Campus Microfinance Alliance Conference 2011

8/3/2019 Campus Microfinance Alliance Conference 2011

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The Campus Microfinance Alliance

SPONSORED BY

2011 Annual ConferenceThis binder belongs to_________________________________________

Climbing thegrowth tree

Building the student-led

microfinance movement

NEW HAVEN, CT

October 21-23, 2011


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The Campus Microfinance AllianceAnnual Conference

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The purpose of Credit Builders Alliance (CBA)

is to help low and moderate income individuals

currently served by non-traditional financial

and asset building institutions build their credit

and access conventional financing.

Join CBA today to help your clients build credit

as an asset for themselves and their families.


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Organization Profile

BENTLEY MICROCREDIT INITIATIVE

YEAR OF INCEPTION 2008

UNIVERSITY OF AFFILIATIONBentley University

ORGANIZATIONAL STRUCTURE

Registered student organizationNonprofit 501(c)3

Funding & Budget

CONTACT INFO

175 Forest StreetWaltham, MA 02452

$5,000OPERATING BUDGET

($125K for Lending)

Demographics & Scale

AREA SERVED

Boston, Massachusetts

CLIENTS SERVED YTD

from Oct. 2010 to present

DESCRIPTION OF CLIENT BASE

We target Boston, MA and surroundingsuburbs.

1

LOANS DISBURSED YTDfrom Oct. 2010 to present1

VALUE OF LOANS MADE

from Oct. 2010 to present$10k

Geographic Focus

AREA TYPE

Urban

PROGRAM FOCUS Credit-led

Microenterprise Products & Services

TRAINING SERVICES

OFFERED

Referrals/partnerships with

other training programs

TYPE OF LENDING

Individual lending

$50015,000

LOAN AMOUNTS

for first-time borrowers

10% INTEREST RATE

YesARE CREDIT SCORES &HISTORY CHECKED?

DESCRIPTION OF SERVICES OFFERED

We oer consulting services as well as loan services. Internal services(consulting group) include legal, finance, accounting, business plan, marketing,and research databases. Externally we can connect loan clients with outsidecompanies to partner and learn from.

PARTICIPANTS

James Haight ([email protected])John Warden ([email protected])Chris Orihuela ([email protected])

NUMBER OF STUDENT STAFF

OFFICE?

Yes, on campus

100%

University

55

LOAN LOSS RATE

from Oct. 2010 to present0%

PORTFOLIO AT RISK

as of Oct. 2011100%

RESTRUCTURE RATE

as of Oct. 20110%


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COMMUNITY EMPOWERMENT FUND


UNIVERSITY OF AFFILIATIONU. of North Carolina, Chapel Hill


501(c)(3) nonprofit

Funding & Budget

CONTACT INFO

phone (919) 200-0233www.communityempowermentfund.org

81%

Private Sources

19%

University



AREA SERVED

Orange and Durham Counties, NC

CLIENTS SERVED YTD



Two-thirds of our clients are minority, one-halfare women, and 70 percent are homeless atintake.

80


VALUE OF LOANS MADE

from Oct. 2010 to present$0.5k

Geographic Focus

AREA TYPE

Urban

PROGRAM FOCUS Training-led


TRAINING SERVICESOFFERED

Multi-week business class

One-to-one business plandevelopment

Mentoring

Referrals/partnerships withother training programs

Personal credit counseling

Assistance with loanapplication

Site visits to businesses

Tax assistance

Information & TechnologyAsisstance

Access to Markets Assistance

Legal Assistance

TYPE OF LENDING

Individual lending

$401,000

LOAN AMOUNTS


0% INTEREST RATE(S)

NoARE CREDIT SCORES &HISTORY CHECKED?


CEF focuses our work in shelters and transitional housing communities.Much of our challenges as an organization have been based in formalizingand systematizing a mechanism of loan repayment, loan processing, and loanservicing. CEFs savings program has in some ways replaced the demand forour loan program, meaning we now oer fewer loans.

PARTICIPANTS

Maggie West ([email protected])Alexis Seccombe ([email protected])Linda Chamiec-Chase ([email protected])Jonathan Young ([email protected])

NUMBER OF STUDENT STAFF70

OFFICE?

Yes, o campus

LOAN LOSS RATE


PORTFOLIO AT RISK

as of Oct. 2011DK

RESTRUCTURE RATE

as of Oct. 2011

DK


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ELMSEED ENTERPRISE FUND


UNIVERSITY OF AFFILIATION

Yale University


501(c)(3) nonprofit

Funding & Budget

CONTACT INFO

P.O. Box 207148New Haven, CT 06520

phone (203) 687-4590

www.elmseed.org

33%

University59%

Private

Sources

8% Earned Income



AREA SERVED

New Haven area (including Hamden,East Haven, West Haven)

CLIENTS SERVED YTD



Low income entrepreneurs in Greater NewHaven. We serve a mix of both start up andexisting businesses, and for most clients thebusiness is the primary source of income.

68

LOANS DISBURSED YTD

from Oct. 2010 to present8

VALUE OF LOANS MADE


Geographic Focus

AREA TYPE

Urban





MentoringMembership events



Project-based Consulting

TYPE OF LENDING

Individual lending

$05,000

LOAN AMOUNTS


10% INTEREST RATE



We oer a 4 week business training class, which helps clients refine theirbusiness idea into a viable executive summary. The class works throughseveral business concepts - target market, niche, basics of cash flow. It focusesheavily on peer engagement and disucssion among participants. We alsooer one on one consulting to clients to address a specific business problem.Typically 2 consultants work with one client. Finally, we hold membershipevents in which a speaker comes to engage clients in collective discussionabout their businesses.

PARTICIPANTS

Jared Jones ([email protected])

Jasjit Singh ([email protected])Sinye Tang ([email protected])

Jungwon Byon ( [email protected])

Drew Macklis ([email protected])


OFFICE?

Yes, o campus

30

LOAN LOSS RATE


PORTFOLIO AT RISK

as of Oct. 20110%

RESTRUCTURE RATE

as of Oct. 20110%


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FORZA FINANCIAL


UNIVERSITY OF AFFILIATION

University of Alabama


Nonprofit 501(c)3

Funding & Budget

CONTACT INFO

P.O. Box 861491

Tuscaloosa, AL 35486

www.forzafinancial.com

$4,500


AREA SERVED

Tuscaloosa, AL

CLIENTS SERVED YTD



Low income entrepreneurs and smallbusiness owners in Tuscaloosa andthroughout Black Belt region in AL.

0


VALUE OF LOANS MADE


Geographic Focus

AREA TYPEDual (Urban and rural)



TRAINING SERVICES

OFFERED

Multi week business course

One to One business plandevelopment




Tax assistance

Information & TechnologyAssistance

TYPE OF LENDING

Individual lending

Group lending

$500-5,000

LOAN AMOUNTS


10-20% INTEREST RATE



We plan to oer microloans, educational seminars. We plan to lendspecifically to entrepreneurs in the bottom 50% AMI or who have employeeswho fall below the bottom 50% AMI. We will match each borrower with abusiness students who can assist the entrepreneur and help them accessresources through the university such as legal counsel.

