What Is The Highest Triglyceride Level

What can we learn from the social irresponsibility of some microfinance?

Why worry now this? For two reasons. The first is that the recent crisis that micro finance system in a state of India can spread to the rest of the world and especially Latin America. When you see your neighbor's beard burn, put yours to soak. And the other is because this crisis teaches us lessons for accountability office of financial institutions in general and businesses in particular.


The crisis in the state of Andhra Pradesh in India is emerging as a result of some customers could not pay the high rates of interest on loans which led many families to ruin and disgrace and, in some cases, suicide. This situation was unfortunately exacerbated by opportunistic politicians who suggested not paying the loans until they fix the situation. By interrupting the flow to the microfinance has closed the renewal of credit, business critical link, and opened a vicious circle virulent. Much of the high interest rates due to high transaction costs in very small loans with direct supervision intensity. However, some of these high rates is due to the quasi-monopoly power of some financial. The fact that one of them was the capital market with a share issue that made millionaires of some of its shareholders, damaged the public image of these institutions. An issue of corporate responsibility.


there was a case in Latin America, which fortunately did not reach higher. Apart from isolated protests by some experts in the field, there was no reaction of customers or politicians. Was the case of microfinance, with a large market position Urban was a monopoly, charging interest rates in excess of 100 percent, even with minimal delinquency, with more than 600,000 customers. Its return on equity exceeded 50 percent, when traditional banks did not exceed 10 percent. The owners decided to go to the Stock Exchange, to raise capital and expand its coverage, but to sell 30 percent of their shares converted into cash and accounting earnings. The issuance was an over-subscription of 12 times. The original contributions of capital of U.S. $ 6 million had become $ 125 million in book value through profit accounting, and became U.S. $ 1,500 million through the assessment in the bag. The shareholders had a yield of 100% compounded annually during each of the seven years of the existence of financial. All thanks to higher interest rates to 100 by the way the poor pay. Who paid for these extraordinary profits for shareholders?


Legal "? YES, Ethics? NO. Not that I have nothing wrong with making money legally, but there are ways and ways. The broadcast was aimed at capturing the high value of the microfinance market, under the expectation of gains, based on high interest rates. But what they charged was not illegal and unregulated. It has always been argued, correctly, that control of interest rates would deprive severely credit. But what about social responsibility where it is? Apparently it was enough for developers to engage in microcredit, it fulfilled its work to society. This was a great missed opportunity to create, with some of the perks, a Foundation for financial education of microentrepreneurs. And obviously voluntarily reduce interest rates.


addition to the traditional responsibilities of any company, what are the specific responsibilities to microfinance? In fact the vast majority are common with any financial institution only more intense, more social, more cohesive. These must be tailored to the market they cover, which is usually very competitive and very few customers with financial expertise. Only enumerate these special responsibilities not to extend:


• Provide funding that the customer needs and the customer only needs

• As the client does not usually know what you need, you have to give financial education in the demand resources and responsible use.

• And the most important responsibility, reduce borrowing costs through the efficiency of financial intermediation by:

• Collection Low cost : financial risk control and portfolio mix of funding, good governance, accountability (ethics and transparency), compliance reporting objectives (client monitoring and aggregation)
• intermediation margins Netherlands: Efficiency management, technology applications, selection and customer support, management of liquidity.
• effective placement: for maximum recovery

But MFIs have concerned the impact of transaction costs have on their clients or simply passed on these higher costs? MFIs will say that it is problem competitive market in which they operate. But the market is not competitive, with all that you mean. The poor client (in the broad sense of the word) has no knowledge of finance, is not sophisticated enough to go from financial financial to see who gives better conditions. Do you know how to distinguish which are the best conditions? And if he does find out, do not worry, financials will take care of so they do not complicate it.


The fact provide a service that supposedly helps improve the quality of life of the population, that supposedly helps reduce poverty (in fact not yet proven) not allowed to ignore the responsibility of your product / service and the price at which the product sells


The competitive market for microfinance is still a fallacy in most developing countries. Its regulation is relatively weak, and when there is a regulation more closely linked to the stability of the system to protect the consumer.


But it also leaves us important lessons for financial and nonfinancial companies. Many of the problems of MFIs are due to irresponsibility on the product / service they sell and the price at which they sell. In business in general, those who care about social responsibility, care of the traditional typology of tasks: environment, good governance, human resources policies, community support, etc..


But the responsibility for the product and its price does not receive much attention. In the case of obviously harmful products, but for which there is great demand (snuff, alcohol, etc..), The onus on governments to regulate their production and consumption, and largely the same companies, who have to care the goose that lays the golden eggs and not lose the business. But there are many products whose consumption is left to the "regulation" of the consumer, often ignorant of the subject. Bracelets have seen miraculous creams that reverse aging, slimming shoes and reduce cellulite pills and lift it all at full power. Product liability is a relatively ignored by the guards of CSR.


