A loan can help change a life. It did for businesswoman Linda Joy. The native of Lakeville, Mass., owns Aspire Media, a motivational publishing and conference company for women that she founded in 2005 (www.aspiremag.net).
Like many entrepreneurs, Joy needed capital to grow her business. But qualifying for a typical bank loan presented a problem for the former welfare recipient.
That’s where Bentley comes in.
In spring 2009, Joy received the first-ever loan issued by the Bentley Microcredit Initiative (BMI). The innovative, student-run effort promotes economic development through loans of up to $6,000 for local business owners.
Microcredit is the practice of lending small amounts of money to individuals who have entrepreneurial dreams, but limited prospects to obtain financing through traditional channels. The concept gained worldwide attention when Muhammad Yunus, founder of the pioneering microlending institution Grameen Bank, received the Nobel Peace Prize in 2006.
“This loan means everything in helping me move my business forward,” says Joy, who will repay the $6,000 loan over two years at an interest rate of 12 percent, which is the average for microloans in the United States.
Concepts in Action
The BMI was established through the honors course Seminar in Microlending, which debuted in spring 2008. Taught by Professor of Finance Roy (Chip) Wiggins, the course introduces students to microfinance and provides an opportunity to apply its concepts.
“This furthers our mission of sending socially responsible business leaders out into the world,” Wiggins says of the course, which, by popular demand, is now open to students of all majors as a finance elective.
Complementing the academic component of the BMI is the Bentley Microfinance Group: a student organization with more than 100 active members. The group is charged with reviewing the loan applications of small-business owners such as Joy. Funds awarded to successful applicants are drawn from donations by Bentley alumni and parents — $125,000 had been raised as of May 2009.
“We always keep in mind that we are dealing with real people,” says Microfinance Group president Michaela Baca ’12, who plans to major in Managerial Economics and pursue the Liberal Studies concentration in Health and Industry. “We have the potential to help change lives. Everyone one in the group is so passionate about this work and doing it successfully.”
Building Relationships
Loans are not the organization’s only specialty. Students also offer consulting services, advising clients on issues such as business plans, marketing, strategic development, and training.
“Not all business owners are ready to receive a loan right away, so we help them build their company in other ways,” says Pranay Jain ’11, an Economics–Finance major who is the Microfinance Group’s vice president for external relations. “Once their businesses are stronger, they may become good candidates for a loan.”
So far, the biggest challenge has been connecting with local entrepreneurs who may benefit from the loan or consulting services. Outreach through Craigslist, nearby business organizations and community centers, Twitter, and a web site has brought in some clients. An additional boost is expected from a Global Microfinance Symposium, planned for March 21. The event aims to raise awareness of microlending efforts at Bentley as well as those in India, which will be the symposium’s focal point.
Student-driven microfinance efforts are rare on U.S. college and university campuses, according to Baca. It’s a fact that she and fellow students hope to change. The Bentley contingent had a hand in founding a student alliance that will teach peers how to establish a microfinance organization at their own school. The alliance also includes Brown, Cornell, Duke, Rutgers and Yale.
Achieving Dreams
The BMI loan has already had a significant impact for Joy. She has introduced an all-digital version of her magazine, Aspire, and forged a partnership with radio talk-show host Pat Baccili of the popular The Dr. Pat Show. The program’s focus on uplifting and inspirational news, education, and practical information has been a perfect complement to her magazine’s mission.
And Joy’s most ambitious endeavor? That would be the Mission to Inspire 100,000 Women in 2010, through which she will provide free Aspire subscriptions to women across the world.
These achievements offer a promising outlook for the newest BMI loan recipient: Frank Burns of Norwood, Mass. The maker of custom furniture and accessories is looking for additional skills to manage and market his four-year-old company (http://www.burnsdesign.us).
“My career has been pretty varied: I’ve served in the Army, worked in small businesses and, most recently, managed telecommunications contracts for Massachusetts,” he explains. “I had developed good business skills, but didn’t know how to apply them to my work as an artist.”
The loan he received in December 2009 enabled Burns to enroll in the Artists’ Educational Toolbox, a career development program that sharpens business savvy for creative types. He also will have ongoing access to Bentley expertise and resources – a BMI benefit that Joy has come to prize.
“This process has been about having a conversation with the students and sharing a vision,” she says. “It’s not just the loan that helped; these students gave me a chance to have my dream heard.”
Global Reach
In January 2010, the Bentley Microfinance Initiative made its first international move, with a gift of $5,000 to aid economic development in Ghana. Bentley students pursuing internships in the African country will join Associate Professor of Management Diane Kellogg to make a first round of loans this summer. Kellogg directs the four-year-old Ghana Project, which began as a partnership with a single NG) – the Mmofra Trom Educational Center – and now includes more than 10 such partnerships in the region.