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Spartans will help globally: student ‘microfinance’ group surpasses $100K in loans to developing countries

By Omar Sofradzija

Brittany Shaheen (BA Marketing ’18) and Megan Reimel (BA Supply Chain ’20) picking coffee.
Brittany Shaheen (BA Marketing ’18) and Megan Reimel (BA Supply Chain ’20) picking coffee in Guatemala.

To most global entrepreneurs, the loans aren’t much, totaling just $3,370 in sum. That amount was sent to Guatemala to help weaving cooperatives buy new equipment and grow their product lines; a leather worker to expand his sales goods; and a pottery maker buy a kiln to increase her production volume.

But to those impoverished entrepreneurs in a developing country, the so-called “microfinance” loans from the student-run Spartan Global Development Fund might feel like a million bucks by helping them achieve better lives through business aspirations come true.

That last round of loans was special for the fund, too, as it allowed the group to surpass $100,000 in loan disbursements since it was founded in 2009 by Michael Thelen (BA Finance ’09). To date, the fund has given out loans ranging from $25 to $1,300 each to roughly 2,500 entrepreneurs in 72 different countries, according to the fund.

Morgan Burns (BA Accounting ’18) learning to weave.
Morgan Burns (BA Accounting ’18) learning to weave in Guatemala.

“In the world of microfinance, it doesn’t take a lot of money to make an impact,” said Scott Lyman (BA Finance and Social Relations & Policy ’18), who was the group’s student president during the 2017–18 school year. “Even a loan of $300 can make a massive difference in terms of possibility for a business owner” in developing countries who otherwise may not have access to any capital, leaving them mired in poverty.

Students oversee nearly all aspects of the loan process:  fundraising, donor relations, marketing and communications, accounting, and planning annual on-site trips for students to meet with prospective loan recipients and see what the money will be used for. Students also coordinate efforts with local “field partner” consultants who help clients develop business plans.

“You can leverage business to impact social change, to impact positive economic development, and you allow students to get hands-on experience and to basically shape and mold that,” said Lyman.

Nate Caverly (BA Accounting ’19), Morgan Burns (BA Accounting ’18) and Jaimee Beckett (BA Computer Science ’19) learning to roast coffee with Victor Catavi.
Nate Caverly (BA Accounting ’19), Morgan Burns (BA Accounting ’18), and Jaimee Beckett (BA Computer Science ’19) learning to roast coffee with Victor Catavi in Guatemala.

When the Spartan Global Development Fund made its first loans – a quartet of $25 microloans in 2009 – SGDF faculty adviser Paulette Stenzel had high hopes that were “tempered with caution,” she said.

“During my 36 years at Michigan State, I have advised about 10 different student organizations, and I knew two things,” Stenzel, an Eli Broad College of Business professor of sustainability and business law and expert in microfinance and fair trade, recalled. “One: students have high hopes, but leadership varies from year to year … moreover, often people simply join an organization to have something for their resume,” thinning the roster of those willing to do the work to sustain, much less grow, a group and its mission.

“The reality of Spartan Global is that the organization has, by far, exceeded my expectations and even my hopes,” Stenzel said. “Working with SGDF is, by far, the most rewarding experience of my career at MSU.”

Broad College Professor Paulette Stenzel tries her hand at weaving.
Broad College Professor Paulette Stenzel tries her hand at weaving.

It may be even more rewarding for involved students. “Our student members of SGDF are forever changed, knowing far more about economics in and supply chains extended into developing countries that are the homes of people to whom we extend microloans,” Stenzel said. “When they graduate, they have experience with international business that extends far beyond reading books and hearing lectures in the classroom.”

“Participation is SGDF is what service learning is all about,” Stenzel said.

For his part, Thelen said “it’s really heartwarming and inspiring to see that as times change,” the organization and its mission has been consistently renewed by new students building upon the achievements of their predecessors.

“There’s been a lot of iterations of the organization of how they want to organize themselves and where they want to focus their efforts,” said Thelen, now a professional software engineer and member of the fund’s nonprofit oversight board. “No matter how many times that’s changed or, around it, the world has changed, there have always been people who’ve stepped up and said, “I see that there’s suffering out there and I believe I’m in a position to do something.'”

Carlos Diaz cutting metal to make a knife.
Carlos Diaz cutting metal to make a knife in his shop in Guatemala.

“East Lansing has no shortage of people who, first and foremost, believe that the value of your education is in enabling them to have an impact. Spartan Global helps them do that, but it’s their drive that is the true human resource,” Thelen said.

And those students offer a true human impact.

“SGDF has deeply impacted the lives of small entrepreneurs to whom they have extended loans,” Stenzel said. “A motorcycle repairman is building his small business thanks to a SGDF microloan. One loan helped a coffee farmer get back into business. He used our SGDF loan to buy new coffee plants to replace those destroyed by ‘roya,’ a coffee rust that is destroying coffee plantations throughout Central America.”

Megan Reimel (BA Supply Chain ’20) with Carlos Diaz.
Megan Reimel (BA Supply Chain ’20) with Carlos Diaz.

“Through microfinance and fair and direct trade, families are able to make choices that improve their lives,” Stenzel said, adding that improved incomes have allowed people to gain access to running water, indoor plumbing, and other necessities taken for granted by people in wealthier nations.

Thelen said the start of SGDF was inspired in part by three consecutive semesters of study abroad, along with lessons on microcredit.

“There’s really a lot out there that we can have impact on that, from East Lansing, can feel really far away and remote … as a finance major it just seemed pretty fantastic that something that seems so counterintuitive in a sense, that just with small amounts and the simple access to capital that people had been stuck in poverty traps could suddenly use” could be a springboard to better lives, Thelen said.

Boats on Lake Atitlan, Guatemala.
Boats on Lake Atitlan, Guatemala.

The interest-free loans are underwritten by donors that range from corporate sponsors to individuals raised by student development volunteers, and through a loan repayment rate around an astounding 99 percent.

“There’s a lot more meaning attached to these loans” than if one were buying a house or car here, Lyman said. “These people’s livelihoods, and by extension their family’s livelihoods and their community’s livelihoods are attached to the success of these loans … so when someone doesn’t pay it back, that not only hurts them, but it also hurts their family and surrounding community.”

“And I think that’s why you see such a high repayment rate, at least when it comes to the loans that we facilitate,” Lyman said.

Bags of coffee at Chacaya Coffee Cooperative.
Bags of coffee at Chacaya Coffee Cooperative.

Meanwhile, those repayments get recirculated in the form of new loans to help others. “Every dollar we raise gets to be used over and over and over by different entrepreneurs at different times,” Thelen said. “It’s really been fascinating and just wonderful to see how the power of that continual accumulation of potential impact the organization can have has really started to snowball over the years.”

The connections go beyond the loans. In the wake of a recent volcano eruption in Guatemala, “our students immediately inquired about our friends” there, said Stenzel, who learned in an email from there that while ash covered crops and blocked roads, “we’re dirty, but unharmed.”

Stenzel said students are gathering funds to help their “friends” in Guatemala. “This immediate concern for an action to help others is what business is about when Spartan Global is part of the team. The challenges and hardships faced by our friends in Guatemala are our concern, too,” Stenzel said.

To see a photo gallery from SGDF’s trip to Guatemala, go to the Broad College Flickr page via this link. People who wish to support the fund and students who want to participate in the fund can get more information at spartanglobalfund.org.


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