Offer students a chance to make a profit while helping the poor and they just might save the world.
The burgeoning new field of microfinance -- the lending of small amounts of money to people in impoverished communities -- allows professionals and students alike a chance to encourage entrepreneurship in developing countries.
College of General Studies student Sam Rosen says the fact that students could profit makes lending small amounts of money to impoverished people all the more appealing.
Rosen helped found the undergraduate Microfinance Club early this October, which helps connect students to internships in a burgeoning field that has recently been in the national spotlight.
"There are so many microfinance organizations that have more work than they can handle," he said. "It's all about changing the world and leveraging the power of college students."
Microfinance institutions often lend less than $200 to the poor in countries like India and Bolivia. Borrowers then use the money to start small businesses like food stands or Internet kiosks.
And the profits go back to the lenders.
Microfinance received media attention last week when eBay founder Pierre Omidyar presented Tufts University with a $100 million gift to be invested in microfinance institutions.
Last year, the United Nation declared 2005 the International Year of Microcredit in recognition of the impact of microloaning in developing countries. Government officials, academics and humanitarian organizations have praised its success in recent years.
Before the rise of microlending, impoverished people were unable to get loans because they lacked the collateral to receive credit. The only available funds were from local money lenders who charged interest rates up to 10 percent per day.
Penn is not currently investing in microfinance institutions, but that hasn't stopped Rosen from spreading the word.
"We're looking for people who want to take an active role," he said. "We know that it works, we know that it's a source of wealth for both investors and entrepreneurs in the developing world."
Wharton and Engineering sophomore Sai Mukkamala -- who helped found the Microfinance Club -- spent the past summer in India studying how technology such as computers could improve small, local businesses.
A microfinance loan to one family to purchase a computer, for example, could allow farmers villagewide to check grain and produce prices over the Internet, he said. This could help prevent them from overproducing, thus saving them money.
As for Penn's contribution to microfinance, Mukkamala would like to see more Wharton classes that combine business with social activism.
"Wharton doesn't have enough classes that allow you to focus on both business and the humanities, as well as community development," he said.
Management professor Keith Weigelt launched an independent study class on microfinance last spring.
"Most people view Wharton as the Dark Side," he said. "There's this other side -- you can take capitalism and you can do a lot of good with it."
While Weigelt said Wharton is forward-thinking with its programs in microfinance, he hopes his independent study will one day become an official class.
"I'd say [Wharton] is in the forefront here," he said. "I'm not saying we've done a lot, but compared to other business schools, we have."
