Mr. Kuroyanagi Hidenori
Mr. Kuroyanagi Hidenori
Born in 1980. As a freelancer, he has worked on business support in Asia, fundraising and corporate partnerships for nonprofit organizations, and support for revitalizing local communities in Japan. In April 2015, he established Linklusion Co., Ltd., which supports microfinance and BOP businesses, to create a world where people living on low incomes or in poverty are not excluded. This business model advanced to the final judging round of a business idea competition for four billion people. He is currently based in Myanmar.
people living in poverty improve their standard of living Microfinance
Q. Mr. Kuroyanagi, you have business partnerships with microfinance institutions. Could you first tell us about microfinance?
Of the world’s population of about 7.3 billion people,
800 million people cannot access clean water,
1.5 billion people have no electricity,
2.5 billion people cannot use hygienic toilets.
As there are still many people who cannot access basic human needs like these,
There are also a great many people who cannot access financial services.
Two billion people, approximately half of the world's adult population, cannot access formal financial services.
Many people may imagine that financial services such as “borrowing money, making deposits, and using insurance” are for wealthy people.
But it is precisely poor people who need financial services.
Because they work as day laborers and in similar jobs, their household finances are fragile, and they do not earn a fixed income every day. A great deal of instability always surrounds their money management.
On top of that situation, if the father dies, a very important breadwinner for the family suddenly disappears from one day to the next. For example, if they had life insurance, the situation might be different.
Their lives are very vulnerable to risks like these.
However, financial services can stabilize or ease this situation.
For example, in rural areas and farming communities, many people run very small businesses, such as selling goods in front of their homes, rather than working for an employer and earning a salary. Of course, even this requires start-up capital. For people who are doing all they can simply to earn enough money to get through the day, starting or expanding a business is difficult.
—So microfinance mainly serves as a bank for people with low incomes.
What we do is almost the same as a bank.
However, transactions such as lending and borrowing money happen much more frequently.
Because there are many complex tasks, they should ideally be managed using an IT system.
—Doing the work manually certainly seems likely to drive up labor costs…
In Myanmar, however, labor costs are still low, so doing the work manually can be cheaper than paying the high cost of introducing a system. But this is not only a question of cost.
Doing things manually inevitably makes mistakes more likely and prevents us from making use of the information.
contribute to improving the living standards of people living in poverty,
and also achieves growth for companies—what is “inclusive business”?
We therefore provide inexpensive IT systems to microfinance institutions in Myanmar. We are also working to make the project commercially viable by using customer information and the networks of microfinance institutions to support Japanese companies aiming to enter Myanmar.
By incorporating the needs of people with low incomes into the business, I want to create a sustainable business that helps improve their living standards while also generating profits for the company.
Q. What kind of customer information serves as a source of business?
This includes every aspect of their living conditions: household income and spending, their living environment and health, their children’s education, and the allocation of living expenses. By clarifying these, for example, it becomes possible to develop financial services and products that suit them better.
Microfinance institutions work to address social issues, and it is very important for them to properly understand the people living in poverty who are their customers. By properly organizing this information, they can improve their financial products and services to meet those customers’ needs.
That is why we do more than simply install IT systems at microfinance institutions: we also provide information-based consulting to support their work toward their social missions.
Q. Mr. Kuroyanagi, could you tell us about your company’s future plans?
Microfinance has also expanded here in Myanmar, but it remains concentrated in urban areas and their surroundings. To overcome this situation, we want to use IT systems to lower operational management costs so that financial services can reach a wider range of people.
Q. In Myanmar as well, is the number of people who can receive support from microfinance institutions quite limited?
Yes. Even in Myanmar, it has so far spread only to the areas around cities. The range is probably about a 1–2-hour drive from central Yangon. Other locations include areas around Bago and Mandalay. Around 160 operators are concentrated in these areas.
This is because operating costs rise the farther you go into rural areas. Microfinance operations require many staff members. Both lending money and collecting repayments are done manually. In addition, activities to deepen recipients’ financial understanding, such as holding regular meetings with them, are essential. But the farther you go into rural areas, the fewer households can be visited in a given time, which increases personnel costs.
Even with microfinance, it is still difficult to deliver these services to people living in the deepest poverty. As long as we operate on a business basis, we have to define and limit the group we serve.
I want to use IT systems to reduce costs such as personnel expenses, establish a sustainable mechanism that generates greater revenue, and enable everyone to access financial services.
Myanmar We also asked about this and IDFC!
Q. Why, in the first place, Myanmar did you choose it?
I can give two reasons, but I did not have any particular attachment to Myanmar (laughs).
First, about three years ago, as a member of a Japanese NGO, I researched Myanmar's microfinance market. This was what made me recognize the potential of Myanmar's microfinance market.
I had also spent about two weeks in Myanmar and had already visited the microfinance institutions that are now our partners.
Some businesses were doing well, while many others were not. But precisely because the need was so great, I felt that the microfinance market needed to grow in a healthy way.
The second reason was that, from a business perspective, I thought the microfinance market in Myanmar would be easy to enter.
Myanmar of Microfinance are mostly small or medium-sized institutions founded only a few years ago.
It is easier to have an institution without a system adopt a new one than to ask an institution that already has one to change its system.
Also, if we do it somewhere it is needed more, the social impac also increases.
Question: Myanmar What is it like working with these people? What kind of Myanmar people are there?
Myanmar I think their personalities have some similarities to those of Japanese people.
I find them very earnest.
There was even a time when everyone came to work despite my having told them they could take the day off.
They are very hardworking. Although the people who take it easy really do take it easy… (laughs).
In addition to the Myanmar people working at our company, I have also met, for example, an energetic mother who receives microfinance support and conducts her own market research.
She grows water spinach in a field, but the field she rents is small, so she can only sell at the market three times a month. On other days, she cycles around the town’s markets to find the cheapest water spinach in the village and earns an income by selling it at other markets where she can get a higher price. She said earning money by reselling things was her hobby (laughs).
Q. Young people Myanmar Why do you think people should come?
Myanmar it could be anywhere, I think (laughs).
I think you should definitely try participating in IDFC as well.
I have always tended to be rather spontaneous. I have repeatedly tried whatever was in front of me that sparked my interest.
All things considered, I am glad that I was able to put my full effort into what I wanted to do at each point in time.
One approach is to build a career based on a plan for 20 years ahead, but I do not think you need to feel that is the only way.
For example, some students are struggling with their job search, but I wonder whether it does any good to keep worrying and remain stuck in one place.
If you are interested in IDFC, why not try participating first?
Q. Please tell us your impression of IDFC members.
When I first heard about IDFC from Hashimoto, the first president, I asked him, “So what are the results?” It felt very refreshing when he clearly said, “There are no immediate results.”
They said something like, “If students from Myanmar and Japan grow closer while working seriously together, that will remain as an intangible bond and, in the future, contribute to their own lives and to society.” I remember immediately understanding what he meant.
I think it is amazing that, with such a small organizing committee and only one advance visit to Myanmar, they could put together such a substantial program.
I do not think there could be a more fully prepared stage for you.
Q. Finally, Mr. Kuroyanagi, for you, Myanmar what kind of country is it?
…It is simply where I live (laughs).
It's like being asked, “What does Tokyo mean to you?”
To be honest, I did not choose it simply because it was Myanmar; the country where there was something I wanted to work on happened to be Myanmar.
In fact, I feel that more people come because they have something they want to do that they can pursue in Myanmar than simply because it is Myanmar.
Seen that way, it may be a country that can interest a wide range of people and offers many possibilities.
