Microfinance in Action

A laptop, several mannequins and the know-how of 11 visiting Smith School students were all it took to help Roxana, a small entrepreneur in Nicaragua, expand her in-home clothing business.

The students accomplished this feat on their study abroad trip to Nicaragua in January 2012, helping Roxana and several other local entrepreneurs get a financial leg up. Even before they left America, students worked to raise money to help fix up a clothing business, regulate a small microfinance company, improve a taxi business and expand a grocery store.

“The study abroad trip to Nicaragua was probably the most exhilarating 10 days I’ve ever had,” said Dipti Badrinath ’12, a finance and supply chain major in the Social Innovation Fellows program. “From learning about microfinance to zip lining though the largest canopy in Central America to volunteering with Nicaraguan families; it was a great trip.”

Designed to help students learn how microfinancing works in the environment of a developing economy, the course was planned and developed by Sue White, Distinguished Tyser Teaching Fellow; Lily Griner, the university’s business librarian; and Pat Herron, the university’s librarian for Spanish, Latin American and Latino/a Studies. Business librarian Zaida Diaz assisted with the course implementation

“The course planning, development and implementation was successful due in large part to Jane Mirandette, the in-country facilitator and founder of the first lending library in Nicaragua and Biblioteca Movil (book mobile),” White said.

Students split into groups and were assigned a specific entrepreneur to assist. Students from the business school at the Universidad Americana worked side-by-side with Smith students and helped with any language barriers.

“The students were making a difference in someone’s life, a family’s life,” White said. “They gained real-life understanding of microfinance — how a small amount of money made a deep impact on people. Several of the entrepreneurs very emotionally told the students that this experience changed their lives and made their dreams come true.”

One of those families was Roxana’s. She bought clothes from the capital city and sold them door-to-door in her neighborhood, while also working full-time at a hotel. She wanted her customers to come to her instead of offering an on-the-go experience. The problem was, she wasn’t sure where to begin and didn’t have the money to create a shop.

Badrinath and her team of students were assigned to help Roxana. They raised money before they even left the U.S. by organizing a book drive at McKeldin Library and soliciting donations from friends and family. They even received free laptops to give the entrepreneurs.

With the money they raised, the students bought mannequins for Roxana’s store. Then they created a business plan for her and set up the store in her home—all over the course of the 11-day trip.

The other students had similar stories: One entrepreneur was looking to build a website for his taxicab service and learn general computer skills. Another started a small microfinance company but was having a hard time running it on his own. A third wanted to expand his grocery store but didn’t have the manpower to do it.

Smith students wrote business plans to help the entrepreneurs solve their unique problems and taught them the skills they would need to improve their businesses.

The students also acted as consultants for Opportunity International, a nonprofit organization that provides small business loans and other similar services to people living in poverty in the developing world.

They connected with their Nicaraguan counterparts before the trip using Skype and e-mail. “We’re still in touch with a few of the other students. It was great having them there as translators,” Badrinath said. “They were also business school students, but they had a more realistic expectation of how it was in Nicaragua.”

The study abroad trip was selected as a finalist for the New Study Abroad Program Innovation Award from GoAbroad.com, an online resource committed to providing databases for international education and alternative travel.

Those same aspects are what interested Badrinath in the study abroad trip to Nicaragua in the first place: “I’d been to Dubai but I wanted to do something more hands-on. I’d also never been to Central America and am really interested in social entrepreneurship — it was an easy sell.”

The trip wasn’t all work — the group visited a volcano, toured several cities, went zip lining, visited the beaches, experienced the nightlife, ate a lot of new foods, and met the people of Nicaragua. In fact, that was Badrinath’s favorite part of the trip.

“We got to really experience Nicaragua as a country, instead of being a tourist and visiting the popular spots. Because of that, we got to interact with the people. And they were the friendliest people. The kids were adorable,” she said. "We had the opportunity to go to schools with the Biblioteca Movil and lend out books to the students. It was a one-in-a-lifetime experience.”

The most important thing she learned in Central America: “People are the same everywhere. It was great working with entrepreneurs in Nicaragua because they wanted the same things as entrepreneurs in America. Everything is exactly the same no matter how well off they are of how well they are doing – the goals are the same.”

By Jessica Smith