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GRAPHIC: PHOTOS: SAFE INSIDE: The modern version of the walled compound still requires guards: the gated community Dream Town, outside Shenzhen. The only thing these residents share is their identity as yezhu, homeowners,' says BeibeI Tang, who studies China's gated communities. 'Before, people were bound by their work units. Now it's property rights. Market Exuberance: Wang, at Vanke headquarters, builds homes for couples just starting out -- and for every stage on the economic ladder thereafter. Far right: A bedroom in Dream Town

RANK: Sun lives in Holiday Town, a Vanke development, and plays on one of its three soccer teams. 'I know Vanke does all this to create brand loyalty,' Sun says. 'But it has really given us some community spirit

STREET LIFE: In Dream Town, separating yourself from the hurly-burly shows you've made it. (PHOTOS BY LARS TUNBJORK FOR THE NEW YORK TIMES)
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Late Edition - Final

Microloans, Big Profits
BYLINE: By ELISABETH MALKIN
SECTION: Section C; Column 0; Business/Financial Desk; Pg. 1
LENGTH: 1868 words
DATELINE: VILLA DE VAZQUEZ, Mexico
Carlos Danel and Carlos Labarthe turned a nonprofit that lent money to Mexico's poor into one of the country's most profitable banks.

But not all of their colleagues in the world of microlending -- so named for the tiny loans it grants -- are heaping praise on the co-executives of Compartamos. Some are vilifying them as ''pawnbrokers'' and ''money lenders.''

They are the center of a fractious debate: how far should microfinance go toward becoming big business?

At one end stand traditional microlenders, like the economist Muhammad Yunus, founder of the most famous microlender, the Grameen Bank, and winner of the 2006 Nobel Peace Prize. At the other are the Two Carloses, as they are widely known in this tight-knit world that gave them their start as starry-eyed idealists.

Microlenders, the original and still the most common type of microfinance organization, help the poor start or expand businesses in places most banks shun, like the slums of Calcutta or these impoverished hills in Mexico's sugar cane country, three hours south of Mexico City. Their efforts are widely considered successful in transforming the lives of developing-world entrepreneurs, particularly women, and their families.

Many microlending advocates, including Mr. Yunus, say that success is threatened by Mr. Danel and Mr. Labarthe's market-oriented model, with its emphasis on investor returns.

''Microfinance started in the 1970s with a focus on using this breakthrough to help end poverty,'' said Sam Daley-Harris, director of the Microcredit Summit Campaign, a nonprofit endeavor that promotes microfinance for families earning less than $1 a day. ''Now it is in great danger of being how well the investors and the microfinance institutions are doing and not about ending poverty.'' He said the situation posed the danger of ''mission drift.''

Mr. Danel and Mr. Labarthe say microfinance will help more poor people by tapping the boundless pool of investor capital rather than the limited pool of donor money.

''It's marvelous to have one creditor but it's marvelous to have one million creditors,'' Mr. Labarthe said, ''and that's where we really start to change the face of opportunity.''

Compartamos (''let's share'' in Spanish) expects to reach one million borrowers this year. Its profits are healthy, some $80 million last year, and its portfolio has grown to almost $400 million. Since it went public nearly a year ago, return on equity has been more than 40 percent.

Both sides agree that there is a need for capital, too great to be met by the donor groups that initially financed microlending. Deutsche Bank estimates the global demand for microfinance loans at about $250 billion, 10 times the amount that has been lent.

But Compartamos's decision to go public last April became a flashpoint in what had been a genteel debate over how microfinance could tap into the financial markets' vast resources. The initial public offering gets special mention at every microfinance conference, and has been condemned by Mr. Yunus, the Nobel laureate.

Alex Counts, president of the Washington-based Grameen Foundation, said Compartamos's poor clients ''were generating the profits but they were excluded from them.''