PARTICIPANTS

David Bailey ([email protected])

Tyler Evans ([email protected])Saahil Agrawal ([email protected])Sebastian Medina ( [email protected])Alex Cohen ([email protected])


OFFICE?

Yes, on campus

50%

Private

Sources

17

LOAN LOSS RATE

from Oct. 2010 to presentNA

PORTFOLIO AT RISK

as of Oct. 2011NA

RESTRUCTURE RATE

as of Oct. 2011NA

OPERATING BUDGET

50%

Private

Sources


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HILLTOP MICROFINANCE INITIATIVE


UNIVERSITY OF AFFILIATIONGeorgetown University


Nonprofit 501(c)3

Funding & Budget

CONTACT INFO

3514 P Street NWWashington, DC 20007

www.hilltopmfi.org



AREA SERVED

Washington, DC, specificallyColumbia Heights and Ward 7

CLIENTS SERVED YTD



Low to moderate income entrepreneurs;focus on Hispanic population

1

LOANS DISBURSED YTD

from Oct. 2010 to present1

VALUE OF LOANS MADE


Geographic Focus

AREA TYPE

Urban



TRAINING SERVICES

OFFERED

Multi week business course

One to one business plan

development




Tax assistance

Information & TechnologyAssistance

TYPE OF LENDING

Individual lending

$1k

12kLOAN AMOUNTS


10% INTEREST RATE

NoARE CREDIT SCORES &

HISTORY CHECKED?

DESCRIPTION OF SERVICES OFFEREDWe oer a six-week business education curriculum that includes informationon business management and registration information for District of Columbiaresidents. Graduates are invited to apply for a microloan. Loan requests over$12K are referred to LEDC. We also oer a matched savings program.

PARTICIPANTS

Alissa Orlando ([email protected])


OFFICE?

No

100%

Private Sources

12

LOAN LOSS RATE


PORTFOLIO AT RISK

as of Oct. 20110%

RESTRUCTURE RATE

as of Oct. 20110%


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THE INTERSECT FUND


UNIVERSITY OF AFFILIATIONRutgers University


501(c)(3) nonprofit

Funding & Budget

CONTACT INFO

109 Church StreetNew Brunswick, NJ 08901

phone (732) 917-0812fax (800) 313-0157

www.intersectfund.org

45%

Private

Sources

50%

Public

Sources

5% Earned Income



AREA SERVED

Central and Northern New Jersey

CLIENTS SERVED YTD



73% women, 85% minorities, 75% low-income;target market is home-based and informalexisting busineses

159


VALUE OF LOANS MADE


Geographic Focus

AREA TYPE

Urban





Regular seminars

Mentoring



Tax assistance

Information & TechnologyAsisstance

Access to Markets Assistance

TYPE OF LENDING

Individual lending

$10010,000

LOAN AMOUNTS


15% INTEREST RATE(S)



Our core product is Entrepreneur University, a nine week course in businessplanning and operation. Participants receive 500 custom designed businesscards, a copy of QuickBooks, and membership to the local chamber. The fee is$100-250, based on income.

For graduates of EU, we oer one-on-one consulting, use of a computer lab,low-cost print and web design, Schedule C tax preparation, microloans up to$10k, credit builder loans, and vending events.

PARTICIPANTS

Rohan Mathew ([email protected])Joe Shure ([email protected])Luis de la Hoz ([email protected])


OFFICE?

Yes, o campus

LOAN LOSS RATE


PORTFOLIO AT RISK

as of Oct. 20114%

RESTRUCTURE RATE

as of Oct. 20111%


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SCSU MICRO LOAN PROGRAM


UNIVERSITY OF AFFILIATIONSt. Cloud State University


Departmental academic program

Registered student organization

Funding & Budget

CONTACT INFO

stcloudstate.edu/mlp

100%

Private Sources



AREA SERVED

15-mile radius of university

CLIENTS SERVED YTD



Primarily low-to-moderate incomeentrepreneurs.

3


VALUE OF LOANS MADE


Geographic Focus

AREA TYPE

Dual-Area (Rural & Urban)


PARTICIPANTS

Matthew Wells ([email protected])


OFFICE?

Yes, on campus

LOAN LOSS RATE

from Oct. 2011 to presentDK

PORTFOLIO AT RISK

as of Oct. 2011DK

RESTRUCTURE RATE

as of Oct. 2011

DK

PROGRAM FOCUS Training-led TRAINING SERVICESOFFERED

Mentoring/Coaching

Partnerships with othertraining programs


Information & Technologyassistance

Access to Markets assistance

Business Plan Development

TYPE OF LENDING

Individual lending

$5,00010,000

LOAN AMOUNTS


8-14% INTEREST RATE



The main goal of the Microloan Program is to foster social and economicprosperity within Central Minnesota by providing loans and technicalassistance to underserved entrepreneurs within the region. Clients receivecoaching and mentoring from graduate students throughout the loan process.clients are granted access to various campus resources, are able to work withstudent organizations to create specific projects or focus groups, and aregiven the opportunity to attend seminars or courses related to their business.The second goal of this program is to provide hands on learning experiencefor students, who sharpen and apply their knowledge, skills and abilities byworking with real clients outside of the ademic setting.


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1

An Introduction to FIELD and issues

in the field

Tamra Thetford/Luz Gomez

October 22, 2011

www.fieldus.org

2

FIELDs Mission

Weidentify, develop,anddisseminatebest practices, and educate funders,policy makers and others aboutmicroenterprise as an anti-povertystrategy.!

The Aspen Institute

3

The Aspen Institutes History in MicroenterpriseDevelopment

1991: The Self-Employment Learning Project launched :

Longitudinal study of client outcomes Case study research of organizational practice Development of performance tracking of key program

indicators Field-wide census

1998: Microenterprise Fund for Innovation, Effectiveness,Learning and Dissemination (FIELD) created

Since then, FIELD has worked directly with more than 100 programson various research and demonstration projects.

The Aspen Institute

4

1. Assessing the State of the Field

FIELD develops comprehensive reviews of industry practicedrawing on quantitative and qualitative research that it hasdone over ten years, and deep engagement withpractitioners in participatory learning processes.

Opening Opportunities,Building Ownership: Fulfilling

the Promise ofMicroenterprise in the United

States (2005) summarized 20years of industry practice,

and made 8 key

recommendations for

moving the field forward.! The Aspen Institute


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2

5

2. Funding Learning and Innovation

1998 2002: $3 million in grants to 33 organizations clusteredaround 5 key areas of practice: training and technical assistance,scaling up services, financial products and services, institutionalmodels and business growth

2006: small grants formarket research and credit scoring 2007-2009: Citi-Aspen Interns program provides grants to 20

organizations annually to fund interns forclient outcomes tracking

2007-2011 Scale Academy for Microenterprise Developmentprovides financing, technical assistance and peer learning to 14organizations poised to achieve greater scale in their operations.

