TOPICS IN GLOBAL FINANCE:
MICROLENDING IN ACTION
BMGT 448
JANUARY 2012
Susan White
Professor
4455 Van Munching
(301) 405-8700
suwhite@rhsmith.umd.edu
Lily Griner
Business Librarian
McKeldin Library
(301) 405-9278
griner@umd.edu
Zaida Diaz
Business Librarian
McKeldin Library
(301) 405-9156
(240) 271-4090 (c)
zdiaz@umd.edu
Patricia Herron
Librarian: English, Spanish, Latin America
5101 D McKeldin Library
(301) 405-9280 (w)
(703) 975-9244 (c)
herron@umd.edu
This course is designed to help Smith School students obtain a real life learning experience where they will have the opportunity simultaneously to
(1) use the knowledge gained in their undergraduate studies, (2) experience entrepreneurship and small business operations first hand and (3)
affect the lives of people in an international community. This is a travel course that requires preparation, engagement while abroad and work on a
project upon return.
Expectations for Students:
1. Students will use their marketing skills and creativity to raise funds to support entrepreneurs in Nicaragua.
2. Students will act as consultants researching business problems/issues identified by the entrepreneurs, and develop
recommendations for ways to solve them.
3. Depending on the business situations the students may help with developing business plans, budgets and other documents as
needed.
4. Students will gain real-life understanding of microfinance; what works and what doesn’t, and what benefits microloans can
bring to entrepreneurs in a developing nation.
5. Students will recognize the opportunities and challenges inherent in cross-cultural experiences and in doing business in
Nicaragua.
Grading
1.
2.
3.
4.
Opportunity International project (possible projects listed below) – 30%
Work with Nicaraguan entrepreneur – 30%
Experiential journal writing/blog – 10%
Attendance and active participation, including pre-trip entrepreneurial assessments and speakers – 30%
Opportunity International project (group project)
You will write a paper, minimum 5 pages, and prepare a power point presentation to be presented to UAM students on one of the
projects listed at the end of the syllabus.
Journaling/Blog (individual)
Students will contribute to a blog on the trip.
Pre-trip work/active participation in UMD and Nicaraguan activities
This includes meeting with the team’s entrepreneur via Skype. This will also include pre-trip fundraising, but note that the grade will
depend on participation only, not the amount raised.
Work with Nicaraguan Entrepreneurs (group project)
Student teams will present their business plans and suggestions to help their entrepreneurs in Nicaragua. Teams will continue to work
with the entrepreneurs in Nicaragua. I will review the presentations prior to our leaving.
Additional Notes:
• Civil, courteous, safe behavior is especially important when traveling abroad. We will be guests and should act as such.
Students participating in this course must adhere to local laws in the places visited, and the UMD Academic Code of Conduct
and Code of Student Conduct will be enforced. Students are reminded to be cautious and not endanger themselves or others.
•
Students must comply with all the policies of the Smith School and the Univ. of Maryland College Park concerning Study
Abroad. See their website http://www.inform.umd.edu/studyabroad/
•
While no major schedule or course structure changes are anticipated once the itinerary is finalized, international travel requires
a degree of flexibility. Circumstances may change. Adjustments may be required, any materials, policies & announcements
distributed by email or as handouts or verbally announced.
•
Students should consult the U.S. Dept. of State’s Travel Warnings & Consular Information Sheets, available at
http://travel.state.gov/travel/cis_pa_tw/cis_pa_tw_1168.html and the Center for Disease Control’s travel advisories available at
http://www.cdc.gov/travel/
Opportunity International Business Research Topics to
Support Microentrepreneurs in the Global Marketplace
Background: Opportunity International is a 40 year old microfinance organization working with over 1 million microentrepreneurs
in 25 developing countries. In Nicaragua our work has focused on how to support microentrepreneurs to take advantage of today’s
global opportunities, specifically how to support their access to global markets for their products. Our cutting edge work in Nicaragua
is seen as a model for replication with microentrepreneurs around the world.
