esotericvoyage.com

From the NY Times article “Turning Around the Idea of Student Loans“:

LAS VEGAS — Over sandwiches and pizza, a group of high school students here debated the pros and cons of combating poverty in five desperate nations. They scrolled through Web sites, analyzed statistics and considered how much they knew about the economy, language and culture of each country.

This was no mere academic exercise. The students, at the Meadows School, have real decisions to make and, they hope, real people to rescue. By the time they scattered after their lunch period, the group had deferred until next month the decision on where to spend the $25,000 they had raised, but seemed to be leaning toward Peru.

That may seem like a lot of money for a student group, but it was the entry fee for the school to become investors in Pro Mujer, a nonprofit lending institution based in New York that issues small loans to poor women in foreign countries to use for buying tools to start or expand small businesses.

In raising the money and investing it with Pro Mujer, the Meadows School is by all accounts the first high school to operate a microbank. “In all the contacts I have had, I’ve never seen a school do this in that particular way, so it’s definitely something extraordinary,” said Brad Hales, assistant director of the Economic Self-Reliance Center at Brigham Young University, widely seen as the academic backbone of the microfinance movement. “At most schools, a club may start and raise a couple of hundred of dollars and the larger microbanks will take their money as a donation, but it’s not enough money to have much say.”

The founder of the Meadows Microcredit Action Group, Justin Blau, 17, and its faculty adviser, Kirk Knutsen, have bigger plans for their endeavor.

Pro Mujer will mete out the $25,000 to recipients in the country the students select and return to the school both regular status reports as well as a modest amount of earned interest. The group plans to use that interest and other money raised locally to invest in smaller, more specific projects through Kiva, another microfinance lender, with no minimum entry requirement.

“We wanted to have a much larger impact and establish ourselves as the first high school microbank so we could make sure that it continues in an ongoing basis and so we could encourage other schools to do it,” said Justin, a senior who recently worked as a Congressional page for Representative Shelley Berkley, Democrat of Nevada. “This is a five-year loan, and that helps ensure a certain amount of longevity for this project.”

Justin said he first became interested in poverty issues while researching a debate team speech on problems in sub-Saharan Africa. His debate teacher, Mr. Knutsen, had recently become intrigued by what he had read on microfinance and its chief theorist, Muhammad Yunus, the Bangladeshi economist who received the 2006 Nobel Peace Prize for promulgating the view that such lending creates work and income.