Home Business Tech Markets Entrepreneurs Leadership Personal Finance ForbesLife Lists Opinions Video Blogs E-mail Newsletters People Tracker Portfolio Tracker Special Reports Commerce Energy Health Care Logistics Manufacturing Media Services Technology Wall Street Washington CIO Network Enterprise Tech Infoimaging Internet Infrastructure Internet Personal Tech Sciences Security Wireless Bonds Commodities Currencies Economy Emerging Markets Equities Options Finance Human Resources Law & Taxation Sales & Marketing Management Technology Careers Compensation Corporate Citizenship Corporate Governance Managing Innovation CEO Network Reference ETFs Guru Insights Investing Ideas Investor Education Mutual Funds Philanthropy Retirement & College Taxes & Estates Collecting Health Real Estate Sports Style Travel Vehicles Wine & Food 100 Top Celebrities 400 Richest Americans Largest Private Cos World's Richest People All Forbes Lists Business Opinions Investing Technology Opinions Washington & The World Companies People Reference Technology Companies Events People Reference Companies People Companies Events People Reference Companies Events People Reference

Book Review

Saving The World, One Loan At A Time

Maureen Farrell, 03.26.09, 12:01 AM EST

Mandatory reading for anyone who wants to change the system.

I think I know bureaucracy. I've stood in line at the Department of Motor Vehicles (better than expected) and attempted to send packages from my local post office (much, much worse).

But my first intimate, day-to-day look at it came during my first job as a "researcher" at a foundation. I wanted to change the world, and I wound up making photocopies, sometimes for eight hours at a clip. I wasn't alone. My colleagues, mostly recent Ivy League graduates, spent weeks hovered over the foundation's Xerox machine too. When we did get involved in projects, after weeks of work, many would quietly evaporate. From my golden cage of sorts, an office in an Upper East Side townhouse, I plotted my exit, a move into journalism.

Article Controls







I fled bureaucracy. Jacqueline Novogratz didn't. When she left a short-lived post-graduate banking career at Chase Manhattan Bank to go to Africa as an "ambassador to African women with an office in the African Development Bank," she ran head-first into institutions that didn't want her help and didn't want to be changed. Since 1986, she's been working in or with many of these organizations: the World Bank, UNICEF, the U.N. and numerous aid organizations. Her book, The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World, might have been subtitled "bridging the gap between idealism and bureaucracy" or "between capitalism and philanthropy." In the book, Novogratz, now CEO of the Acumen Fund, offers a justification of sorts for her foundation that invests in entrepreneurs in developing economies.

Her start in Africa was humbling. In Nairobi, Kenya, she spent hundreds of hours examining the ledgers of a fledgling microfinance institution only to find the bulk of loans in arrears. The institution's executive director ignores her offers to straighten out the problems and mysteriously loses her report. On her next stop to work in the Ivory Coast office of the African Development Bank, the main director, a native of the Ivory Coast, attempts to seduce her and ultimately poisons her--not with the intention to kill but only to disable her for awhile.

Eventually, in the late 1980s, Novogratz lands on her feet in Rwanda and works with the female residents of Kigali, one of the country's main cities, to build a new microfinance institution and a bakery. Here, Novogratz learns some of the challenges of fostering entrepreneurship in an emerging economy--petty (and not so petty) thievery; borrowers who cause food poisoning by failing to change the cooking oil; a probable murder of a partner; and deciding whether to demand repayment of all loans. The microfinance organization, Duterimbere, chooses to push back when loans are overdue and teach the borrowers that they're borrowing from their neighbors, not a faceless charity.

Novogratz's characters often lack for richness. So many of the women she meets "flash the most beautiful smile I've ever seen" or have warm hearts that shine through their troubles. Novogratz's descriptions of her own emotions often fall into this territory too. She falls in love with countries--Rwanda, Kenya, Pakistan--and her writing at times is overwrought, though her love does seem sincere. (If not, she wouldn't continue with her work against her endless confrontations). Upon her return to Kenya, the main hub of the African Development Bank, after a trip to see her family: "Seeing just one familiar, radiant face was enough to make me feel like I'd come home."

The characters sometimes become a blur of radiant faces, but the sheer facts provide enough of a narrative riptide to keep you glued to the pages and enough detail to serve as a primer on how to go about affecting social change. This book should have a spot on the reading lists of MBA and public policy programs.

For more book reviews, see:
David R. Henderson on The Off-Track Economy
Steve Schaefer on March Madness
Gordon G. Chang on The Fat Tail

The author's tales of living and working in Rwanda pre-genocide in the late 1980s, meanwhile, might just be enough to keep anyone reading. She spends much of the first half of the book chronicling the bumps and successes of institution-building and entrepreneurship in Rwanda, but she barely foreshadows.

Perhaps that's an attempt to give her readers time to comprehend Rwanda as a country that's not solely synonymous with mass murder and to avoid pre-judging these women. More than a decade later, we meet two of her partners in her microfinance work again. Both have been implicated in war crimes related to the genocide. While Novogratz can't help but judge the implicated women, there's some narrative detachment. As a reader, I wanted to understand how they could have done this. As a person who knows these women intimately--yet is a foreigner who left the country for a decade--Novogratz struggles over how to deal with both the implicated women and those who lost families in the 1994 massacres.

For whatever this book lacks in emotional rawness, Jacqueline Novogratz takes us on a journey, a sometimes painful but often enlightening one. Getting a chance to walk down this unusual path that moves around Africa and takes an inside look at international institutions like UNICEF, the U.N. and the World Bank and ultimately at the author's work now--investing in (not giving to) entrepreneurs around the world--is well worth the price of admission.

The book trails off with her work at the Acumen Fund, a nonprofit "global venture fund" she founded that uses donations to finance growth of entrepreneurial companies in developing countries. Here, too, I wanted to know more. The final chapters seem to unfold in real time, and as she says in the conclusion, she's attempting to raise $100 million to invest. (She currently has about $30 million invested in various entrepreneurs.) For the readers who make it through the 250 pages of this book, most, I bet, will be following her blog, her Twitter account and her work.

Maureen Farrell is a staff writer at Forbes.

Steve Forbes

CEO Book Club

Book Review The Other India
Book Review Taylor Rules
David R. Henderson

In a new book, economist John Taylor explains the cause of the crisis.