Episode 100 - Patrick Fisher and the Big Deal with Microfinancing
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Patrick Fisher founded Creation Investments in 2007, leaving JPMorgan with a vision to find profitable solutions to difficult social and environmental challenges. As Founder and Managing Partner of Creation Investments Capital Management, Patrick and his team oversee $1.8 billion in assets under management with investments in financial services for the unbanked, supporting international development, poverty eradication, and wealth creation.
All opinions expressed on this podcast, including the team and guests, are solely their opinions. Host and guests may maintain positions in the companies and securities discussed. This podcast is for informational purposes only and should not be relied upon as specific investment advice for any individual or organization.
Episode Transcript
Transcription is done by an AI software. While technology is an incredible tool to automate this process, there will be misspellings and typos that might accompany it. Please keep that in mind as you work through it.
Henry Kaestner: Welcome back to the Faith Driven Investor podcast. This is a special edition, if you listen to this semi-regular, you'll know that all too often say this is a special edition of the Faith Driven Investor podcast. Maybe it's because I think they're all really special and they are today, in particular because microfinance, Christ centered economic development, human flourishing through capital markets and in the marketplace is a great passion of mine, and I can think of few guests that kind of embody all of that altogether. Dan Patrick Fischer He runs a fund that invest in microfinance. And so I've had the great privilege and honor of getting to know Patrick. Over the years, I've been involved in microfinance. I'm not an expert. I did get a chance to serve on the Board of Hope International, and so many of our audience will know Peter Greer and think highly of him. And I was on long enough to get a working knowledge of how effective it is to alleviate financial and spiritual poverty, but not long enough to be an expert, which is why we've got Patrick on board, who brings us all together. How do you think about an investment fund? How do you think about emerging markets? How do you think about the underlying investment of microfinance as it deals with poverty alleviation? All these things together and throwing the other thing I care about too, which is Faith driven entrepreneurs ship and is an itinerary because he's launched his fund. So. Patrick, welcome to the program.
Patrick Fisher: Thanks. Thanks, Henry. Really great to be here.
Henry Kaestner: So we're going to get into law here. We're going to talk about the pros and cons of microfinance. We're going to ask you about the things you've learned and how your working theory of change has changed over time. Some of your experiences love to hear some of the stories. But before we do all of that, we do like to get an autobiographical sketch of Who's our guest? Who are you? Where do you come from?
Patrick Fisher: Sure. Well, I was born and raised in Southern California. My father left right before I was born. So my mom, a single mom, had to raise my older brother and me and L.A. and Orange County. I went into Boy Scouts as a young kid, and that's where I came to faith. My scoutmaster brought so many kids to Faith Cliff Mauvais, which I'm really grateful for his ministry in that role. He also gave me my first job as a landscaper using, I guess, cheap labor, cheap kid labor, but also it as a great way to administer to kids and build them up and equip them for life. So after going through high school, I got a scholarship to go to a Catholic high school in Southern California, and I went to Notre Dame in Indiana and studied philosophy, theology as well as computer science, and came to Chicago and got a job at a bank. I was part of JPMorgan for about seven years, eight years, worked overseas in China and came back to the US actually during the start of the epidemic in 2003. And that's really when all the lights started to come on about economic development, the use of capitalism and business and investment capital to achieve missional goals. I finished my MBA at Northwestern at night and continue my career at Morgan until taking a leave of absence actually from a bank to become an executive pastor at my local church here in Chicago, which is a church plant, helped launch a couple other church campuses within the Chicago area. And at that time had already been incubating the idea of creation investments, which is when I formally left both JPMorgan and the church in 2007 to start creation investments. So it's been quite a ride. I've got amazing and beautiful wife and we've been married for 14 years now. We've got three young kids, got a dog named Bacon, and we live in the city of Chicago. We very much believe in living in the city, and they just really haven't had an amazing life.
Henry Kaestner: So that's amazing to me. And yes, we're going to get to the idea of the lights coming on. But your dog's name bacon. I have a dog. We've got a dog is a Newfoundland. His name is Gus. If I were to say something smells like Gus, everybody here knows exactly what I'm talking about. And that's not necessarily a beautiful thing when you say it smells like bacon. Do people think about bacon or the dog?
