It was a very contrasting set of emotions today. On the one hand, I am really happy that I have gained valuable experience working with a microfinance bank and pharmaceutical in Pakistan. On the other, I probably know deep in my heart that in general, nonprofits are not for me, and no matter how much I want to help my people, it will probably have to be in a different capacity. I expect my ideas about a career to become more concrete as I plough through senior year.

Having two subsequent internships was a very rewarding experience. At Pharmagen, I was working directly with the Head of Water department, while at Kashf, I was working as member of the Operations and Research department. The work assigned was very different too. I worked on one project throughout the course of the internship at Pharmagen, while I worked at different things almost every day at Kashf. The field trips at Kashf were probably the biggest draw, while Pharmagen provided some valuable networking opportunities.

When I did not find the right opportunity in the US, I came to Pakistan, started the internship process very late, worked the phones day and night, and eventually obtained the relevant internships related to finance and nonprofits. My cold-calling experience at First Financial was a good stepping stone to my work at Pharmagen and Kashf this summer. I look forward to connecting these experiences with full-time opportunities in the Fall.

During a scheduled meeting with my supervisor at Pharmagen, I was joined by a Caltech phD who also happened to be working with Acumen Fund. It was great chatting with him about cricket, Pakistani politics – but most of all – his career trajectory in the United States. He was very knowledgeable about finance, and offered me some tips on breaking into impact investing.

Today was exhausting. I can barely walk, having spend the better part of the day during a field trip to Kashf’s branches in low-income areas of Lahore (Thokar Niaz and Green Town). I conducted exit surveys with former clients (or bajis for “sisters”) who had repaid their Kashf loans accompanied by BDOs (Branch Department Officers) – two in Thokar Niaz, one in Green Town I, one in Green Town II. I had a firsthand view of poverty in Pakistan. Needless to say, it was eye-opening (not heart-wrenching though*).

All the customers naturally were female business women, and treated me like their noble guest (and the BDO like their family). The first two customers were really happy to take my questions, satisfaction pouring through their eyes. They repeatedly stated the friendliness and flexibility of the staff (the BDO) for preferring the services provided by Kashf over other MFIs. The third client was in a hurry, and answered questions while standing outside her gate (considered rude in our culture), while the fourth client answered my questions randomly. All of them were nice and offered me water, but since I was fasting, I politely refused.

Three of them agreed with the high interest rate (20%) required to take a KAK loan, which starts at Rs. 25,000. As the BM (Branch Manager) explained in Thokar, the loans increase in 5k increments to a maximum of Rs. 50,000. None of the customers borrowed more than Rs. 30,000, while some of their family members hinted that they had taken loans from other MFIs too. Again goes to show the importance of the common Credit Information Bureau (CIB) for MFIs in Pakistan.

I did a little PR for Pharmagen with client 2 when she complained of stomach aches. I told her and her son that Pharmagen sells filtered water for as little as Rs. 1.5 / liter. They were delightfully surprised.

* sign of maturity

At Pharmagen, I am developing a business plan to pave the way for a franchise-based expansion of the firm. First, I began with reading through a LUMS MBA project about the marketing and branding strategy of Pharmagen’s water shops. I also researched online, especially on Acumen blogs, about the role Acumen played in developing Pharmagen’s first project. I synthesized what I learned by discussing it with my supervisor, who was happy to answer my myriad of questions. Now, I am applying the knowledge to a business plan. I want to have about 8-10 sections, and recently concluded Section 4: Marketing.

At Kasf Foundation, I worked on helping create an English version of the operations manual used by Branch Managers (we call them BMs) across Pakistan. I edited it in Word, and learned quite a few new tricks along the way, such as how to create a table of contents and how to align all bullet points in a document (yeah, I didn’t know that!). I am guessing they will save me a lot of time once I start working on my senior thesis.

Currently, I am working on a research report about the need for Credit Information Bureaus (CIBs) in Pakistan.

Three controversial pieces in the Stanford Social Innovation Review poke many holes in the impact investing industry. Here’s part 1, part 2, and part 3. Patient capital has to be really “patient” for impact investing to create any lasting impact, for there are precious few nonprofit ventures that generate any returns even in the long-run. One way impact investors can reduce their portfolio risk is to partner with the local government, which can offer incentives to susidize market failure.

As Laura Hattendorf states in part 2, some risks are unavoidable, and leave few successful social enterprises.

Cash flow projections are wildly unrealistic, management teams untested, and market failures unacknowledged. There’s 10 times the risk profile of a standard US venture deal without the same potential upside.

Because the risk is so large compared to the reward, which is meager at best, financial returns should be eliminated as the yardstick for measuring the success of investments in social enterprises. The bottom line should be impact.

The natural question then arises: What is impact? At Acumen Fund, impact is the total output of goods and services produced by a nonprofit. While other organizations may have different definitions of impact, it is important to start somewhere.

Kevin Starr states in part 3:

What’s weird to me is that while all impact investors know that you could never maximize profit without measuring it, they often fail to recognize that the same is true of impact.

To deal with the problem of measuring impact, impact investors should decide either:

  1. What level of return they want, and then shop for firms producing the most impact at that level of return; or
  2. The level of impact they want, and then shop for firms producing it at the highest level of return.

Overall, impact should be consistently measured and reported across the industry. Only then can we see the initial promise of impact investing coming to fruition.

I visited the Acumen Fund office in Lahore today. After cold-calling for a couple of weeks, I got to sit with the Portfolio Manager for 15 mins as I pitched myself, and my Gettysburg education. It was difficult to explain what I wanted to do with my interests in Economics, Psychology and Business, but I think he got the gist that I was a consciousness student willing to work hard. Hoping to hear back in a week!

Update: I will be working with Pharmagen, one of Acumen’s affiliates in Pakistan. Pharmagen’s mission is to provide safe drinking water to low income households in Lahore. I will be helping them with a project backed by Acumen Fund.

I will also be interning part-time at Kashf Foundation, another Acumen investee. It is a nonprofit microfinance institute dedicated to alleviating poverty by providing financial services for low income households.

Just like the oft-repeated advice parents scour on their children – “work hard and money will come naturally” – impact investing seeks to fulfill social goals over financial benefits, in the hopes that the former would lead to the latter. While Acumen Fund has shown over the past 10 years that this indeed is possible, many more aggressive firms are entering the impact investing industry with dreams of making bigger profits. Whether they succeed or not will not only affect their bottom line, but also shape the industry for many years to come. It seems that impacting investing is following a similar trajectory to microfinance, which showed enormous promise initially, but eventually became another vehicle for exploiting the poor. I hope Acumen can stand and lead from the front.


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