FIELD makes targeted grants tomicroenterprise practitioners andintermediaries that are exploring issuesof critical importance to the field.!

The Aspen Institute6

3. Evaluating New Ideas and Approaches

FIELD conducts evaluations ofdemonstration programs in theareas of microenterprise andentrepreneurial development: 1998-2003: Welfare to Work

(Charles Stewart MottFoundation)

1998 2001: Access to Markets(Charles Stewart MottFoundation)

2003-2009: Womensmicroenterprise developmentand social purpose business(Ms. FoundationsCollaborative Fund forWomens EconomicDevelopment)

2006-2008: EntrepreneurialDevelopment Systems (W.K.Kellogg Foundation)

2011: Secured Credit CardPilot (Citi Foundation)

The Aspen Institute

7

4. Building Infrastructure

FIELD has started and/or invested in initiativesthat build services for the field.

MicroTest: the performancemanagement system for the industry,

provides metrics, tools, analysis,training and technical assistance to

help organizations assess performance

and track client outcomes; 160trained; 100 current members.

MicroMentor: an online mentoringservice matching entrepreneurs to

mentors anywhere in the U.S.;incubated at FIELD; transferred to

Mercy Corps in 2006; now reaching

thousands.

microTracker.org: new data websitethat tracks performance and clientoutcomes. The Aspen Institute 8

5. Sharing Knowledge

FIELD develops practitioner guides, manuals, and toolsto help practitioners provide services that reflect thelatest innovations and best practices. Over 80publications produced; 38,404 downloads last year(6/1/08-5/31/09)

FIELD supports Microenterprise Development FundersGroup with meetings, webinars, and a Funder Guideseries offering briefs on major issues, innovations.

FIELD participates in the Microenterprise AntiPovertyCoalition, dedicated to developing and supportingpolicy on behalf of low-income microentrepreneurs.

FIELD delivers training on leading issues and bestpractice through in-person events and webinars, suchas signature Leading Edge series, sponsored by Bankof America The Aspen Institute


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3

Why Microenterprise?

Downsizing

Outsourcing

Loss ofmiddle class jobs

More contingency work

Emerging niche markets

Declining rural economies

Balancing work and family

Changes in the safety net

An aging populationGrowth in immigration

10

Market Size in the United States

24.8 millionmicroenterprises,

responsible for 17.9% ofall employment

10 millionexperiencebarriers to credit andbusiness developmentservices

22 million unbanked

Large and growinginformal economy,estimated at 10% GDP

The Aspen Institute

11

Key Facts About the US MicroenterpriseIndustry

~ 700 service providers Almost 275,000 served annually (est. as of 2008) 362 microlenders had $100.9 million in 9,191outstanding loans in

2008.

(in 2007, 115 reporting to the CDFI Common Data Project had11,345 transactions outstanding* valued at $110,905,326)

Average loan size: $11,136 in FY2008*loans, debt w/ equity, and equity outstanding!


Microfinance!Microenterprise !Development

Business DevelopmentFinancingMicrocreditIDAs

MicrograntsMicroequity

Retail FinancialServicesConsumer loansSavingsCheck cashingEITC linked savingsAlternative paydayloanproducts

Business DevelopmentServicesBusiness Training/TAAccess to MarketsFinancial LiteracyPersonal EffectivenessBank Linkages

The Aspen Institute


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4

13

Student-led microenterprise program study

Started with a question:

Can student-run microfinanceorganizations help address issues of

scale and sustainability in the US

domestic microenterprise industry?


Student-led Microenterprise ProgramStudy: Our Conclusions

No self-sufficient programs, but very low-cost ones Potential for scale not clear Managing loan funds is challengingthere needs to be a

better model

But,

Capacity to deliver training and technical assistance Ability to mobilize student engagement Ability to develop next generation of fields leadership Ability to generate greater awareness

ALL VERY HIGH

Need for a stronger methodology and support structure The Aspen Institute


19/75


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1

Community Outreach and

Client Recruitment

Luz Gomez

The Aspen Institute 2

Goals

Brief overview Share ideas & best practices Q & A Discussion: we want to hear

from you!

Resource


Can be found at:!!~At the Alliance website!!~FIELD site!!!!

Why is micro hard to reach?


Know your local environment

What industries/sectors are prevalentlocally?

Which are up-and-coming? What can your clients tell you about

whats needed?


IDing Target Markets

What geographies can we consider? What is the demographic/socio-

economic profile?

Are there sectors with defined needs? What are the attitudes and

preferences of the expected clients? The Aspen Institute 6


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1

Build Credit. Build Assets.Kristin Redmond

Relationship Manager

202-730-9390

[email protected]

www.creditbuildersalliance.org

Credit Builders Alliance ("CBA"), a not-for-profit organization, makes this information available for informational purposes only. This information is not intended aslegal, financial, or other advice, and you and your clients should consult qualified advisors before making any decisions. CBAdoes not represent that any of the

information will produce results.

CREDITBUILDERS ALLIANCE and the accompanying Logo are trademarks of Credit Builders Alliance, Inc. This document is licensed under a Creative CommonsAttribution-Noncommercial-Share Alike License (US/v.3.0). Noncommercial uses are permitted on the condition that you include an attribution to Credit Builders

Alliance. If you alter, transform, or build upon this work, you may distribute the resulting work only under the same or similar license to this one. More informationregarding the license is at: http://creativecommons.org/licenses/by-nc-sa/3.0/ . Requests for permissions beyond the scope of the license should be directed to Credit

Builders Alliance, Inc., at www.creditbuildersalliance.org/.

CBA Theory of

Change

Credit is a Financial Asset

Good credit rating will save approximately $250,000 ininterest throughout our working lives

A car buyer can save $50/month on a 36-month car loan.

A renter has access to apartment in community with good schools

Consumer has security and utility company deposits.

2010 Credit Builders Alliance, Inc. Some rights reserved.

Potential Savings over 5 years = $6,288Source: www.bankrate.com

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2011 Credit Builders Alliance, Inc and LISC Chicago. Some rights reserved.

Good Credit = Asset

Yes! helps families build wealth a home, a business, education.

Yes! offers access to safe, affordable financial services

Yes! impacts opportunities with growing number of businesses: landlords/rental housing insurersauto lendersemployersbanks -- checking, savings, and investment accountsutilities and phonesmedical providers


Catch-22

Good credit scores provide access for most

business transactions

BUT

Individuals, entrepreneurs and communities

with low or poor traditional credit have

few opportunities to build good credit


Cost-Effective

By reporting payments to the credit bureaus, you:

! SAVE your borrowers thousands of dollars over theirlifetime.

! SAVE time collecting late payments and give you moretime and money to SERVE more families!

Typically the cost is much less than the improvedcash flow

Why Report?


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2

Portfolio Quality

Spend less time collecting late

payments, and more timeBUILDING

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3

CBA Access

CBA partnership with TransUnion!

