In this blog post we introduce the July 2022 tracking survey results of Gojo's Sri Lanka Financial Diaries project. Read the full report in PDF here and our June 2022 report here.
Overall, there was an improvement in access to food and healthcare, but people are still experiencing continuous income decrease and are tapping into different sources of funds to cope with this situation.
Majority of the diarists feel high levels of stress
69.4% have difficulties in accessing food - an improvement from June’s 86%
69.4% claim that their income decreased and more people (31.6%) had to source funds compared to June (27%)
Food spending ratio in households continues to increase
Have you had difficulties in accessing food during the last week?
Is there change in income you / your partner earned in the last 2 weeks compared to a month ago?
Can you tell us whether you experienced any instance where you had to source funds in the last 2 weeks?
On a scale of 1-10 where 1 = Not stressed at all and 10 = Very stressed, how stressed are you in the past two weeks financially?
Did you face any of the below situations in the last 2 weeks?(Food)
Food spending ratio in households (Dec '21-May '22)
Did you face any of the below situations in the last 2 weeks?(Health)
Is there change in income you / your partner earned in last 2 week compared to month ago?
Can you tell us whether you experienced any instance where you had to source fund from a financial institution or from a friend / neighbor in last 2 weeks?
What at this right moment, is the worst aspect of the crisis for you and your family?
Inflow and outflow of households (Dec ‘21-May ‘22)
The spike in April is due to the New Year, which inevitably demands an increase in income
The financial inflow also increased in April to meet the spendings
Inflation has led to an overall trend of increased expenditure
To support each other's finances, financial outflow (lendings and repayments) also increased
In this blog post we introduce the June 2022 tracking survey results of Gojo's Sri Lanka Financial Diaries project. Read the full report in PDF here.
In 2021 October, Gojo started a Financial Diary project in Sri Lanka. We collect daily inflows and outflows of 100 households in Sri Lanka which gives us a lot of rich insights about the financial situation of the households, including their income sources, major spending, financial transactions such as loans and savings etc.
Given the recent political and economic instability of the country, we have decided to take monthly surveys with the diarists to understand how the crisis is impacting each of the households. Here's what we found:
80% of the diarists feel high level of stress, while 77% feel mentally unsafe
99% had to cut down on food spendings
29% are purchasing less medicine due to financial reasons
83% claim their income has decreased compared to last month
27% borrowed money, mainly from neighbours to meet daily needs
How much stress did you feel financially in the last 2 weeks?
The reasons of stress include a rapid increase in commodity price, loss of job, and lack of money to meet basic needs.
Did you feel mentally or physically unsafe in the last 2 weeks?
Reasons include children crying because of hunger, inability to procure necessary medicines, and mental breakdowns due to struggle.
Did you face any of the below situations in the last 2 weeks (Food)?
Did you face any of the below situations in the last 2 weeks (Healthcare)?
Is there change in income you/your partner earned in the last 2 weeks compares to a month ago?
Reasons include the lack of resources to conduct jobs, daily wage work being unavailable, and inability to find jobs.
Did you borrow money from someone in the last 2 weeks?
Those who answered "Yes" mainly borrowed money from their neighbours to buy essentials, meanwhile those who answered "No" either already have other loans to pay or can't find anyone who is willing to lend.
If we look back at the history of accounting, it has been changing and improving constantly since its birth, and the scope it is covering is spreading and adapting with the ever-changing world of business.
Fireside Chat featuring Firdavs Mayunusov (Co-founder and General Director, MDO Humo) and Taejun Shin (Founder & CEO, Gojo & Company), moderated by Arnaud Ventura (Managing Partner, Gojo & Company) was held on the 14th April 2022. The one-hour event focused on the Ukraine crisis effect on Humo and their management of the crisis. The informative session was supported by the active engagement from the audience.
We were able to deep dive into the crisis situation including specific topics as below.
Impact of the crisis on Tajikistan’s macroeconomics: GDP growth and inflation
Impact on Humo’s loan portfolio’s credit quality and hedging cost
How the impact on remittance flow would influence Humo’s business
Impact on deposit
Product focus: Agriculture, Government employees
Plan on green finance
3 top challenges under the crisis
Gojo’s position (as a shareholder and an investing company)
To watch or rewatch the webinar, the recording is available here, while the slideshow used by the speakers can be downloaded here.
If you are interested in learning more about Gojo and receiving invitations to our future webinars, subscribe to our newsletter at the bottom of this page.