Patrick Fisher: Probably the actual food. No, he's a he's a great dog. Know, being a philosophy and theology major, I have a love of sort of the writers and great thinkers, so I wanted to name our kids, you know? Oh, but my wife wouldn't allow me to. Exactly. Sir Francis Bacon. But it works both ways, which I hope is how all of us, you know where we were able to laugh, but also allude to sort of bigger ideas. Bacon is what my wife allowed me to name our dog, not our journalism.
Henry Kaestner: There's nothing deeper theologically about Gus talking about the lights coming on, though. Talk to us about that experience as you are thinking about starting creation. And so fast forward a bit. How big is creation today? And then, yeah, we're going to go right back into what do you mean by the lights coming on? And then how do you say, Well, you know, this is the opportunity?
Patrick Fisher: Yeah. I mean, you know, by God's grace, we've been in existence for 15 years now. We managed $1.6 billion in assets, and they're all dedicated to impact ESG investing in financial inclusion, which is this bigger category. Microfinance is a part of it, but a bigger category. How do you provide financial services to the poor, the unbanked, the underbanked women? How do you give them access to capital savings insurance payment tools all to help them manage risk and get access to the productive means of our day to increase income and improve livelihood? So that's the mission of creation. We have offices in Mexico City and Bangalore and through those offices in our office here in Chicago. We make investments and own banks, non-bank finance companies, insurance companies, payments companies, fintech tech enabled businesses that makes these kinds of investments and loans to the marginalized. So yeah, that's I mean where we are, we're scc registered, and that's a big part of one of my messages to Faith Driven Investor use the structures that exist, but within that do it differently. And that's a way to get to scale because the problems we're trying to deal with are massive and require scale and require the use of all the tools we have available to achieve true kingdom and scalable impact.
Henry Kaestner: What was it that you saw during your time at JPMorgan, where he said, OK, there's a problem. Any good entrepreneur is about solving a problem and bringing something closer to the way the Kingdom of God might look like? Was there a formative experience where he said, OK, this is where I know that I'm called to do, and here's why.
Patrick Fisher: Yeah, it's a very much so. When I lived in China, I was living in Beijing. At the time, JPMorgan Morgan was getting a local bank license, which allowed us to make local currency loans in renminbi and going through that licensing process and realizing, you know, JP Morgan was going to make loans of the equivalent of one hundred million two hundred million dollars to large corporations. Yet on my way back and forth between the regulator and our offices, you'd pass by a little shop after little shop, after a little shop that had no access to a bank loan. And after coming back, I started to read about microfinance. I started to read about all the NGOs, in particular Christian NGOs that were doing phenomenal work and making small loans of poor. And that's really when the connection came in. Of all the mission trips, all the work we've done, all the experiences I've had in particular in high poverty situations and to see how banking as a core service use of capitalism could be leveraged to that very problem. And so I wrote in my journal in two thousand three. I love Jesus and I love capitalism. You know, how do we put these together? And I happen to be somebody who's sort of a bank nerd just like the rest of my team. For some reason, we love banks. So that became a very obvious place to say, how do we use our our interest or curiosity in banking and our love of God to propel us down this road to read every book, went to every conference, met all the people from World Vision, from Opportunity International, and really started to talk to them about the difference in paradigm between giving as a mechanism to achieve these goals versus using investment capital and why investment capital had some attributes to it that would first allow it to scale. Because we all know there is an order of magnitude of investment capital than there will ever be on the charitable side to. How do we free up the charitable money to do only what charitable money can do, which is, you know, evangelism and church and other kinds of things without a business model. But how do you tap in and leverage investment capital for mission driven investments that really do have a true business model and a track record? And how do we deal with the risk return within that? And so over time, just start to develop this and other funds were coming about at that time. But there is a real need in private equity in particular, and that's what fit my background and the background of my team members. That seemed like a pretty obvious place to put our time and energy.
Henry Kaestner: So when you talk about private equity, can I say that there's some level of an entrepreneurial ecosystem of folks that are trying to solve problems in their local context, but they themselves need capital to, in turn provide capital to their customers? Am I getting that right?