Our artisan support model contains two intertwined components:
NicaWorks: Is a best practice, peer-to-peer group that serves as an organizing vehicle to bring microentrepreneurs together to share
best practices, learn new production and quality control techniques and to share lessons learned. Equally important is that NicaWorks
allows Opportunity to develop relationships with its clients and create the loyalty needed to assure success in new product or sales
opportunities and assure consistent quality and distribution for international buyers. Ojala: In 2008 Opportunity created a distribution
company to market and sell clients’ products using the trademark brand Ojalá, meaning “God Willing”. Ojalá is influential in
assisting artisans to develop new products for diverse customers, increase artisan incomes, and access new, diverse markets. Over 140
products are being sold as part of the Ojalá artisan collection. Participating artisans have seen over a 20% increase in profit margins,
enabling them to expand, earn more, hire others and transform their lives. NicaWorks and Ojala are companion investments in artisans
to assure their businesses expand and grow with market knowledge, technical support and access to markets necessary in today’s
global marketplace.
Business Research Needed: Because our work with microentrepreneurs is innovative we are struggling to “systematize” various steps
and decision points to scale the work. This is where we need your help. There are three areas where we need help defining how to
grow and systematize our processes with microentrepreneurs.
Microfinance (not a project from OI, but one that may be of interest to students). Research sources of microfinance, including
how microfinance works, what are the benefits and pitfalls of microfinance, how to successfully obtain and use microfinance.
Business Plan Guide: Microentrepreneurs working with NicaWorks do not have business plans. Something that would be very useful
would be a facilitator guide and manual for microentrepreneurs to develop their own business plan. The challenge is that many are not
formally educated, so it would have to be developed in a simple way. This would be a tool that could be used with guidance from
NicaWorks staff… but our interest is to have the microentrepreneurs be able to walk through some sort of “manual” to complete a
simple business plan.
Assess the capacity of microentrepreneurs. In order to work successfully with artisans we need to have an assessment tool (survey
or questionnaire) that will provide us baseline information on each micro entrepreneur’s production capacity for their workshop. This
questionnaire is something that would be used perhaps 2/year to track growth/changes and provide vital information to the
microentrepreneur about areas of growth needed for their business to remain competitive. Project: research assessment tools or
“business audits” available, interview OI staff and select artisans to better understand key information that the survey needs to contain.
Develop sample survey’s or elements for NicaWorks clients to review.
Evaluate the OI operations in Nicaragua. Prepare an evaluation and recommendations on how to streamline, expand and improve
efficiencies to reduce costs/increase effectiveness of processing Ojala products for international markets. Project: Define all current
steps (process elements) of how a product moves from the artisan workshop to USA. Research system operation improvements and
define “decisions” that must be evaluated at each step as we grow the business. (For example, one element in the chain is choosing a
shipping vendor. Currently, because we ship small quantities of products, we use DHL and ship cases of products(very expensive).
We need an assessment and a type of “decision tree” answering at what scale… we can effectively move to other, less expensive,
shipping options such as air freight, consolidated shipping, or shipping our own container of products, etc. This type of assessment is
needed at every step of our business model.
Evaluate the OI operations in USA. Currently, when we ship artisan products to USA they arrive at the home of a volunteer in
Atlanta. She has converted her basement into a “warehouse”. It is from her home that she takes inventory, receives orders, re-packages
product to meet each order, prepares the invoice and ships to buyer (in USA). Project: As we grow, we need help defining when we
are ready to move from our current “volunteer basement” operations to perhaps renting a warehouse with a volunteer or hiring an
order fulfillment company to handle all aspects of fulfilling orders. Research is needed to define all elements of this process and
define order fulfillment options based on scale and costs. Provide recommendations on what minimum volume of sales are needed to
justify various order fulfillment options available as we grow.
