The Norwegian newspaper Vårt Land writes in the Monday issue (October 17, 2016 p. 8-9) about my research in an article with the title “Therefore microfinance is not that effective” (Derfor er mikrofinans lite effektivt). While my findings do find that microfinance does add extra income to an individual´s business, it also shows that size can act as a counterbalancing factor such that income actually is reduced with increased sized. The economies of scale are in other words negative in the early phase of the firm. My research also points to the fact that growth in sales or assets does not seem to be related to taking on microloans. This is not controversial. What is obvious and perhaps more relevant from my research is that the level of financial literacy among poor microentrepreneurs is VERY low, and then one should take into account that the clients I surveyed were not the poorest of the poor, but merely poor. Little research is still however done in this area, and much more is needed. There is even research pointing towards the odd fact that those with more education actually do worse. This
Little research is still however done in this area, and much more is needed. There is even research finding in some informal economies that those with more education actually do worse (Honig, 1998). This is counterintuitive, and much more research is needed here. I am currently working on a paper which looks at the role of Financial Literacy, Role Models and how these two concepts affect firm performance in the informal economy. Research in the left tail of human capital among the poorest individuals on the planet is still in its infancy, but over time we will eventually learn how to effectively lift the human capital and sustain individuals in an improved economic state. The practical example of MTI Investments, and other pioneering firms, financing small and medium-sized firms, may be leading the way in this regard, where more investments are allocated towards small and medium sized firms, rather than mostly microenterprises today.
Here I present my story, connecting the dots of my academic life. I began thinking about pursuing a PhD in 1991, when I was an undergraduate student at Slippery Rock University (SRU) in Pennsylvania, USA, on a Sweden–America Foundation scholarship.
Several informal talks with one of my undergraduate professors helped me weigh the pros and cons of an MBA versus a PhD. Being a bit ambivalent about the decision and wanting to keep both doors open, I elected to go for a bachelor of science degree in economics. Upon graduating summa cum laude in 1994, I was still ambivalent, so I returned to Sweden, where I took a job assisting Professor Lars Oxelheim at the Research Institute of Industrial Economics (IFN, then known as IUI) in writing a book about the deregulation of the Nordic financial markets and its effect on Nordic interest rates as compared to a global interest rate (Oxelheim, 1996). Professor Oxelheim and I also discussed me potentially pursuing a PhD, but back then I did not know what research focus I was interested in, nor did I realize that embarking on a PhD is one of the more entrepreneurial ventures in which a person can engage.
The experience at IFN led to my next job as a researcher at the Boston Consulting Group (BCG), where I specialized in corporate valuations and a corporate performance framework known as Cash Flow Return On Investment (CFROI), developed by HOLT Value Associates (Madden, 1999). The experience at BCG motivated me to take a master of science degree in economics and finance from the Stockholm School of Economics (SSE). This was one of the best career decisions I have made and gave me many valuable contacts with whom I still interact today. In 1998 and 1999, after graduating, I tried starting a couple of businesses. One was an online database for financial analysis services called MIG (Management Information Group) and the other a business promoting stand-up comedians and speakers, called IGNITE Infotainment Professionals. Both firms had high-flying visions (seen in the pluralistic nature of the names) but made meager progress. Despite the tough times, the experience was enjoyable, and I learned more about business in these two years than any school could have taught me. Specifically, I learned that perseverance, along with a strong personal conviction, is important, but that luck is probably also part of the equation. The experience and knowledge gained through these years are also shown throughout this dissertation.
In 2005, having spent five years as a financial advisor on global equities at Credit Suisse, I became a portfolio manager at DNB Asset Management, responsible for global cyclical firms (materials, transportation, automobiles, and commercial services). However, in 2008, this work came to a sharp halt with the collapse of Lehman Brothers and the layoff of many in the financial industry, including those of us at DNB. I discussed with Professor Carl Fey starting a PhD, but I still felt ambivalence about the prospect. I had previously written an academic paper with Professor Fey and Professor Ingmar Björkman based in my master thesis at SSE. The article is today cited 49 times according to Google Scholar (Fey, Engström, & Björkman, 1999). However, I did not pursue the opportunity, as this was not an area of interest close to my heart, and I therefore again missed how incredibly entrepreneurial it is to undertake a PhD.