Patrick Fisher: Yeah, yeah. I think capital is the ultimate phrase here. I mean, we all know there are certain kinds of capital, there's financial money, there's intellectual capital, there's social capital, there's spiritual capital. God is the ultimate investor of all of this has given us all different kinds of capital to use. So how do we involve ourselves? Seize our intellectual capital to channel financial capital to those that need it? Unfortunately, poverty in America is an incredibly complicated thing. Know I'd say by and large, when you go to rural India, let's say it. Very uncomplicated, if there is a lack of financial capital in those markets where you wish a $200 loan could affect you in major ways, poverty on the south side of Chicago and effectuate job creation and economic development. $200 loan can actually do that in certain places in the world, where in other places they're more complicated problems that need to be untangled and worked on, not just plugging a financial capital hole. So then that's where the whole spectrum of charitable capital and financial capital really have a role to play in all of this. But what we're narrowly focused on is where we can use pension funds, insurance, high net worth family assets, capital where there are going to be investing it anyhow. But how do you invest it in a bank that is specifically targeting low income women? A lot like my mom, who was the working poor working to provide for a family as a single mom? How do we get behind those entrepreneurs who are forced to be entrepreneurs but don't have access to the productive means of their day and the Bible and biblical times? There was land access to land, which is why cleaning was so important for gleaning even involved work and effort. And there's something beautiful about that. But how do we give people capital so that they can get a return on their effort? And that's, you know, ultimately in something we've talked about probably years ago, Henry might have forgotten. But when I read Isaiah, 65, to me, that was really when it all came together. And for those like all of us who might not know Isaiah sixty five by heart. Just to recap, in the middle of the chapter, Isaiah is saying he sees the new heaven in the new Earth. God is declaring the new heaven in the new Earth, and this is what it will look like, and it will look like a person is able to plant in a field and they eat of the harvest and a person builds a house and they live in that house. It will no longer be that somebody builds a house and a different person lives there, or a different person gets to eat on the field. And that no longer will children be born into misfortune, and that if that's the new heaven and newer that's really being depicted, it's really one of empowerment. How do you help somebody build their own house where they live in it? And how do you help them plan to feel where they get the upside of the production? And that ultimately is what alone and other kinds of financial services help people tap into. And we actually make affordable housing loans. You know, our newest portfolio company, Vastu, has now over $400 million of $10000 apiece single family loans to help people construct their own home. And, you know, it's just unbelievable. Company 40 percent loan to value. So from a banker standpoint, very low risk. Yeah, we have a point four percent delinquency rate. So again, very low risk, we're growing at almost 100 percent per year, which makes it a very exciting investment proposition, profitable company. But to be helping, you know, hundreds of thousands of people build their own home and living, it is very much a fulfillment of Isaiah, 65.
Henry Kaestner: So I love that passage. And now we're going to use Isaiah, 65, much more freely. And I may or may not give you credit for it. Now I will. I will. I think that that's really important. I think that we all are wondering what the new heavens and the Earth look like. And I I know that I've read Isaiah, 65, but I don't think through that context. So that's a blessing for me. The question for you on how you think about and you can correct me if I'm using my terminology and the concepts wrong. But a lot of times I think the general concept of what you're talking about being the fortune at the bottom end of the pyramid and having spent some time with microfinance, I know that in many communities you've got usurious money lenders who are out there, and the way that people are able to access capital is just really just exacerbates poverty. So if somebody is borrowing money at what effectively might be a couple hundred percent on an annualized basis, right? You borrow five at the beginning of the week and you go up six back at the end of the week and it compounds pretty quickly when you do that as an entrepreneur. What's the temptation to come in and say, Well, we're not going to charge 100 percent annualized basis, but we're going to charge 60 or 70 percent. We're still 30 or 40 percent under. But the market is, you know, because users money lenders have been out forever. There's clearly a big enough market and we can make a lot of money and still be a third cheaper. How do you process that conceptually? And then presumably, as you invest in these different institutions yourselves, you have to have some sort of guidelines because some of the companies you're investing in might also be tempted to have something less usurious, but still in a way that doesn't allow the poor to really escape. This cycle of poverty, how do you process that?