Assessment of market viability for potential new artisan products: Opportunity needs support in researching and defining each
aspect of our artisan support work, beginning with an assessment of artisan workshop capacities and walking through the entire model.
In order to take this to scale, we need to begin to understand the systems and decisions needed to grow each element of our business
support model. Research what are successful processes used to consider new products to bring to the market place when working with
microentrepreneurs? OI works with many artisans with many diverse products. We need assistance in defining a process to assess
which products have the potential for success in the marketplace. Currently we purchase artisan products and take 100% of the risk
as to whether they will be accepted by our buyers and be competitive in pricing in the marketplace. This works on a small scale but
will not work as we try to include more and more artisans and their products. Project: What steps do businesses use to research the
viability of bringing a new product to market? How can we incorporate those steps and adapt our process of working with
microentrepreneurs in NicaWorks?
Volunteer Support: Research needed on how volunteers are being utilized successfully for artisan business development through
organizations like SERRV, Oxfam, NOVICA, 10,000 Villages, etc. These are highly successful organizations with established
volunteer-led projects. Research and recommend a volunteer program with roles and job descriptions that would support our business
model and provide microentrepreneurs access to ongoing support.
READINGS AND VIDEOS
About our partners:
Universidad Americana (UAM), College of University Studies in English (CUSE)
http://www.uamcuse.org/
Opportunity International
http://www.opportunity.org/
Opportunity International : Media Center: Videos
http://www.opportunity.org/media-center/videos/#.TqgZXnLEUTA
Suggested Videos from Opportunity International:
Microfinance – A Working Solution to Global Poverty (An Overview)
http://www.opportunity.org/media-center/videos/video-microfinance-a-working-solution-to-global-poverty-an-overview/#.TqgZeXLEUTA
Rosa Argentina, Baker in Nicaragua and Opportunity Client
http://www.opportunity.org/media-center/videos/video-rosa-argentina-baker-in-nicaragua-and-opportunity-client/#.TqgZ4XLEUTA
History and Culture of Nicaragua
US Department of State – Background Notes: Nicaragua http://www.state.gov/r/pa/ei/bgn/1850.htm
YouTube Videos
Nicaragua’s History & Culture – Careli Tours Nicaragua
http://www.youtube.com/watch?v=HF5E1M9ZM5Q
This is clearly a tourist video. What is nice about it is that it shows a number of the places we will be visiting and/or driving through: Masaya,
Granada, Los Pueblos Blancos, and San Juan del Oriente. It also highlights a number of the beautiful artisan works that are typical to Nicaragua:
hammocks, pottery, folk paintings, and furniture.
Nicaragua: An Unfinished Revolution
‘On July 19, 1979, the Sandinista revolution removed what many considered to be one of Latin America's most brutal dictatorships.
Thirty years later, and with the Sandinista leader Daniel Ortega once again in power, Al Jazeera's Lucia Newman visited Nicaragua
and found that many of the revolution's promises have remained unfulfilled.’
Nicaragua: An Unfinished Revolution Part 1
http://www.youtube.com/watch?v=LpEhi9XYllA
Nicaragua: An Unfinished Revolution Part 2
http://www.youtube.com/watch?v=URdzoDrp-Ss
Nicaragua: An Unfinished Revolution Part 3
http://www.youtube.com/watch?v=lxCImH9ZOq0
Nicaragua: An Unfinished Revolution Part 4
http://www.youtube.com/watch?v=p2lBOPvMWqc
Recommended Readings - Microfinance
Business solutions for the global poor: creating social and economic value. Jossey-Bass, 2007. MCK Stacks HD60.C624, 2005
Counts, Alex. Small loans, big dreams: how Nobel Prize winner Muhammad Yunus and microfinance are changing the world.