Why governance matters for Gojo is clear — Because Gojo aims to operate in 50 countries by 2030, which means Gojo will have to manage at least 50 different group companies as a holding company by then.
This is a message from Kohei Katada, Gojo's CFO and devoted teamplayer.
Me and teamwork
Working together as a team and winning a game has always been an important part of my life.
Since I started working, it has become difficult for me to make time for team sports, so I mainly enjoy individual sports (triathlons, marathons, and recently, kickboxing). However, teamwork has always been an important part of my life as I have played various team sports such as soccer, basketball, and lacrosse since my childhood.
Recently, Taejun, our founder, recommended that I watch “The Playbook”, a documentary series on various sports coaches on Netflix. In this blog, I would like to write about my thoughts on teamwork at work.
What is teamwork
When I think back to some of the most memorable projects I’ve had, they have always involved teamwork with wonderfully talented people. When I was in investment banking, M&A advisory work required collaboration with clients, supervisors, colleagues, and external stakeholders such as lawyers and tax accountants. Preparing for the IPO of LIFENET INSURANCE also required close cooperation with the management team, a securities firm, and leaders from different departments. At Gojo, we have overcome many challenges as a team, such as raising funds for the Series D round and implementation of IFRS across group companies.
What is teamwork in the first place? I personally found the following definition by Andrew Carnegie, the Steel Magnate, to be the most convincing (I was a little happy to learn that the term “teamwork” existed over 100 years ago, even in Carnegie’s time!):
Mr. Deguchi, the founder of LIFENET INSURANCE, where I used to serve as CFO, had this to say about people and teamwork:
There is also a famous African proverb that goes like this:
Essentials of teamwork
So, what do we need to work effectively as a team in a diverse, low-context environment like Gojo?
My hypothesis, which is still under development, is that the following elements are necessary.
(from “Team Geek” by Brian W. Fitzpatrick, Ben Collins-Sussman)
Humility: No one on the team is perfect, and no one knows the right answer alone.
Respect: A sincere concern for the people you work with. Treating members as individuals and fairly evaluating their abilities and achievements.
Trust: Belief that every other team member is capable and will do the right thing.
Team Geek also has the following statement, which I agree with 100%.
Three key elements:
Shared Purpose/Goals: Each team member must share the purpose and goals with strong ownership.
Communication: Sharing information is the basis for good decision-making. High-frequency communication is essential for mutual trust and psychological safety.
Feedback: Based on the belief that everyone can grow, support each other’s growth and development through mutual feedback.
When I joined Gojo in 2019, I wrote the following in my personal blog.
Two and a half years have passed since I joined Gojo. The road has not been smooth, with the Covid-19 pandemic and the coup d'état in Myanmar…etc., however, my desire to build the best team in the industry with the best people has not changed from day 1.
In order to share our purpose as a team, we discussed and created our team’s mission statement during a workshop in 2020 and have been brushing it up every now and then. Below is the latest version of the statement.
Enhance the credibility of Gojo and its Partners (group companies) as an investment destination through transparent communication and amplify the financial inclusion around the world
Enable internal stakeholders within Gojo and Partners to make high-quality decisions and to achieve our mission, by delivering reliable financial information and thoughtful risk/opportunity analyses in a timely manner
Explore and implement an optimal and resilient capital structure that supports dynamic resource allocation in collaboration with Partners
Inch by inch
I’d like to conclude this post by writing about “winning” as a team.
I mentioned the documentary “The Playbook — A Coach’s Rules For Life” at the beginning of this post. It was indeed great and I would recommend it to everyone, especially if you have ever played a team sport.
Personally, I’d recommend Episode 1: Doc Rivers, who is currently the head coach of the Philadelphia 76ers (The documentary is mostly about his days with the Boston Celtics and Los Angeles Clippers). I was particularly impressed by the following two statements by him.
The second quote is about the 2008 NBA Finals, in which the Boston Celtics defied all expectations to win against the L.A. Lakers and become NBA champions for the first time in 24 years.
One last thing. Let me quote here my favorite speech Al Pacino from the movie “Any Given Sunday”.
Our long-term goal is to enable the provision of high-quality affordable financial services for 100+ million unserved and underserved people in 50+ countries by 2030. There have been and I believe there will be so many unexpected things happening. However, let’s work together as a team and move forward one step at a time, inch by inch, until we win.