Lynne Patterson, a founder of Pro Mujer, a nonprofit microfinance group with branches in several Latin American countries, agrees. ''We use the profit to reinvest in the service of the clients,'' she said, referring to loan repayment profits.

Since lack of access to credit is just one of the problems the poor face, Pro Mujer also offers services like breast cancer screenings, advice on dealing with domestic violence and financial education.

Still, in three decades microfinance has evolved -- from small nongovernmental organizations lending $50 to women to buy sewing machines or fruit to sell at market to, in some cases, formal banks that cover costs and grow through profits, like any business.

On Wall Street, investment banks package microfinance loans to sell to institutional investors, many of them ''socially responsible'' and looking for steady returns rather than trading profits. A few equity funds have even taken stakes in microfinance institutions.

Critics say that Compartamos manages its business to benefit its investors, not its borrowers. The bank began as a nongovernmental organization in 1990, started by a Catholic social action group called Gente Nueva, whose inspiration was a visit by Mother Teresa to Mexico.

After Compartamos became a for-profit company in 2000, costs fell as efficiencies increased, but the bank kept interest rates high. On average, customers pay an annual interest rate of almost 90 percent, which includes 15 percent in government tax. In much of the world, microfinance interest rates range from 25 to 45 percent. But in Mexico, high costs, inefficiency and limited competition keep interest rates much higher. Compartamos's rates are only a few percentage points higher than Pro Mujer's, for example.

Like microfinance businesses around the world, Compartamos makes loans without collateral. Its borrowers, who are nearly all women, are organized in groups, which guarantee the loans. Stop paying and your friends must pay for you: the system keeps default rates down.

Historically, microlenders point out, such borrowers are excellent risks. For instance, Compartamos's nonperforming loans were just 1.36 percent of its portfolio at the end of last year.

Servicing those loans takes labor and that pushes up rates on such small amounts. A Compartamos collection agent visits each group every week, riding public buses out to villages.

Compartamos is more efficient than other Mexican microfinance institutions and its own borrowing costs are lower, thanks to its strong credit rating. Critics charge that it has not passed those savings on to its customers.

The numbers seem to bear that out. A study last year by the Consultative Group to Assist the Poor, known as CGAP, a microfinance industry group based at the World Bank, estimated that 23.6 percent of Compartamos's interest income went to profits. Its return on average equity is more than triple the 15 percent average for Mexican commercial banks.

Profit is not a dirty word in the microfinance world. The question is how much is appropriate. CGAP estimates the average return on assets for self-sufficient organizations to be 5.5 percent. The figure for Compartamos was 19.6 percent in the fourth quarter.

Mr. Danel said Compartamos's interest rates have fallen 30 percentage points over the last five years. ''They go down based on efficiencies, and we pass this benefit on to the customer,'' he said.

Compartamos grew to 840,000 customers last year, from 60,000 in 2000.

Last April, Compartamos' owners sold 30 percent of their stock on the Mexican stock market in an initial public offering. The public offering brought in $458 million. Private Mexican investors, including the bank's top executives, pocketed $150 million from the sale. More than half of the public offering proceeds went back to development institutions that had invested in Compartamos when it moved from being a nonprofit to a commercial venture in 2000.

One of them was Accion International, a Boston-based nongovernmental organization that helps build microcredit institutions and provides them with technical assistance. Accion invested $1 million in Compartamos in 2000. It sold half its 18 percent stake at the time of the public offering for $135 million.

''This is one strategy to address poverty that doesn't remain small and beautiful,'' said Maria Otero, president of Accion.

Charles Waterfield, a microfinance consultant who has been among the most vocal critics of Compartamos's model, disagrees. ''Not only are they making obscene profits off poor people, they are in danger of tarnishing the rest of the industry,'' he said. ''Compartamos is the first but they won't be the last.''

There has not been a rush to market yet. In part, the subprime mortgage debacle and the ensuing selloff on global markets has made this a poor time for initial public offerings. Compartamos has not escaped the turmoil; its stock price is up nearly 17 percent since the offering, but down 32 percent from its high last July.