$150 TU set-up and site visit fee Waived TU monthly fees or minimums for CBA members Credit Reports from $2.00 - $5.25 plus score

Monthly tiered pricing great f or VITA sites! Score options are $.40 each to CBA members

FICO score (no consumer disclosure) TU New Account score (TU score can be disclosed)


Be part of CBA!

Three ways to be part of CBA:

CBA Reporter. Community lenders can provide borrower data through ourunique partnerships with major credit bureaus.

CBA Access.Nonprofits organizations can pull credit reports for lending, crediteducation, and measuring outcome.

CBA Member.

CBA Toolkitis an online resource to collect and share tools and bestpractices for asset-based credit building strategies.

Webinars and Workshopsas webinars and on-site trainings.

Consultingproduct development, outcome tracking

Credit Impact Measure Researchcredit reports as cost-effective,objective,longitudinalmeasure of economic self-sufficiency.



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1

Copyright Elmseed Enterprise Fund MMVIII

Disclaimer:Thispresentationhasbeen createdforpresentationat Elmseedtrainingmeetingsonly.AllotheruseswillrequireadditionalpermissionfromElmseedEnterpriseFund.

e Elmseed Enterprise Fund

www.elmseed.org

CMA Conference: Challenges of Institutional Memory

CopyrightElmseedEnterpriseFundMMVIII

ELMSEEDClient Overview

Turnover

Institutionalmemory

Inconsistentrelationships

Inadequatetraining

2 Copyright Elmseed Enterprise Fund MMIX

Volunteer

! Variance ofoutcomes

! Organization

oscillation

! Strategic

inconsistency

! Good systems/

processes hard to

sustain

! Communitycontacts

! Clients

! Institutional

donors

! Alumni

! Board of Directors

! Inconsistentquality

! Lag time and

inefficiency getting

up to speed

! Spend significant

energy training

Challenges of Turnover

CopyrightElmseedEnterpriseFund MMVIII


Confronting the challenge

3

!Tools!Systems!Institution



Tools

4

!Highrise(www.highrisehq.com)

!Backpack(www.backpackit.com)

! Zoho(www.creator.zoho.com)



Systems

5

!Grooming!Transition letter!Mid-level positions!Joint-teams (2 consultants)!Mid-year changeover (/Elders)!Office



6

!Strategic continuity!Historical contextknowledge of failures!Outlet for former leadership!Caveat: clearly define their scope

Institutions (Board of Directors)


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3



13 Copyright Elmseed Enterprise Fund MMIX

Disclaimer:Thispresentationhasbeen createdforpresentationat Elmseedcentermeetingsonly.AllotheruseswillrequireadditionalpermissionfromElmseedEnterpriseFund.

Conclusion, Q&A


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10/20/11

1

Access to Markets:CEF Latino

Case Study: Maria

Member Profile Working part-time $10/hour, 30 hours/week Wanted to pursue higher wages Undocumented

Marketing Services: Business Class

Name Logo Business Cards Fliers Website Marketing Plan

Access to Markets

Students have knowledge of/connections to markets ourbusiness members are trying to access

University: high volume of people interested in social issueswith money

Theres a big difference between helping someone developmarketing materials, and providing connections through

which to distribute them

Access to Markets: Maria

Cupon Newsletter Where we distributed

Listservs Fliers on campus Personal contacts

Why We Went the Extra Mile

Established relationship with Aly (9 months), felt I couldpersonally vouch for her

Took business classes Took out loan Made regular classes/meetings for 9 months

She/her business was struggling financially


54/75

10/20/11

2

Issues/Points of Discussion

Equal distribution of access to market services How to brand/market/describe this service Vouching for a member: CEFs reputation Do things foror with members? Inaccessable markets


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Can Student-run Microfinance Organizations Help

Address Issues of Scale and Sustainability in the U.S.Domestic Microenterprise Industry?

A study submitted to

The Charles Stewart Mott Foundation

June 2009

Elaine L. Edgcomb and Luz Gomez

FIELD

The Aspen Institute


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FIELD - The Aspen Institute 1

Introduction

College students are always asked for their labor, to hand out food at soup kitchens, [theyre]not asked for their minds ~Rohan Mathew, The Intersect Fund

Against the backdrop of the worst financial crisis in a generation, the U.S. microenterprise

industry has shown its ability to persevere and continue to serve hundreds of thousands of small

businesses owners. However, this crisis has underscored the ever greater challenge of

sustainability in the field. With grant and donor dollars curtailed in this environment, the search

for innovative business models that lower the cost of service delivery and require lower levels of

donor financing, is more imperative than ever before.

The Charles Stewart Mott Foundation asked FIELD to evaluate one of those inventive business

models---microenterprise programming embedded within a university setting--which uses all

volunteer student resources to significantly bring down the cost of service. The idea for thisresearch was born the day the Associated Press released an article1 declaring that the Elmseed

Enterprise Fund, a long-running Yale student program, was the first self-sufficient program in

the United States. This was a bold claim. But what if it were true? Or nearly true? Could

university programs offer quality services to low-income entrepreneurs and do it at a very low

cost?

We proposed to answer that question by evaluating the Elmseed Enterprise Fund, and reviewing

as many other university programs as we could find. We visited both Elmseed and the Intersect

Fund, a Rutgers University student initiative. We interviewed representatives of five additional

programs and electronically surveyed another 16.

Our findings can be summarized as follows:

There are no self-sufficient university programs in the United States butthere are manylow-cost ones.

Their potential for scale is not clear. Currently the programs report serving between fiveand 40 during their current school year. But many are nascent, and their capacity just

emerging.

Their capacity to manage loan funds is low. Yet this service is extremely appealing tostudents, and other program stakeholders. A model needs to be evolved to address the

challenges that student-run lending contains.

1Christofferson, John. Yale Students Serve as Bankers for Struggling Entrepreneurs,Associated Press , 9 May

2008.


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Their capacity to deliver training and technical assistance is higher than their lendingcapacity, due to both their access to student talent, and to university and communityresources the students can mobilize.

Their ability to mobilize student engagement and community involvement is very high.The Elmseed and Intersect Funds both report student memberships of around 30. Theirleadership is talented, committed, and volunteering a substantial number of hours. Eachhas demonstrated the capacity to generate high levels of interest from university andcommunity leaders. Each has won a business plan competition earning $20,000 to$25,000. They and other programs have raised grant funds from a number of localsources.

The potential of these efforts to develop young leadersand build greater awareness ofmicroenterpriseis also very high.

There is a real need to evolve a stronger methodology and supporting structure for theseefforts. New student initiatives are informally learning from earlier efforts andinnovating. Several have voiced an interest in a more formal exchange, and in thepossibility of a hub to provide services to support other similar programs regionally ornationally, providing a common infrastructure and professional leadership.

After evaluation, we believe some further work is warranted with a core set of student groups toexplore how this seedbed of activity can be translated into a more effective and sustainedsupport for microenterprise development. This would include some feasibility testing of howlearning can be more rapidly diffused across the groups, and whether a common infrastructurecould be developed. We think this exploration is important not only for the potential for scaledclient services, but also for the leadership development potential that the experience affords these

students. Both these critical elements can ultimately positively impact the U.S. microenterprisefield.

