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After he left Amazon (“one of the hardest, scariest and best decisions” he’s made in his life) Kushal Chakrabarti knew he would start a company.  He’d done well at Amazon, helping to improve its product recommendation engine, and felt he could either build a business that made a lot of money or create an organization that helped a lot of people. It was a decision, but likely not a serious dilemma for Kushal who’s motto is create meaning or die trying.

Kushal fixed on education and on a challenge that’s resulted from successfully giving more children access to education: what to do after secondary school.  He explains that there’s an entire generation of kids who’ve finished high school and want professional training or a college education. In most developing countries, loans for college or vocational school simply don’t exist.

So with co-founder Brett Witt, Kushal created Vittana, a nonprofit social enterprise that brings student loans to developing countries through person-to-person micro-lending.  He compares it to setting up a “mini Sally Maes” in the five countries in which Vittana now operates–Nicaragua, Peru, Paraguay, Vietnam and Mongolia. Lenders contribute $25 on average, which is bundled with 8-10 donations to fund a loan. The average loan amount is $655.11, which the student repays in about a year.  Vittana works with local microfinance institutions to vet the students and distribute and manage the loans. Since its September 2007 launch, the organization has facilitated nearly $300,000 in loans and has a 95% success and repayment rate.

Vittana graduates earn 200-300% of their previous income–about $18 per day versus $6 per day.  Kushal sees Vittana as helping to “make good on these students’ previous 18 years of education.”

Vittana launched with seed funding and collects operational donations from lenders equivalent to a 10-15% margin. In our conversation Kushal talks cracks an industry code and talks about the importance of showing funders that you’re doing a lot with few resources and making continual progress.

Here’s a link to the videos of Haward, a Vittana graduate who learned his law degree in Nicaragua, that Kushal and I talk about.

If you like this interview you should thank Kushal on Twitter like this, or follow him at @kushalc.

Kiva.org has faciliated more than $100 million in loans in a few short years. Really outstanding, except it could be millions of dollars more. Nearly half of the people who create member accounts on Kiva don’t end up making a loan. One reason for this is because Kiva doesn’t show you the impact of your potential loan at decision-making time. A lender only sees the impact of the loan he made some months after he made it. Instead, imagine this

Welcome Olivia!

Want to see what Jim did with $25?  His $25 funded 20% of the money Amelia needed to buy a refrigerator to store the lunches she makes and sells. Now she sells one-third more lunches by traveling to new neighborhoods. She used to spend every morning making food to sell that afternoon, but now Amelia can make food one day and spend the entire following day selling it, allowing her to reach more customers.

How far can you make your $25 go? Here are a few suggestions to get you started…

Does this give you greater incentive to part with $25?  People who lend through Kiva make an average of five loans, so Kiva’s lending power will grow exponentially, but it’s critical to get people in the pipeline and hooked on the feeling of direct impact.

Framing your message and setting up the action for users doesn’t need to be complex. 37Signals shows their products by how you will benefit from them. Simple, clear language; no humorous, clever or emotional pitch needed. 

Click the player to listen to my conversation with Ted, which goes into detail about how he launched operations oversees and why he choose to become incorporated as an L3C.  Right-click and save for the MP3.

Prosperity Candle is a for-profit social venture with L3C legal status (a Low-profit Limited Liability Company combines the financial advantages of an LLC with the social advantages of a nonprofit).  Ted Barber and his co-founder Amber Chand spent several years exploring the optimal product or service that could be used to create a business model they called Shared Prosperity, which gives every woman a regular and transparent share in profits.  They settled on candle-making (after extensive at-home tests) because it’s a highly scalable craft that requires only incremental investment in low-cost equipment (in this case, the wax molds).

For $140 an Iraqi woman can purchase a kit complete with the materials and equipment for candle-making, as well as an extensive entrepreneurship guide that covers record keeping, steps for starting a business and attributes of a successful entrepreneur.  Working with its core partner Women for Women International, Prosperity candle subsidizes the cost of the kits and additional wax molds; a new partnership with a microfinance provider now enables the women to buy materials on credit.  The entrepreneurs are paid $5 for every exportable candle when they bring their products to their local collection branch, run by Women for Women.  The entrepreneurs can produce one candle per mold per day, which, at one $5-candle per day, allows a woman to receive more than double the average hourly wage.  After selling eight candles, a woman can invest in a new wax mold and double her output and income.

