Students invest after professor suggests

 

 

 

 

 

 

 

 

 

 

 

By: Saloma Ayoub

Staff Writer

Kiva connects borrowers and lenders and allows entrepreneurs to make an impact on investing towards something meaningful.

Following a microfinance model, millions of people around the world are partnering up to break economic shackles by pooling capital to improve societal productivity.

Microfinancing taps into the concept of lending money to reduce the conditions of poverty and lack of capital for individuals with the motivation to expand productivity.

Joesph Stenard, a professor at Hudson Valley Community College for economics, introduced Kiva to his micro and macroeconomic students and the impact $25 can make.

“The old joke goes, ‘bankers are willing to loan money to anyone but the people that actually need it,’”  Professor Stenard said while explaining Kiva, a platform that capitalizes on microfinance.

Maxwell Scheriff, business administration major, explained how he loaned a girl in the Philippines $25 to buy fruit for her stand. Doing this, Scheriff hoped the money would help and she wouldn’t need another loan.

This faith lent to the entrepreneur is a big factor of microfinance.

Professor Stenard’s assignment asks the micro students to analyze the business plan of an entrepreneur. The macro students look at the banking system and the invisible hand.

The assignment encourages students to evaluate business plans.

To Ashton Meriam, business administration major, the ripple effect is surreal.

“My favorite thing about Kiva is that it connects people from opposite sides of the world and allows them to help each other directly, which is such a surreal opportunity,” Meriam said.

Stenard described the process and how he hopes this impacts his students.

“[My students] realize that they have provided the means for someone to stay fed for a day,” Stenard said. “They have helped them feed themselves, and get out of poverty,” he said. “It is very, very meaningful that my students who are themselves perhaps struggling financially are helping that person to lift themselves out of poverty.”

“Although I did receive the money I lent out eventually, I would have been fine if I never saw a dime,” said Tyler Tschumi, business administration major.

The functionality of the program is that it can be cyclical once the borrowers repay. The money is either yours to keep or invest in a new dream.

“Its premise is loaning money that will help someone begin their business venture and soon they will be successful enough to be able to pay you back, and in turn show you that your financial support was truly beneficial to them,” Meriam said.

The functionality of the program is that the money is either yours to keep or you can invest in a new dream.

Muhammed Yunus, a Bangladeshi economist, won the Nobel Peace Prize for microfinance in 2006. He might not have invented microfinance but was the first to apply it on a larger scale.

Yunus was a professor inspired by the exploitation he witnessed in a small village next to the university he taught at in the 1970s. Loan sharks were giving out money to small businesses powered by hard-working individuals and giving them barely enough margin for profit to keep their businesses dependent. The vicious cycle was near slavery.

Yunus went around and made a list of about 42 individuals who were indebted to loan sharks and calculated how much they needed to get out of debt. The total came to $27. He supplied that $27 and broke the chain.

Yunus is the inspiration to Kiva and one of its founders, Jessica Jackley.

Today you can donate to someone in Paraguay to help stock their retail drink business or to someone who lives in the United States develop his eco-friendly paint brush cleaner business.

The important thing to consider is you’re not just helping one person, you’re helping their community,” Meriam said. “Think about it, if you help someone start their business, everyone around them will benefit from it and the overall economy will prosper from it as well.”