When you are about to buy a stock or a company, hire an employee, choose a bank to deposit your money, or even donate to an NGO you look for information about them that gives you enough detail to TRUST them. You want to buy a stock that will perform great in the future, so you can have an amazing return. You want to buy a company that is financially stable. You want to hire an employee that has a professional background. You want to deposit your money in a bank that measures carefully its risks and manages well the money. Finally, you want to donate to an NGO that is using its fund properly and making a change. Every bit of information you collect about a company matters. It matters because the more you know it, the more likely you are to TRUST on it. The most TRANSPARENT institutions and people are the ones who gain their clients TRUST first.
There is a stereotype that banks aren’t friendly, they INTIMIDATE. In Peru, many people living in the lowest secret of the economy don’t have access to the financial system. In many cases, this is related to their economical background, but mainly most of them don’t TRUST these HUGE institutions to watch their money. So, what do they do? They put away their savings under their mattress and hope for the best. One of the things that has contributed to this stereotype is the fact that banks are too complex, the information they give out is too hard to understand and we want S I M P L E. We want simple because if we don't understand the information given, how can we TRUST?. Another thing that greatly impacts many people’s and corporations CHOICE of bank is the fact that they are AWARE of how this institution is performing, if it’s stable, and how it's handling its money. Therefore, TRANSPARENCY is the vital ingredient for TRUST.
When companies are TRANSPARENT with their customers, meaning they also share information when they are having trouble, the client feels CONFIDENT about the institution as nothing is held back hidden; thus, they gain more TRUST and stay true to the business, they buy more products and continue building a relationship with the bank. It’s like a certification that no information is being manipulated and the right decisions, with the money placement, are being done well. TRANSPARENCY is the new ingredient to compete in the market, is the new guarantee of TRUST. So even though it’s hard to stay TRANSPARENT, because there is always that dentition to hide some things, it does bring advantages in the long run.
Every year, an external corporation like Deloitte, makes an INTERNAL audit for the bank, which confirms that everything they document in the papers they file to SUNAT are TRUE. Banks are extremely regulated because they lend money from the public; however, the idea of having regulators isn’t enough for an individual or a corporation, there is nothing like beign a primary source. Clients want ALL the cards in the table that display how the bank has performed, by seeing it with their own eyes and analyzing the data they can FEEL more confident about the decision they've made with the bank. After the bank undergoes the audit, this document is PUBLISHED on the SUNAT website, so anyone who want so see how the bank has performed over the years can.
In our own company, Blendz, we’ve implemented TRANSPARENCY in our culture because we see the value in it. We are very TRANSPARENT with our finances, in our website we have published the financial status of all the sales, so our clients can see how much money we've made and how the 100% of the profit goes to Habla Roosevelt. Now, people who doubted our S/.8 price can be sure that we don’t keep anything in our pockets, and the money is used RESPONSIBLY. Even though Habla Roosevlet takes place during Saturday’s when there is no school and anyone can’t see it, we constantly put updates and pictures of how things are going. We want to display the change our company is making because it’s important that our clients see that every smoothie makes a CHANGE. Something we could work on, is creating a detailed balance sheet and posting it on the website or Facebook page, this is a clear way to see where we are going financially. Additionally, by keeping our finances in public, it builds HUGE amounts of trust in the clients, which makes them want to keep buying. Now they know their purchase is worth it. Furthermore, we’ve also been very transparent with our recipes, the magnificent Berry-B or classic Banorange are no HIDDEN treasures. If you want to drink one at home the recipes are posted online. We still need to advertise this much more to our customers, but they are posted. We not only share each ingredient that goes in our smoothies, but also every calorie as well.
On the other side, being TRANSPARENT also has it’s down falls and things we need to CHALLENGE. Especially in banks transparency is COMPLICATED. They display complex information that maybe misinterpreted by the clients as they are not familiar with the terms or balance sheets and the numbers look scary, information can be misread. Also, if you put your information out to the public it's most likely that the COMPETITION will use this to their advantage and eventually pass you. Finally, there is always that hard BALANCE between showcasing some information, and also keeping the some of it private. It’s hard to do this because it may seem that you are hiding something, but banks do need to manage this balance because they work with confidential information from their clients.
Nonetheless, if we take into account the benefits and challenges TRANSPARENCY has I’d agree that being transparent creates a TRUSTWORTHIER environment, and it's pros surpass the cons. It gives clients relief that their money is being held in great hands and makes them LOYAL to you. It also brings trust amongst corporations, stakeholders, and even with your own employees. This is a great tool to attack the competitive market and bring together a community that TRUST you and will make you GROW.