Instead, I worked for three years as chief financial officer at the Swedish Mission Covenant Church, which not only gave me a better understanding of civil society and organizations based on the popular movements from the late 1800s and early 1900s but also a lot of experience in managing people, creating control systems, and managing a budget process and different type of assets, such as properties and foundations. The job involved a lot of responsibility and creativity, but it was also very entrepreneurial. It gave me a good glimpse at how small businesses are run and governed, since the church was involved in several small and large businesses.
One of the investments the church had made was a small footnote on the balance sheet, Oikocredit, that was not earning any interest for the church. As the financial assets I was responsible for were a guarantee for the future pensions of several employees, I was keen to ensure the assets were managed in the best possible way. Not getting a return on investment was unsatisfactory to me. I therefore investigated Oikocredit and visited an annual general meeting in 2011 in Dar es Salaam, Tanzania, where I learned about microfinance. I observed how controversial the idea of paying investors a market interest rate was; some owners there argued frantically that this was morally wrong. In 2011, the interest investors could receive from lending money to Oikocredit was at most 2%. In a scenario where inflation is running at 3%, I as an investor would lose 1% by investing in microfinance. The argument against a higher return to investors was that there was also a return to society, a social return, upon which investors should look favorably. The return was not close enough to the cost of capital required by the pension fund, which was the foundation of the church assets, and thus microfinance did not seem as a good investment to me at the time. Now, with global interest rates at record low levels, many investors are turning towards microfinance as an alternative asset class, in hopes better returns.
AGM at Oikocredit in 2011
Members of Oikocredit
The experience in Tanzania sparked my interest in this controversial topic, and I immediately contacted Professor Lars Oxelheim again, with whom I had kept in touch with over the years. The decision to contact Professor Lars Oxelheim was also inspired by my friend Klas Palm, who had just initiated his PhD studies on innovation and quality management related issues. My research interest then was how interest rates are affected by the increased rate of return required by investors. My hypothesis was that the interest rate would not change to the end user, as the local market sets the interest rate. What I therefore wanted to research was the degree to which the microfinance investment vehicles like Oikocredit, which operate between the investors and the local microfinance banks, could absorb a higher required rate from investors, and whether this would pressure them to become more efficient in order to preserve a low interest rate. Little did I know that my topic would be completely different a year later.
I believe it is also worth mentioning that about a year prior to me beginning at the University of Agder, I became friends with the beat artist Michael Bowen and his family, who had moved from Hawaii to Sweden (Collin, 2006). On a few occasions, I played the saxophone while Michael spoke or painted. It was inspirational to meet with Michael, who was very positive and encouraging of my talents. Tragically, Michael passed away in 2009. However, his memories live on and are, in fact, scattered all over the University of Agder. He has more than 100 art objects installed at the university and the nearby Kristiansand Cathedral School. I have obtained permission from his widow Isabel Paoli-Bowen to use his paintings as article separators in this thesis. Michael was a pioneer in combining music and painting (art), known as performance art, and building on these ideas, I would like to emphasize the long-standing relationship between research and art, and the inspiration both music and art are to my endeavors.
After my first year of PhD studies, during which I learned about current and historic research and methods and interacted with many students and faculty, my interest had turned to how microfinance impacts the microentrepreneurs. I had experienced being an entrepreneur previously, and the topic of microfinance and the microentrepreneurs seemed a lot more interesting than doing research on the sensitivity of interest rates. “Come on,” as my supervisor Trond Randøy would say. I also had access to unique data, since one of my supervisors, Professor Roy Mersland, had helped build a leading microfinance institution in Ecuador (Banco D-Micro). I am especially grateful to Carolina and Hans Martin Espegren, for a successful collaboration in gathering data in Ecuador. We spent several weeks collecting and analyzing the data together, but we also had fun visiting the coast, surfing, cooking dinner together, or going for an evening run.
I would also like to express my gratitude to my supervisors. First of all, a big thank you to my main supervisor, Professor Trond Randøy. Working together with Professor Randøy has been truly enjoyable from the start, and I am grateful for not only the professional collaborations, but also for the personal friendship we have built over the years, including a few jazz jam sessions, hikes in the mountains, canoeing around Kristiansand, international research conferences, and entrepreneurial ventures in Tanzania. An indirect result and spin-off from this PhD endeavor is the creation of MTI Investment AS (www.mti-investment.com), a venture capital firm investing in the growth of eastern Africa. In MTI, all of my previous undertakings and experiences are combined and maximized, and every person with whom I have ever worked is connected somehow with this business.