Patrick Fisher: Yeah. No great questions. I mean, first and foremost, the money lenders are the people that we want to put out of business through our activity. And the best way to do that, I feel, is through the power of markets. There always be room and importance for good regulation and laws and consumer protection. And those are the markets we invest in that have good consumer protection and laws against serious money lending. But it's one of the reasons why we focus on regulated banking institutions that comply with not only the consumer protection requirements, but also a part of our own code of ethics and policies about client protection principles where under what was called the smart campaign, but also using capital to drive interest rates down and drive access and capital is the best way of doing that introduction of competition. And this goes back to the sort of the love of capitalism and there always needs to be. Maybe before I go on sort of a healthy sense of distrust of any system, any human system, there should be a sense of distrust of socialism, as well as a sense of distrust of capitalism. We shouldn't, you know, anticipate that these systems will create in a fallen world some perfect utopia. There'll always be a tendency toward abuse or some form of misuse. But capitalism is the best system we have and has demonstrated results over and over again of having a unique ability to allow people to bring whatever capital they have to the system and participate as equals and to participate once given access to further levels of capital to generate their own returns on that. So what we really like to see is where Christians in particular get off the sidelines and get into the mess of what these situations are. And by bringing their capital in, it drives the costs of money down. By using technology, it drives the cost of client acquisition, client transaction costs, collection costs down, increasing transparency drives risk costs down. So all those things are really good for the business model. We actually make way more money as just a pure financial investment by having lower interest rates and sticky customer relationships, customers that not only have a willingness to repay but such excess returns in their own business that they want to borrow more for the next loan because of the returns they're able to generate. It's often why you see, even if we look around Chicago, you know, title loans, which are pretty dodgy, payday lending, you know, they're always these kind of one or two stop to location places. You know, JPMorgan's got trillions of dollars under assets. You don't get the trillions of dollars and that much market value by trying to eke out a couple more percent on folks. You do it by building enterprise value, by helping people flourish, because then they won't only need or want a home loan. They'll also need a small business loan or an education loan for their children. Don't need insurance on top of that. That's really what I see how the financial, social, spiritual returns all come in, especially when you're acting like an equity owner, thereby really delivering excellent value to the client by lowering rates, increasing access it leads to. It is a direct contributor to our financial returns, and that's why I love the alignment. But I would say with all things, everyone should wrestle with what it means to lend money, what it means to charge a customer or whatever business you're in. How do you judge a fair price? How do you judge a fair wage? And that's something we rely on the Holy Spirit to work in us and to help us use our wisdom. You do that in community, but also we do have this functioning market. When a market does function, it by definition will help you price something. The laws of supply and demand really do help you find a price, and that essentially leads to what is now a burgeoning market of individuals who now hundreds and hundreds of millions of people now have access to financial services that didn't, and they've come out of the shadow banks and into formal regulated opportunities. And that's a whole part of the mission. That's why it's called financial inclusion, bringing people into the systems that we get to use and benefit from every day.
Henry Kaestner: So I'd love for you to talk to us a little bit more about that. You said at the outset, of course, that financial inclusion is much more than just microfinance, though that that's an element. And you mentioned that this home fund. Give us some more examples of the types of investments you make and kind of the larger cornucopia, if you will, of financial inclusion. Sure.
Patrick Fisher: So we're the largest owner of a licensed bank in Mexico called Tim Keller Amos. It's the number two in terms of market penetration micro lender, so they do three hundred dollar loans almost exclusively to women in Mexico.
Henry Kaestner: Well, I love the name and this is me dropping that. I know you're still there. Yeah, but you know, we believe in you, right?
Patrick Fisher: Is that exactly what a great name? Yeah, I agree. From that core micro loan of three hundred dollars, they've also added through their app the ability to make utility payments, the ability to save in a savings account and have access to a savings account and Braun Insurance. We do life insurance health insurance now, and that's been a big draw. That creation investments brought to the company helped them expand. Also in Mexico, we're investors in a company called Plus Corp., which does $100000 to $500000 small business loans and leases, mainly for equipment. Somebody needs to buy a machine. We have a fleet for people need trucks, all the small business needs. So we're involved in the one hundred thousand dollar loans. We're investors in several different companies in India, one being that the affordable housing finance lender that I mentioned, Vastu, another one which has become a unicorn over the past couple of years, have been our best investment ever. But a company called Of Business, which has a technology platform that allows small businesses to go online and order basic materials, lumber, steel, concrete bags of concrete. And so this company handles the ordering the logistics to get 10 bags of concrete delivered to your small business. And then they'll also provide the financing they'll give you that, you know, a couple thousand dollars you need for your order of lumber for the 90 day period in which you're using that lumber to build furniture, for example. And that business has grown dramatically, and COVID has only accelerated all of the digital adoption and efforts there. We've been involved in used vehicle finance, so we do a lot of two, three and four wheel vehicles. So if you know your motorbikes and took trucks and all in Southeast Asia, still in Sri Lanka, as well as Cambodia and Thailand, we've done other kinds of products like pure insurance. So we have a company called Afler Insurance, which is in four different countries in South America and Mexico, Brazil, Peru and Chile. And they provide a variety of different kinds of insurance products, including now mortgage insurance. You know, you don't think about the role that mortgage insurance plays even here in America to help people get access to that loan. The banks wouldn't lend money to a first time homebuyer, typically if there wasn't some form of insurance or other kind of securitization pool or a Fannie Mae or all these systems that we really take for granted. But they're what's required there, the pipes that are required to be able to channel money to these underbanked folks. And maybe with that, I'll just use our last example, which is where the majority owner of a company in India called the Greedy Capital and the variety really is building the pipes for the entire debt capital markets in India. They have a digital business called Credit Avenue, which allows for institutional money to flow and make a digital debt market. But they also have their own balance sheet in which they channel capital to lenders like a micro lender, like a fusion microfinance or an education finance that's doing small ticket loans to help pay for school fees. Because school fees in the majority of the world are due upfront before you start school, you have to pay as you go, and that just shows you how much capital is still needed to help our whole globe really take a big step up in economic development. So those are a few of our companies.
