Micro-loan Pilot

We had another review meeting last Thursday to decide on whether or not to go ahead with the microloan program. There were mostly mixed reactions, but I think everyone seems to agree that dependency on donations to sponsor children’s education was probably not going to work very well this year; with the economy in doldrums, it was going to be difficult to find many sponsors. Personally, I think there is a possibility to leverage the microcredit concept for providing low interest student loans. I believe if we can keep the initiative “niche” enough to attract few deserving applicants, we might start to gain more confidence in the program and then later expand the program into a more robust social investment opportunity.

Anyway, I know a couple of children in my neighborhood (10th and 9th graders) whose parents are looking for some sort of financial assistance for their tuition needs. I know their parents well- they own the grocery shop opposite my apartment and are absolutely credible. The kids are really smart and I think we might have a genuine opportunity to launch a pilot. I discussed the case with the board, they seemed quite enthusiastic. Dhana knows another kid that he can vouch for, so we might be able to start the program with these three kids and monitor how the program goes..

I have asked Santhosh to draw up a sample business plan and bring it to the board for next week’s meeting. Meanwhile, I will be collecting some more information about the kids and start the review process. I am truly excited!

Microfinance

We had this amazing brains storming session today, Pankaj, one of the folks we have been having in our volunteer program came up with this amazing concept of launching a micro credit program for Creative minds. I was like, wow! Let’s talk about it. Apparently, Pankaj had worked for a little while with the Grameen Microloan program, and they were having this initiative to extend microloans to school children. I hadn’t heard about microfinance so much, and wanted to know more. I learnt that Mohammed Yusuf, a professor of economics in Bangladesh began this organization to provide collateral free loans to villagers who wanted to start their own business, since banks were unwilling to lend such small sums of money to them. Apparently, this turned out to be a very successful model.
I was real curious how this will work out for us! We obviously can’t give loans to college kids and wait for 4 years for them to repay! We probably have to do this for school kids, and maybe plan it for a semester wise period, Anyway we were talking about these ideas for almost an hour! Sounded really exciting, might launch a pilot project. I do know some kids in Chennai who were looking for sponsorships, might talk to those parents next week.
Anyway, planning to read up on Mohammed Yusuf’s book “Banking for the Poor” over the weekend. Might get some more insights!