And not to mention price. Prices are also supposedly "regulated" by competitive markets. Under the assumption that there are many manufacturers that produce similar products, not necessary that the company implements its responsibility to be fair prices. The market does. But this depends on an assumption in the functioning of competitive markets, which as in the case of microcredit, is rarely respected. And is the availability of information and the consumer's ability to act on it.


And we are not proposing price controls, we are proposing a better functioning of markets where they exist, via more and better consumer information and education


microfinance This case illustrates the responsibility that companies should have two areas that CSR watchers often assume that others ignore or cover them: the responsibility of the product and its price. In these respects we are a little late.

4 Post Wedding Arches

What are the indices of sustainability?

begin asking the reader a little patience as this article is a little longer than usual to be a less familiar topic.

This article aims to contribute to a better understanding of what are and what the rates are not sustainable, what are they and what will not work. This is important to understand the criticisms made of them, so that the reader knows how to use and can draw your conclusions in an informed manner.

To mark the event named BP and Shell least, has recently revived the issue of sustainability indices. The first case refers to criticism of the indices include companies such as BP irresponsible. The second to Shell decided to exclude the Dow Jones Sustainability Index of the indicators to determine some of the bonuses of their executives, to be excluded from the index.

This has given rise to great critical indices especially the lack of transparency about the criteria used for inclusion and exclusion of companies (Jose Angel Moreno Izquierdo wrote a lengthy article, Qualifiers "disqualified? on these critical Responsible Journal on October 28, 2010 (www . diarioresponsable.com). There have also been critical of apparent inconsistencies between rates when companies include and exclude.

To understand all this criticism need to know more about the different indices. Why indexes are created What are the criteria for inclusion of companies what are their problems? Why what are they and how are they used? Why do companies want to be members?

mid-2009 had more than 50 levels of sustainability, most of them created in the last three years, some new are general indices, multisectoral and multinational companies, but most are specialized in clean energy and climate change some are specialized in countries. In September 2010 the stock of Mexico and Istanbul announced the creation of its indexes. In Latin America was created in 2005, the Sao Paulo Stock Exchange (ISE BM & FBovespa). In Spain was created in 2009 the FTSE4Good IBEX, which belongs to the family of indices FTSE4Good, which also consisted of many other stock exchanges in developed countries.

This article attempts to put these criticisms into context and clarify some misunderstandings that have arisen with regard to indexes. Obviously not a treatise on sustainability indexes. I will comment on Dow Jones Sustainability Index (originated by the company then owns the Wall Street Journal, created in 1999) and the FTSE4Good (Financial Times, established in 2001) are the largest and most popular, and the Stock Market Sao Paulo, being the first in Latin America (and second in developing countries). The Dow Jones covers 318 companies, the FTSE4Good not revealed and the Stock Market Sao Paulo only 34 companies. The first two are family and have rates by country and region subscripts.

Let's start by answering why they create these indexes. Are created primarily to meet the needs of the socially responsible investment industry, ISR, which seeks to invest in securities of companies that according to some criterion , qualify as responsible. Investors can buy shares directly (if you know what) or buy shares in investment funds created to reproduce partially or totally the index.

Once investors create portfolios or funds based on criteria of sustainability need evaluate their performance, and used these indexes as benchmark for reference. The sale of these services is where the income comes from rates of Dow Jones and FTSE4Good (this index gives its revenue from licensing UNICEF.) They also prepare indexes of the client. For example, the Dow Jones has sold more than 70 licenses for use. The Stock Exchange of Sao Paulo derives its revenue by charging for applications, as not yet being used as a benchmark. These indexes also have costs that must be covered and, in some cases, provide benefits. Therefore, the methodology in both cases is copyrighted reserved. The product indexes is relatively easy to copy, but expensive to reproduce, and hence the confidence with which they are managed.

is very important to stress that the rating is done "according to a criterion" because this is where they leave a lot of confusion. We have mentioned many times that there is no fully responsible company. The companies have some or many responsible practices (see my recent article "The tip of the iceberg of CSR " http://www.cumpetere.blogspot.com/ ). For this reason, the indexes must decide what criteria and methodology will be used to determine the inclusion of companies.

The Dow Jones index is a kind of "best in class", so it includes companies that are considered more responsible in their "class", ie, within your industry or subsector. Some companies might consider very responsible but not so as the leader and therefore may not be, or exit at any given time if it gets any better. Dow Jones publishes The components, inputs and outputs of the index and the general methodology for calculating the index. The FTSE4Good is an index. Only public companies entering and leaving, and neither its composition nor its methodology in the public domain. What can find are the criteria for inclusion and exclusion that are public and other details about the methodology, as the areas of risk and compliance requirements by risk and level of market capitalization .