The following sections of the report will provide greater detail regarding the experience ofElmseed and those that have followed it. It will conclude with recommendations regarding nextsteps.

Methodology

The research methodology included an extensive document review and site visit with ElmseedEnterprise Fund, a program founded and run by Yale University students since 2001. The New

Haven visit included meetings with student leaders, long-term board members, and a mix of oldand new clients. We were also able to observe a client training session and attend their fullstudent volunteer staff meeting.

A second site visit was conducted with the newly launched Intersect Fund, run by students atRutgers University in New Jersey. Over a few visits, we were able to meet with the studentfounders and review documents, such as their business plan summary and training materials. We


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observed a training session with student trainers, and went to an end of year reception that hadan attendance of at least 50 and included student members of Intersect, Rutgers university facultyand administration, community organization partners, and other external stakeholders.

We also conducted phone interviews with student or faculty leaders of other student-runmicrofinance organizations including those at Brown, Loyola (New Orleans), Stetson, Lehigh,Georgetown and Harvard. Finally, we conducted an on-line survey of microfinanceclubs/organizations across the country that had either an international and/or domestic focus.Summary profiles of those additional 16 organizations main activities are available.2

A Case Study: The Elmseed Enterprise Fund

Elmseed is a unique student organization because it expects so much of students but it alsogives so much back. ~Alice Song, Elmseed Enterprise Fund

Microfinance is a thriving topic on college campuses across the U.S., sparked by the popularityand name recognition of international microfinance. Many students we spoke to cited theirreading of Mohammad YunusBanker to the Pooras sparking their initial interest in engaging inthe field. Others also saw their work in microfinance as an extension of their interest in socialentrepreneurship3, another emerging field that is being explored in many different parts ofuniversity curricula and activities. As a result, most student leaders reported that it wasremarkably easy to engage and recruit others to participate in their student groups.

This is the energy that enabled four undergraduate Yale students to launch the ElmseedEnterprise Fund with a $20,000 prize from the Yale Entrepreneurial Society (YES) in 2001. Theorganization is an independent 501(c)(3) nonprofit staffed by Yale undergraduate students with a

board of directors comprised of local representatives of financial institutions, the university andother private firms.

Elmseed originally launched its program using the classic Grameen peer lending model (groupsof three to four clients; center meetings of all groups) adding a training and consultingcomponent. Students currently use the Core Four Curriculum4. They rotate weekly sessions ofthe Core Four Curriculum, taught by students and guest speakers, and individualized consultingby one to two students per trainee.

Program Scale

Elmseeds reach is limited in its current configuration. The organization operates within the cityof New Haven, where there is a large low-to-moderate income African American community and

an emerging Latino population. Presently, students serve eight clients, six of whom are goingthrough the organizations four-month training program and one-on-one consulting. Two more

2 Please see the appendix to this document for a list of those organizations.3 Social entrepreneurship is defined here as a methodology that recognizes a social problem and uses entrepreneurial

principles to organize, create, and manage a venture to make social change.4 Core Four Curriculum was developed by the Northeast Entrepreneur Fund.http://www.corefouronline.com/index.htm


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clients are still actively repaying loans and receiving individualized support. When discussingthe topic of capacity under the existing all-volunteer staff structure with the student leaders, theyestimated they could only take on an additional five clients (totaling 10-11 training clients) overthe course of a school year. The students acknowledge that this limit is due to the rigidity of theirtraining schedule and limited product/service offerings. As such they have been unable to breakthrough this ceiling of scale of operation. These constraints have prompted discussions in theorganization to address the programs shortcomings:

Client recruitment and student schedules: Client recruitment starts at the beginning ofthe fall semester; training commences thereafter and continues throughout the springsemester. Once a class is started, they do not add clients to that training program mid-semester and students take a winter, spring and summer break. As a result, potentialparticipants, reached through other activities throughout the year, often lose interestbecause there is no immediate activity or financing product available. They are nowexploring having two training periods to capitalize on interest throughout the year.

Product offering: until now, participants have had to undergo the group trainingcomponent and develop a business plan to be eligible for a typical first-time loan of about$2,000. In an effort to diversify and scale up their lending, Elmseed would like to launcha fast track product more targeted to existing business owners who do not want toparticipate in the training component.

Portfolio quality: Elmseed has had problems with its portfolio quality recently and, as aresult, has not made any new loans in the past year and a half. There is approximately$7,600 in loans outstanding5, an estimated 50 percent of which is at risk or in some stageof delinquency. However, its definition of delinquency does not seem to be standard forthe industry and the Board of Directors Finance Committee is actively trying to assist thestaff in improving its tracking of portfolio quality, and in getting the portfolio undercontrol. Students report a cumulative 91 percent repayment rate, having lent almost$60,000 since the programs inception.

Market and Client Profile

Although Elmseed has existed for eight years, the organization today is still unclear of thepotential size and characteristics of its target market. Elmseeds original goal was to usemicrofinance for poverty alleviation, but there is a clear diversity in income strata among theclients we met; most would not necessarily be considered very low-income. The organizationsmarketing strategy casts a wide net to bring in clients. Its outreach materials announce no creditchecks or collateral, and emphasize the importance of clients illustrating their commitmentwith their feet (participation at center trainings). Informally though, they do not just acceptany applicant into the training program; rather they see if the scale of the business operation and

the clients future financing needs might be met by their product/service offering.

Given this outreach positioning, no income verification during the loan evaluation and the lackof a deeper discussion on credit worthiness within their core training curriculum, Elmseed is

5 As of the writing of this report, Elmseeds Co-Directors reported the write-off of a loan that was in collections,bringing down their historical repayment rate.


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likely reaching business owners underserved by typical microfinance organizations with morerigorous underwriting standards in place. However, the reality is there is probably a range: whoenters is partly driven by self-selection, and partly by marketing and contacts students have madewith other organizations.

Another untapped customer pool is the emergingHispanic community in New Haven. Accordingto U.S. Census figures, 24 percent of thepopulation of the city of New Haven isHispanic/Latino.6 Elmseed does not provideservices or training materials in Spanish. As anindication of the potential opportunity that existsto expand the reach of its program, Elmseed hadan excellent turnout for a completely bilingualconference in February 2009, held in partnershipwith a local Hispanic agency.

Clearly, the market in which student groupsoperate matters and, in the case of Elmseed, hascontributed to the programs longevity. NewHaven appears to have an abundance of smallbusiness development training and lendingprograms offering loans over $35,000, and noone competing below $35,000. Eli Bildner, aCo-Director, cited two strong training programsthat were recently closed due to loss of funding(the local Chamber and an organization servingHispanics). Whether their leaders state it expressly or not, the organization has carved out its

niche in this environment by leveraging its no-cost student resources for complementarytraining/consulting coupled with its microloan offering.

Quality and Continuity

I dont think well ever compete on providing expert training advice, I dont think we should. Ithink we should focus on the one-on-one consulting and lending [small amounts of capital].