Those who argue for more such public offerings say that Compartamos set the right example.

''Boy, you got a lot of people's attention with that I.P.O.,'' said Bob Pattillo, who runs Gray Ghost, a fund that invests in microfinance. ''This has got Wall Street's eye, London's eye, Geneva's eye -- to have one out there to say that if all the dots got connected this can be quite profitable.''

Mr. Danel and Mr. Labarthe argue that successful microlenders in a middle-income country like Mexico should use the capital markets, instead of crowding out donations.

As part of their defense, they argue that Compartamos's success has prompted a number of institutions, including traditional banks and retailers, to start offering financial products to the poor. ''We don't only see ourselves as a specialist in microfinance but also as the builder of an industry,'' Mr. Danel said.

Compartamos estimates that its target market is 14 million households, more than half of the country's population, most of them with little or no access to banking services.

At the recent weekly meeting of a group of Compartamos borrowers in the village of Valle de Vazquez, the interest rate was not a great concern. Indeed, several women said they had left another microfinance institution because it charged more.

The group was well established, 35 strong and well into its third year of borrowing. The meeting, which took place in the living room of one borrower's home, was the start of a new four-month borrowing cycle.

A Compartamos manager, Claudia Ayala, began with a pep talk, pointing to a house plant set on a chair beside her. ''This plant grows and this group can grow,'' she said to the women, who were listless in the afternoon heat. ''How? By inviting more companeras,'' or friends. ''By fertilizing it with responsibility,'' she said.

Though the village depends largely on remittances sent by relatives in the United States, the Compartamos loans have helped some women become self-sufficient.

Silvina Martinez started a little restaurant in her house a year ago to sell her homemade snacks to students at a nearby high school. It has grown steadily since then. With this cycle, she was going to borrow about $1,100 to paint the restaurant and expand her menu. ''It's my own business,'' she said. ''You are a slave to it, but at least it's mine.''

Other women were successful entrepreneurs to start with, but the Compartamos credit gives them a push, allowing them to hire an employee or help ease their cash flow.

Alejandra Abundez, 57, keeps pigs and cattle, and produces 330 pounds of cheese a day, which she sells in the local market. She and her daughter, Micaela Rivera, were borrowing $3,550 from Compartamos to buy animal feed and to stock the tiny store in her front entryway.

''Everything I have, I invest,'' said Ms. Abundez, who was left a widow with five children at 35. ''No gadding about for me.''
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LOAD-DATE: April 5, 2008
LANGUAGE: ENGLISH
GRAPHIC: PHOTOS: Micaela Rivera, top, of Villa de Vazquez, Mexico, and her mother borrowed $3,550 for their homemade cheese business. (PHOTOGRAPHS BY ADRIANA ZEHBRAUSKAS FOR THE NEW YORK TIMES) (pg. C1)

A meeting of Compartamos borrowers in Villa de Vazquez, Mexico. Borrowers meet weekly

Micaela Rivera signing her credit loan. On average, customers of Compartamos pay a yearly interest rate of almost 90 percent. (PHOTOGRAPHS BY ADRIANA ZEHBRAUSKAS FOR THE NEW YORK TIMES) (pg. C4)
PUBLICATION-TYPE: Newspaper

Copyright 2008 The New York Times Company

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The New York Times
April 5, 2008 Saturday

Late Edition - Final

A U.S.-Trained Entrepreneur Becomes Voodoo's Pope
BYLINE: By MARC LACEY
SECTION: Section A; Column 0; Foreign Desk; THE SATURDAY PROFILE; Pg. 7
LENGTH: 1112 words
PORT-AU-PRINCE, Haiti

THE goat tethered to a tree outside Max Beauvoir's home is doomed.

Mr. Beauvoir, tall and majestic with closely cropped white hair, is a voodoo priest who was just named the religion's supreme master, a newly created position that is aimed at reviving voodoo.