Henry Kaestner: So this next question to ask you is going to sound, by the way, I ask it to be prescriptive or presumptuous. It's not meant to be that way because what you're able to do in the marketplace in terms of offering up financial inclusion is very much about human flourishing. And yet I also know, of course, that you're very much motivated by your Christian faith. What are opportunities that you see on the ground to be able to address not just financial piety, which is huge issue to be clear, but also maybe to partner with others. But what does it look like also in some of these markets to be able to address spiritual poverty as well? Are there opportunities that you see that or is that just, hey, actually, you know, maybe didn't catch me at the beginning? I said that there are opportunities for charitable capital, and that's an evangelism in church planning. And so I'm not meant to say be judgmental because if you say no, we don't do it, that's the wrong answer. Not at all. But do you see operating? How do you process that?
Patrick Fisher: Yeah. Well, I mean, I would say, first and foremost, you start with your own calling as a teenager as coming to say that I was, I did. Street witnessing in Southern California, so on Friday nights, you know, so so, you know, God is fed a desire to evangelize in my own heart and hopefully a gift in that. And so doing that through my own personal work here at the firm with every employee that I have here and my partners and and our team members, as well as on the boards I sit in and the regulators that I get to meet with, and I've been invited to speak at the Vatican against Jesus
Henry Kaestner: of regulators
Patrick Fisher: to death. He does, you know, interestingly, when we need to sign forms and certain parts of Southeast Asia, I have to sign Patrick Fischer Comma Christian comma here by saying as a director, so it's very much there on my director forms as well. But with that, I think there's just something that really needs to be communicated about how we work with our management teams, too. And we have CEOs in all of these businesses, men and women that are amazing leaders and teaching them how to lead with their faith and to communicate our own faith. Now, of course, we have Hindu and Muslim and Christian and Protestant Christians, Catholic Christians, we've all sorts of and atheists, management teams as well. So this is a great opportunity for them to know why we do what we do and who we are. And I've always very much believe that Christians should be leaders in the impact investing space. I mean, nobody should be able to put all these components better than a Christian, especially creation care the environment who should care more. You know, somebody that sort of says, we're here randomly and we evolve with no real design. Why would you know we're just a bunch of atoms now? It should be people that really believe that we have a creator, and that's part of the name. Creation is the creation of opportunities, the sense of that we've been created to do something and that we need to care for all of God's creation, as well as wealth being created, not exchanged. And that's one of the big misnomer is that we try to deal with. But with that, there is a spiritual element, of course, that goes into our work. And I think it goes back to some of the principles even Martin Luther talked about with with the Cobbler and his example, which I'm sure you're very familiar of, which is how does a cobbler best represent Christ? Is it by putting a cross on every shoe or is it just making really good shoes? And Luther says it's by making really good shoes and maybe a misattributed that maybe it's somebody else, but I led the group. We're going to go
Henry Kaestner: with it offered this thing.