Wiley, 2008. MCK Stacks HG2390.6.A8G73 2008
Muhammad Yunus. Banker to the poor: micro lending and the battle against poverty. PublicAffairs, 2003. MCK Stacks
HG3290.6.A6Y86 2003
Saturday, Jan 7
Managua
Evening arrival
Travel day
Evening arrival -8:009:00
Managua airport
Hotel shuttle transfer to
Camino Real- check in
Welcome & orientation
meeting
Welcome bags
Itinerary & Q&A
Sunday, Jan 8
Managua
Casual
Breakfast at Hotel
Camino Real -8:00-9:00
Codice- upscale art gallery
whose Nicaraguan owner
travels throughout
Nicaragua
-LUNCH-12:30
Galleria at Santa
DomingoTour local trades market
speak w various booth
owners .
Tour -Mombacho
Chocolate Factory
( John Wyss owner to give
tour)
Reception at
English/Spanish
language bookstore with
businesswoman Susan
Bursey who will discuss
running a business in the
political climate of
Nicaragua.
Dinner at famous
Hacienda 6:00
W Music
Monday, Jan 9
Managua
Business Casual
Breakfast at Hotel
Camino Real - 8:00-9:30
UAM and UMD – meet
and greet
Visit La Prensa
Newspaper meet with
reporter
-LUNCH-12:30
Executive Lunch Buffet at
Princess Hilton with
director from
Opportunity
International Presentation
and Q & A
Presentation from
Alternativa (local microlending group)
Dinner- Donia Haydes
Lodging-Camino Real
Breakfast at Hotel
Camino Real 7:00-8:30
Drive to UAM campus
UMD students present OI
group projects to UAM
students/faculty 3 groups
(20 min each)
Q&A to follow
UAM students present on
topic of Family Owned
Business vs. Small
Business Ownership and
a Case Study
Q&A to follow
Trip to Pro Nica
Nicaraguan Investment
Promotion Agency
-LUNCH-12:30
LAFISE Bank Executive
cafeteria
Presentation by LAFISE
rep
(Financial Investment
Group)
Discussion with owners
of Pan Y Vino at
Frontera Books before
dinner 6:00
Return to UAM CampusStudents get ready for
program with OI trainers
on campus. 3:00-5:00
Dinner follows at Italian
restaurant located on
property.
Meals on your own
Tuesday, Jan 10
Managua
Business Casual
Dinner- Pan y Vino
Lodging-Camino Real
Dinner at local Buffet
Restaurant serving
Tipico Fare 6:00
Dinner- Ruta Maya
Lodging-Camino Real
Wednesday, Jan 11
Granada
Business Casual
Thursday, Jan 12
Granada
Business Casual
Breakfast at Hotel
Camino Real 7:00-8:30casual
Check out
Breakfast at Hotel
Corazon 7:00-8:30
Drive to Hotel
Corazon in Granada
Check in
UMD & UAM Teams
work with OI trainers to
fine tune
projects/possible
solutions
Tour International
Opportunities office
Walk/Shop around in
Granada
Travel to Catarina visit
Catarina Mirador
-LUNCHLunch at hotel with OI
trainers
Teams present summaries
of their projects/possible
solutions to other teams
and OI trainers with
Awards of Matching
Grants
Tour around Granada
Cathedrals/Museums as
group.
Dinner at well known
Parrilla Garden
Restaurant 6:30
Dinner- Zaquan
Lodging-Hotel Corazon
UMD students only
-LunchMi RanchitoTour artisan shops in new
village not functioning well
Talk /store keepers &
compare w/local shops
Drive to Masatepe
(famous for making
hardwood and Mimbre
furniture)
visit 2 stores(factory and
locally owned)
Discuss challenges
w/owner. Visit a
Cooperativa 3rd type of
business
Return Granada.
