FreedomWorks

I consider it a privilege to recommend my friend and colleague Art Avidesian for the ‘I am an Entrepreneur’ contest.

As a colleague at Chatham Financial, a financial risk and derivatives consultancy based in Kennett Square, Pennsylvania, I got to know Art through informal conversations about microfinance. Our financial, a specialist in the fields of financial risk management and hedging, sought a way to apply our capital markets expertise to the microfinance industry to support the ultimate goal of microfinance: to provide financial services to those traditionally underserved by financial institutions in order to allow their own entrepreneurship to be the engine that drives economic improvements among the world’s most poor.

Having served as a Peace Corps volunteer in Bolivia, I had worked with several microfinance institutions (MFIs - financial institutions based in developing countries that lend directly to individuals or groups that have not traditionally had access to financial services and may not be able to provide any loan security) in Bolivia and had experienced the business model on the ground. Art, on the other hand, had worked with several microfinance investment vehicles (MIVs – based in developed countries, these organizations fund MFIs through a variety of mechanisms, including investment funds, direct loans, equity stakes, and donations) to hedge the foreign exchange risk inherent in a loan made in US Dollars to a financial institution operating in a foreign local currency, such as Peruvian Soles. Art was searching for a model that would allow Chatham Financial to provide an industry-wide risk management solution for MIVs to hedge currency risk, allowing the firms to concentrate on and take only those risks that they are most suited to evaluate – the credit risk of MFIs and their loan portfolios.

Art reached out across the microfinance industry and academia searching for models and risk management solutions, portraying an incredible talent to understand the risks and incentives particular to different industry players and to translate the hypothetical, and often highly theoretical, into practical, workable business solutions. Aft continually proved himself to be a man of action in the truest sense of the word: inspiring collaboration in ideas, bringing forth and challenging theoretical concepts in a ceaseless effort to create a real, sustainable (read: profitable) model to re-allocate the FX risk that fundamentally constrained the microfinance model.

Von Mises once described action as follows: “Action is purposive conduct. It is not simply behavior, but behavior begot by judgments of value, aiming at a definite end and guided by ideas concerning the suitability or unsuitability of definite means. . . . It is conscious behavior. It is choosing. It is volition; it is a display of the will.” These words define Art’s leadership in which a vague desire to impact the world through business has become a functioning business model and a platform to make a tremendous impact on the microfinance industry.

Continuously selling the idea to both backers and potential clients alike, Art developed the momentum necessary to build a team of professionals, and later to launch a separate company: Cygma Financial (http://www.cygmafinancial.com/). His energy and leadership made possible a collaborative work by our microfinance team to put forth our ideas in a paper, which later took Silver Prize in the IFC/FT 2008 Essay Contest (http://www.ifc.org/competition - also, see attached). These ideas are now, through Art’s tireless effort, inspiration, and leadership, being translated from the real of ideas into action. This, I contend, is the ultimate mark of the entrepreneur – overcoming obstacles to create, invent, and organize productive activity that achieves results and impacts consumers and the world. Art’s work has already benefited client organizations in the microfinance industry, and will continue to grow in its reach and capacity to impact, ultimately, the lives of those poor who have not in the past had access to essential financial services and capital.

On a personal level, Art’s drive and determination are matched only be his humility and accessibility. He has been a friend, a mentor, and an inspiration, and I believe he is an excellent example of entrepreneurship, leadership, and action.