Business Students Change Lives Through Microloans
One hundred people and counting have been helped by University of St. Thomas Cameron School of Business students, as this semester an undergraduate management class awarded its 100th microcredit loan. Richard Heagy, adjunct professor at UST, started this project in his management class five years ago, as a way to apply management principles such as risk evaluation and make a difference for people needing credit in developing countries.
The students funded the loans themselves and awarded them through Kiva, which is a non-profit organization that connects people to borrowers in 73 countries. It helps poor families get the resources they need to raise their economic level above poverty.
“I started this project to build awareness of developing world need,” Heagy said.
This project is based on the same idea of borrowing a loan from a bank, but without charging any interest. Kiva targets the low-income people in different developing countries, who need to set-up their own small businesses.
One successful project was a $400 loan that helped Josselyn Lisbeth buy new products for her small grocery store in El Salvador. Another microloan of $350 lent to Peter in Kenya helped him purchase a zigzag sewing machine, and he succeeded to profit more from his tailoring business.
Mathew McNally, Master of Business Administration candidate and one of Heagy’s students, believes this project should be mirrored all over the world, as he feels that this methodology is helpful for many empty-handed people.
“I never heard about the microloans project or Kiva organization before taking this class,” McNally said. “I am glad that I took this class with Professor Heagy.”
Heagy’s project began five years ago, to spread the awareness of this lending project. He implemented this project in the classroom in the form of a survey that contains different cases for poor families, who applied for loans. Students decide who should receive a loan after studying the cases. About 400 students have participated in granting loans through Heagy’s class.
Cassandra Varacalli, an MBA student, thinks that this idea is helpful for the economy to progress in these developing countries.
“This project helps small businesses get on their feet, which helps build up the economy,” Varacalli said. “It's a great program that allows these small business owners to start or maintain their product without the hassle that you would normally get from another lender.”
Heagy said the class will surpass 103 this month. “We are now planning to hit 200 loans participation,” Heagy said.
The image of Winnie Akyini was provided by Kiva to advance its mission of connecting people around the world through lending to alleviate poverty.