Free evening to walk
about etc
Dinner-on own in
Granada
Lodging- Hotel Corazon
Friday, Jan 13
San Juan del Sur
Business Casual
Breakfast at Hotel
Corazon 7:30—8:30
Check out
Saturday, Jan 14
San Juan del Sur
Casual
Breakfast at Villa
Isabella 7:30-9:00
Sunday Jan, 15
San Juan del Sur
Casual
Breakfast at Villa
Isabella 7:30-9:00
Monday, Jan 16
San Juan del Sur
Business Casual
Breakfast at Villa
Isabella- 7:30-8:30
UMD students only
Go to beach, church,
shopping, explore town
UMD & UAM
students work with
entrepreneurs in their
teams
UMD students only
Amayo Wind Farm
Tour and Luncheon
Tour and visit Local
lending library project
Free time
-LunchTravel to SJDS Tour
City Hall (Alcadia)
Visit w/ Mayor or
Vice Mayor of SJDS
Free time for canopy
tour, surfing lessons
etc.
UAM students arrive
in afternoon
UAM and UM Teams
meet as needed
Check into Hotel Villa
Isabella
Walk about tour of
SJDS
Prepare for upcoming
programs.
Meeting with SJDS
entrepreneurs
-DinnerBuffet dinner by the
pool w SJdS
entrepeneurs
Free evening
Dinner –Villa Isabella
Lodging-Hotel Villa
Isabella
Sunset time on beach
-DinnerAt Expat owned
Mediterranean
Restaurant With
Edwardo Holman
(Helping community
start a local Rotary
Club. Discuss benefits
of having our own
club
Optional speaker:
Tim Rogers political
analyst who is
intiating a new online
newspaper in English.
Lunch on Own
Dinner Colibri
Lodging- Villa Isabella
-Dinnerw/local business
expats
Talk by owner of local
restaurant on the
beach
Each UMD & UAM
student team present
their final projects to
the other teams and all
the entrepreneurs
Awards of Matching
Grants
Farewell Dinner at
upscale Seafood
Restaurant on the
beach w groups staff
etc. inc UAM
students.
Cultural Dance/Music
program
Tuesday, Jan17
Managua
Casual
Breakfast at Villa
Isabella- 7:30-8:30
Check out
Leave SJDS to
Managua- 9:00
UMD students only
Tour San Juan de
Oriente (village known
for pottery)
Wednesday, Jan 18
Travel Day
Casual
Depart Camino Real
5AM by shuttle bus.
Meet with successful
local potter (Juan
Palino) Tour Palino’s
home and studio
Depart 7:30 am (see
possible booking
changes)
Note: Program manager
handles check out
Check in as group
Managua Airport
5:30 AM
Lunch at Tip Top
Masaya
Volcan Masaya and
Natural History
Museum
Return to Managua- w
last shopping stops
Meet up w UAM
students for Final
Dinner
Invitation from UAM!
UAM returns to MGA
Return to Camino
Real
Lunch on own
Dinner El Globo
Lodging- Hotel Villa
Isabella
Dinner- El Timon
Lodging- Hotel Villa
Isabella
Dinner-w UAM
Lodging-Camino Real
Meals on own
TRANSPORTATION/HOUSING:
Students are responsible for making their own flight arrangements for travel to Nicaragua. You may travel on the same flight that we’ve chosen,
or, if you’re leaving from a different location, choose your own flight that gets to Managua at the right time. Arrangements have been made to
meet you at the airport in Managua and take you to the hotel where we will be staying – Camino Real. We will have a van to take us from
Managua to San Juan del Sur. Students also must make arrangements for their own passports.
Housing will be provided at the Camino Real in Managua (http://www.caminoreal.com.ni/ ), and at the Hotel Villa Isabella
(http://villaisabellasjds.com/ ) in San Juan del Sur. Housing in a double-bedded room at each hotel is included in the cost of the course. The
arrangements and costs for land transportation to and from Managua to San Juan del Sur; transportation for activities within Nicaragua; admission
fees to museums and historic sites identified in the program; and all breakfasts and either lunch or dinner each day from January 8 – 17 are
included in the cost of the course. Students are responsible for their own international flights; meals not included in the program; optional
activities (e.g., trip to Pelican Eyes resort, canopy tour, etc.); alcoholic beverages; and all personal expenses.