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January 09, 2008

How to Start a Microcredit Investment Fund

Jill Stoddard
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Based on a conversation with Microlumbia cofounders Katie Leonberger ’08 and David del Ser Bartolome ’08.

First, start with a completely different idea: “As part of our student cluster, we decided to donate to a charity. I picked a charity called DonorsChoose, where you can make small donations to U.S. schools.”

Think globally:
“One-third of our CBS class is not from the U.S. We asked ourselves, ‘What about the people in Africa?’ We should also help them. So our cluster loaned money to Kiva (a site that takes donations to finance entreprenuers in developing countries).”

Bring in the experts:
“We started talking about charitable giving to some expert alumni, and they really challenged us to think bigger. We decided to create something sustainable — something that would help developing countries while not distorting the principles of microfinance.”

Watch it take off: “From the first idea, this has gone through a huge transformation. We published an article in the Bottom Line, and that helped us recruit 15 more students. We also got our first donor — a pro bono lawyer — and eventually a write up in Business Week.

“We’re overwhelmed by the professors and alumni who have helped Microlumbia. It’s a fantastic thing to do at Columbia and a great example of what you can do only at business school.”

Comments

by Michael | January 16, 2008 at 6:41 PM

Incredible to see such a great venture coming out of a business school. Hopefully you have an enormously positive impact.

by Judy Udeze | January 17, 2008 at 11:51 AM

Its good to read about Micro-financing initiatives from Columbia and Kiva, it would also be nice to see how their model works especially in terms of repayment. In some parts of West Africa, micro-financing is done at the back of 'Esusu' principles - a local credit contributory system primarily involving micro-scale women entrepreneurs. Largely successful because the women act as sureties to one another.

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