EVERYDAY we are posed with RISKS. There is a risk that while you cross the road, a car will flash out of nowhere, there is a risk that if you cut your hair, you won't like it, and there is a risk that if you order sushi, the fish is bad. No matter what we do, there is a risk in every choice we make. However, if we STRONGLY believe the good outcome is worth the RISK, then we should EMBRACE it.
In microfinance, there is a risk in every loan provided to a micro client. There is risk that even the best paying client won't pay you back, because there is always a chance he will get sick or that something happens in the business or family, and he has no money to pay. But if nothing does wrong, then you've made quite the deal. Therefore, financial institutions take these chances, because just like the bad outcome can mean a loss of money, if the client does pay back the loan it's a SUPER win for them, especially if they are in the RISKIEST category. All clients are categorized into four different risk groups, this allows the bank or institution to determine their interest rates and eligibility for the different credits. The riskiest clients have the highest interest rates because they have the highest probability of default; therefore, the bank needs to secure some money, and thus poses HIGH INTEREST RATES on these types of clients. Even though, informal business owners are risky clients, financial institutions are willing to make these colocations of money because they know that if the client pays the loan will be very profitable. This is why many financial institutions, like Banco Financiero, are working strategies to target the most RISKY sector of the economy: the small and informal business.
Usually, when banks or any financial institution want to give a loan, they have to understand how the business of the client works, and most importantly understand how much they sell and how much money they make to see if the business if PROFITABLE. So, in order to determine this, institutions ask clients to supply them with balance sheets, invoices, or tickets that demonstrate the things mentioned previously. With this information on hand, banks are able to determine the loans that suit their client financially; a loan that allows them to buy what they need, but at the same time is in their paying range. Banks build CLOSE relationships with their clients and advise them with good financial decisions, so that they don't FALL into debt. But despite their efforts to help clients payback with no trouble, they also OVERWHELM them with financial opportunities, which the clients end up taking because they are desperate to ascend from social class. In the past few years, there has been a lot of PREDATORY LENDING, which has not only FEED debt to many individuals, but has also caused some financial institutions to fall apart (like Mi Banco).
Despite the RISK taken with every client, these new types of credits offered to Peruvians are giving the people--of the lowest sector of the economy--an OPPORTUNITY to flourish and accomplish their dreams. Research, has found that Peruvians have some sort of entrepreneurial spirit in their DNA. Peruvians have an insane DRIVE to survive, to be creative, and thus be entrepreneurial to make their dreams reality. Additionally, it has also been found that the Peruvian females are one of the most entrepreneurial women in the world, and they are also the best paying gender as they feel responsibility to take care of their families and the work hard to prevent falling into debt. Currently, the middle class has extended because the lower sector has been given more CHANCES.
Furthermore, even though taking risks is profitable for a bank, they also need to establish some LIMITS, so they don't go broke. Therefore, financial models have been created to determine the probability of default, level of risk, each individual possess, and thus determine if they will be rejected or granted the loan. Nevertheless, risk is not only determined through mathematical equations, nothing replaces a HUMAN CONVERSATION and RELATIONSHIP. A very important part of risk is also determined when the collaborator meets the client. Many times, these people can have a hard financial history, but are extremely hard working and trustworthy, and in these special cases the numbers aren't the defining factor.
"INFORMED RISK CALCULATIONS ALLOWS AN INSTITUTION TO ASSESS NEW MARKET OPPORTUNITIES, ENSURE EXISTING OPERATIONS ARE CONSTANTLY IMPROVED, AND DELIVER COMPETITIVE, EFFECTIVE GOODS AND SERVICES TO ITS CUSTOMERS. THE CHALLENGE IS TO NURTURE A CULTURE THAT REWARDS GOOD RISK MANAGEMENT WITHOUT DISCOURAGING RISK TAKING."
BIG risks come with BAD consequences, but also GREAT benefits. It's a matter of knowing how to measure this risks, and knowing exactly what you want that makes the outcome WORTHWHILE. Two years ago I took a huge risk in my education path, instead of following the revered and recognized IB Diploma I decided to take a risk and do the Innovation Academy. Even though, the outcome of college was UNCERTAIN, I was determined that the experience, skills, knowledge, and opportunities I was going to have in the IA were worth the risk. It has been two years and the results have been outstanding. I've found who I am, I've embarked myself in the road to the carear I want to purse, I've made great friends, had plenty of real world experience, and grown as a learner and person. All because I measured my risk and knew exactly what I wanted to get from my decision. The same happens in a loan, the outcome is clear, and the risks are measured in order to control the probability of default. Just like people, companies have to take risks to grow out of their confront zone, but they also have to do it moderately.