Kohei Katada is Gojo’s CFO. He leads Gojo’s fundraising, finance and admin teams. Prior to joining Gojo, Kohei served as the Senior Vice President of Finance at SmartNews and as CFO at LIFENET INSURANCE COMPANY.
As a contribution to the post-COVID recovery, GOJO’s Operations will post a series of posts related to effective delinquency management practices, which could be helpful for the readers. This is the first blog post with more posts to follow.
Microfinance Institutions (MFIs) were long evolving on the correct idea that poor people can pull themselves out of poverty by borrowing small amounts of money. Before the widespread adoption of mobile phones, loan officers delivered these loans directly to small groups of women or individual borrowers. As loan officers were working and living in the neighborhood, they would initiate peer pressure to encourage the repayment of the loan1.
In recent years the digital transformation in the financial sector has taken the delivery of small loans to a very new level. As smartphones have taken over the world and cost per 1GB of data continued to decrease in most places, fully digital microfinance players started to gain market presence and pose competitive pressure on traditional players. Their model does not rely on the judgment of loan officers or group members but the metadata from the borrower’s smartphone. The advanced R&D, IT, and behavior-based scoring have become keys for the success of this newly rising business model in the microfinance sector.
Thus, as these business models would require different drivers for effective operations, the critical business elements of each model also differ:
TRADITIONAL MICROFINANCE PLAYER
FULLY DIGITAL PLAYER
- Branches/Proximity - Loan officers
- Algorithms - Software engineers
Note that it is generally very difficult to have all parts of this equation in one institution. Traditional MFIs usually don’t have adequate resources for the successful R&D needed to develop practical metadata-based scoring, and most digital MFIs are not interested in the investment in branches and loan officers because they fear it would drive all California-based hi-tech investors out of them. (One of the aims of Gojo Group MFIs in their digital transformation journey is to achieve that difficult balance of “Tech & Touch” that leverages the efficiency of digital processes while keeping the trust-worthiness and inclusivity of in-person interactions, but that’s already the topic of other posts on this blog.)
No matter which of the two approaches you lean towards, in 2020 players of both kinds have faced a very new enemy. This enemy didn’t care much about the scoring model MFIs would use. The hit of COVID-19 had an astonishing effect on both digital and traditional players, bringing the delinquency levels in the microfinance sector to levels no one could imagine possible.
In some countries, the virus outbreak has interflowed with other predicaments changing the situation from bad to worse. In Myanmar, the COVID-19 epidemic, intensified by the civil war after the well-known coup d'état, has affected the PAR>30 levels in the microfinance sector to a staggering 90%. Suddenly, traditional MFIs, which have always enjoyed a PAR>302 at about 1%, were left with staff and systems not trained to manage the avalanche of cases needing restructuring and rescheduling. And the digital MFIs were simply left with nothing but relying on countless SMSs and calls from out-of-country call centers.
But as the dust gradually began to settle, the level of PAR>30 among MFIs of Myanmar began to differ. Data from August 2021 shows that while some institutions were able to reach the relatively suitable level of portfolio quality, a significant number of other MFIs continued to struggle with very high delinquency rates.
As most Myanmar MFIs have relatively similar products, systems, and personnel capacity, the critical differentiator here was the readiness and the efficiency of the deployment of delinquency management systems. MFIs that were more efficient in reaching out to customers with new, tailor-made offers to deal with sudden repayment difficulties ended up in a much better state and continue to widen their advantage.
The situation in Myanmar substantiated that no matter what type of MFI you are running, traditional or digital, the new reality will force you to consider the investment in developing a new element in your business model:
TRADITIONAL MICROFINANCE PLAYER
FULLY DIGITAL PLAYER
- Branches/proximity - Loan officers - Delinquency management system
- Scoring algorithms - Software engineers - Delinquency management system
Of course, the overall impact of COVID-19 on the microfinance industry has yet to be fully understood. Still, effective delinquency management systems will become essential parts of the competitive advantage of modern MFIs. The MFIs that will deliver the best-in-class efficiency in delinquency management will come out as winners in major contemporary existential crises in the microfinance industry caused by COVID-19. In the following posts, we will discuss the instruments and approaches that proved effective in addressing this task.
1. Gojo and its Partners specifically focus on eliminating pressure practices. 2. Portfolio At Risk (PAR) is the percentage of gross loan portfolio that is at risk. So, PAR 30 is the percentage of the gross loan portfolio for all open loans that is overdue by more than 30 days.
