The Colgate Scene
July 2001
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A hand up

by Rebecca Costello

A secluded, undeveloped Samoan beach.
"We're trying to provide opportunities so that poor people have a motivation to succeed," says Greg Casagrande '85. A capitalist with a social conscience, he is president and founder of South Pacific Business Development (SPBD), which provides no-collateral microbusiness loans to poor women.

     From 1990 to 1998, Casagrande had a successful corporate career in progressive financial management positions at Ford Motor Company. He eventually became the youngest Bucho in Japanese corporate history as a general manager within Mazda in Hiroshima, Japan shortly after Ford took it over.

     "The reason I got into Ford was because I was interested in economic development and private sector solutions," Casagrande remarks. "I tried to steer myself into the direction of developing Third World businesses. We were building plants, creating jobs and putting major infrastructure into the developing world, and I liked that, but of course that's not the bottom line objective for Ford. So it was kind of my secret agenda," he chuckles. But ultimately, Casa-grande says, "I wanted to do something that would make a more direct positive impact on society. I was interested in poverty alleviation and started looking for leading edge ways of doing it."

     Casagrande notes that his Colgate experience was instrumental in formulating this interest. He spent his first January term in Washington, D.C. with the Community for Creative Nonviolence, "my first activism project," sleeping in a tent city in Lafayette Park and gathering discarded food cans from dumpsters to feed the homeless.

     His economics major interested him in finding tools to reduce poverty. The London study group set off his passion for international affairs, and in a Hunt Terrell ethics class, "I gleaned a lot of insight, put together a coherent opinion set and gained confidence in expressing my opinions on international development and ethical issues."

     In late 1998, Casagrande quit his job at Ford and moved with his wife Enko and daughters Yumi and Stephanie, now five and three, to Auckland, New Zealand to regroup and plan. His brother Jerry, then a World Bank consultant, introduced him to the field of microfinance and its leading organization, the Grameen Bank in Bangladesh.

     "Grameen pioneered the concept of unsecured lending to poor people for entrepreneurial ventures in the 1980s," Casagrande explains. "Today microfinance is viewed as one of the best methods of eradicating hard core poverty in the world. I deeply agreed with the philosophy -- it's not a handout, but a hand up."

     After extensive research and pondering what he'd learned during long runs on the beach ("I do my best thinking when I'm running"), Casagrande created SPBD (www.spbd.ws), replicating the Grameen methodology.

     He determined that Samoa, which lacks traditional employment and has a 48 percent poverty rate and GDP of under $1,000 (U.S.), had a lot of need and the most potential for initial success.

     SPBD targets that 48 percent of the Samoan population in poverty. In addition to food deficiency, "we look at metrics like the quality of the roof on the house, the presence or lack of electricity, the quality of sanitation and ease of access to clean water, as well as whether or not the children are in school.


The villagers of Samusu, Samoa, where SPBD has financed 30 active microbusinesses [Zoom]
     "While Samoa has a cohesive society where everybody helps out the poor so that nobody is starving, the women who are dependent are made to feel like scum. They have very low self-esteem."

     A staff of nine Samoans, trained in business practice and the Grameen methodology, work out of the SPBD office in Apia, the capital. In the structured program, an SPBD loan officer visits a village and explains the process to its leaders and interested families. After those most in need of loans are identified, the women form self-selected groups of five and receive training. SBPD establishes a center in the village, a location for mandatory weekly meetings and loan repayments.

     The women who join SPBD generally start businesses around their existing livelihood skills. They take out loans of about $200 (U.S.) to begin vegetable or pig farms; bakeries; handicraft, weaving or clothing production operations; copra or kava production; ice block manufacture; fishing or other ventures.

     "In the beginning they're afraid to join, but over time their self-esteem rises," Casagrande says, beaming. "Their lives are completely turned around. No one has ever entrusted them with money before, and now they are creating businesses. They know how to cook, or bake bread or raise a pig." The increases in household income allow borrowers to provide better meals to their families, educate their children, and improve their homes. "I go on visits and the women bring tears to my eyes when they tell me how their lives have changed."

     The SPBD philosophy considers the human qualities of ingenuity, drive and self-esteem -- rather than collateral -- as the measure of creditworthiness. Entrepreneurs who receive loans guarantee each other within their groups; perfect attendance and repayment is required.

     "It has to do with trust and character," explains Casagrande. "If you find poor people who have good character and give them an opportunity they can understand, they'll have the ability to repay."

     By the end of 2000, SPBD became the largest institution serving the poor in the South Pacific. As of May, it had distributed just over a half-million U.S. dollars to help start more than 1,600 microbusinesses in 54 villages throughout Samoa.

     Although Casagrande provided the bulk of startup funding himself and created SPBD-USA, a 501(c)3 organization through which U.S. citizens can make contributions, he's also built some strong partnerships. The Grameen Trust provided support through its replication program. The U.S. Peace Corps furnished a retired CFO of a major insurance company to build SPBD's information systems. And Stanford University is funding an MBA student who will set up a new IT project, to replace handwritten field records with Palm Pilots. Each SPBD loan officer travels daily to several villages to conduct meetings, distribute loans and collect repayments, making hundreds of transactions to keep track of.

     One challenge to getting SPBD off the ground was mistrust. "It's incredible, but sometimes you try to do something good and people become suspicious. Especially in the beginning, we had people accusing us of laundering money, being the mafia, using drug money, starting a cult or being a political party trying to buy votes." Casagrande recognizes that his venture is unusual and said keeping the organization focused on the mission, maintaining a professional image and "letting people know what we are, and what we're not" has helped fight that battle. Convincing people to accept the idea of becoming self-sustaining, in a culture where handouts are simply expected, has been a focus as well. In this light, Casagrande has worked to gain strong support of Samoa's prime minister and the new minister of finance-deputy prime minister.

     In mid-May, after working from Auckland, attracting international funding, raising awareness of SPBD and supervising his local manager by phone, Casagrande moved back to Samoa to take over day-to-day operations again. He's ready to take SPBD to the next level, to build up to between 4,000 and 5,000 members.

     On the horizon are hiring and training more staff, developing a strong partnership with the Asian Development Bank, and cultivating interest from other investors such as Deutsche Bank. Casagrande will also work to develop export markets for SPBD members who make handicrafts.

     "I get satisfaction out of building this organization," he says. "I think SPBD has a noble purpose, to change the world for the poor."

For information about SPBD-USA, 3102 Circle Hill Rd, Alexandria, VA 22305, or to contact Casagrande, write PO Box 1614, Apia, Samoa; call 011-685-20189; or e-mail gregcas@ihug.co.nz.
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