Microfinance can help save communities in need, but only if done responsibly.
This Saturday, students, academics and professionals met in Huntsman Hall to discuss the ethical repercussions of the microfinancial industry.
Microfinance involves providing financial services to households and small businesses where formal loans are not available.
Focusing on diversity for microfinance institutions — or MFIs — Penn Microfinance Club kicked off its seventh annual conference with the theme “Diversi-MFI-cation.”
Featuring a series of panels, presentations and a keynote speaker, the conference aimed at spreading awareness of microfinance’s social impact and debating its positive and negative effects.
The conference had been in the works since September 2012. College junior Zoe Lau, one of the conference co-chairs, said the club had done a lot of research on the theme, attempting to grasp a more in-depth understanding of microfinance as a general concept.
“Microfinance is a very important tool for international development and poverty elimination, but it’s not just about giving out money,” Lau said. “It’s more about diversifying the general concept of economic empowerment and tailoring financial service to the needs of different communities.”
The keynote speaker, David Roodman — a senior fellow at the Center of Global Development — also chose to focus his speech on the complexity and risks of microfinance, after briefly outlining the concept’s history.
“The credit market is intrinsically unstable, and over-indebtedness will create a bubble,” Roodman said. “People must be aware of the danger and easy assumption they might make about lending money to small businesses.”
College senior Guanyuan Chung said Roodman’s points informed her of the importance of research when making a microfinancial investment.
“Usually our theme is about what can be done in the future based on what was done in the past,” said Wharton senior Risha Asokan, president of Penn Microfinance Club. “But this year, we focused more on giving people different perspectives on the industry — being critical about microfinance while still seeing how productive it is.”
“There’s a general trend towards social impact in Wharton today, and the school has been very supportive — it’s overall very positive,” Asokan added, commenting on Penn’s growing awareness of the issue.
2008 College and Wharton graduate Joyce Meng had played an active role in the conference while still a student.
After graduating from the Huntsman Program in International Studies and Business, Joyce Meng co-founded Givology — an online marketplace that connects donors to grassroots education projects.
On Saturday, she sat on a panel titled “Microfinance Plus: The Expansion Of Micro-services And Community Impact,” where she underlined the importance of education in communities that receive microfinancial services.
The panel moderator, School of Law professor Praveen Kosuri, said he has been working with Penn Microfinance for years and thinks the conference creates a great sense of continuity.
“Discussion of microfinance has grown dramatically in the last three or four years, but there is still a lot of room,” Kosuri said. “If it just sparks ideas among the students and catalyzes the next great innovation, it will be the best outcome.”
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