Micro Solutions for Macro Problems

There are few people who can be as self-satisfied as Muhammad Yunus. When he goes to bed at night he basks in the glow of his overall goodness, he must look at his family, Nobel peace prize and his billions of dollars and think life is good. His story is the greatest vindication of capitalism which so often is derided for exploiting the poor; he has proved that you can help the poor and make billions. His Grameen Bank started in 1976 in rural Bangladesh with only $27 in capital but now has distributed $6.5 billion in loans.

His business is the template for aspiring micro-credit businesses worldwide including those in Rwanda. In the years following independence, African countries borrowing billions of dollars for huge white elephant projects that were expected to kick-start our economies in the Keynesian model but alas this did not happen. It is only now that we see that the money would have been better spent if it was used for micro-credit. People are better at assessing their priorities or problems and more efficient than government bureaucracies, which due to their size and nature are slower to react to events on the ground.

The top-down model (trickle-down) has been proved not to work so bottom-up models are required, there will still be need for top-down leadership from the government but bottom-up solutions are more democratic, efficient and always have the support of the end-users. Micro-credit exemplifies this ethos, helping people to help themselves and letting them pull themselves out of poverty. Micro-credit is the solution to some of our problems but it has to follow strict rules in order to succeed.

Firstly the company lending has to think local and be in sync with its clients who are often poor. The firm has to abandon all the precepts of large-scale banking such as looking for wealthy clients and charging higher rates. The profit motive must be there otherwise the whole system will crash but the costs must be low and the lender must be sensitized to the problems facing the debtor. Likewise the lender will benefit by knowing the opportunities in the market as well as the pitfalls. Local issues occur independently of global issues; for example a drought in a particular district can lead to economic collapse while the next district is unaffected. Multinationals have the motto “Think global, act local” but in micro-credit it is “Think local, act local.

Secondly the sums lent must be small, in order for the client to be able to repay, for example people sometimes use a goat as collateral because it is the most valuable thing they own. This helps the micro-business to grow organically due to good management and not because of high start-up capital. This also helps limit the risk involved and lower sums mean that you can lend to more people. Micro-credit must help the society in general not single individuals as businesses need to develop alongside their markets. The small sums highlight the fact that micro-credit is needed just to kick-start businesses, sometimes people need as little as $10 to start a business but even that is beyond the means of many people in poverty. This also means that a successful business can be out of debt in a matter of weeks if all goes well unlike firms who borrow larger amounts and can be in debt for years. This also helps turnover money quicker because the quicker they pay the quicker they can lend somebody else.

Thirdly support must be given to the client, it is not enough to just give them money, you have to give them skills, moral support, more time to pay if necessary and help develop symbiotic relationships. It is not the lenders interest for the business to fold and everything must be done to help them. Nobody ever has the whole answer; local knowledge must be added to modern business practices to produce a dynamic system to deal with problems. Education must be very important to the lender and vocational skills must be imparted to borrowers. If the population is better educated then it more likely to succeed, issues like resource management are important because these are often rural areas in delicate eco-systems. The projects must also be sustainable, not only in the environmental sense but economically and socially. Local customs and traditions must also be taken into account.

Lastly, women are the key to the success; in their role as primary care givers they are more likely to spend money wisely. Yunus saw women as the key his success, the same applies to Rwanda where women underpin the rural economy. If a woman is educated then her children are more likely to be educated, and if a woman is economically self-sufficient then her children will be as well. This was seen first hand in rural Rwanda when micro-credit was first introduced, the loans were given to men as they were the head of the family according to tradition but the money often ended up paying for local brew and increased alcoholism. Women however were seen to be more sensible in their handling of money.

In the absence of banking for the poor, or the just generally disadvantaged, micro-credit can fill a void that established banks have left behind. There still needs to be serious regulation of these firms to make sure they are not charging extortionate rates otherwise they can end up just being loan sharks.

The hardest part of banking is scrutinizing the character and determination of the borrower to pay, when someone is borrowing they always promise to pay but circumstances dictate whether they will. Close community ties make it easy to keep track of debtors. Micro-credit develops in conjunction with the needs and aspirations of a community; for now people want money to buy a goat or heifer but eventually they will need money to buy computers or cars. Micro-creditors have to stay in sync with their clients and think like they do no matter how big they get. They can provide micro-solutions for the global problem of poverty, one person as a time.

By Rama Isibo




This New York Times blog is a delight to read even for people who are not particularly enamored with business and economics. If you think economics could never be fun or ‘hip’, this site will prove you wrong. Written by Steven Leavitt who wrote the massively popular book ‘Freakonomics, it looks at the more unconventional side of economics; written with wit and genuinely fascinating, Business Rwanda highly recommends it.


This is another fascinating blog in the same vein as the one above though this one is more link-based. There are dozens of links everyday on major developments and studies in economics, trade and finance and it is almost always illuminating. It’s a great way to be at the cutting-edge of modern economics.


The Economist magazine is widely known as one of the major authorities on world business but sadly many of the articles on this website cannot be read without a subscription on their website. This is why their blog ‘Free Exchange’ is highly welcome and gives the magazine a chance to tackle all the crucial issues in a more informal way.


This is the website for the Financial Times newspaper, possibly the media source which has the final say on all things financial. It covers the markets and most business stories comprehensively although those who do not fancy themselves as experts will find the lingo and the dry academic prose a bit heavy to deal with.


This is the business section of the acclaimed British paper The Times. It’s mainly centered on British business news although there is a world business news section.  


