Risk Aversion

This has been the subject of a couple of posts now already, but to me, this is one of the most important questions about poverty alleviation.  How can we help the risk averse, those who are unwilling to take out loans or invest in income generating products, out of poverty?  As I have been trying to determine a thesis topic, this question has been at the center of my search.  I still, however, have been unable to determine a large number of possible solutions to this problem.  This is another opportunity for the 1 and 1/2 people who will read this post now, or those who read it in the future to share any thoughts you may have on the subject.

Aerating and Irrigating

I was reminded recently of an attempt I made in high school to start an aerating business during the summer break.  I determined that if I worked throughout the summer, I could make a good deal of money.  I figured I could make about $20 a lawn and that I could aerate about 5 lawns a day.  That comes to about $100 a day or $500 dollars a week.  Over a three month summer, I could have taken in over $6000 dollars.  For me, that would have been an extremely large amount of money.  However, I had one big problem, I needed an Aerator, which cost, somewhere in the visinity of $1500, if my memory is correct.  I went and looked into getting an aerators, but I had two problems.  I didn't have the $1500 to buy an aerator and even if I could get the money from my dad, I was far to scared that I wouldn't make enough money to pay him back by the end of the summer.  This effectively ended my plans to go into business as an aerator.
I realized that this is effectively the same type of situation many people in the developing world are put in when given the option to purchase income generating products, such as irrigation tools.  They may not have the money to invest.  However, even if they can get the money, they are likely to be to scared to buy the product in fear that they will not be able to turn a profit, and as a result, not have the money to provide for their families.  This to me seems to be one of the primary concerns when it comes to poverty alleviation.  How can we help those who because of lack of money, or because of fear that they will end up not turning a profit are unwilling to invest in these income generating tools?  If anyone who reads this now, or three years in the future has any ideas as to how to combate this issue, please share.

A Morning in the Rain

I had an interesting walk into school this morning.  I would say that it was a pleasurable trip, but it wasn't.  By the time I had gone two blocks from my apartment, I was both freezing cold and dripping wet.  I knew, however, that not far away was a lab in the Clyde building which is both warm and dry.  This got me thinking about those in extreme poverty who don't have a Clyde building where they run when the weather gets cold.  A greater sense of urgency has now come upon me, a sense that we need find a quicker way to get these people out of the conditions they are in, so they too can have a place to come in from the bitter cold.  And to do this, we need a greater number of people to pull together to help these, our brothers and sisters, out of poverty.

Kiva.org

I recently found a way that I can help to make a change to alleviate poverty right now.  I discovered a website, Kiva.org, on another blog.  This website is set-up to provide loans to people in developing countries who would be unable to receive a loan in a traditional method.  It allows you to contribute money, in $25 increments, to support these loans.  I was able to help finance loans for 2 small farmers in Peru.  Both of the loans periods are 12 months at which point I will be able to use the money to help other people.  Kiva has, I believe, a greater than 98% payback.  I haven't donated a large amount of money, but in the lives of these small farmers, I'm sure it means a lot.  I encourage everyone to at least take a look at this website to see if there is something that you can do.  Even $25 can make a large difference in the life of a person living in extreme poverty and by reinvesting over a ten year period you could make a great impact on the lives of 10 such people, all with the same $25 dollars.

The Two Sides of Poverty Alleviation

I have come to find that there are two effective ways to alleviate poverty currently being practiced, to fairly good results, around the world.  The first, as I have described in earlier posts, is involved in creating and selling products to those in developing countries to help them increase their incomes.  The other practice is that of microfinance loans.  These are loans made poor people who are unable to qualify for traditional credit typically because they have no credit history and no possessions to ensure that they will pay their loans back.  From what I can tell, the two of these methods have each contributed to helping tens of millions of people out of poverty, if not more.  The questions that I am primarily interesting in now are: what can be done to make poverty alleviation methods more effective?  How can we join these methods of product alleviation to better help the poor?  And, how can we help those poor people who are unwilling to take the risk of accepting a loan or purchasing an expensive product?  If anyone has a good answer to any of these questions, please let me know.

Out of Poverty by Paul Polak

I recently read a book called Out of Poverty by Paul Polak. This book was not only very informative, but it is the most intriguing new book I have read since I read measure twice, cut once by Norm Abram during high school. For approximately 30 years Paul Polak has spent his life on the problem of poverty alleviation. In the 1980's, he established a non-profit organization called IDE which has help approximately 19 million people throughout the world out of poverty. The book is filled with the things he has learned over the past three decades from small acreage farmers living in poverty all over the world. I would highly recommend this book to anyone and everyone.

Introduction

As this is my first ever blog post and as almost no one has any idea that this blog exists, I don't know whether this post will ever be read. However, for those of you who, like me, go back and read all of the old post whenever you find a new blog, I'll try and make this intorductory post somewhat informative. My name is Jacob Morrise. My wife's name is Cassanda, and we have one son named Steven who is 9 months old. I recently returned to school as a graduate student after spending a year working as a mechanical engineer at a goverment contractor in Salt Lake City, Utah. I graduated with my bachelor's degree in mechanical engineering from Brigham Young University - Idaho in December of 2008. As of the end of last month, April 2010, I am attending Brigham Young University, in Provo, Utah. Coincidentally, I am originally from Provo, Utah. I am working to get a master's degree in mechanical engineering as well as an MBA, and I am currently working on my thesis project. Although I have not selected a specific thesis project yet, the research is directed at discovering the methods needed to design products for the poor in third world countries that will help them increase their incomes significantly. It is because of this research that this blog has been created, and it is the topic of poverty alleviation that will be the focus of this blog. However, I will be adding some personal personality to the blog try and help make it more interesting. The main purposes of this blog is to try and get information out about poverty alleviation as well as to give me a place to put my thoughts on the subject. I understand that this blog may only ever be read by my wife and a few others, but if it is successful in winning over even one person to the cause of helping to alleviate poverty throughout the world, then I feel that it will have been completely successful.