“Ut på tur, aldri sur” is a Norwegian saying – “You’ll never be grumpy on a hike”
One of Professor Randøy’s previous PhD students, Professor Roy Mersland, was my second supervisor. He became a professor within five years of obtaining his PhD. I am grateful for having met Professor Mersland and seen the dedication, passion, and focus with which he carries out all work. Professor Mersland was instrumental in getting me access to Banco D-Miro data, which form the skeleton of my PhD. My third supervisor is Dr. Leif Atle Beisland. Dr. Beisland and I had many discussions about performance measurement that were instrumental in focusing the thesis on return on assets. I would also like to express a special thank you to Professor Oxelheim who has followed my academic progress and with whom I have written several debate articles with during these three years (Engström & Oxelheim, 2013a, 2013b, 2014). Professor Oxelheim has an inner energy and passion for research that is truly inspirational. Just like my supervisors did, I wrote this thesis during numerous flights, on various airport buses and trains, sometimes in a hotel room in a foreign country such as in Tanzania, sometimes in the office in Kristiansand, and sometimes in the office at the Stockholm School of Economics (SSE), with which I was affiliated during the last year of my thesis.
I also would like to thank all the faculty members at the University of Agder, in particular Professor Otto Andersen, Dr. Bjørn-Tore Flåten, Dr. Rotem Shneor, Professor Andreas Falkenberg, Professor Joyce Falkenberg, Andre Tofteland, Anne Line Omsland, Dr. Burak Tunca, Dr. Daniel Göller, Daudi Pascal Ndaki, Diana Trydal, Professor Ellen Nyhus, Erik Arntsen, Geir Haaland, Gro Anita Homme, Professor Emeritus Harald Knudsen, Professor Ilan Alon, Irfan Irfan, Professor Jan-Inge Jensen, Dr. Kjetil Andersson, Dr. Kristin Dale, Kristina Walker Pedersen, Bandula Galhena, Amila Sirisena, Harald Stokkeland, Lisa Whitehead, Dr. Naima Saeed, Dr. Neema Mori, Dr. Gibson Munisi, Nertila Stringa, Professor Stein Kristiansen, Dr. Stina Torjesen, Stina Øyna, Stine Bårdsen, Unni Henriksen, Inger-Lise Myrvold, and Målfrid Tangedal.
In addition to the above-mentioned individuals, I also owe a thank you to many of the faculty members and PhD students from other schools, such as Professor Dale Duhan, Professor Arent Greve, Professor Terje Moen, Professor Yaakob Weber, Professor Kirsten Foss, Dr. Gry Alsos, Professor Tommy Clausen, Professor Johan Wiklund, Professor Karl Wennberg, Professor Carin Holmquist, Professor Sara Carter, Professor Hans Lundström, Dr. Espen Isaksen, Dr. Marianne Steinmo, Dr. Maj Munkefjord, Dr. Sølvi Solvoll, Marianne Arntzen-Nortquist, Marit Breivik Meyer, Karin Wigger, Oxana Bulanova, Nhien Nguyen, Thomas Lauvås, Siri Jakobsen, Are Jensen, Dr. Terese Strand, Nedim Effendic, Dr. Nadav Rotemberg Shir, Beldina Owalla, Kajsa Asplund, and Professor Alex McKelvie.
Apart from academia I am also grateful to the Norwegian Alliance Microfinance and their CEO Andreas Andersen for allowing me to work with Banco D-Miro in Ecuador. At Banco D-Miro, I am thankful to all the support and help from the CEO Carlos Viteri and the marketing director John Pacheco in creating the survey instrument and in motivating and instructing the local call center. I am also grateful to Johnny Villavicencio and colleagues for helping me in retrieving longitudinal (historic) data from the Banco D-Miro database. When in Ecuador, I was also fortunate to get to know many wonderful people from the local Alliance Mission group, including Hans Martin and Caroline Espegren,Isak Holmen Sørensen, Maria Andreassen, Rebeckka Andreassen Garcia, Daniel Garcia, Maria Andreassen,Ingunn Skutlaberg Valbø, Bjørnar Valbø, Rita Franco, Lily Macias Ramos, and many more. Gathering data without this group of individuals around would simply not have been the same experience. Thank you all.
