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South Club Banks for Poor

Posted By Jeremiah Davis On November 21, 2007 @ 10:00 pm In News | Comments Disabled

Although American banks loan billions of dollars everyday to entrepreneurs, in poorer countries, businesses do not have the same opportunity.

A group of South students, however, have joined the Youth MicroCredit International (YMCI), an organization that aims to remedy that problem.

Newton North senior Alex Simon started YMCI to educate students about microcredit and developing economies. South sophomores Ben Chesler and Naveen Sridhar started a local chapter at South. They hope to convince people to donate money that can be lent to poor people in the third world.

Economics professor of Chittagong University Muhammad Yunus invented microcredit in the early 1970′s. Private investors give “microloans,” loans ranging from $600 to $1,200, to citizens of developing nations.

This money helps them start businesses, spurring the local economy and creating jobs. Over 90 percent of entrepreneurs eventually pay back the loan.
After 30 years the concept grew into an international effort that today brings millions of families in third world countries out of poverty and began numerous organizations committed to the cause. This feat earned Yunus the Nobel Peace Prize in 2006.

“It is not just giving money to poor people,” Chesler said. “Because the people have to repay the loans, it fosters a sense of pride and responsibility. They use the small loans to stimulate their own economy, which will eventually bring the country out of poverty.”

Chesler has high hopes for the club and feels that it will help not only needy people in other countries, but educate people here in the United States as well.

“I want the club to raise money for microcredit, but I also want the club to educate people about microcredit,” he said. “Even though Muhammad Yunus won the Nobel Peace Prize last year for founding the Grameen Bank, a microfinance institution, nobody has heard of microcredit. I want to change that.”

YMCI is partnered with Kiva, an organization that allows investors to support and loan money to a private business through microfinance institutions in the area. All the money raised by the club will be loaned through Kiva.

“Microcredit is an incredible way to help people sustain themselves and other people around them,” co-founder Naveen Sridhar said.

YMCI hopes that South students will consider using their money to help alleviate poverty in developing instead of buying something for themselves. As Naveen points out, the money will eventually be repaid, allowing students to spend money on themselves anyway.

YMCI meets Wednesday J Blocks starting November 28.

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