fund does "for" people in need. I am curious about what Vandana Shiva or Wangari Maathai thinks about these loans.

And of course this conversation is devoid of the possibility that these "poor people" were deliberately underdeveloped by powers greater than the worldly W2 employee confident about what the "third world" really is.

Poverty is not natural. Poverty happens when people are taken out of the world of nature. And it is so, so sad to assume that living in the world of nature has nothing to do with "advanced" technology. This assumption is what is actually stupid.

dantheman82 wrote:

C++ is unimportant?  Apparently, not according to the most recent TIOBE ratings:

to us, not, to MS, yes, because of less enhancement in VC++ in recently years, i heard that most of developers used to VB, the 80/20 mentality told us that 20% are best of best, and the rest is unimportant(20% of population control 80% of resource), that's a reason why VB is popular.

Unfortuneatly, poverty IS natural. To be more precise, it's an aspect of human nature. By default, people are lazy at best and downright destructive at their worst (see Cain, Nero, The Crusades, slavery/racism, Hitler, Stalin, Hussein, etc., etc.). Given this fact, it's no wonder there are many people in the world who live in poverty.

This is not to say that there is no hope for mankind. Things like technology are evidence of this hope (technology = applied knowledge = productivity = prosperity = order). Rather, I'm just pointing out the difference between how things should (in the philosophical sense of the word) be and how they are.

In fact, from my brief exposure to microfinance, I'm inclined to say that it seems like a very reasonable approach to the problem. It holds people accountable and invites them to join the prosperous in being productive. This is part of the kind of encouragement and motivation that is required to overcome human nature. To add another cliché, it's a hand up rather than a hand out.

A very moving cause.

I have been looking at DRIPs (Direct Re-Investment Plans) lately.  This looks like a better investment.

I'll coin the phrase DROPs (Direct Re-Investment Opportunity for Poverty) to describe Mike Murray's objectives.

Do you know that only 2% of philanthropy in the US goes outside the US.

With a $100 loan, a woman can purchase a water bucket & a dairy cow.  It will take 2 years to pay off this loan.  By 7 years she will be self-sustaining and her family will be able to go to school.  Her family will break the cycle.

Over 7 years seems like such a long time for the 30-second MTV generation.  How can we do this faster?  (hope I quoted him right on that)

How do we get this money to the people, and be sure it gets there?  Paypal?  Mail?  The journalists who risk their lives every day, like Kevin Sites?  The aid workers who have access to the Internet? Eco-tourists who want to give a little extra? Are there banks or money transfer stations people can go to?  How does this get distributed?

How do we see the results of our donations?  Some ideas. The Million Dollar Home Page becomes full of people's joyful faces for each hundred dollar loan.  Digg becomes a list of different testimonials from the field on how people will use the money, with dugg people receiving more loans.  Slashdot, well, Slashdot better not change.

Microfinance is a great idea that sounds like it just may work.

Read this book if you want to open your eyes to the world of insurmountable poverty.

Not so much agreeing with that Smurf Video though.  There are many other ways to get your point across with positive messages.



Click. Click.

Interesting video...I've heard about the micropayment systems a few times before...however, what jumped out at me was the interest rate.

20 to 30%?!

How is that compounded? What are the terms of the loan? Even simple interest would rack up quite a bit of money.  I think the whole "responsibility and accountability" argument (as opposed the "free handouts" if you really want to give them that label) is intriguing and would have some benefits.  But I can't imagine the overhead on such loans costs 20 to 30%.  If the operation is as efficient as you say it is, and some of the implementation is passed of to other non-profit organizations, why such a high rate? What, just because it is below 300% that the local loan sharks offer, it is a better deal?

Are you actually teaching these people how to stay out of debt on top of this? Is there any financial educational process that goes with this? Or are you just handing out loans and in a sense "conditioning" them to become dependent on credit/loans in the future?  You can talk about empowerment all you want, and building businesses, but if you do not teach them anything about money in the process, the cause is potentially lost.  Many first time businesses fail for lack of financial education. Or are you saying they are already educated in terms of the marketplace and this offers them just enough of a lift to get out of poverty?

billh wrote:

Interesting video...I've heard about the micropayment systems a few times before...however, what jumped out at me was the interest rate.

20 to 30%?!