Over the past few weeks, we’ve continued working on Blendz. We are currently APPROACHING the FINISH LINE, so we need to polish our baby. It’s been a tough term; aside from being very short, we’ve had tremendous amount of work. With a real life business in one hand and mocks on the other, it’s been a challenge to keep a BALANCE. Nonetheless, with just a few months, we’ve been able to CONCRETE some things like the cart and systems. Both have helped us organize, grow and be more efficient. Also, in the process, I’ve continued to learn new things about myself like my strengths and the areas that I still need to work on.
During the past week, we’ve begin REFLECTING on our performance and putting down midterm grades. I’ve looked back into my performance (of these two months) and processed the FEEDBACK my classmates gave me, and I’ve come up with new goals. We only have a few months left, but I've still wrote down some things I want to work on..
To be honest, before the IA, I wasn’t PASSIONATE or interested about writing; it was always just another task. Today, as soon as the INSPIRATION moment hits me, I love to sit and write my blog or article. Currently, I enjoy writing because I’ve defined my style and my voice; I feel this is one of my STRENGTHS. Also, another FORTE I have is listening. Because I’m introverted, I don’t speak up as much, so I’ve developed good listening skills. In many cases, listening to other people first has helped me rethink my ideas and even improve them too. Nonetheless, I also feel that this semester I’ve been more PRESENT in the class, like a classmate said to me the feedback sessions. I’ve gain more confidence and trust within my peers, so I feel confortable sharing my thoughts. Moreover, there are some things I want to work on. I’ve learned how to synthesis big concepts and capture them into one theme, which ties everything together, but I feel that this semester I’ve moved away from sharing my personal thoughts and making connections with things learn in the class and how they are valuable to ME. Therefore, I challenged myself to bring ME—from time to time—to my reflections and either explain how different lessons are significant to me or how I can improve my habits. Additionally, it’s good to INTROSPECT in order to grow and be self aware of your weaknesses and strengths, so you can apply or work on them. The last challenge I want to pose, is to read more continuously; this will not only help me command my punctuation at a higher level, but it will improve my vocabulary and help me vary my style.
I’ve always considered ORGANIZATION my greatest strength, but I also consider it one of my greatest WEAKNESSES. In one hand, being organized has helped me stay on top of things, complete my work good and on time. This skill is reflected in many aspects of my life, even in my writing. I don’t like to limit myself in moments of INSPIRATION, but I do like to outline my blogs, presentations, and even articles, so it has a coherent order and structure. This allows me to transmit my ideas clearly and concisely. On the other side, being organized has made my life very STRUCTURED. Many times, I’m so busy working and completing task after task that I forget to E N J O Y my work. Something I still struggle, and I’m challenging myself this semester with, is to find the PLAY and FUN in my work. I need to find a balance between working and having fun, because what is the purpose of creating beautiful work without enjoying it. At times it’s good to step back and see the big picture, when you understand the purpose it’s easier to see the PLAYFUL side.
Furthermore, my role didn’t encompass much media, but I feel that I’ve continued to ENGAGE with it in other areas. Something I’ve begun to do this term, which I want to keep doing, is experiment and be more CREATIVE with the media in my blogs. Before I searched for pictures, but I currently play with it more in keynote, so I transmit my writing more precisely through the images. Really, I enjoy working with media and this is why it plays an important role in my blogs and presentations. Although, I’m a frequent Twitter user, I feel I could do much more with it. I tweet out many articles and pictures, but I want to push myself to CONNECT with my classmates more. I think it’s not only a great tool to share my learning and the cool projects I'm working on, but also to NETWORK with other people. Also, since I’ve been working on the sales and the cart I’ve been able to balance my screen time better than before. This term I was forced not to spend too much time in the computer, but I want to make this a habit even if my job does require a lot of screen time. It’s important to know your screen LIMITS and from time to time move away from the computer.
There are so many VALUABLE skills, knowledge, and experiences I’ve taken from the IA. I wish I could have some more time here. The IA has pushed me to IDENTIFY my strengths and apply them in the projects we work on, and it has also made me aware of my weaknesses and has CHALLENGED me to work on them. As I work in my internship and visit colleges, I realize how the lessons I’ve taken from here will be handy the rest of my life. Two years ago I took the risk and it has paid back.
Although I only have a few months left in the IA, I still want to work challenge myself and work on my weaknesses. I now know how to INTROSPECT, do self-reflections, work on my weaknesses, and I’ll be able to apply this ANYWHERE I go.