Patrick Fisher: Yeah. So it's about being excellent at what we do in financial services, knowing we're going to work with diverse teams, knowing we're motivated by our faith and knowing the best way to honor God and inspire others is by creating the best financial institutions that will really be a light. Now through that, it gives us a platform and I've had a platform to speak to our investors. Some of our investors just see this as one of the best opportunities to make a financial return because we're in emerging markets where in high growth financial services has a great track record behind it. Our own track record is fantastic. But there's an opportunity to say that's not all we're doing here. We're a part of the idea. Sixty five that we talked about earlier and we're doing it motivated out of our faith. That doesn't lead to any fuzzy thinking, though, of why we do or how we do what we do with rigor. But also, you know, we have and will continue to give to things like city to city and other kinds of churches that are in and involved in these areas to strengthen the local church around where our investments are. We give to other NGOs as well that are doing health care, education, spiritual evangelism and church and other kinds of community work as a way to know what we do has a very specific focus, but clearly for a whole human flourishing, we're going to need all sorts of groups to be involved and address a particular community for the resources that they need and the sharing of the gospel.
Henry Kaestner: So I love that perspective. I think back to an NPR report that I heard recently. I actually went online. I found it, but it was probably 10 years ago, and they're doing a 40 year retrospective on the Green Revolution in India. And they talked about how, you know, 40 or 50 years ago, people weren't talking about the climate as much. They were talking about worldwide starvation. That was the big problem. People in India are going to starve. And so the Green Revolution came about increasing crop yields, and they were looking at doing this retrospective and I thought was very curious the way they did it. They looked back and said, you know, with the advent of pesticides and water and financial tools, the crop yields have absolutely increased. But 40 years on now, instead of using two bags of pesticide per hectare, you get to use 20 instead of drawing 20 feet for water. You've got to draw 80. And because of the proliferation of that vehicle, some number of Indian farmers have gotten overextended, and depression and even suicide have become rampant. You know, it's kind of a cautionary tale. And it ignores the fact that, you know, millions of people didn't starve to be clear. Many more millions of people were saved from starvation then and having mental illness and suicide. But as I'm listening to this, I thought, Oh my goodness, this was great in terms of addressing financial poverty. But if the church had been able to have this thoughtful partnership in there. These are people may come to understand that not only am I not concerned, but there actually a guy that really loves me and gave me this gift of life. And so I love to hear that where you can't necessarily do the type of things that you have a heart for in evangelism through the model, you're able to supplement some of those things by knowing the communities in which you serve. In some cases, it means working with church planners and doing it holistically, but with an idea that there is an opportunity to alleviate spiritual poverty in addition to financial poverty. And I suppose that some part of that includes addressing the the spiritual poverty we all have inside ourselves, too.
Patrick Fisher: Yeah, I mean, I think the farmers in India and I'll bring up a couple of different points here. I hope I can be articulate, but one is, yeah, it's been an amazing revolution that it's occurred within India and China as well. I mean, hundreds of millions of people over the last decades have moved from extreme poverty now into being low income, which is even out of the poverty level, which is unbelievable and wonderful from a reduction of human suffering. With that comes, of course, you'll always get excesses. And it's again one of the things we want to drive out through our operations. You know, there was a survey done even 10 years ago looking at Indian farmers and prior to financial services being offered. There are about 11000 suicides a year within the Indian farmer community after financial services, those with financial services from a regulated institution. There were 30 suicides total. Wow. So the reason I bring that up, and it's not to say that, you know again, that these are magic bullet solutions to all you know alone can only do so much, but it does impart dignity and hope in a very powerful way. Now it's incomplete without the whole picture of Jesus, but it's the cup of cold water in Jesus name. It's the opportunity to play a role in your community. It's the path out of dealing with the local money lender. You know, it's really substantial. And then the crop increases to me. Is it getting back to even the why I named the firm creation to begin with is exactly the point that there's always been a fear that by investing in social enterprise that deals with poverty or the poor, that you'll be extracting rents essentially from the poorer that we make money because they lost money. But the point of planting seeds and knowing that you can plant and have a harvest that yields a normal yield, or five fold or 10 fold or biblically 100 fold. Now how do you account for that game? And how should it be split? And that gain is the essential framework that God put into our whole world system is that, he adds, increase and that wealth can really be created. It's not just exchanged. And so how do we provide financial capital and not just financial capital, but other kinds of services? I mentioned this company of business on logistics and ordering and inventory management. We do the same in agriculture. Our latest company, Rusty Amundi, does a ton within the silk and cotton supply chains in India. And that's a very interesting case because those supply chains are dominated at different points by Hindu or Muslim communities. The Muslim community are primarily weavers within silk, but they don't trust the other Hindu communities by and large. So how do you have an intermediary help those two communities trade with one another, their inputs and outputs so there can be an increase of wealth for both sides? And you do that through transparency, through financial services, by injecting liquidity technology so that there's trust and that's what this company recombined. Mandi has done an amazing, amazing ways. But it all goes back to that metaphor of planting and really trying to create excessive yields because the Earth and we have a god of abundance who wants to have excessive yields. But the economic yields are not the only ones here. There are other things happening, but just the core financial service alone actually does. It's not a complete evangelism, but there's so much dignity and hope that's in part of that is very easily measured just through that sort of farmer suicide ratio.