How is that compounded? What are the terms of the loan? Even simple interest would rack up quite a bit of money.  I think the whole "responsibility and accountability" argument (as opposed the "free handouts" if you really want to give them that label) is intriguing and would have some benefits.  But I can't imagine the overhead on such loans costs 20 to 30%.  If the operation is as efficient as you say it is, and some of the implementation is passed of to other non-profit organizations, why such a high rate? What, just because it is below 300% that the local loan sharks offer, it is a better deal?

Are you actually teaching these people how to stay out of debt on top of this? Is there any financial educational process that goes with this? Or are you just handing out loans and in a sense "conditioning" them to become dependent on credit/loans in the future?  You can talk about empowerment all you want, and building businesses, but if you do not teach them anything about money in the process, the cause is potentially lost.  Many first time businesses fail for lack of financial education. Or are you saying they are already educated in terms of the marketplace and this offers them just enough of a lift to get out of poverty?

Sounds like a credit card to me...  Maybe if they don't hold a balance after a month they won't have to pay interest? 

A summary of the lending rules the company uses would be of interest.

A few of you have asked questions about the interest rates on microcredit loans -- why 25-35%?  Sounds like a rip off!!

Here's the skinny:  Microfinance institutions (MFIs) are the on-the-ground organizations that make the loans to very poor men and women.   6-8 women (or men) agree in advance to form a lending group.  They agree to help each out in the event that one is unable to repay her loan.  The MFI then enters the picture and provides serveral training sessions.  Then the loans (averaging $100) are given to the women.   The women agree to meet at a set time, on a weekly basis, to make loan payments.   The loan officer from the MFI arrives on his/her scooter and collects the loan payments, answers questions and does the paperwork.  The loan officer zips around to a number of villages having similar meetings.  If an MFI has 40,000 clients -- with all clients making weekly repayments -- you can imagine the number of loan officers, scooters, laptops, etc. required.  

The average cost of funds for MFIs in India (for example) is 8-11%.  This is how much the MFI pays to borrow money from local big banks -- in order to have money to lend to their borrowers.  By the time all the costs of running the MFI are loaded into the budgeting spreadsheet, the MFI is required to charge a 25-35% interest rate in order to cover all costs.   These interest rates are often equivalent to the prevailing credit card interest rates in the respective countries in which we work.  Without such microcredit loans, the poor are forced to borrow from money lenders and loan sharks at interest rates of 300% - 3,000%.

MFIs are NOT in the business to make a ton of profit.  On the other hand, if they are running at a huge loss, then they won't be able to repay THEIR loans that they've received via large lines of credit from commercial banks in their home countries.

Unitus strives to lower the cost of running an MFI by streamlining internal operations, improving I.T. infrastructure, and lowering the cost of capital.  This will have a two pronged benefit:  (1) The interest rate the poor woman pays will be lowered and (2) the MFI will be able to scale its operations more rapidly.

Microfinance is not the panacea to all the world's ills - but it is, in fact, a very powerful and reliable tool for empowering the poorest people in the world.

Please let me know if you'd like to learn more. 

Mike Murray -- mike@csf.org

I donated to Unitus!

I found the interview quite inspiring and informative.  Based on some of the commentary here, I also took a shot at answering some of the questions. 

It seems pointless to view the terms of these loans relative to the US credit markets and lending environment.  Since none of us are living in a third world country subsisting on $2 per day, it makes no sense to wonder what seems like fair terms.

We just can't think about terms for these type of loans from our world.  For example, how many traditional US banks would lend $100 to someone with no assets, no education and no income?  I would suggest zero. 

Rather than compare 20%-30% to our mortage rates, we should be comparing them as Mike does to their market of 300%+.  Even so, a a rate of 20%-30% is not far off from credit card rates.

Micro-credit is all about economic self-reliance and empowering an individual to lift herself out of poverty.  Increasing sustainable income decreases vulnerability. It empowers individuals to overcome the inequities of the structures that produce and reproduce poverty.

Unitus is a great example of innovation and leadership.

More about my analysis of micro-credit on http://www.leadernotes.com/">http://www.leadernotes.com

Thanks, Mike, for replying, and I'm hoping my previous reply was not considered an "attack" on the process in any way.  I'm just more interested in the bigger picture, and yes, I can do further reading. But to appease all the people in this thread who interpreted it as an attack, I just want to say that this is one of the better videos I have seen here, and it was a great change of pace from all the heavy-tech related videos.  The overhead issues make more sense now, and thanks for that explanation. 

