How did a senior executive for a local life sciences technology company, and former chief legal officer of a New York Stock Exchange company become an exponent of microlending?
My business took me around the world, including to developing countries, where I saw great poverty and a lack of opportunity. My business, which focused on drug discovery and development, often could not help in these communities, where the infrastructure and economic development simply wasn’t present. I decided that I would return some day to try to help people without opportunity to improve their lives, through business. Creating opportunity, especially through providing capital and teaching entrepreneurship, was my goal for a “second” career.
What is the success rate of microlending in helping the poor become self-sufficient?
The reported success rate is very high, in terms of repayment rates for microloans, which is often above 95% (meaning, a 5% or less default rate). Many consider microcredit as the most sustainable and effective model for helping the poor and disenfranchised in developing countries to improve their economic lives, and in turn, enable them to feed, educate and shelter their children. The great legacy of microfinance will be the impact it has on the children of borrowers, and the signs continue to be positive.
Personally, what is it like when you hear about, or meet the recipient of a loan who turned his or her life around with just a few hundred dollars? Is there any one story that always stays with you?
It is always very heartwarming to hear stories of self-improvement via microcredit and entrepreneurship. We saw the impact of microcredit in the townships, or “slums” of South Africa, where single mothers for the first time were able to meet all of the needs of their children, especially to get them into school and prepared to create a new future for their children.
It seems that increasing numbers of Northeastern students are learning about this area of lending, some even traveling to refugee camps and poor countries to help the needy learn to earn a living. To what do you attribute this interest and dedication?
We have been trying to stimulate student interest on campus, and the addition of academic classes into our curriculum appears to have had a positive impact. We started with just a one-credit seminar with 10 students, and now we offer three classes each year with more than 100 students at the undergraduate level. We also offer a class at the graduate level.
How do these classes motivate students?
We see the classroom as a place to stimulate interest in fieldwork, where students are greatly impacted by what they see and do, in places like Africa and right here in the disadvantaged communities in Boston neighborhoods, and their stories further help to expand our reach on campus.
How many students have incorporated microlending into their education?
We have more than 100 undergraduate students who take a class in social entrepreneurship (where microfinance is a part) or microfinance each year.
Has the world of microfinance been affected by the global economic climate?
Very little, in fact microfinance has continued to progress and expand during the economic downturn. Borrowers in the microcredit context are largely outside of the credit markets in the developed world, and thus haven’t suffered as much of the contraction.