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Muhammad At-Tauhidi
Philadelphia, PA
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Muhammad signed the petition | -
Muhammad signed the petition | -
Muhammad commented on the article |Ive been following along all day at work. I like Citysourced a lot too. They are not the very first to do something but i think there is a lot of room here. What would be really interesting to me would be see a way of combining citizen-to-government channels like Citysourced with citizen-to-citizen channels like TrafficTweet (http://diycity.org/challenge-response/first-response-diycity-challenge-1-traffictweet).
Healthywage is interesting, but I am not sure whether its value will really come from financially motivating to make healthy lifestyle changes or if it really more of a way to help identify and vet people who are already living a healthier lifestyle than average for the benefit of insurance companies.
Glide Health also seems worth a look. http://www.techcrunch.com/2009/09/15/tc50-glide-health-lets-docs-and-patients-access-health-records-across-mobile-and-desktop-platforms/
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Muhammad signed the petition | -
Muhammad commented on the article |Love this story. I tweeted (@MuhammmadAtt) and blogged (http://cr8destroy.wordpress.com) this the other day. . :)
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Muhammad commented on the article |There is no doubt that trying to stimulate economic opportunities in Palestine like swimming upstream, but I cant think of a place where social enterprise is more needed. A friend of my mine is one of the founders of LendforPeace.org, which is a Kiva-like platform focused on Palestinian entrepreneurs. I think this type of thing is even more important that what Kiva has done in other places because it address problems on two fronts: not only does is provide capital where it is needed, but just as importantly it helps humanize the plight of those living in Palestine. Willful ignorance about conditions in Palestine and a general dehumanization of its citizens behind a wall of rhetoric, particularly here in the U.S., is a large part of why these conditions are tolerated. I agree that little is likely to change without a broader political solution, but social enterprise ought to have a role to play there as well.
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Muhammad commented on the article |Spencer -
Feel free to present a contrary point of view but I would appreciate if you kept the personal comments to yourself as I dont see how they particularly helpful.
To your point, the fact that some people in the U.S. cant get credit cards, or can only do so with high interest rates, is not the same as saying there is a market gap.
The situation among the poor in emerging countries was that these markets were completely ignored by traditional financial institutions. There was simply NO underwriting going on in these areas because the market was not well understood and because sizes of the loans were unattractive within traditional banking models. What Grameen et al. did was show that these markets where actually far better risks than traditional finance had anticipated.
That is simply not the reality in the United States. Credit card companies and other are very actively engaged in underwriting (underwriting = pricing of credit risks) at the low end of the United States market. These markets are not "overlooked" - on the contrary, financial institutions have looked at them closely and decided that they are risky (and have priced credit accordingly). The fact that some people can only get credit cards with high interest rates does not mean there is a market failure – it just means that some people are not very good credit risks. Under these circumstances, it seems less likely that Kiva knows something that traditional finance has persistently overlooked.
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Muhammad commented on the article |
I just got back from a conference in DC on something called New Market Tax Credits - a federal program designed to encourage capital investment in low-income neighborhoods in the United States. While there I spoke to someone who works at a community development financial institution whose mission he described as "Banking the Unbanked." Among other strategies, they also do a small amount of microloans and we got to talking about Kiva's expansion into the U.S.
Now this person (a very knowledgeable guy) had a pretty critical appraisal of the potential for Kiva to replicate their model in the U.S. His basic take was it is a lot harder to raise a meaningful amount of money for a small business in the U.S. than an entrepreneur in Kenya. Raising $500 in financing from 40 people who each contribute $25 makes a very meaningful difference for someone who otherwise makes less than $2 a day. But $500 is unlikely to be a "game changer" to a business based in the U.S. So Kiva will either need to attract a LOT more supporters or much larger loan sizes in order to have more than a negligible impact in the U.S.
His second point was that it is not clear that there is a true capital gap in the United States for Kiva to fill. Providing loans to developing countries is valuable because it addresses a true inefficiency in the capital markets. But loan amounts of less than a few thousand dollar are readily available to most in the United States through credit cards. So in the United States, Kiva is unlikely to solve a capital inefficiency as much as they are simply competing against Amex.
I am sure that Kiva has thought about these issues, but it will be interesting to keep on eye on how they adapt their model the the U.S. environment. -
Muhammad commented on the article |
"In a fascinating twist to the story, TechCrunch points out that while other peer-to-peer lending sites like Prosper and Lending Club have gotten into trouble with the SEC for offering a security-like instrument that actually has a rate of return, Kiva is likely fine because they don't have any rate of return, making the funding a charitable donation. This continues to be a fascinating case of where it makes more sense for a social enterprise to stay nonprofit."
It is not often that I get to use my law degree on here, but just a quick clarification on this -
The reason that Kiva avoided the SEC scrutiny that snagged Prosper is because Kiva loans do not pay interest or any other return - therefore they escape the statutory definition of a "security" - not because Kiva was formed as a not-for-profit entity. Non-profits can and do issue securities (such as notes) and when they do, they are generally equally responsible for complying with securities laws as for-profits. -
Muhammad commented on the article |One blog that somehow escaped both the entrepreneur list and the VC list is Paul Graham's at http://www.paulgraham.com. Paul is the man behind what later become Yahoo Store and one of the folks behind Y Combinator. His essays on startups are absolutely positively must reads for anyone involved with or thinking about launching a startup.
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