Last but not least, I would like to thank my close friends and family for supporting me every step of the way. I wish I could thank my aunt Kajsa Tunér, who is not with us anymore, but she definitely was an influence, and I still to this day remember when she earned her PhD in 1986 when I was 15 years old (Tunér, 1986). The same must also be said about some other important people who are no longer with us, like my grandparents on both my mother’s and father’s sides. My brother Johan Engström has been an inspiration in his hard work to become a radiologist, and also my sister Hedvig Engström Jakobsson, who earned her PhD in 2011 (Engström Jakobsson, 2011). I would like to thank my mother Margareta Dehle for always being very supportive and for helping my family in so many ways. A special thank you is directed to my two daughters Ella and Kajsa who, who during these three years, have had to speak to their father on Skype and Facetime far too many times. A special welcome and thank you to my newborn adorable daughter Leona, who was born in the very last phase of my PhD, a phase when I also lost my dear and greatly missed father, Per Engström, who had been a surgeon. This dissertation is therefore made in memory of my father and dedicated to my three children.
Collin, L. (2006, November 7). Det bor en beatnik i staden. Svenska Dagladet. Stockholm.
Engström Jakobsson, H. (2011). Molecular characterization of the dynamics and development of the human microbiota.
Translated from original article in norwegian foundhere.
This is revealed in the doctoral dissertation of Pontus Engström at the University of Agder (UiA).
– Microfinance provides a little more money in the wallet to the microentrepreneur, but they remain poor. Microfinance does not contribute to business growth or economic growth in society at large, says Engström.
He has just defended his doctoral dissertation on microfinance. Engström has followed 755 microentrepreneurs in Equador over a ten-year period. The findings show that, on average, the entrepreneurs make a little more money on their business, but not enough for the business to grow and fight poverty.
– The intention of micro-loans is to kick-start economic growth from scratch by giving small loans to poor people. Most small contractors want to grow, but that doesn’t happen. Microfinance does not help fight poverty as the scheme is used today, says Engström.
Engström shows in the doctoral dissertation that experience and general education mean little to the development of micro-entrepreneurs. What matters, on the other hand, is an understanding of basic financial concepts.
– Lack of growth in micro enterprises is often due to financial illiteracy of the business owner. The microentrepreneur is most concerned about getting money in his wallet from day to day and is not concerned about long-term value creation, says Engström.
He believes there is a need for more training in business and finance.
– The actors lack financial skills to grow and must be offered more education in business and finance. We must not stop supporting micro-enterprises, but most preferably we must invest in small and medium-sized enterprises with 10 to 300 employees. There are too few SMEs in poor countries, especially in Africa. The lack of such companies is called “the missing middle,” says Engström.
According to the World Bank, SMEs create four out of five jobs.
– We need to support the slightly larger companies, which have the power to hire people. There is no shortage of access to micro loans, but the loans must be given to the small and medium-sized businesses that have already grown and shown that they have a market position, says Engström.
Norway with a key role
Norway plays a key role when it comes to microfinance in the world. Norad, the Mission Alliance and the Strømme Foundation are among the Norwegian players involved in microfinance in poor countries, and in 2006 the Nobel Peace Prize was awarded to Muhammad Yunus.
– Microfinance became a hype when Muhammad Yunus received the Peace Prize, says Engström.
The Bangladeshi economist received the award for developing microfinance. Yunus believes that all people are potentially entrepreneurs, but that not everyone has access to resources. When he received the Peace Prize, Yunus said that microfinance would create a world without poverty, and that in the future we would go to museums to experience poverty and unemployment.
Criticism of microfinance
Engström was among those who liked the message from the business professor, but the Peace Prize gave a brief cheer in public space before criticism began. Both Yunus and microfinance were criticized for being too big in words and too strong in ambition.
– Critical journalists claim that microfinance led to more poverty. This was partially confirmed by other research showing that microfinance has no or very little effect on the economic development of poor countries, says Engström.
He believes the peace award to Yunus has helped reinforce a romanticized image that it is good that all people are entrepreneurs.
– We have to move away from the naive idea that everyone should be their own entrepreneur. 40 per cent of Uganda’s residents are entrepreneurs, while only 6-7 per cent of the population in the Nordic countries is. Everyone does not want to be entrepreneurs, many just want a job, says Engström.