Elchin Abdullayev is part of Gojo's Operations Team, and focuses on financial product development and strategic operation initiatives with Gojo's partners.
On 20th January 2022, we held a webinar to share how Humo, our newest partner company, has established Humo Lab to spearhead digitalization and innovation. At Humo Lab, several products have been developed and launched, including mobile banking apps, payment apps, kiosks, and more. The webinar focused on Humo’s introduction, sharing best practices on how microfinance institutions can do better to extend financial inclusion.
The one-hour event featured Taejun Shin (Founder & CEO, Gojo & Company), Firdavs Mayunusov (Co-founder and General Director, MDO Humo), Firdavs Nuriddinzoda (Director of HumoLab, MDO Humo), moderated by Arnaud Ventura (Managing Partner, Gojo & Company). The webinar consisted of four parts: Introduction of Gojo & Company, Introduction of Humo, Introduction of Humo Lab, and Panel Discussion.
In the first part, Taejun shared what financial inclusion is, what Gojo strives to achieve and how Gojo operates in many parts of the world with its newest footprint being Tajikistan. It was followed by a talk from Firdavs M. covering the history and evolution of Humo, the story of how Humo Lab was established, and how the collaboration between tech and business teams allows disruptive thinking. Firdavs N. continued the presentation to introduce user-friendly services of Humo Lab and strategies behind their provision. The last 20 minutes was a panel discussion answering questions from audience, including topics such as synergies between Gojo and Humo.
The webinar was a great success, attended by over 150 people from 22 countries. The webinar was followed by an Ask Me Anything session where the audiences enjoyed direct interaction with the panelists.
To watch or rewatch the webinar, the recording is available here:
Gojo recently developed its leave policy by which everyone is entitled to 14 weeks maternity and paternity, 100% paid by the company up to a certain amount. According to our study, it is the most generous of this kind. I became the second person inside the organization to use it, and I was away from the office from late September until late October (I wish I could make it longer!). I am not alone — during the pandemic period, Gojo members are seeing a baby boom, and some more will take it soon.
Let me write about why we developed this policy and the things I hadn't realized before taking the leave.
A good parental leave policy is essential for pursuing gender parity in society. The gender pay gap is insignificant when both men and women don't have kids. The gap conspicuously widens after they become parents. In many countries, only women take maternity leave and look after the newborn babies, and their role tends to remain fixed even after the end of the maternity leave. Thus the gender gap widens. To prevent this from happening, both men and women should take ma/paternity leave.
Not only that. A strong leave policy makes the organization more sustainable. Che Guevara used to say something like, "no one is irreplaceable." Organizations should be able to run just as well even when key people are absent, including the founder CEO.
However, after taking my paternity leave, I learned a few more things.
First, I learned that it is an extreme joy to spend time with a newborn baby. Her face changes literally every day (I took a photo every single day, so I am sure). I learn something new about her every day, and vice versa. I felt that every input I gave to her impacted her development. It is a fantastic experience that all parents ought to enjoy.
Second, it makes a happy family. Especially under covid, even husbands are not allowed to spend the first several days with the neonatal baby. These days generate a significant “parental IQ” gap between women and men. If men don't take paternity leave, it is almost impossible to catch up. The result would be that wives always look after all kids-related matters, and husbands cannot be involved (some are deliberately not involved). The grudge gets larger every month. In the worst-case scenario, husbands become isolated from their family members. Some Japanese men told me things like, "after I became a father, my wife started focusing on kids only, and I felt like I became an ATM." In Japan, many old-age divorces are due to kids-related matters. It is a sad thing — they loved each other to the point of getting married, and the result of the marriage becomes the cause of divorce.
If you take paternity leave and actively join kids-raising, you will not experience this problem. At the very least, my relationship with my wife got even better after having a baby.
Third, after skipping the company's Executive Committee for 5 consecutive times, I confirmed that even without me, the organization would get going. I read the meeting minutes and watched the meeting videos, realizing that all the key problems are raised and analyzed well, and all the required solutions are executed.
The experience made me think about what is my raison d'etre. As the founder CEO, I am here to bring about non-linear change to the organization, delivering something the other colleagues cannot do. Following my period of leave, my work time allocation changed considerably, and I see some positive results already.
In this post Haruna, a member of Gojo's Corporate Planning Team, shares her career journey until she joined Gojo, and what she learned in the process. Enjoy!
