Merkur Bank

This week I met with Lars Pherson, the CEO and co-founder of a local lending institution, Merkur Bank. It was a very worthwhile conversation. The gist of what I walked away with are some pretty basic concepts that often get pushed aside or overlooked in the unquestioned business quest to ALWAYS maximize the bottom line. It is possible for a bank or for any institution to earn "modest" profits and to be content as a profitable institution. Its likewise feasible to be a task driven organization, meaning that they identify a problem in the current system and work to encourage solutions to that problem. Investing at any level can and should be as much about mission as profitability. Merkur has 2 different and separate rubrics for lending, BOTH of which need to be satisfied in order to lend: Mission and Profitability. Long term client relationships are as important, often trumping the perceived value of short term profits.

The new window of interest, which was opened for me through this conversation and research, was that of small to medium sized business development loans. In the post Yunus world of microfinance, microcredit/loans have received a tremendous boost, however the "lost level", as Lars referred to it is that of the established small business. From the Merkur website:

Imagine you are the owner of a successful business that produces organic products for which there is a growing demand. The natural thing to do is to expand your business, but when you contact your local bank, it offers you a loan at an interest rate of between 25-40 pct., if it is willing to offer you a loan at all. This is the reality faced by many businesses in developing and industrialized countries.
These limited credit possibilities constrain the ability of businesses to expand and to improve further their sustainable production lines. It is in light of this challenge that Merkur Development Loans Ltd. was founded, a joint venture between the cooperative bank, Merkur, and the Industrialisation Fund for Developing Countries (IFU). Both Merkur and IFU are experienced in financing initiatives within the area of sustainable development and providing credit to developing countries.

Merkur Development Loans Ltd. extends loans to small and medium size businesses and cooperatives in developing countries. For lending projects to be eligible for loans, projects must be certified within one or more of the following fields: Organic and biodynamic agriculture, fair trade, or sustainable forestry.
Up until now, microcredits, which have mostly been extended to individuals, enabling them to start their own businesses, have received a great deal of attention. But there is also a great need for loans to somewhat larger companies and cooperatives. These businesses promote local development since they hire their manpower locally.




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As I came to business school last year, I had virtually no idea what direction it would take me. However, one main observation leading me to study this thing called business, in what will likely be the only advanced degree of my life, was of a clear and vast control of resources allocated to this entity known as big business, whatever that is. I felt that in the last 100 years-ish, the control of specifically financial resources has emerged as the dominant power mechanism to affect the allocation of natural and economic resources throughout society.

So, that Combined with my varied background was what was tickling my brain coming in. My background of science and design, combined with a lifetime of commercial fishing, then remodeling houses and starting a construction business. Despite the obscure path as it seems laid out, the fishing provided me with a work ethic and an appreciation for nature and its resource value, the science and design provided a lens to my understanding of the world, the construction and remodeling gave me hands on experience with a trade, and the starting and running a business contextualized the trade and its role in society while introducing me to the nuts and bolts of business.

Since beginning this MBA, I have been on a mission to find a path I am passionate about contributing my career toward. Admittedly I have fluctuated, as interesting conversations and courses constantly flooded new ideas into my head & I kept picturing what it would be like to work in one field or another. The most grounding concept that has kept my journey toward a path at all focused, has been the big picture of what it was that fascinated me about business in the first place. It wasn't the lure of making 6 figures, but rather the hook of wanting to understand the seemingly out of whack power structure, in which the top controls not only all the money and how natural resources are managed and protected, but far too often it also dictates the policies that govern us.

Regardless, I came in to this hoping to shift the status-quo of how power and resources are allocated in society. Considering my entrepreneurial background and upbringing by educators, I feel that looking to entrepreneurs and youth with the greatest potential to bring a new perspective to these positions of power, seems like the best mechanism to affect long term change, which is the only meaningful kind. I have worked hard in seeking out conversations, and have been privileged enough to manage some very interesting meetings with business leaders in Oregon who have from one angle or another had similar agendas in what they do. I am trying to keep that ball rolling while in Europe.

My interest in energy efficient building led to a great opportunity to assist in the teaching of a carbon footprint analysis course in the Fall and Winter, which has stimulated an interest in burgeoning carbon markets and carbon finance. I have become very intrigued with the food industry and the role of supply chains to encourage local distribution of responsibly grown products. That was derived from a broad interest in the management of natural resource industries, forestry, farming, fishing, and ranching, which at some level grew from my background in commercial fishing. At some point I got a meeting with the CEO of Shorebank Pacific, and that led to meeting with the President of Shorebank Enterprise Cascadia. My conversations with him really introduced me to the realm of community development finance, and in that I seem to have found an intersection of the potential paths forming in my head. Incorporating tools of social responsibility into entrepreneurial and transitional models... keeping up with burgeoning carbon markets, and fighting to get poverty a legitimate seat at the table, all seem to intersect in the realm of community development finance and consulting.

Here are a couple video links with the CEO of ShoreBank International talking about what it is. Its not emmy material, but it does lay it out pretty clearly...