Bentley University Class Creates Local Microfinance Fund
New Student-Run Initiative Brings Microlending to the Greater Boston Area
An honors finance class at Bentley University has paved the way for an innovative financing initiative: a domestic microcredit organization that will fuel economic and community development by providing loans of $1,500 to $6,000 to local entrepreneurs at or below the poverty level.
The Bentley Microcredit Initiative (BMI) is the result of a course, Seminar in Micro Lending, which debuted in spring 2008. The mission of the BMI is to integrate microfinance into the Bentley community and to promote community development through education and innovation in microlending activities. The class and the BMI are the brainchild of Finance Professor and BMI Director Roy Wiggins. "The fund is something I really thought could be viable here at Bentley", says Wiggins. "Since it's student-run, it will provide hands-on, real-world banking experience while also furthering the Bentley mission to send future business leaders into the world who are socially responsible."
Microcredit or microlending refers to modest-sized loans for poverty-level recipients who may not qualify for funds at traditional financial institutions. The practice gained public attention in 2006, when Grameen Bank and its founder, Muhammad Yunus, received the Nobel Peace Prize for their work in microfinance. With other organizations such as Boston-based ACCION in the ranks, microlending has flourished in developing countries.
Students enrolled in Seminar in Micro Lending developed a working model for the BMI after researching microfinance successes and failures both abroad and domestically to create a framework that could operate in Greater Boston. The fund is being financed by donations from alumni and parents and has an initial equity line of $100,000 on its way to a total loan portfolio of $300,000.
"To make this fund happen we are building on the foundation of involvement from our parents and alums to create a viable learning experience for students," says Bentley President Gloria Larson. "One of the attractive things about this venture is that it will be utilizing Bentley's academic resources. We are essentially marrying Bentley's foundation in service and business to help address a societal issue. We hope the Microcredit Initiative will become a part of Bentley's legacy."
The Bentley Microcredit Initiative will identify potential loan applicants by tapping into existing Bentley relationships with community organizations. To gather data for initial client screenings, the BMI is working with the Bentley Service Learning Center which has strong ties to many centers and service-oriented organizations.
The BMI's organizational structure is designed to provide ample oversight on borrower progress and loan collection. Each borrower will be assigned a loan team made up of a loan officer and one or more student associates. The loan officer will be a Bentley student who has fulfilled the prerequisite of taking a microfinance class. The fund will have a board of advisers to oversee program operations and mission objective.
Sara Kovacic, a student who took Seminar in Micro Lending and helped create the BMI, says the fund will have a deep impact on students who get involved, "You're not just giving money away, you're investing in another person. It's a tangible way to make a difference." Kovacic is currently working with seven other Bentley seniors to establish the Bentley Microfinance Club. The club will provide the pool of student loan officers and associates.
BENTLEY UNIVERSITY is a leader in business education. Centered on teaching and research in business and related professions, Bentley blends the breadth and technological strength of a university with the core values and student focus of a close-knit campus. Our undergraduate curriculum combines business study with a strong foundation in the arts and sciences. The McCallum Graduate School emphasizes the impact of technology on business practice, in offerings that include MBA and Master of Science programs, PhD programs in accountancy and in business, and custom executive education programs. Located minutes from Boston in Waltham, Massachusetts, the school enrolls approximately 4,000 full-time undergraduate, 250 adult part-time undergraduate, 1,400 graduate, and 30 doctoral students. Bentley is accredited by the New England Association of Schools and Colleges; AACSB International – The Association to Advance Collegiate Schools of Business; and the European Quality Improvement System (EQUIS), which benchmarks quality in management and business education.