The Time magazine website has a business and technology page which is comprehensive and it offers fascinating interactions between business and politics in many of its comment pieces. This is a handy guide.


No Logo’, a book written by Naomi Klein explored the way corporations discovered and perfected the art of branding their products. Whether you agree with Klein that the shift towards the brand was a dangerous one or not, it is quite clear that the modern brand is here to stay and today we have the ‘brand’ in a variety of guises all following a similar template of product transcendence.

Curiously, despite a rapidly expanding business sector, branding has not quite taken root in Rwanda. In fact, only a handful of companies could be said to have embraced the power of the brand and the three most successful are familiar- MTN, BCR and Bralirwa

For sheer creativity, MTN reigns supreme. Being a continental corporation, it has had years to hone its craft before arriving in Rwanda, there is no denying that it has taken branding in this country to the next level. In fact, one can say that it gave birth to branding as it exists in the country today. Blanketing the media with ads, sponsoring countless events, setting up attractive billboards with their distinctive yellow- the MTN blitzkrieg has paid off.

MTN are clearly trying to anchor their brand in the mould of a vibrant and feel-good company; young at heart, but a veteran on the scene. Bold without being too brash, MTN tries to impart a sense of joie de vivre and through a plethora of sponsorships and programs, also aim to portray themselves as a caring company. With their new series of ‘GO’ adverts, MTN has shown its philosophical side, the ads are replete with inspirational messages, encouraging people to fulfill their potential and reach for the impossible.

This strategy is not without its dangers, the very ubiquity of the MTN brand does annoy some people and in some quarters, makes the company look like an aggressive invader of public space and the network problems that have plagued them over the last five months have not helped their image either . However, on balance, MTN have clearly been a successful and effective brand and have stamped their image on the public consciousness in a way no other company has managed to do.

BCR have also successfully branded their company and like MTN have tried to showcase their vibrancy. They have also placed an emphasis on innovation, repeatedly launching new promotions and incentives and have, like MTN, successfully straddled the line between coming across as being youthful and yet experienced.

In sponsoring Crossfire on Contact FM, they are also positioning themselves as the bank for the intellectually astute. Added to this package is the extra dimensional, in the form of surreal humor exemplified by the ‘How Do You Eat a Watermelon?’ billboards that have baffled and amused in equal measure.

With those billboards, BCR have signaled a boldness and willingness not to talk down to their market. They appear to have grasped one of the essential tenets of branding- it is not a literal manifestation of your company. If every company limited their advertising to exactly what they were, branding would be a redundant exercise. In this sense, BCR’s watermelon ad was a tremendous trailblazer. It may be too soon to tell how successful the ads have been, but it is fair to say that BCR is taking the art of branding to new and interesting levels in the country. And the mere fact that everyone has been talking about the watermelon ad marks out the campaign as something of a success, obviously the clearest indication of a branding misfire would be facing total apathy from the public.

Bralirwa has also achieved major success as a brand. Using the ‘Billboard Explosion Strategy’, Bralirwa has erected colorful billboards with young good looking people, whose lives seem to revolve around that oh-so-tasty drink. One particular billboard, featuring a woman taking a long gulp of a Coca-Cola, is a brilliant ad: utter satisfaction condensed in a single image.

However it is not all about billboards and soft drinks. Last year Bralirwa launched their sleek, new Petit Primus. Petit Primus was intended to target middle and upper-class drinkers who considered the older unwieldy bottle too cumbersome and suggestive of lower-income tastes. It is an interesting experiment and appears to have achieved a large degree of success so far. Indeed shifting the attitudes of the targeted market so dramatically is one of the most successful examples of branding in the country and is incredibly hard to do considering the task they faced in attempting to challenge people’s deeply held prejudices to one of their products. It also shows that sometimes the genius of branding is that utter simplicity can bring about a huge change, in this case making the product, smaller and more compact.

Yet aside from the big three few others in Rwanda appear to be interested in branding themselves effectively. Some have made partial progress. Rwandair Express has been making some big gains in this regard with their ambitious approach of trying to make the airline the very embodiment of the country’s hopes and dreams. A few others are showing some promise; Rwandatel for example is worth keeping an eye on as it reinvents itself.

However one wonders about the lack of presence of the other brands. Most attempts at branding from local companies come across as either half-hearted or unsuccessful. A good example is COGEAR. They have a catchy jingle accompanying their television ad but the ad itself is bland and, sadly, instantly forgettable.

Radio stations also provide a good illustration of this problem. Most of them don’t bother to create their own niche in the market or target any demographic- they merely play homogenous contemporary tunes and yet even the choice of music could prove to be a smart piece of branding. Likewise many companies are just a mass of indistinct, generic brands making little effort to stand out of the pack. Granted advertising, sponsorship and other methods of branding don’t come cheap, but neither does making your company distinctive name on the market.

Perhaps the underlying cause of the lack of branding is an aversion to thinking outside the box. The same mindset that sees a dozen pharmacies all open side-by-side on a typical street corner in Kigali. It is also likely that many companies simply underestimate the intelligence of the market little realizing that you don’t need a particularly sophisticated market to become a major brand. Advertising, the bedrock of branding, is often experienced at a gut level and few of us would be able to articulate exactly why an ad works for us because it hits us at more than just a conscious level.

It is also likely that many companies just don’t realize the value of branding and think they can do just fine without it. However with competition in all sectors growing increasingly fierce and with an increasingly sophisticated market out there, it is inevitable that branding is going to dominate the future.

By Minega Isibo