His grand residence on the outskirts of the Haitian capital serves as a temple for voodoo practitioners and a late-night hangout for those paying customers eager to take in an exotic evening of spiritual awakening.

The temple, the Peristyle de Mariani, is where Mr. Beauvoir and his followers dance around a giant totem to the beat of drums. It is where they light bonfires to summon the spirits. And it is where they drain the blood of animals like that scrawny white goat to, among other things, heal the sick.

On a recent night, Haiti's voodooists convened for a special ceremony. With music blaring and devotees dancing with all their might, two children threw white rose petals on a red carpet. Then along came Mr. Beauvoir.

Popular in Haiti even among many of those who attend Christian churches, voodoo lacks the formal hierarchy of other religions. Most voodoo priests, known as houngans, operate semi-independently, catering to their followers without much structure.

But many of Haiti's houngans recently came together into a national federation and chose Mr. Beauvoir, 72, as their public face. He is now the spokesman for a faith whose followers say too often gets a bad rap and is in dire need of an image overhaul. (Think ''voodoo economics.'')

Even before he got the job, Mr. Beauvoir was a voodoo promoter extraordinaire. With his own Web site (www.vodou.org) and a following among foreigners intrigued by voodoo, Mr. Beauvoir is criticized by some purists as too much of a showman.

''My position as supreme chief in voodoo was born out of a controversy,'' Mr. Beauvoir said, saying Haiti's elite had marginalized the houngans who generations ago wielded significant influence in society. ''Today, voodooists are at the bottom of society. They are virtually all illiterate. They are poor. They are hungry. You have people who are eating mud, and I don't mean that as a figure of speech.''

A DOCTOR'S son who was not particularly interested in spiritual matters in his youth, Mr. Beauvoir left Haiti in the mid-1950s for the City College of New York, where he studied chemistry. Then he went off to the Sorbonne for graduate study in biochemistry. After various jobs in the New York area, he returned to Haiti in the early 1970s to conduct experiments on traditional herbal remedies.

It was then that voodoo called.

His grandfather, who was in his 90s, was dying and the entire extended family had gathered around his bed. Before he died, though, the old man pointed at Mr. Beauvoir and ordered him to take over his duties as a voodoo priest.

Mr. Beauvoir said he was taken aback. He did not know his grandfather well, and could not understand why he had been selected from the 20 or so other family members in the room. And he knew virtually nothing about voodoo.

But that was decades ago. Mr. Beauvoir has devoted the rest of his life to studying the religion, a mix of Christianity (introduced by slaves to mask their paganism from their masters) and animism that traces its origins to West Africa, which is also where Haitians, descendants of slaves, originated. The more he learns about voodoo, Mr. Beauvoir said, the more convinced he is that it can, and should, play a role in resolving Haiti's problems, especially given its reach among the most disenfranchised people.

As it is now, he said, the government seeks the input of Catholic and Protestant leaders when grappling with societal issues. ''But do they call for the input of the voodooists?'' he asked, shaking his head.

Haiti has long been a battleground for Christian missionaries who view voodoo as devil worship and work tirelessly to convert the population to Christ. Voodoo, like Christianity, has one god, but it incorporates pagan elements that make Christians uneasy: casting spells and worshiping spirits seen as the major forces of the universe.

To turn things around, the country's voodooists decided they needed to organize themselves and confront voodoo-bashing head on.

''We decided to come together and form a new voodoo structure,'' Mr. Beauvoir said. ''We Haitians want to move forward in life. We need to find our identity again, and voodoo is our identity. It's part of our collective personality. We feel the government we have is relying too much on foreigners to fill their pockets.''

VOODOO and politics have long been intertwined in Haiti, with some past leaders reaching out to voodooists as a way of burnishing their populist credentials. Mr. Beauvoir has himself been linked with Jean-Claude Duvalier, or Baby Doc, the dictator who fled the country in 1986 after a popular uprising against him. And Mr. Beauvoir opposed Jean-Bertrand Aristide, making him a hated figure among Mr. Aristide's loyalists.

