Assessing Community Empowerment in Social Impact

When it comes to assessment of social impact, economic metrics come to the top of mind without a doubt. Even if we talk about more intangible aspects of social impact such as improving abilities to perform various jobs or providing for family needs, raise of income level acts as the precursor that also leads to other aspects of social development.

There is a great of interest right now among key stakeholders in social entrepreneurship to talk about assessing intangible social impact. I think community empowerment is at the center of it.

We know what individual empowerment can do, it breaks cycle of poverty and gives the poor choices to make. The next wave of social development occurs when individual recipients of assistance turn into providers within the community. It is not just about the informal financial assistance to fellow community members, job creation through small-scale businesses or encouragement that they provide to community members to take up new challenges in improving living condition, but it is also a major breakthrough in self belief that they can do better to help others beyond self and family survival.

This positive chain reaction is critical to enable greater progress toward financial independence and sustainability. As much as we stress the significance of scaling social enterprises, I believe the underlying aspect is actually scaling and allowing community empowerment to thrive. It is something that we should not miss in social impact assessment.

Key Challenges of Online P2P Microfinancing

A small sum of loan can make a difference. Microfinancing pioneers have unyielding belief in this concept and the integrity of the poor to improve their own living condition with a small loan. By now, microfinancing concept has been replicated into myriad forms including online P2P microloan facilitators that raise and channel loans to partnered microfinancing institutions (MFIs) to help poor entrepreneurs in developing countries.

To show this form of microfinancing works, its performance assessment is generally based on the amount of loans raised and sent, number of poor entrepreneurs who benefit, income rise and repayment rate in an attempt to quantify success. But when working in a distance and lacking the capacity to conduct regular field visits especially during start-up phase, there is a lack of first hand account and collective assessment to track social impact for all those who access microloans. I do not think individual success stories produced by partnered MFIs alone are sufficient. Indeed, the reliance on partnered MFIs is a necessity but I expect the future demand on online P2P microloan facilitators will be getting more involved on the ground with MFIs to serve poor entrepreneurs.

No doubt that the intention of online P2P microloan facilitators is to create opportunities for the poor to become entrepreneurs and generate income on their own. But a hybrid model of donation & investment is still inherently a dependency model where money mostly flows from wealthy countries to the poor. I am not trying to debate on ideology of where financing source should come from, but I think it is equally important to assist partnered MFIs to be financially sustainable in offering microloans and expanding coverage through combination of interests earned and saving pools. I believe online P2P microloan facilitators should have a plan to exit, it is just as important to recognize local MFIs and communities of entrepreneurs need to thrive on their own to make real progress.

Market Liberalization in Myanmar?

WSJ news cited from Reuters and informal sources that Myanmar's junta is planning to start a new wave of privatization. There is still no official announcement, the deals to sell off state enterprises are still shrouded in secrecy and the junta's intention is much speculated. Well, we may never hear any justification from the junta but at least it leads to an intriguing question that hardly anybody can imagine that it could be relevant in Myanmar – Has market reform begun under junta?

Some government insiders are quick to praise the move as Myanmar's intensified effort to join global economy from its relatively isolated position. But facts cannot be hidden, previous privatization deals dubiously fell in the hands of junta cronies.

So claims of market liberalization are very much laughable when the junta still rules with an iron fist. And democracy critical to market liberalization is simply dismissible when there is no citizen-accountable and transparent governance in place. Well, other than accountability to suspiciously guarded valuable natural resources.

Thanks to the leaks anyway, but market reform? It must be a premature jubilation. We are probably waiting for a few more enriched cronies to surface.