What does “work” mean to you? It means a lot to me — as someone once said, more than half of your time awake is time spent at work, so it should bring joy. I fully agree with this statement. In my view, it should not just bring joy, but also be meaningful. Today I will share my journey on how I built up my career, what my struggles and lessons learned were, and how I eventually decided to shift my career to pursue my original hope of serving the developing countries. I hope it will be interesting to those who are thinking about shifting their career, especially in a more “social” direction.
When I graduated from university, I questioned myself, “what do I want to spend my time on?” I wanted to make sure I spent time on something I thought was important, and to me, at that time, working to improve the life of poor people in developing countries felt much more impactful than spending time to bring marginal value to already somewhat-fulfilled people in Japan. So I started looking for a government job to support developing countries. However, I could not get an offer and, when I got my first offer from a consulting company, I stopped searching. At that time, I wanted to focus on my university orchestra activities and wasn’t thinking very seriously about my career and future, so I ended up starting my career as a strategy consultant.
The experience was terrible. Very long working hours, no proper training, a bad relationship with the manager all piled up to become a lot of stress. I started getting both mental and physical issues, and had to take leave of absence. I went back to work after 3 months, but was asked to leave the company at the end of my third year.
I quickly searched for a new job. Luckily, because of my “strategy consultant” background, I got a lot of offers. I chose to go to a company called Rakuten, a Japan-based e-commerce company, which was trying to go global at that time — including developing countries in Asia and Africa. I thought that maybe this job could connect one day to my original wish of serving the developing countries.
This job change turned out to be a success. I worked closely with the CEO and had a chance to see the company from his view, which was a whole new experience for me — it definitely pushed me up to a different level. I started to enjoy work for the first time in my life, and started to feel that I was making a difference. I increased my presence within the company and was soon promoted to become one of the youngest business heads. I had a lot of struggles there too, but really enjoyed growing the business supported by a great team. Moreover, I loved the people at Rakuten. Everywhere, there was the culture of moving fast, getting things done.
However, even though my career at Rakuten was successful, I started to question myself again, the same question I asked myself when I had first started my career: “what did I really want to spend my time on?” I hadn’t forgotten my initial aspiration of contributing to the people in developing countries. I tried to chase this dream within Rakuten by raising my hand to meet startups in India, visiting Africa to find business opportunities etc. I also started looking outside to find things to do outside work to fulfill my wish — I joined a network of professionals supporting social startups, and I started to volunteer for an NGO supporting children in Africa. I even started a similar kind of program within Rakuten, an accelerator to support social startups by Rakuten employees.
I could have continued like this, but once I experienced the deep sense of achievement and fulfillment by putting my energy into something to which I was really committed, it was hard for me to fully focus on my assigned job at Rakuten. I decided to shift my career to pursue my original mission — to support developing countries and reduce poverty. It was a tough decision. I had to leave behind 10 years worth of social credit I had built, a good salary, a stable job which I knew how to run, a managerial position — basically a successful career. People said I should continue at Rakuten, especially as I had just given birth to my second child, and I was already going through a lot of changes in life. I could understand this argument, but one day I asked myself: if I died today, would I have any regrets or not? The answer was clear: I would regret not having spent my work time on something I thought was meaningful.
So here I am at Gojo & Company, a startup with a mission to extend financial inclusion to everyone, so that people can determine their own future. The mission resonates with my personal values, and so far my 6 months at Gojo have been great. Of course, there are pros and cons, and there never is a “perfect job”. My salary went down significantly, and I need to work more. Lots of new things to learn, a new culture to get used to, new people to get to know — all of this requires hard work. Having said that, the best thing here is that there are like-minded people around me who take social impact seriously. There are so many things which I can tackle that seem interesting and important — the kind of things I really pushed for at Rakuten but never got management attention can easily become an important project here at Gojo. Although it might be too early to tell, I think I managed to make a successful transition.
Aligning your personal mission with the company’s mission may not matter so much if you think about your day to day work. Having a good relationship with your colleagues, working on a fun yet challenging job, and having good work-life balance matters more in the short run. But if you stop and look back on what you have achieved, and see that it is exactly the impact you wanted to make on the world, there is a deep sense of satisfaction. So, I want to encourage those who are hesitating — “it is never too late to pursue your mission!”
Haruna Tanaka works for the Corporate Planning Department at Gojo & Company. She works on various projects at Gojo, including corporate governance, social performance management, stakeholder impact management, client impact measurement and R&D.