7

The clients we met with seem to value the expertise of guest lectures, individual attention andconnection to the resources of the university. Since Elmseeds yearly pool of clients is small,students receive continuous feedback via simple surveys and informal exchanges after each

group training or guest lecture. The Co-Directors valued this direct feedback as a way to fuelorganizational innovation in small ways.

6 Data for City of New Haven, 2005-2007 American Community Survey 3-Year Estimates, U.S. Census Bureau,U.S. Census Bureau, http://factfinder.census.gov/home/saff/main.html?_lang=en.7 Interview with Co-Directors, Eli Bildner and Alice Song, April 1, 2009.

Client Visits:o Tim- first cohort of Elmseed clients.

Now very formalized. Owns 15 hotdog carts that he subleases to othervendors, owns several apartmentrental complexes and is a contractor.

o Lorna- new Elmseed client currentlyparticipating in the training course.Already has a business dedicated to

therapeutic massage services. ValuesYale connections and studenttechnological savvy.

o Ruth- Repeat client. Seamstress andsewing class teacher to localcommunity. Didnt do well in groupsetting, enjoys the individualconsulting and microloan offerings ofthe students.


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One renewal client, Ruth, who owns a business that designs clothing and teaches community

sewing classes, seemingly gets tremendous value from Elmseeds consulting services. For

example, students have assisted her in responding to city Requests for Proposals to secure

contracts providing sewing classes for low-income teenagers and seniors. These contracts

clearly supplemented income gained from her alteration/seamstress services. Similarly, another

long-time client, Tim, noted that he secured building contracts with Yale through his affiliation

with Elmseed over the years.

The age differential between client and technical assistance provider is obviously wide and we

questioned whether that impacted the quality of the training relationship in some way. Students

are aware of this age gap and ingrain a sense of professionalism through their dress and

timeliness. Clients, however, reported that not only did the age gap not matter, but that they see

the students having critical advantages that could be put to use in their favor. In addition to their

excellent writing skills put to use for Ruths RFPs, another popular consulting area is technology

and low-cost guerrilla marketing strategies. One client, Lorna, mentioned this could give her

new business a critical edge. Other student organizations, such as Harvards Cambridge

Microfinance Initiative (CMI), have specialized their individual consulting in technologyservices to leverage student skills in this area.

Despite this positive feedback, Elmseed faces three issues with respect to quality:

Outcomes Tracking: There are no formal outcomes tracking or evaluationmethodologies. Students lose track of clients over time. Staff have now shown interest in

outcomes tracking and requested tools and consulting advice from MicroTest.

Student Training: There is not a strong training of student trainers, and it is not clear iftheir training is implemented using adult-learning principles.8 There is also no formal

training program for its student consultants, neither in business content nor in consulting

methodologies. Clients have a wide variety of needs, some more advanced than others.

This was noted by a consultant at their staff meeting. The Yale students are bright and

apply their research skills to serve clients specific needs, but the student consultants

could benefit from a more solid consulting training program.

Year-round Continuity: The program is hampered by the organizations current lack ofyear-round continuity and inconsistent institutional memory. Students cycle in and out

depending on their interests, and when their tenure at Yale draws to a close. Given the

relatively high turnover rate and regular student breaks, Elmseeds board members

described themselves as serving an important role in maintenance of institutional

memory, both with funding relationships and community partnerships. During the

summer months, for example, Elmseed staff goes from 30 to 3 students who remain inNew Haven. The Co-Directors attribute some of their current problems with their

delinquent portfolio to lack of contact with borrowers over a six-month period

8Adult-learning principles favor training that is directly responsive to participants needs, is pragmatic, participatory

and active. Classes focus less on lectures and more on experiential learning through the use of case studies and otherexercises.


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Elmseeds current management team has decided to address these transition issues by creating a

handbook for the consulting staff that would allow new staff members to get up and running

much more quickly. But the students need to address these capacity issues with training and

mentoring, and they also need to address the issue of continuity. Other student groups, such as

those at Brown and Rutgers, have met informally with Elmseed and shared handbooks, materials

and experiences. As a result, these newer groups have already made adjustments in strategy at

launch. For example, Brown students will not lend during the summer and have begun to think

about how to eventually make this project more sustainable through use of a full-time

AmeriCorps/Vista volunteer to transition the program longer term. Rutgers, on the other hand,

expects to be able to field year-round services given the size of the university and its substantial

summer semester, in which many students participate.

Lending Methodology

Based on our experienceit didnt seem that [with] people in U.S. theres actually the socialpressure network available to exploit in the group. ~Alice Song, Elmseed Enterprise Fund

Elmseed founders designed the program on the classic peer lending model. Current students are

slowly moving away from this model because they have experienced the limits of group social

dynamics and the inherent pressure to give a loan to each group member regardless of the

individual merit of the business plan. Attempts at scaling this group lending two years ago may

also have contributed to the current portfolio problems. One Director noted that last years

leadership pushed the limits of this model and discussed a need to develop more controls.

Again, this experience has already informed newer groups strategy. Browns Capital Good Fund

launched their program in February 2009 with an individual lending product, while Rutgers

students are beginning with the group lending methodology but report not being completely

wedded to it should it not take in New Brunswick.

When both the Co-Directors and interviewed board members were asked whether the lending

component was imperative to Elmseeds model, there did not seem to be a clear consensus. Two

somewhat contradictory sentiments came to the fore after much discussion: 1) a feeling that no

other organization was reaching far enough down market and that their services were filling a

specific community need, but that 2) the model was not scalable in its current configuration.

Two long-serving board members9

indicated a reticence to give this aspect up because of theperceived loss of Elmseed decision-making abilities. On the other hand, Nathan Huttner, a

former student Director of Elmseed 10, and current board member, suggested that economies of

scale might be built by creating a centralized body or hub, which would presumably have full-

time, experienced staff and could assist student branches with underwriting capability andsystems management. In his view, this could help Yale students overcome their current

obstacles to scale, which include inconsistent information flow year-to-year, and the lack of

management information systems and credit reporting capability. The focus would be to

9Board members Dave Jenkins and Lori Lindfors have served on the Elmseed Board since the organizations

inception.10 Nathan Huttner will graduate from the Yale School of Management this year.


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capitalize on what they see as Elmseeds comparative advantage the client servicescomponent. (Interestingly, this notion of a service center or hub was also raised by the foundersof the Rutgers-based Intersect Fund, who would like to take a leadership role in itsdevelopment.)

However, there was definitely diversity of opinion on whether the underwriting should beoutsourced completely versus just the servicing component being handled by anothermicrofinance organization. 11 Ultimately, board members came to a consensus when Nathansuggested:

If someone came to me as a staffer and said you wont have the final underwriting decision butthat your report to the committee will be an important factor, it would still be a meaningful wayto be involved. Because the way it is now the staff doesnt make client [loan] decisions, its theboard, so its almost the same thing.

12

Interestingly, despite not having made a loan in over a year and a half, this founding principle or

identity ofmicroloan providerseems to still be ingrained in Elmseeds overall outlook. This isclearly an area with which the organization is currently wrestling.