Henry Kaestner: So we're coming down to the end of the podcast. And just so, you know, if you've listened to podcast before we get to, we're going to finish this up by asking you a verse. Or something that you feel or understand that guy speaking to you through his word about two things you come through and let's hit them in rapid fire, kind of like the ESPN 30 for 30 at the end, just kind of rapid fire. First one is I love the fact you brought the parable sower in. It's my favorite passage actually in the Bible on investments. Not the parable of the talents is not even it when a treasure in heaven where moss and rice don't destroy, it's actually the 36.0, as you mentioned. And the thing that holds us back from that 3500 is you've gone through the things like that. The sea has been picked down, and all this stuff with the final one is the worries of the world and the deceitfulness of riches as folks come out of poverty and are looking at are now in the low income. At what point in time is there opportunities to have kind of like a crown? I'd see I'm being too prescriptive, but you know, a crown, financial type of thing like all these things you thought you might have, you know, in the emerging consumer class. And to be clear, Sovereign's Capital, which I co-founded, is involved in the emerging middle class and it's based on a consumer economy. And yet we know that the worries of the world and the deceitfulness of riches can hold us back from that 30, 60 100. At what point in time does the people that are coming out of poverty come to realize some financial wisdom? That's above the context in the scope of what you do with your fund, but I'm curious on any thoughts you have on that as these folks start getting money.
Patrick Fisher: Yeah, I love it. I mean, I think essentially and you mentioned hope and hope and again, World Vision or are working in the hardest places in the world that are fundamentally on investable investment capital won't go there. There's just too many risks. But as a donor, we should take that risk essentially by the money already being given away. It doesn't require a return. Put it in these hard plays that make it work. Give these people access as that access increases and as people are more and more well-off, they start to put their excess income into protein. So they're stronger education, health care into their children, really into better homes, which lead to health outcomes that are great. But then they move toward some more business opportunities and consumables, so use vehicle televisions, access to internet and information. And as you move up that chain, there's now going to be a push toward how do we offer wealth services, wealth management services for our client, who 10 or 20 years ago made less than a couple of dollars a day and now has access income to invest for the future? And with that, our financial literacy courses that we offer through our institutions, there's financial literacy and training also needs to adjust because financial literacy for someone who's basically on the margins of poverty and survival needs to be about how do loans work, how to use it for productive purposes, how to repay, how to save, how to become more resourceful and use the capital over time. It needs to start dealing with the other issues that money provides and brings out, which are issues of the heart and of abundance. And what do I do with my money? How do I cultivate a generous giving heart and we've all had to go through that in our own journeys? And that will just naturally happen as we move along, but that's definitely the goal.
Henry Kaestner: OK, last question before we get to the scripture, and it's as follows You start in 2017, you talked about. Twenty seven. What are and you knew enough in 2007 because you talked about running your journal in 2003, but you knew enough in 2007. Here's a problem. I'm called into it. And yet, undoubtedly, over the last 15 years, you've learned a lot and you spent a ton of time in these different countries. Can you talk to us briefly about the lessons you've learned and the things it may not have been as you thought they would be? When you first got into this, because most of the listeners this podcast are starting to get involved in frontier in emerging markets and thinking, You know, what can I expect? I'm feel drawn into it. I see the biblical mandate, the opportunity to participate in what God is doing in the world. But what's something you've learned over the last 15 years that maybe you didn't expect?