Assistance with aid
Micro businesses have up to 10 employees, but often only 2-3 employees, including the one running the business.
– Microfinance as it is practiced today simply does not have the socially changing power of Yunus as such. Microfinance is too much of an aid issue. We need to stop thinking about assistance and start thinking about business. We must think about economic growth and development, as we do in the West. Short-term thinking prolongs poverty, says Engström.
– Does this mean that microfinance players today are extending poverty in the countries they operate in?
– Microfinance gives money to the individual, but it does not develop to a small extent.
The local knowledge players that the Strømme Foundation has built up are very important for being able to further develop microfinance. I have faith in the actors working on this, but the method itself is ripe for change, says Engström.
The poorest do not get a loan
Stromme Foundation has been operating with microfinance in poor countries for several years, and is aware that the financing scheme does not always work.
– Microfinance does not work when we talk about micro loans to the very poor, says Bjørn Stian Hellgren, head of Strømme Mikrofinans AS.
– Only when a borrower has a sustainable business plan, some productivity and some values in terms of products and production conditions will it make a positive contribution from a micro loan. Therefore, Stromme Foundation emphasizes that micro-loans should be linked with education and training. The borrower must have some prerequisites for us to provide micro loans, says Hellgren.
– Who gets micro loans from you?
– There are everything from small toy companies with 2-3 employees on the street in Uganda to companies with up to 10 employees.
– You have not considered changing the practice and lending to larger companies?
– So far we have not done so, but we are closely monitoring microfinance research and are constantly assessing what we can do to improve our microfinance, says Hellgren.
The 2016 BCERC was held at Bodø in “northern” Norway (it is actually in the middle) and attracted 639 submitted abstracts of which 180 papers were accepted and 70 interactive paper sessions (kind of like speed-pitching your ideas). In total 336 entrepreneurial researchers were present presenting 226 papers, with 24 countries represented at the conference (Argentina, Australia, Austria, Belgium, Canada, Chile, Denmark, Finland, France, Germany, India, Ireland, Kazakhstan, New Zealand, Netherlands, Norway, Russian Federation, Singapore, Spain, Sweden, Switzerland, United Kingdom and United States).
Midnight sun 00.00
Bodø sunbathing in the midnight sun
Dinner in tent
Fish…they actually served whale without most of us knowing
The Bodø Parade Orchester
Professor Karl Wennberg in action
Another paper session
I presented my paper on Financial literacy, role models and Firm Performance in the Informal Economy of Ecuador which I am co-writing with Professor Alexander McKelvie from Syracuse. We received good feedback, especially on the idea of how challenging it is to grow in the informal economy, often because of the intense and near perfect competition.
In the final phase of my PhD two BIG events take place. The first one happen on January 9th when my daughter Leona was born (nr 3 after Ella and Kajsa). Quite a little beauty and doing just well. Leona has her whole life in front of herself. Perhaps she will also take a PhD one day in a topic which interests her. But no pressure, she is fortunate to be born in a part of the world where she can be anything she wants.
Me and my dad
Me and Leona
The other major event happen on February 2nd, when my dad Per Robert Helmer passed away after some illness. My dad was a surgeon during most of his active carrier, but he actually always wanted to be a carpenter and build houses. My dad was born January 7th 1943 so he just turned 73 years old. He was one centimeter taller than me, standing proud at 1.99 m. I have always called my dad “Per”. This happened apparently because my parents were influenced by some friends of my dad, (Jonas Modig I believe), who called his parents by their first name. I also call my mother by her first name, or a nick name of Margareta: “Maggan”. However, the feeling when I say “Per” or “Maggan” is exactly the same as if I had said “dad” or “mum”. That is what it is like to be born by parents from the 1940s who were a bit rebellious in the early 1970s.
I know I had a great dad, with all his human shortcomings. Although he was a typical “40-talist” (an expression used in Sweden for someone born in the 1940s) he was a very fun and loving dad. Sometimes my dad was a hero, saving or improving people´s life. I remember my old saxophone teacher in Härnösand, Rolf Hellsing, who was thrilled that Per had operated on his hand, and many of my school friends, or their parents, would at some point run into my dad for surgery or other examination. That is what it is like to grow up in a small town. Everyone knows everyone. For my own part, I have also been fortunate to have had a father who at all times could provide quick care. No need to dial 1177 (sjukvårdsupplysningen / special number to talk to a nurse) – you just ask your dad.