Sustainability

Contrary to its portrayal in the Associated Press article of May 2008, and given the smalloutstanding portfolio and pricing structure13, the Elmseed program is not generating enoughearned revenue to become self-sufficient.14 However, what is interesting as a business model isthe inherent low-cost structure of the student model, coupled with the capacity to generate localfunding, illustrated both at Elmseed and at a handful of other emerging programs.

Historically, Elmseed reports a 91 percent repayment rate (constituting approximately $50,000 ofrepaid loans), not including the current outstanding balances. The programs current outstandingportfolio is roughly $7,60015 with, as previously discussed, 50 percent or more in some stage ofdelinquency. Arguably, managing the loan fund is something that the students have not masteredor systemized.

11 Elmseed board member Lori Lindfors (CRA officer for Citizens Bank covering Connecticut) had facilitated aconversation with a local program director of ACCION USA in Boston to discuss potential underwritingcapabilities. She noted they werent ready to pursue the conversation further.12 Interview with Elmseed Board members, April 1, 2009.

13 Elmseeds interest rate is 10% per annum for first time loans. Fifty percent of that is reimbursed if all paymentsare made on time.14 FIELD defines self-sufficiency as achieving 100 percent cost recovery through revenues earned through earnedinterest and loan fees, fees charged for training, technical assistance and other business development services, andinterest on loan fund capital. Sustainability is defined as balancing a focus on mission, organizational capacity andcapitalization such that the organization can sustain or increase impact over time. This includes building the capacityto maintain a degree of financial stability and to grow revenue and assets.15 At writing of this report, Co-Directors noted they had just written off several delinquent loans, shrinking theiroutstanding portfolio to about $3,200.


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How does this compare to the industry?

For FY 2007, microenterprise developmentorganizations participating in MicroTest

reported the following results:

o Number of clients: 175 median, 346mean (n = 58)

o Number of loans disbursed: 27 median;127 mean (n = 37)

o Cost per client: $2,294 median; $ 2,257mean (n = 57)

With a net asset base of approximately$35,00016 and an annual operating budget of$8,000, Elmseeds largest expense is therental of their off-campus meeting space($500/month). The students are planning toeliminate or dramatically reduce thatexpense in the coming year. In contrast,Browns Capital Good Fund and HarvardsCMI receive free space from the university.The various student organizations reportedthe basic cost structure to range from $2,500to $8,500 for yearly administrative,marketing and miscellaneous expenses (i.e.copies, books, travel reimbursements, smallequipment, etc.).

With its current $8,000 operating budget, the fundraising responsibility for the volunteer staff issignificant if they are not to exhaust their net asset base. If Elmseed were able to achieve thelower end of the range of the student cost structure, the model becomes more sustainable from aresource perspective. Yearly, the group already receives several smaller grants from an off-campus Yale affiliated entity (Dwight Hall), former alumni, a local bank leveraged throughboard connections (i.e. Citizens Bank)17, and online fundraising contests.18 What seems to be anadvantageous trend in many of these student programs is the new and very localizednature of thefunding sources they are tapping.

Leadership Development and Building Awareness of U.S. Microfinance:

The Co-Directors and executive team spend, on average, from 10-25 hours per week managingElmseed, and this provides very hands-on experience in U.S. microfinance and nonprofitmanagement. Despite the substantial investment of time, one of the co-Directors expressedfrustration at not being able to do all the strategic thinking he wanted given the part-time natureof the organization:

and its the mental anguish that goes with it [managing the organization], its a part time jobbut you worry about it all the time. Its hard because since its only 20 hours a week you just getto cover the basics [of running the organization]There are limits to what a student runorganization could do. A good CEO would be thinking about strategy all the time.

19

16 Data taken from Elmseed Balance Sheet, March 2009.17 From a review of Elmseed documents, after their initial start up development push, they did not raise significantnew dollars until 2004/5 with a Community Development Block Grant, then again in 2006/7 with consistentdonations from Citizens Bank.18 For example, during the staff meeting we attended students noted participating in www.bluestatedc.com, an onlinefundraising contest.19 Interview with Co-Directors, Eli Bildner and Alice Song, April 1, 2009.


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In many ways, the students face the same discussions and management problems tackled by any

other small microfinance program how to reach your target audience, craft the right product,

assess the programs quality, and still stay within an organizations mission while scaling up.

The training ground it provides these students to stay within and contribute to the field is

powerful.

Further, the awareness building that Elmseed, and the other student organizations, is generating

regarding U.S. microenterprise development is substantial. Elmseed currently has 30 student

staff, a remarkable number given the small number of clients the program has. And the Co-

Directors report that the number of applications they receive allows them to be selective in their

choice of staff. Students are engaged in committees focused on marketing and outreach,

fundraising, accounting/finance, client services and strategic planning. The Intersect Fund also

reports having 20 to 30 staff. The power of the model for generating awareness regarding the

U.S. field and its potential to develop leadership for the field is clear. And the awareness-

building goes beyond student participants to other campus and community members. The

Intersect Fund held a year-end reception to introduce its clients to university and community

stakeholders, and at least 50 guests. Students also use social networking tools and technology(Facebook, Twitter, website development, blogs, videos

20) to expand awareness. Their skills in

this area herald the opportunity to build a greater awareness of microfinance domesticallylow

awareness being the Achilles heel of the industry in the U.S.

Key Differences and Innovations of other Domestic Programs

The discussion above included some references to several other microfinance student

organizations. Chart 1 summarizes key differences or innovations among these and other

microfinance student groups that have at least some domestic focus. Most are still quite young.

Domestically, three programs in particular, are seemingly addressing some of the limits outlined

in the Elmseed program. The Rutgers, Brown and Harvard programs have put thoughts and

actions into the following areas:

Better planning for student transitions to maintain continuity of service; Focusing on a particular expertise (training or consulting only); Developing a stronger outreach and partnership component with a focus on a targeted

market; and

Board development to marshal consistent local resources for scale up.At the same time, it is not clear which, if any, will solve the challenges around microlending that

Elmseed has experienced. Not one has either lent long enough, or substantially enough, topresent a model that matches student capacity to the demands of successful loan management.

20See Intersect Fund (Rutgers University) video showcasing New Brunswick at http://www.vimeo.com/4036593.

Also, see Owl Microfinance (Rice University) video at www.owlmicrofinance.org, illustrating the grassrootsawareness-building that is taking place on campus.


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The willingness to depart from the pure peer lending model, in some instances, demonstrates thestudents willingness to learn from each others experience and adapt.

Chart 1: Summary of Domestically-Focused Student Microfinance Groups

Program Components Key Differences/Innovations Current Scale

IntersectFund/RutgersUniversity

-Training course,group loans at$2,500; one-on-oneconsulting-Serves the NewBrunswick, N.J.area, and expandingto other parts ofcentral New Jersey

-Strong partner development. --Training at multiple locations, inEnglish and Spanish.-Self-designed curriculum basedon review of many U.S.

practitioner curricula-Teaching style interactive andcase-based-Strong earned revenue plan(scaled charge for coursework and

planned individual consulting).-Recently awarded $25,000 in

business plan competition-Plan year-round services

Launched in November2008, already trained 40emerging businessowners.