In ''The Rainy Season: Haiti Since Duvalier,'' her 1994 book on Haiti, Amy Wilentz portrayed Mr. Beauvoir as an opportunist who preyed upon his people and had ''the oily manner of a man whom you wouldn't want to leave alone with your money or your child.''

Mr. Beauvoir waves off such criticism. He acknowledges that he received death threats from political opponents in the mid-1990s and that he was worried enough about his safety -- and that of his wife and two daughters -- that he fled Haiti for the United States. He settled in Washington, D.C., where he continued with voodoo ceremonies from his apartment not far from the White House. Recently, though, he returned home and wasted no time in grabbing the spotlight.

Speaking of the current crop of political leaders, Mr. Beauvoir is as harsh as some are about him.

''They have been seduced by Western attitudes,'' he said of current leaders. ''They believe foreigners think that way so they have to think that way. They fear that if they don't oppose voodoo, they won't get a dime in their bowl.''

The movie industry is another focus of Mr. Beauvoir's wrath. And he speaks as something of an insider, having helped the anthropologist Wade Davis with his investigation of voodoo, which first became a book, ''The Serpent and the Rainbow,'' and later a Hollywood movie. On the big screen, zombies are scary monsters, Mr. Beauvoir complained, and not the carefully controlled subjects of voodoo science that he believes them to be.

''The voice of Hollywood has grown beyond the border of the United States,'' he said. ''It's everywhere. The voice of Max Beauvoir is very small compared to that.''

URL: http://www.nytimes.com
SUBJECT: RELIGION (92%); CLERGY & RELIGIOUS (90%); CHRISTIANS & CHRISTIANITY (88%); FAMILY (72%)
GEOGRAPHIC: HAITI (91%)
LOAD-DATE: April 5, 2008
LANGUAGE: ENGLISH
GRAPHIC: PHOTO (PHOTOGRAPH BY RUTH FREMSON/THE NEW YORK TIMES)
DOCUMENT-TYPE: Biography
PUBLICATION-TYPE: Newspaper

Copyright 2008 The New York Times Company

898 of 1231 DOCUMENTS

The New York Times
April 5, 2008 Saturday

Late Edition - Final

Work Every Bit as Wild as It Is Woolly
BYLINE: By KIRK JOHNSON
SECTION: Section A; Column 0; National Desk; Pg. 10
LENGTH: 1015 words
DATELINE: NORRIS, Mont.
It sounds like something a Zen master might ask: How does the wool come off a sheep?

But when you have a squirming 100-pound yearling between your knees, a roaring set of power shears in one hand, and a completely blank mind because everything your instructor just told you about which stroke comes next has faded into a white noise of panic and muscle fatigue, getting the wool off is not an academic question.

You stare down, bent over, and the universe contracts. It is only you, the sheep and the shears. Find the way, you think. Try to remember. Is the ''long blow'' next? Or up the brisket and under the neck? Or maybe the ''top knot''?

To shear a sheep is to touch a fading chord of Western culture. In the 1990s alone, 40,000 sheep ranches blinked out of existence, a 38 percent decline. And the number of people who know how to shear is falling even faster.

Which brings us to a sheep-shearing class here: 10 men and 5 women -- a few entrepreneurs, some back-to-the-land idealists, a psychiatrist from Butte who has made a bet with his wife, three high school buddies, a home builder looking for an economic sideline in tough times and a reporter trying to get inside the story.

And, of course, there are the sheep.

Sheep, you might think, should be among the mildest and easiest of animals to handle. In literature, they have been handy symbols since the days of Homer for innocence in the face of adversity, forever typecast as lost pals to Little Bo Peep or victims of the Big Bad Wolf.