When I was younger we lived in Mälarhöjden, Stockholm. We lived in a red house with a big garden with several apple trees, raspberries, even cherries (bigarreaus), next to Per´s parents (our grandparents) so it was idyllic in many ways. The memories from Mälarhöjden mostly circle around the house at Pettersbergsvägen 15A and the extension we made to that, but I also remember how my dad often was picked up by the so called “Läkarbilen” (doctor´s car) for work.
1971 Christmas, Fårösund with the Höjmans
In Mälarhöjden, Pettersbergsvägen 15A and 17.
Some of the friends my mum and dad used to hang out were the family Östberg and the Thelanders, just to mention a few. With the Östberg family we would join and play badminton once in a while for instance in Vårby Gård. But when I was 12 years old we had to move to another town because my dad had to find a new job. We ended up in Härnösand, but it could equally have been Vimmerby where he was also offered a job. Either way, Härnösand turned out to be a fantastic place for us to grow up in. With our dad we were mostly involved in renovating a big house in Gådeå By but also sailing a lot. Somewhere around this time he also spent one year abroad, working in Saudi Arabia and also a few months in Mo i Rana.
Per then worked at the emergency clinic at the hospital in Härnösand, merged with Sundsvall, for a decade before they decided to close the hospital and he had to move. He then became the director of the emergency clinic in Finspång, until they closed that down (merged with Norrköping), and he started his own private surgical clinic in Norrköping. He ran one of the first private surgical clinics, and for most parts he did well here.
Most recently he lived outside of Finspång in a beautiful area known as Stenstorp with Elisabeth. There he renovated a house, had sheep, worked in the forests, planted trees, made planks from the wood which he built other things with. The favorite place we had was the small boat house with a small landing-stage (brygga). We have picked blue berries, mushrooms (chanterelles), etc and really enjoyed the countryside there, including the many sheep they used to have. All children of Per and Elisabeth enjoyed going to Stenstorp for relaxing and just hanging out. Per had five children (me, Johan, Hedvig, Frida + Sofia) and Elisabeth three (Thomas, Åsa + Sofia). In Finspång the family Krig became important to my dad and Elisabeth, but also to us.
My dad experienced a lot of things, such as seeing his father Lars Engström build Villa Engström with architect Ralph Erskine at Lisö, or when me, and his friend Tosse sailed to Fårö.
When he was young he was quite close to his grandmother Signe, who was quite nice to her grandchild. I know she helped him early on to finance the purchase of an MG (wish he had kept it…). A story we remembered when being young was when he was driving it very fast, at 180 km/hour, and the clutch stuck to the floor. (One need to remember that most cars really were not as good as the cars are today, or the roads, so this was fast….then). We liked hearing about that. Our dad was a rebel in many ways. He had one brother (Anders), and two sisters (Kajsa and Kersti). His mother, my grandma, was Eivor, known as Eve. Lars and Eve came from Lidingö, but moved to an apartment in Västberga, before finally settling in on Pettersbergsvägen 17 in Mälarhöjden.
When we were young we did a lot of sailing in the Stockholm archipelago and in the winter we would go ice skating on the Baltic sea or go downhill skiing in Idre.
My dad had a lot of friends, one being in particular network of doctors, artists and writers known as “Pepparkaksordern”. This group of close friends enjoyed life and did have get togethers frequently. To me, all of the individuals in this group are unforgettable characters, legends, and I know that one could easily make a movie about the adventures of this group. Below are some of them, others include Nito (Joaquin Masoliver), Jonas Modig, and many more, with their wives . They would meet several times a year to have dinner and just enjoy life, circling around a common interest in art and literature, more recently they found inspiration in the so called Folke Dahlberg sällskapet. The friends in Pepparkaksordern were very important to my dad, and one of the things my dad was good at was to make sure they would meet often. He and Elisabeth showed enormous hospitality, as he did also when he was younger, either at his parent´s home in Mälarhöjden or at Villa Engström at Lisö.