Patrick Fisher: Yeah. Well, I would say a few things, but maybe like if anyone's going to do a construction project on their house, you know, anticipated it'll take twice as long and cost twice as much. So it is just sort of anticipate and normalized disruption failure even and really try to strip out that really easy to slip in notion that if it's successful, that means God's in it. And I tried to debunk that every time people say, Wow, you know what you've done, accretions gone so well and been so successful. It's clear God's in it to try to wave my hands and say no way, you know, God was in it. If we failed, if we failed at year one or year five or had to shut down, God was in it because my job was to follow him every day and do the job that he asked me to do that day. And that's still the case today. The numbers may have changed. And the details are different, but it's very much the same calling, so that to me is a fundamental. If you focus on that, then all the rest can come and go and you'll be completely grounded in what is, you know, especially when dealing with emerging markets. But even just look over the last 15 years from a global financial crisis now to COVID and in between, we had a bank in Russia in 2014, when the first Ukraine crisis and issues were going on. We went through demonetization in India, so currencies and out of pandemic. I think what what remains to be true is that the mission is unbelievable and that our work has a real, tangible impact. I've never believed in financial services for the poor more. It's never been more investable. But what I also know is that just it's constantly changing and complicated world. And if you put your identity into anything other than being a servant and following God and doing the job we asked you to do, you're going to get away, of course. Real quick.
Henry Kaestner: OK, well said. I lied. I've got one more before we close with scripture, and that is that the listeners to this podcast are going to go the whole spectrum. They're going be qualified purchasers, accredited investors, folks working for foundations, endowments, hopefully right down to the word owner. Might some number of the people listening to this and this is not a fun pitch, but some number of people are going to listen. It's like, Oh my goodness, I've got to be an LP in something like this, and that's awesome. Some other number won't be able to. Or maybe they can. How would you speak to a listener in this audience that says, Oh my goodness, I get it. I want to invest in financial inclusion? What's the spectrum of what's available to them as they are called to participate?
Patrick Fisher: Yeah, great question. I mean, again, we still continue to give out of a charitable bucket to financial services for the poor, in particular in frontier markets. So that's the Congo and Haiti and, you know, really almost failed states where, you know, it's the ultimate of risk. But you're thrilled that Christians in particular are they're leading the charge and helping build the foundation such that as those countries and communities grow, that really you could utilize them this next bucket of investment capital and within the investment capital world, there are a number of different options. Obviously, creation is one that's focused on financial inclusion. Again, we're only open and eligible for qualified investors, accredited investors because we're scc regulated and under private funds and private placement rules. But within that, there are other firms that offer private credit, private equity opportunities and more and more. We'll see public investment vehicles allow for this. So there's a whole spectrum of what's available. I think most people tend to fix their capital toward a geography of Tennessee. So if you're hired as for Africa, it's going to end up being a donation to one of the great charities doing great work. If your heart is for a place like India, there are a number of amazing investment opportunities there as well. And I'm thrilled that some of our investors obviously are very large institutions, but others that really believe this is the best social return they can generate. Because the use of investment capital and the structure that business and shareholding naturally provides actually creates better impact than a charitable structure. And I don't like to compare one versus the other in terms of effectiveness. It's really all good, but I'm really excited about where investment capital can go.
Henry Kaestner: Outstanding. What's something you're hearing from God in this word? Maybe it's today. Maybe is this week. Maybe it's recently, but how is he speaking to you?
Patrick Fisher: Yeah. I mean, I think for me, the you know, it's the come with me over to the other side, Praxis scripture, where you see Jesus challenging his disciples to take the next step with him. Me and my own leadership journey is what made us quote unquote successful or at least survive for the first many years was being scrappy, you know, really kind of a DIY mentality. Now that sort of early scrappiness startup mentality needs to shift into how do you build structures, policies, procedures, scale layers of teams really to manage more and more that we have coming in? And that's a really exciting but scary calling to come to the next kind of level of leadership. And I know and I'm very familiar with the founders trap and really trying to buck that. So it really is trusting God that he'll continue to equip me as a leader to hire and find great people because that's always the fear. Whether you know you work in a church or a charity, or will God bring the next people that we're going to need for the future and to trust that he will and that will be ready to empower them and, you know, in the right seats on the bus? When they come, so that's really the word come with me to the other side. Yeah.
Henry Kaestner: Patrick, thank you. Very grateful.
Patrick Fisher: Yeah. Always great to be with you, Henry. Thanks for all you're doing for faith driven entrepreneurs and investors.