Capital GoodFund, BrownUniversity

-Work throughpartners thatprovide businessmentorship andtraining.-Loans under$5,000.-Serves theProvidence, R.I.area.

-Launched with a strong outreachcomponent and partnerships in

place.-Local focus groups informed

product development1) personal loans of $900 to securegreen card,2) business loans under $5,000.-Received $2,500 in start up fundsfrom Clinton Global InitiativeUniversity.-Works through a nonprofit, fiscalsponsor.

Launched in February2009,disbursed approximatelyfive loans as of 4/09.

CHOMI (Centerfor HolisticMicrocreditInitiatives),StetsonUniversity

-5 week businessworkshop seriestaught by students;loans under $2,000.-Serves the localSpring Hill, Fla.community.-Has an

internationalcomponent workingin Tanzania with aguarantee fund.

-Community business course isintegrated into the Universitycurriculum.-Directed by two economics

professors for longevity ofinitiative.

Launched in 2000.Trained fewer than 100

people, made 10 loans(all repaid) as of end of2008.


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BR Microcapital,CornellUniversity

Individual coachingand microloans (upto $5,000) for

business owners inUpstate New York

(Ithaca, TompkinsCounty)

-Run their loan fund in partnershipwith Alternatives Federal CreditUnion.-Seemingly well-developed

program for their business school

consultants.

Launched January 2009,disbursed 5 loans andtook on 5 consultingclients for 4 monthduration.

CambridgeMicrofinanceInitiative,HarvardUniversity

Provide seminarsand one-on-onetechnical assistanceto surroundingCambridgecommunity

business owners.

-Strong outreach capabilityawareness in Cambridgeapparently outpaces other localtechnical assistance providers likeSCORE.-Leverage technical expertise ofstudents in web development.

Launched in 2006, hasserved over 100 clients.Very active seminarseries that drew 70+

business owners. 15active members.

LehighMicrofinanceClub, LehighUniversity

-Seek to getstudents activelyinvolved in povertyalleviationmeasures, bothinternationally andnationally.-Looking to partnerwith local fund inBethlehem, Pa. touse their fundraiseddollars.

Group working on creating aMicrofinance Student Network(a la Facebook) to network otheruniversity microfinance (MF)clubs (post updates, research,internships, forum to shareinformation).

Launched fall 2007, 30active members.

LoyolaMicrofinance,Loyola University

Target existingmicro-businesses in

New Orleans.Consulting and

loans up to $1500.

-Formally affiliated with theuniversity (see discussion below).-Received $2,500 start up fundsfrom Clinton Global Initiative

University.

Group initially receivedfunding from businessschool to keep a founderand graduating senior as

full-time staff to launchproject in 2009. Projecthalted since 5/21/09.

DukeMicrofinanceLeadershipInitiative, DukeUniversity

-FLIP IT!program workswith communityorganizations andlocal businesses inTriangle area of

North Carolina.--Hands-oninvestment fundwith Ugandan MFI.

This project brings in localorganizations interested insustainability, including some thatwork with low-incomecommunities. The organizations

present to students on a key set ofissues they are facing, and thestudents then brainstorm solutionsand ideas in a "rapid-fireconsulting" session.

2006, 30+ members.

University ofPennsylvaniaMicrofinanceClub (Penn MFC)

Get studentsactively involved in

poverty alleviationmeasures abroadand locally inPhiladelphia

-One of their programs is inpartnership with WORC to puttogether business courses for localentrepreneurs.-Working with Lehigh Universitygroup to build student MFnetwork.

Launched in 2006, 30active members.


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BentleyMicrocreditInitiative, BentleyCollege

Integratemicrocredit into theWaltham, Mass.Community, by

providing loans

under $6,000.

-Part of an honors course at theuniversity. Strong support fromUniversity.-Apparent strong local fundingamong alumnifund capitalized

at $100,000 according to pressrelease.

Course launched in spring2008. First loan recipientMarch 2009.

Streetbank,GeorgetownUniversity

-Consulting andlending to

businesses in D.C.area.

Encourage participation of thestudent body by getting thosestudents to invest into a loan pool(leveraging success of existinginvestment groups on campus)Kiva-like but domestic.

Plan to launch in fall2009 if capital is raisedthrough winning business

plan competitions.

The organizational structure and affiliation of surveyed organizations varies from independent,

501(c)(3)3 nonprofits like Elmseed and Rutgers, to university-affiliated and fiscal-sponsoredprograms. Of the sixteen surveyed organizations, sixty-three percent noted they were university-affiliated organizations. At writing of this report, we received news that the Loyola programwas not going to launch because of the withdrawal of support from the University due topotential legal liability of supporting a direct lending program. Liability issues for solelyuniversity-affiliated programs could be barriers for student programs that want to lend directly.

This research also included internationally-focused student organizations.21 These groups mayalso offer some awareness building for the U.S. industry through on and off campus activities,and provide a feeder for internships and young talent into the field. A few offer uniqueinvestment structures or consulting services for international initiatives, which might be valuablefor U.S. programs as well.22 Some of these groups may be more amenable than others to adding a

U.S. component to their activities. We could see this group being a secondary focus of attention,if a pilot with the domestic-focused organizations succeeds.

21 Please see the appendix for a list of surveyed organizations including those focused on international issues.22 Microlumbia out of Columbia University provides MBA-level consulting services to international MFIs at no-costand Gumball Capital is a Stanford University group that has created a microfinance investment group.


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Replication: outline of a pilot initiative

As illustrated above, these student initiatives have both strengths and weaknesses. The key onesare enumerated in the scorecard below:

Strengths: Challenges:

o No-cost, generally high qualitymanpower intrinsically motivated

o Large pool of students to scale-upprograms

o Leadership development opportunitieso Low-cost overheado Early adopters of social media can

contribute awareness to domestic field

o Leverage additional universityresources

o Local board development bringresources to bear (i.e. fundraising,

access)

o Managing student transitionso Very limited lending expertiseo Lack of mentorship by (or in most

cases) connections to other domestic

MFIs

o Inconsistent training qualityo Limited outcomes evaluation in place

It is important to note that the students recognize most of these challenges, and many are seeking

solutions to them. Several have been exchanging information informally, and have raised the

idea of creating a more formal exchange among them, either via an in-person meeting or through

a technological format. The idea of a hub or center to provide support to student

organizations in critical areas has also been floated by several. And the founders of the IntersectFund have spoken of creating such a center within their program, creating or affiliating chapters

to their current operation. This is quite an ambitious goal for a newly established organization,

one that is just about to make its first loans, but illustrates the high level of engagement these

students bring to these activities and the enthusiasm for increasing the professionalization of

their work.

The time appears ripe

Documents

Campus Microfinance Alliance Conference 2011