Empowering people, one dollar at a time

I had always thought Wharton MBA students never strayed from Huntsman Hall. It was like there was an electric fence around the perimeter or something. So I was rather startled to find one in a "Women Leaders in Emerging Democracies" class last fall.

As we went around the table to introduce ourselves and say why we were taking the course -- usually some variant of "Women in politics are cool" or "I interned for Hillary" -- an MBA student surprised me with, "Because I want to learn about microfinance."

Once I learned what microfinance actually was, that statement made a whole lot more sense in the context of the class. Whereas large organizations like the World Bank or the International Monetary Fund give large loans to developing governments, microfinance organizations lend relatively minute amounts of money to impoverished individuals who then use it to start businesses. The majority of those benefiting from these loans are women, which is understandable considering that 70 percent of people living on less than dollar a day are women. For that very reason, the topic was included in the class syllabus.

At the time, the government-administration course was the only class MBA students could take to study microfinance. The Wharton option, "Commercial Bank Management," hadn't been offered in years.

That fall, however, things started to change. The United Nations launched the "Year of Microcredit" a year ago this Friday, and student interest in the subject has grown ever since. Last spring, the Management Department offered a microfinance "advance study project" class -- open to graduates and undergraduates -- for the first time and hopes to offer it again next semester.

It's not hard to see why students would want to study and work in microfinance. "It's a very compelling approach. You empower people to run their own businesses. You enable them to get themselves out of poverty," said Lopa Shah, president of the Wharton MBA Microfinance Club.

While talking with club officers, it became quite clear what Penn should do to become more involved in microfinance in the future. Investing directly in microfinance institutions through its endowment, as Tufts is currently, would certainly be a large step in that direction. However, Penn is notoriously conservative with its investments, and it remains to be seen what kind of equity return can be had with this approach. Perhaps Penn's caution, in this case, is warranted.

There is another option with a more short-term and predictable outcome. It's simple. Penn should follow the lead of its students.

Prior the creation of the Microfinance Club, students were completely on their own when it came to finding internships in the field. "You had to contact each individual organization and have the good fortune to talk to the right person at the right time." said Idehen Aruede, club vice president, who worked for a microfinance organization in sub-Saharan Africa this summer.

Over the past few years, the club has worked to create relationships with microfinance institutions and to place students in the field. The foundation of the undergraduate Microfinance Club this October shows that interest in these internships extends well beyond the graduate level.

What Penn students need is not another on-campus recruiting session on I-banking, but rather one on microfinance. Career Services should reach out to major organizations like Women's World Banking, Axiom and FINCA and establish contacts. Microfinance presentations should be a part of the OCR calendar.

"It's a two-way street. The organizations need to reach out to Penn as well," Aruede acknowledges. "But a lot of the time they don't even think that Wharton would be interested."

Apparently, when organizations look for students, John Hopkins, George Washington and Georgetown universities are the obvious choices, probably because the organizations are largely Washington-based. Penn and Wharton need to be added to that list.

"Unfortunately, it's a vicious cycle. Career Services probably doesn't think there's enough interest in microfinance, but we need something like Career Services to make students aware of such opportunities," Aruede said.

Who knows, maybe by next semester Career Services will be sending out e-mails with subject headings like, "Panel on Microfinance Internships this Thursday!!!"

Now that's an e-mail from Aileen Kyung Kim I wouldn't mind getting.

Amara Rockar is a junior political science major from St. Louis. Out of Range appears on Tuesdays.

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