On October 4 Haverford hosted the first in a series of lectures sponsored by the Center for Peace and Global Citizenship, the Department of Economics and the newly created microfinance program. This program includes, in addition to the lecture series, two new courses in microfinance, more possibilities for internships in the field and a conference on microfinance, which is scheduled to be held next year Haverford.
Visiting Assistant Professor of Economics and Microfinance Program Coordinator Shannon Mudd, who introduced the evening’s speaker, said that the program was “not just a cheerleader,” but that he is planning for it to make contributions to the quickly evolving field.
The night’s speaker was Sashi Selvendran. Currently she works for Mennonite Economic Development Associates (MEDA), but in the past she has worked for other microfinance and economic assistance institutions like Grameen Foundation, the Consultative Group to Assist the Poor (CGAP) and USAID. She got her B.A. from Vanderbilt University and her MSc from the London School of Economics. In the last year Selvendran has traveled to Nepal, Afghanistan, Sierra Leone and Rwanda for MEDA.
MEDA was founded in 1953 when a group of Canadians lent some men in Paraguay enough money to start a dairy farm. That loan was repaid in full and today that farm is still producing milk. MEDA operates in 44 countries with 190 partners. Last year alone, the organization helped 2.5 million families.
Selvendran says that even though MEDA is no longer strictly Mennonite, it still adheres to Mennonite values, which allows it to operate as a business without loosing sight of their mission of lifting people out of poverty. The way she described it was very similar to the way Haverford admissions officers describe our college’s important ties to Quakerism without actually being a religious institution.
Today, MEDA provides three main things: investment capital, technical support and financial services. Their technical support focuses on helping their partners on the ground form “value chains” with other businesses so that they can prosper. Their financial services, which Selvendran is involved in, focuses on helping businesses expand when they need to and helps get loans to the right people.
Although she fully believes in microfinance, Selvendran did point out some places where it has broken down. When she worked for USAID, she got a good look at what she called “the machine” behind it. She claimed that USAID itself was not to be blamed for its failures. The reason so many of its investments fail, according to her, is not because the people there make poor choices, but because 90% of the funds they receive from Congress are earmarked for certain countries, which often are not the ones in the most need.
“There are always multiple factors moving behind the scenes,” she said, adding that because government aid is tied into foreign policy and “investors are saying grow, grow” many microfinance institutions “lose sight of the bottom line.”
She still believes, however, that microfinance “still has so much potential.”
These days, microfinancing is branching off into housing, health clinics, energy, clean water and sanitation. In addition, it is also helping communities respond to natural and man-made disasters by building connections and giving some of their partners insurance against such threats.
Selvendran concluded her lecture with four pieces of advice: “Question Everything; Innovate and Create; Development or Dysfunction; and Stay True to Your Principles.” She said that by development or dysfunction, she meant that not all plans work, and that you have to take set-backs as part of progress. The most important question to always be asking, she said, is “Are we doing things for the right reason?”
Check MEDA’s website for more information about the company.
Click here for more information about Haverford’s Microfinance Consulting Club.
Visit the Department of Economics’ website for more information about the new microfinance program.
– Jack Hasler ’15 (Photos by Debbie Leter ’15)