Taking a trip to a developing country often brings pangs of guilt along with the spectacular scenery. It’s easy to go on an adventure travel trip to a spectacular place like the Nepali Himalayas. Still, it’s quite another to live in a country like Nepal, where the average monthly wage is about $120. While many adventure travel companies make an effort to give back, a young company called OneSeed Expeditions has tapped into the microfinance model. Founder Chris Baker recently answered my questions about how it all works.
Everett Potter: Chris, the premise with OneSeed Expeditions is that if you take a trip, an entrepreneur at your destination in a developing country launches or expands their business. Can you tell us more?
Chris Baker: That’s right. When you book a trip with OneSeed, we take 10% of your trip’s total price and cycle it through the OneSeed Fund, which lends out capital at 0% interest to our microfinance partners around the world. These microfinance institutions (MFIs) then loan these funds to individual entrepreneurs in the communities where we work. Over the term of that 6-24-month loan, the entrepreneur repays the loan principal and can grow or expand their small business.
Our nonprofit MFI partners play an important role in the selection and support of our borrowers. As key stakeholders within those communities, they bring expertise and knowledge. In contrast, OneSeed brings the necessary seed capital that is often hard to access for the small-scale entrepreneurs we support. Working together, we’ve funded more than 650 loans around the world over the past 8 years.
Potter: Many adventure travel companies say they give something back to host countries in one way or another. How is OneSeed different?
We try to show rather than tell. Early on, we decided that impact wasn’t going to be a nice byproduct of our business but rather an integral part of our core model. By that, I mean that everything we do drives investment in the communities where we work because we directly tie investment to our growth as a business. We make this transparent at every stage of the process by pegging our funding levels to gross revenue so that the traveler knows exactly what funds are being designated through their travel. We then make all financials available on our website and work hard to really educate our travelers about the work of the OneSeed Fund.
Potter: As a guest, do you have a chance of actually interacting with those who benefit from the microfinance projects?
Baker: We get this question a lot. The short answer is no, and the reasons why are at the core of how we work.
First, our borrowers aren’t often in the highly-traveled trekking regions where we work. That’s because we focus on the areas of greatest need and work hard to drive tourism benefits to those more peripheral regions. One of the challenges of tourism’s impact is the unequal distribution of its costs and benefits. OneSeed’s model is designed to ameliorate this by more widely distributing the benefits of tourism by providing capital to underserved regions, and communities often left out of the industry’s benefits.
Second, we never want to make the recipients of our loans a tourism attraction. These are incredibly hardworking women and men who have a right to privacy and their work’s dignity. We respect that and never want to violate that.
Potter: How did you come up with the idea for OneSeed?
Baker: When I was 18 years old, I had no idea what I wanted to do. I moved to Nepal to teach English with a vague notion of wanting to help others. Like most 18-year old’s, I had few actual skills and found that while I wasn’t accomplishing much, I had fallen for the people and geography that make the Himalayas such a special place.
I then returned to Nepal to study the language and complete my research in anthropology as a student at Yale. I found I was a much better student than a teacher, and I spent a good portion of my early 20’s living, working, and walking in the Himalayas. During this time, I worked as a Fellow with Kiva, a microfinance platform that connects individual lenders to borrowers around the world. My job was to hop on a motorcycle and ride out to rural villages to document these small loans’ impact. Meeting with hundreds of small-plot farmers, tea shop owners, and dairy farmers, I was able to see first-hand the potential of relatively small amounts of capital and the creativity of individual entrepreneurs.
At the same time, I’ve always been drawn to the mountains and spent most of my time in the Khumbu region near Mt. Everest. Researching many of the small villages that dot the trail to Base Camp, I watched thousands of travelers drawn to the mountains and spending the equivalent of the average per capita income in Nepal every few days of their vacation. OneSeed was born out of trying to meet the two driving forces of travel: exploring new places and leaving a place better than you found it. For us, capital provision to entrepreneurs was the most direct and transparent means of achieving this.
Potter: Can you describe some of the success stories you’ve witnessed?
Baker: We talk about risk a lot at OneSeed. Whether you’re scaling a mountain or starting a small business, you’re balancing risk at every step of the process. Not every loan we fund results in success, and we try to be very clear about this. Microfinance–making financial services available to the world’s working poor–isn’t so much a solution as it is a tool.
But when we’re able to get that tool into the hands of the right people, they’re able to accomplish incredible things. One particular example comes to mind from my time working in the field with Kiva: a woman living in a village just south of Kathmandu had taken an initial loan to purchase a Jersey cow for milk production. This cow turned out to be a good investment, and she was able to take the profits of her milk sales and purchase a methane catchment system where she stored the cow dung and converted the methane produced into cooking fuel for sale in her village. She then bought more cows and eventually a van to bring her milk to the more lucrative markets in the city center. With that initial loan of about USD 200, she had created a thriving business and employed most of her family in its operation.
While not every loan results in this scale’s success, we are continually amazed by the industry and creativity of the entrepreneurs we work with around the world. There’s nothing I enjoy more about this work than sitting down with fellow business owners and sharing the universal stories of hard work, failures, and successes as entrepreneurs.