Just out of curiousity, would it be possible, instead of the MFIs taking out lines of credit from commercial banks, to instead start up your own institution strictly to fund the MFIs?  Then you could cut down the on the lending rates (as opposed to what the commercial banks are charging you right now), which would help you to cut down on the interest rates that are offered with the microloans, possibly accelerating the "trip out of poverty". 

The next question is, well, how do you fund such an entity?  Perhaps by taking a piece of the 25-35% that is currently charged and investing it somewhere, then using that capital to fund the new institution. Of course, I understand that you would have to take the money out initially from commercial banks, probably for lots of various reasons, from funding overhead issues to the micro loans themselves, to transportation costs, to laptop costs, etc. However, since things are more or less still "getting going" in this whole process, that is pretty much how you would have to start out anyway.

Now if MIT would get going on those windup PC laptops, the tech overhead would drop further.

Anyway, now you have me wondering about safety issues for the loan officers (or whoever is travelling on the scooters).  Is there going to come a point when the loan sharks start coming after them (through intimidation or physical violence) because you are beginning to cut off their source of income?

Perhaps I should take these questions offline...

halh wrote:

It seems pointless to view the terms of these loans relative to the US credit markets and lending environment.  Since none of us are living in a third world country subsisting on $2 per day, it makes no sense to wonder what seems like fair terms.

Hopefully this was not directed at me, but if it was...well, I wasn't comparing "my little world" to theirs.  I was asking about financial education for a reason.  Like I said, many first time businesses can fail, although the loan repayment rate of 98% is stunning.

halh wrote:

We just can't think about terms for these type of loans from our world.  For example, how many traditional US banks would lend $100 to someone with no assets, no education and no income?  I would suggest zero. 

 
I wonder why that is? It's a tough issue with no easy solutions.  Other than to stop flooding people's mailboxes with credit card offers. How about some educational materials? They are readily available at the public library.

halh wrote:

Rather than compare 20%-30% to our mortage rates, we should be comparing them as Mike does to their market of 300%+.  Even so, a a rate of 20%-30% is not far off from credit card rates.

It's one thing to help a person to a better life.  It's a different issue to help educate them to avoid falling into traps (that other people might set) later on. I think you are misinterpreting my point of view...I think it is a solid idea...however, the money can be made to work even harder for the women with the microloans if they are further educated financially.

Good comments and additional insight ad perspective.  I agree that an important step for these new entrepreneurs is education.  I checked out a few resources and it looks like providing additional educaiton (and how to pay for it) is an issue.  Generally the focus wasn't on debt education but was more focussed on basic needs like basic healthcare, nutrition, education, disease prevention.  But the idea of gathering the brorrowers together in a community to share ideas and learn together in all of these areas seems to make sense.  Financial education will likely follow these more basic needs.

It is all baby steps. You would hope that those that had succeeded would then share with the starters and that some form of mentoring (villager to villager) could eventually occur.

I hate to interrupt the party, but I have to, to put these things in a broader perspective.

The Unitas-Campaign is a noble thing.

The "issue" is: it is not enough to 'donate' money/time to support the idiosyncrasies of 'things' you feel appealing (=poverty, environment, education etc.)... - Living a life in a rich country by applying to the rules of neo-captialism and then redeem yourself by donating money before "Christmas" out of guilt is a 'very christian thing' to do. But religion is not a good adviser to solve political problems. And these are political problems. 

If you really want to do "good" change global politics. Get your politicians to act on your behalf. Pay the prize for oil/energy. One US-Citizen spends 10.000times more energy DAILY then someone in Somalia ever could. Free trade would mean: let those poor countries participate. Don't dominate the global prices for goods by trading bets on WallStreet. Europe is selling their subsidized overproduction to African States so that those last farmers there can't sell their own products. And when tose poorest of the poor try to reach Europe, they will find fences or bullets. Look at the mexican border.  

BAFTA, WTO, G8 are all clubs the poor world is not invited to. Change politics first. It's a reasonable, ethical thing to do.

And THEN, you - as an overwealthy member of the rich and famous - may deal with your 'personal' "I-like-this-NGO-better-because-I-like-xyz-too"... the rest of your life.

Have a nice day.

I think someone at google was watching this: www.google.org

Hi,

This was one of the most interesting video interviews i have seen on channel 9.

I wish all success to Mike Murray and his team in his endeavour.. Good work mate..

Anil Narayanan