The initiative for microfinance at Bucknell involves a student group that loans to low-income entrepreneurs around the world to help them start small business and generate a sustainable income. The loaning process is completed through KIVA . KIVA is a website which partners with microfinance institutions all around the world to connect lenders like us to borrowers in different countries. They provide an open platform of information on the lenders and the microfinance institutions that they work with to help lenders make informed decisions before making a loan. Students can identify borrowers on KIVA's website and loan to them electronically through a lending account. Loans are administered to the borrowers by an on-site microfinance institution, which also collects loan repayments and transfers the money back through kiva to the lender account once the loan is fully repaid. Loans are typically repaid by borrowers in small weekly increments throughout the course of a year. The students can then recycle the money by choosing another entrepreneur to loan to. This will generate a long-term relationship between microfinance and Bucknell.

See our powerpoint presentation for more information!

Students will need a start-up fund of approximately $1,000 in order to engage in this process. With $1,000, students can loan to at least two entrepreneurs throughout the academic year (one each semester). Borrowers request small loans by our standards – usually only a few hundred dollars. Depending on the loan size and commitment of the student group, the students may be able to loan to more than two entrepreneurs with this amount of money.

Students will approach different academic departments and ask them to contribute to the fund. Students would only need five departments to agree to contribute $200 to reach the start-up goal. Since microfinance overlaps with so many different subjects, a number of departments should be interested in supporting the activity (Economics, Management, International Relations, Sociology, Women's and Gender Studies …).

After the project gets on its feet, funding can be extended to include alumni donations. Bucknell's alumni might be very interested in contributing to the microfinance fund because it is helping Bucknell's future leaders get hands on experience with issues regarding risk, credit, and social responsibility.

Students will engage in an active learning process when selecting which borrowers they wish to loan to. Decisions on what entrepreneur the group will invest in will be made through an election process. Students in the club will break off into small groups and each pick out the entrepreneurs they believe the student organization should loan to. Each group will create a presentation and pitch the idea to the rest of the group. In their presentation, students will consider factors such as country (development indicators, political stability), regional stability (environmental factors, poverty rate, education level...), microfinance institution (mission statement, profit-motive, scale of operations, default rate), loan type (interest rate, purpose of loan), and borrower. After hearing everyone's cases, the group as a whole will vote based on which borrower they believe would strike the best balance between being a relatively low risk loan and having the most social impact.

In addition to providing pictures and information on each borrower, KIVA regularly updates lenders on the progress of their loan, the borrower, and the micro-enterprise that the borrower develops with their loan. Because of how accessible this information is, the student group can post pictures of and information on their borrowers on the Bucknell website for the rest of the campus and wider Bucknell network of alumni and parents to see. Students can also include a brief summary of why they chose to loan to this entrepreneur and how they think it will help contribute to social and economic development. As the loan progresses, students can update the website to let the campus know how our loan is doing, and how the borrower is using that loan to create a small business.

The initiative for microfinance at Bucknell has the potential to be extended in the future in two ways: (1) by becoming part of the formal academic curriculum, and (2) including a travel abroad (service-learning) program.

Academic curriculum:

Incorporating microfinance into the curriculum in the future might be an excellent complement to the creation of a Bucknell Business school and fit perfectly with the University's new commitment to sustainability. Bentely College of Business provides an example of how Bucknell can do this. A professor at Bentely recently started an honors seminar course where students are investigating how to start a microfinance institution at Bentley that would invest in their local community. Each student in the course takes on his/her own independent semester-long research project on aspect of microfinance / starting an microfinance institution. For example, one student chose to explore the different models of microfinance, another decided to investigate how microfinance can be adapted to the United States, another did research on the issues of target markets, and another student became an expert on how to start a 501c3 non profit institution. These students are working together to present their idea to a group of investors who they hope will fund their project at the end of the semester.

Travel Abroad:

The microfinance initiative also has the potential to be extended into a travel abroad program. KIVA has a program called "kiva fellows," which selects interns to travel to some of the microfinance institutions that they partner with. Interns would do field research on the institution – collect data on loans, loan repayments, and investigate the organizational structure of the institution. KIVA uses the data that interns collect to develop a "risk rating" for each institution that they post on their website to provide borrowers with information. Since KIVA was founded by a Bucknell Alum, there is a possibility that KIVA would be willing to partner with Bucknell and agree to send a few qualified Bucknell students each year on their program.