But in this three-day class, a harder truth emerges: Sheepish innocence and stoicism are only a front for the jagged reef on which beginners can founder. Sheep endure. It is the shearer who must adapt, adjust and pivot.

''Learning to shear is a lesson in humility,'' said one instructor, Jim Moore, a field agent at the Montana Sheep Institute, which focuses on all things woolly at Montana State University and runs training programs at the university's experimental ranch here about 30 miles west of its Bozeman campus.

This is a fortunate year to become an American shearer. In a strange local backwash of global capitalism and the weak United States dollar, the Australian and New Zealand shearing companies on which Western ranchers have come to depend are staying home this spring, unable to justify the exchange-rate loss. The short-term shortage of shearers, which the sheep institute tries to address, has meant all but guaranteed work for domestic talent, notwithstanding the long-term decline in American sheep ranching, coincident with a growing foreign dominance.

Still, there are motivations to learn shearing other than quick employment, or masochism.

Becky Weed, 48, runs about 150 sheep with her husband on a certified organic ranch and wool mill near Bozeman and was enrolled in the class. A geologist by training, Ms. Weed worked on hazardous waste cleanup projects for years and became obsessed with the idea of preserving a patch of earth by natural means. Learning to shear, she said, is part of that same impulse.

''I see the interest in learning these old skills not as a backward-looking thing at all,'' she said. ''Old-timers have a lot to teach us.''

Joletta Spang, another student, said she wanted to bring sheep ranching back to the Northern Cheyenne Indian Reservation, about 300 miles east of here, where she is a leader of a 4-H club.

''Forty-one years old and I'm finally learning how to shear a sheep,'' Ms. Spang said. ''Not sure how much sense that makes, but how often do you get to do something like this?''

Cody Newland, 23, who completed four years in the Marines in December, including a tour in Iraq, drove 14 hours from his home in Oregon to be here. Soft-spoken but determined, he said he planned to buy his first flock of 150 sheep this spring.

''I'll be a sheep farmer the rest of my life, hopefully,'' he said.

An unheated Montana shearing shed in March is a cold and cacophonous place. A grinding wheel for sharpening blades periodically screams from one corner. The thumping of sheep on the plywood floor is punctuated by the occasional curses of the students when a sheep gets loose and sets off a mad scramble of recapture.

The thick, waxy feel of lanolin, the natural oil in sheep's wool, hangs over everything, coating jeans and skin. Lanolin gives wool its waterproof property but is also completely enmeshed in the shearing process. It lubricates the cutting blades as the shearing comb slides across the sheep's skin.

A good shearer can finish a sheep in two or three minutes and earn upward of $70 to $80 an hour, minus expenses. Mike Schuldt, one of the instructors, did one in 52 seconds in competition last year. This reporter, just a beginner, managed seven in a day and a half.

There is poetry in watching any physical task done well. But shearing is more like ballet. The sheep and the shearer must move as one. Each shift of the shearer's feet into a new position for the next set of strokes also shifts the sheep's posture and weight, presenting a new flank or angle for the blade's pass.

Shearing has its own language, too. The thick tuft on the sheep's head is the ''top knot.'' A pass of the blade is a ''blow.'' The ''long blow,'' a big sweep of the shears on the animal's side from rump to neck, comes near the end when in a sense the shearer connect the dots of the previous strokes.

For some students, empathy was an issue, if mostly unspoken. Are the sheep stressed?

Put in the right positions, though, some sheep went almost limp and closed their eyes. And when the work was done, they mostly scampered out the open end of the shed seeming no worse for wear.

Meagan Rathjen, 22, a ranch hand at a sheep spread near Missoula -- she came west from small-town Iowa, interested in helping support sustainable agriculture -- nicked her first sheep. It was nothing too serious, but enough to draw a small trickle of blood, which looked stark and red against the yearling's white skin.

So quietly that almost no one else could hear, Ms. Rathjen bent down over the half-shorn animal, and apologized.