The Stock Exchange of Sao Paulo has its own methodology. The process of selection of companies is based on a survey of nearly 200 questions, inviting companies that exceed a minimum of stock market liquidity. The responses from companies that agree to participate are encrypted, eliminating the worst, and it becomes a statistical analysis to determine the best that are submitted for final decision making Advisory Council.

Can these indexes include companies with irresponsible practices? Sure . And here's the first confusion. Firstly, because the primary source of information to companies. In some cases analysts pose questions to the companies or physical information is asked back, but overall the information is controlled by companies. Secondly the selection process itself can not be exhaustive.

In the case of the Dow Jones Sustainability Index are companies that produce products that many would describe as irresponsible, but in your industry are the most responsible and best practices have. In the index there are producers of snuff and spirits, that maybe used with raw material from sustainable agriculture by paying fair prices, excellent human resources management, etc. Companies included are those rated as more responsible in their subsector (also prepared subscripts to the measure, without snuff, weapons or alcohol products). In the case of FTSE4Good, companies may also be irresponsible because it does not measure all of their practices. Should the indexes include companies with products irresponsible? I think not. Is oil a responsible product?

Inclusion criteria are different for each index. Some indexes are updated every six months, other annual update, hence they do not react immediately to the detection of some irresponsibility. This may also explain why a company can enter and exit a rate other than using different criteria for inclusion.

Much of the criticism is based on a mistaken assumption that membership in the indexes, it means that companies are fully accountable. The user of the index, as the user of any tool, you must know how to use. It is possible that producers have rates much of the blame by failing to make this clear. It is also important to understand that a company is at a rate just means that the company was met, at the time of selection, the criteria used by the index.

Another part of the problem, which extends the above is the lack of transparency. These indexes are now going through the same stage that passed the rating agencies during the financial crisis. The methodology was not in the public and users used them without looking behind him. The problem was that the pundits did not trust us and the ignorant. The sustainability indices are also products for use by experts.

Remember that the information they deliver the Delivery companies are confidential, hence it can explain, though not justify, the lack of transparency regarding this information. Can we qualify as a responsible company that considers its sustainability information confidential? Many readers will say that this is a contradiction, which is a sign of irresponsibility. But here is also worth remembering that there may be information that would allow competition to decipher some secrets. If the information were to become public, companies begin to provide less information and therefore may be disadvantaged or even to stop. We are not defending the confidentiality, we are explaining. It would be desirable that the companies disclose all the information they gave to the indexes, make it available on their sustainability reports. But is that confidentiality is not as trivial as it seems.

is also alleged lack of transparency on the part of the indexes on the reasons for excluding or including companies. During 2010 there was a case that one of the indices exclude some firms that were included in another index. While it may seem absurd, remember that what is considered as a sustainable company in an index is different from what it considers another.

Moreover, disclose the reasons for the exclusion of a company may cause damage important, ranging far beyond the "irresponsibility" in which it is excluded. Some are excluded because they went one better (Dow Jones). Again, some would argue that disclosure is what to do. But we must also remember that rates are not institutions whose aim is to reward and punish irresponsible. They do not compete. If so, would be very few companies that wanted to participate in the process, and lose the opportunity for continuous improvement in sustainability. Presumably they know companies excluded because they are excluded and do something to improve and re-enter the index. As long as the cost-benefit to do so warrants.

There is a delicate balance between transparency and effectiveness, including precision and between utility rates. It is not trivial.

is also important to understand why companies want to become members. Presumably, the inclusion in the index should improve responsible business practices, improve market liquidity, improving access to financial markets and, perhaps, until his return on the stock. In a detailed study of the sustainability index a bag that I have just completed I realized that in fact, responsible practices of companies tend to improve to be included in the index and deteriorate to leave, but that their inclusion not have any affect on market liquidity, access to financial markets. In many studies it has been a confirmation on whether the inclusion makes his return on the stock is higher than that of companies not included. In some studies it seems that yes, in others not. They might be the most profitable to make efforts to be in the index. In any case, being in the indexes, not hurt.

Much of the criticism arising from that some people expect rates to be something they are not. Are not intended to be a source of information for the public, not information intermediaries between businesses and the public. Are special products for those who want to buy, are investment products to guide a group of investors. Many of those who criticize them because the indexes do not play the role they wanted to meet . We must remember that there is a public good, is a private good. This does not mean that just as we require companies to be responsible, so we should also require indexes. But we must also ask: Do you publish details of their business processes and components of its products and services?

But the day will discuss CSR in the sustainability indices.

But as in the case of companies, we can not achieve all of the overnight. Purists might be trying to create indexes and fully transparent. Companies you participate? We could pretend that contain only firms fully responsible. Where are they? Lose a good opportunity to contribute to sustainability.

With all these problems, the indexes can help improve the sustainability of enterprises, both through the process of internal introspection that they should take to prepare the information, and by the feedback they receive. Moreover, the inclusion in these indexes can help improve market liquidity and access to financing, which can start a vicious virtuoso of sustainability.

not throw the baby with the bath water bath.