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LEWISBURG, Pa. – Bucknell University professors from interdisciplinary fields addressed questions of economic entrepreneurship in developing countries in a panel discussion, “Microfinance Challenges: Developing Paths to Self-Sufficiency,” on Tuesday, April 7, in Trout Auditorium.
The event was hosted by Microfinance Initiative at Bucknell (MIB), a student organization committed to educating the campus community and public about the potential for microlending to alleviate poverty and encourage socially responsible entrepreneurship in South America and Africa.
“If there is an industry in the U.S. doing well right now, it’s microlending,” said Douglas Hecock, an assistant professor of political science, who contextualized microfinance’s defiant prosperity within the current financial crisis.
Hecock said that microfinance is a more personal style of economics, returning to a financial system that is pre-consolidation. “’You don’t have the best credit score or collateral, but I know you so I’ll lend to you,’” he said, highlighting one strong sentiment in microfinance lending.
Student representatives from MIB gave a brief history of microfinance, which allows lenders around the world to loan small amounts of money to low-income entrepreneurs in developing countries. Initially envisioned by Nobel Peace Prize-winning Bangladeshi economist Dr. Muhammad Yunus in the 1980s, microlending now provides credit to start-up entrepreneurs in more than 100 countries.
Richard Waller, an associate professor of African history, urged caution about placing too much faith in microfinance. “It can enable some people to better themselves in a reasonable amount of time,” he said.
Lending and aid
Waller differentiated between microfinance lending and aid.
“One of the most important things about microfinance is a return is expected. There is a degree of responsibility that aid does not require. We should remember that microfinance is something we do with people, not for people or at people,” he said.
But if there are criticisms of microfinance, getting reimbursed for a loan is not chief among them. “The folks getting these loans are extremely creative. I think that’s one of the reasons this works so well,” said Geoffrey Schneider, an associate professor of economics. “Market infrastructure evolved in the United States. Very little of that is in place in the developing world.”
Microfinance has already reached the Bucknell community. Jessica Jackley Flannery ’00 founded the first person-to-person microlending website, Kiva, in March 2005. Donations are also being accepted by MIB for microlending through Kiva and other microfinance lenders. The student microfinance organization’s goal is to become more sustainable down the road, using repaid loans to lend to other entrepreneurs.
Kyle Winslow ’09 is an intern in the Division of Communications.
Contact: Division of Communications