On Prosperity Candle’s signature components is the interaction between consumers and the entrepreneurs.  ”It’s a rare instance when [an entrepreneur] is able to sell her product across the world and have a [consumer] talk directly to [her].  It’s had a tremendous impact on the women’s…sense of self esteem, of being connected to the world, of not being isolated in Baghdad…. It’s a powerful experience for them to realize that this isn’t just a project taking place in Baghdad, but that it’s a long-term opportunity for them and that they now have customers,” says Ted.

Like this interview?  You can thank Ted on Twitter like this and follow him at @WomenProsper.

Living Goods replicates Avon’s model of door-to-door selling, but instead of peddling lipstick and mascara to middle-class women, Living Goods’ Health Promoters sell affordable health products–from antibacterial soap to de-worming tablets to condoms to bednets–to the Ugandan poor.  By providing a way for women to make a living by selling products that prevent unnecessary death from treatable diseases, Living Goods is fighting the double-headed dragon of mortality and poverty.

More than 10 million children die every year (pause for a second; that’s 27,398 deaths a day) from easily treatable conditions like malaria, TB and diarrhoeal disease.  Products for prevention and treatment exist, but efficient and scalable delivery systems are lacking. Living Goods uses micro-enterprise and micro-franchising to get these products into communities and to keep them there. Health Promoters buy a business-in-a-box for $100-$250, which includes the products, as well as training, marketing and coaching.  Living Goods and its partners–one of whom is the microfinance and development organization BRAC–provide affordable financing for the kits.

Malaria, as one example, deals a double blow by causing economic as well as physical suffering.  Reoccurring and prolonged bouts with malaria prevent people from working. Living Goods is committed to inverting this cycle by incentivizing its Health Promoters (through profit) to make essential health products available to more people.  The more a Health Promoter does this, the larger her profit and the greater the health impact she will have on her community.

Over the next five years, Living Goods aims to become financially self-sustaining and to replicate its model in other countries. Charles Slaughter, Living Goods’ founder and president, is very open to helping other social enterprises adopt or replicate the model.  Partnering with the Poverty Action Lab* (PAL), Living Goods is tracking its impact through randomized control studies as it works to lower mortality rates for children under five by 15-30% in its target communities.

Child and community health, female economic development, financial sustainability, open-source replication, local support, microfinance micro-enterprise–these outcomes and mechanisms give me an adrenaline jolt.  Why have I not heard of Living Goods earlier?  If you’re as moved by Living Goods’ approach and mission as I am, you can sign up for its e-newsletter or make a donation.  Living Goods doesn’t yet have a Twitter or Facebook presence (but I’m about to offer to help develop it for them).

*The New Yorker recently wrote a great profile on PAL and the organization’s co-founder Esther Duflo.

Photo credit: Time Magazine

Click the player to listen to my conversation with Mike or right-click and save for the MP3.

After two decades working in capital markets on Wall Street, Mike began thinking about how he could apply his background to social capital markets. “I wanted people to consider valuing social and environmental characteristics as much as they do the financial aspects of their investments, while also giving them market-rate returns.”   The product of his financial experience, exposure to poverty and desire for people to invest with a broader set of goals is Mission Markets.  

Mission Markets is the first U.S. electronic platforms geared toward social and environmental companies and investors, as well as people buying and selling environmental credits (carbon, water or fishery licenses).  It’s divided into two platforms.  The Capital Marketplace is for accredited investors, social enterprises seeking capital, foundations offering PRIs and third-party service providers.  The second platform, Mission Markets Earth, is “an environmental markets trading board,” to support market based mechanisms for environmental conservation.

“Mission-related investments aren’t anonymous. They’re about engagement with companies, organizations and people.”  Mike sees Mission Markets as an information delivery system that supports localized and collaborative interaction and encourages investors and companies to talk to each other and develop strategic relationships with nonprofit organizations.  ”The transaction part [of the platform] is incidental. It’s only 25-30% of what we offer.”

For-profit social and environmental companies looking for funding can apply online by filling out a profile and taking B Corporation’s survey, which is Mission Markets’ current metric for assessing sustainability.

The Capital Marketplace will launch later this month and Mission Markets Earth will launch in mid-June. Mike demoed the site for me and it’s an incredible resource for individuals and companies interested in impact investing.

About Mike Van Patten

Mike is CEO and founder of Mission Markets, Inc.  He has more than 20 years experience in capital markets, including serving as a vice president at Bear Stearns and co-founding NYPPEX.  He’s also an avid outdoorsman and has completed more than 50 triathlons.