Changing the World, One Small Loan at a Time

While governments and businesses are fighting economic disaster with huge bailouts and loans, the microfinance industry is tackling poverty the same way it has for many years: with small loans to entrepreneurs around the world. On March 30, 2009, the Smith Community gathered to hear from Alex Counts, CEO of Grameen Foundation, and former associate of Muhammad Yunus at Grameen Bank.

Counts, whose recent book Small Loans, Big Dreams: How Nobel Prize Winner Muhammad Yunus and Microfinance are Changing the World was released in hardcover in 2008, addressed the assembled guests in Frank Auditorium to discuss his experiences with microfinance. His journey began as a college student, in a time when he says “everyone seemed to know what they were against. I was trying to figure out what I was for.” His studies led him to some preliminary publications about the work of Muhammad Yunus, who pioneered the use of microfinance loans in developing countries as a means to alleviating poverty.

Microfinance is a simple lending method that has been shown to empower poor people from across the globe to pull themselves out of poverty. These poor people, mostly women, use small loans and other financial services to launch or enhance a small self-supporting businesses. The programs rely on communities of entrepreneurs who support each other and invest in each other’s success. Yunnus introduced the practice in Bangladesh in 1976, and Grameen Bank has now grown into an organization with 2,545 branches, making a total of $1 billion in loans per year.

Counts spoke of his initial involvement with Yunnus and Grameen Bank: as a college student, counts wrote a letter to Yunnus asking to be involved with the work that was happening in Bangladesh. To his surprise, he received a personal response saying that he was welcome to join the effort, with a further recommendation to learn Bengali before coming. Counts registered for Bengali language courses at Cornell, finished his senior year of undergraduate studies, and set off to join Yunnus in Bangladesh in 1988. From there, he was later sent to the Philippines, to “oberserve the beginnings of Microfinance in that country”. Counts, under a charge from Yunnus, founded Grameen Foundation in 1997 to gather U.S. resources and direct them into the worldwide microfinance effort.

After hearing stories and facts about ending poverty through microfinance, students engaged Counts in questions ranging from career opportunities in the industry to how microfinance will change in the future. Counts encouraged students that are interested in the industry to develop language skills that will allow them to interact with the world’s poor in their homes and villages. He also encouraged students to think toward the future. “Half of the things we will teach you about microfinance are wrong,” Counts quipped, “but we’ve made a start!” Speaking of the untapped benefits of the microfinance movement, Counts pointed to the “organization of the world’s poor, similar to the interconnections of the internet. This network of trust,” he said, “could be used to solve world health problems and other global issues.”

The evening, sponsored by Smith’s Initiative for Social Value Creation, ended with a reception, which provided excellent opportunities for discussion among members of the Smith community. Alex Counts also signed copies of his new book and offered words of encouragement and advice to Smith students. Students in attendance were pleased by Counts’ message, which supports the growing effort of the Robert H. Smith School of Business to promote and educate regarding opportunities to create social value within business.