My dad lived for most part a great life. Of course there are tough times, but for most parts he had fun, he saw the world, he had many friends, and was always on to some fun projects, apart for the last few years when Parkinson slowed him down gradually. He was always very found of growing things in the garden. When we were younger he had a big field of potatoes, and more lately he kept his fingers green in the garden at Stenstorp.
A couple of years ago, my sister Sofia lived in New Zealand, and Per had a chance to visit her there as well.
His favorite music was jazz, and throughout his life he enjoyed listening to Charlie Parker, Miles Davis, Duke Ellington, Art Blakey and the Jazz Messengers, Roland Kirk etc. I know he saw several jazz artists in the 1960s with his friends Jonas Modig, Tomas Jansson, Gudmund Blomgren etc and took many photos of the artists while they performed. During a few years in the 1980s he was also a fan of Dire Straits, and more recently he fell for the music of Emmilou Harris. I know that my dad´s interest in jazz must have influenced me when I was younger, although I never intentionally think I did that. My dad also played saxophone when younger, but I believe he never got very far, but during the last few years he bought a soprano sax in an attempt to pick it up again. He really liked listening and “digging” to jazz, watching his foot move with the jazz beat.
Thank you dad for all these years, for my sisters and brother and for many memories.
One of the most exciting times when taking a PhD is the opportunity to meet with other PhD students and listen to experienced Professors from all over the world. This year we, roughly 125 students and faculty, met in beautiful Trondheim at Clarion Hotel & Congress, at the annual NFB Research conference. It is really impressing to see that Norway invests money in allowing PhD students from all across Norway in the area of Economics and Business, and it becomes an invaluable platform for allowing students to interact and build these important networks which help in not only advancing our research, but also helps in growing us as researchers.
This time I am presenting my third paper, which may be the last one I need for my PhD. This paper is entitled “Financial Literacy and Entrepreneurial Success in the Informal Economy.” The discussant was Professor Grete Hennes. The paper links in with the data collection and previous papers, but specifically focuses on the impact of Financial Literacy on the performance of small informal businesses in Ecuador. The findings indicate that those microfinance clients who are more financially literate, have more success in their business, measured in terms of profits or return on assets. The feedback from the presentation helps me in several ways:
While the presentation is great, including photos of the context etc, I need to better explain in the paper the context.
I need to consider other factors which could bias the result
Discuss the data reliability in more detail
Keynote speakers during the conference included Professors Barbara Czarniawska, Frode Mellemvik, Ingeborg Astrid Kleppe and John Burns. For more details, please see the program. A reflection for next year is to perhaps try to get even more well known key note speakers, as the group is quite large and it would make a lot of sense to invite some of the big names in research.
In the evening we had a dinner at the business school, with a Norwegian choir entertaining…
Later we walked home and passed the so called Nidarosdomen or Nidaro´s cathedral. It was completed in 1300, but the beginning of the dome was built in 1035. It is built over the burial site of St. Olav who was a Norwegian Viking king, who has become a patron saint of Norway.
This interesting TED-talk by Diana Enriquez provides a nice introduction to what my PhD is about, the Informal Economy. In India, about 84% get their employment from the informal economy, that is a little bit more than 4 out of 5 jobs. The informal economy exists even in Europe, the US and other developing countries. The informal economy is everywhere, but a lot more in developing economies. Informal businesses are businesses which operate out of sight of government regulations, either completely or to some degree. My PhD looks at how finance and specific skills like financial literacy can enhance the micro businesses of the informal economy. Currently I am working on finishing the 3-4 papers which will be used in my PhD dissertation, with the intention to submit later this year. Cheers, Pontus
“Mti” is Swahili for tree – symbolizing MTI’s focus on growing companies, with the potential to bear fruit from our long-term efforts of investing, coaching, mentoring and monitoring our portfolio companies.
MTI Investment is a Tanzanian/Nordic investment company founded by Professor Trond Randøy, PhD candidate/MSc. Pontus Engström, Dr Neema Mori and Dr Gibson Munisi. Since 2012 the team has been seeking investment opportunities in Tanzania, and built the relational infrastructure with key stakeholders such as universities, legal advisers and local firms. In early 2014 the company was formally incorporated and the first initial investments were performed.
What makes MTI Investment unique is our university-based approach to investing. We seek businesses that are run by highly competent university-educated managers and owners, and we capitalize on our university-based networks to help these businesses further excel. By being university-based we are able to be at the forefront of knowledge creation and entrepreneurship in East Africa.
Har varit i Bodø i Nordnorge och konfererat (NCSB 2014) och firat 17 maj. Har presenterat ett par olika artiklar om finansiering av mikroföretag i Ecuador. Ett preliminärt resultat är att finansiering av mikroföretag i utveckingsländer inte nödvändigtvis skapar ekonomisk utveckling –> bara för att man dubblar sin verksamhet t.ex. genom ett nytt kylskåp betyder det inte att man når ut till fler kunder om antal kunder redan är konstant. Är entreprenörskap extra svårt i utvecklingsländer och den informella sektorn kanske?
Vid ett besök i Bodø får man inte missa ett besök på Damadi där man också med fördel bör avnjuta en stycke Mjelle från mikrobryggeriet Bådin. Kanske passa på att lyssna till låten Mjelle av Terje Nilsen. Från vackra Bodø i nordland begav jag mig så till minst lika vackra Mölle på sveriges sydvästkust. ett par dagar för en konferens om svensk research kring europeisk integration. Här presenterade jag en artikel (idé än så länge) om hur finansiering av mikroentreprenörer å ena sidan ska ske utifrån marknadsprinciper, men samtidigt också ta hänsyn till samhällsnyttan. Statliga ALMI lånar idag t.ex ut pengar till en HÖGRE ränta till marknadsaktörer, vilket jag menar man kan ifrågasätta. Om Almi är en privataktör kan jag förstå deras tänkt, men ur statens perspektiv borde risken se annorlunda ut. En annan statlig aktör, Den Nordiska Investeringsbanken, ska ta hänsyn till samhällsnyttan i sin utlåning vilket också kan ifrågasättas – idag finansieras stora nordiska och utländska bolag, som t.ex. Gazprom, Tele2, Ericsson etc. Jag menar att det kan finnas andra delar av ekonomin som behöver sådan finansiering, t.ex. unga, drivna individer som idag har svårt att få finansiering till sina ideér, och hamnar i utanförskap.
Peter Norman berättade på konferensen i Mölle (SNEE 2014) att vi har för många banker i Sverige, samt att det går bra för våra svenska banker. De spekulerades lite i hur regeringen skulle reagera om en utländsk bank, t.ex. Deutsch Bank, skulle köpa upp SEB Banken. Det skulle inte Peter spontant ha något emot.
Som en ytterligare förmån av att få vara på konferensen fick vi njuta av fint väder och en middag på slottet Sofiero, där vi nere vid havet kunde se över till Danmark och Kronborg Slott. Här ses några av deltagarna.
From Bodø in the north to Mölle in the south
I have been to Bodø in northern Norway for a conference (NCSB 2014) and celebrated May 17 (national day). I have presented a couple of different articles on the financing of micro-enterprises in the informal sector of Ecuador. A preliminary result is that the financing of micro enterprises in this context does not necessarily create economic value –> just because one doubles the business by for instance buying a new refrigerator, does not mean that one reaches more customers as the number of customers is already fixed. Entrepreneurship is perhaps more challenging in developing countries than we would like to think.
From beautiful Bodø in the north of Norway I headed to the equally beautiful Mölle on Sweden’s southwest coast for a conference on Swedish research on European integration. Here I presented a paper on the financing of micro-entrepreneurs which on the one hand should be based on market principles , yet also take account of socio-economic values . The Swedish government agency ALMI lends money to entrepreneurs at a HIGHER interest rate, something which I find questionable. If ALMI were a private company, I can understand their thinking , but from a state perspective, the risks should look different, and should warrant a LOWER interest rate. Another state actor, the Nordic Investment Bank, should also take account socio-economic values in their lending – which today goes to large nordic firms and international companies – such as Gazprom , Tele2, Ericsson etc. I believe there may be other parts of the economy , such as the funding of young and entrepreneurial individuals who have difficulty getting financing for their ideas who are today being excluded.
The minister of financial markets, Peter Norman, told us in the conference in Molle (SNEE 2014) that we have too many banks in Sweden. We speculated a bit on how the government would react if a foreign bank , such as Deutsche Bank , would buy up SEB Bank.
As an additional benefit of getting to be at the conference , we were enjoying nice weather and a dinner at the castle Sofiero, where we down at sea could see across to Denmark and Kronborg Castle. Here you see some of the participants.