NEW YORK, New York – St. John’s University in Queens, New York, is home to the Peter J. Tobin School of Business. At Tobin’s, there is a teacher who goes the extra mile. Dr. Linda Sama is the Associate Dean for Global Initiatives in St. John’s and the Founder of GLOBE.
The origins of GLOBE
When she was appointed Associate Dean of Global Initiatives, Dr Sama was considering ways for the Tobin School of Business to increase its global footprint. As a donor to KIVA, an online microfinance program for entrepreneurs in developing countries, Dr Sama was inspired. She thought about the possibility that such a program could be adapted for the classroom as a student-run microfinance fund. With its research focused on corporate social responsibility and business ethics, the founding of GLOBE was a way to reconcile its interests with the needs of the university. GLOBE was originally intended for business school students as a means of experiential learning. Now GLOBE has opened up to students from all undergraduate colleges to participate.
Although the program is mainly run by students, it would not be possible without the help of the Daughters of Charity. The Daughters of Charity is a Vincentian Order of nuns within the Catholic Church whose mission is poverty reduction. “We couldn’t do this program without them,” Dr Sama told Project Borgen in an interview, “So not only do I have the mission that inspires me, but I have the active hands of the Daughters of Charity. who are totally committed to the same goals of the program and they do a lot of the work for us in the field The Daughters of Charity are the link between the GLOBE program and people living in poverty.
GLOBE Around the world
GLOBE is currently present in 7 countries and spans three continents. Kenya, Nigeria, Democratic Republic of Congo, Nicaragua, Guatemala, Vietnam and the Philippines are home to all beneficiaries of GLOBE loans. When an area of interest is identified, Dr Sama will contact the Daughters of Charity in the region to establish a relationship with the charity and the community they serve. These communities often have huge poverty rates. “It’s our mission, it’s to work with the poorest of the poor because even microfinance institutions tend to ignore them,” said Dr Sama.
GLOBE offers a scholarship opportunity to a few selected students which allows them to travel to any of the regions in which they operate. “The aim of the program is to reduce poverty, but of course the other part is to educate students about the change they can make in the world,” Dr Sama told Project Borgen of the stock Exchange. While traveling, Dr Sama and his students meet with the Daughters of Charity and potential borrowers to tell them about their program. Putting a face to a name builds the confidence of borrowers to enter into a loan deal. It acts as an incentive for the students when they meet the people they have helped. GLOBE has seen the effects, with a surge in requests after a visit.
Microfinance and global poverty
Microfinance is characterized by small monetary loans to people who would otherwise not have access to banking services or traditional finance. The Asian Development Bank (AfDB) says, “Rural women, low-income households and the often tiny businesses they run are too often deprived of finance in Asia and the Pacific.” Formal financial institutions often view borrowers of this description as high risk and are unwilling to offer services for fear of default. The AfDB continues: “Microfinance can break down these barriers. It helps low-income households stabilize their income streams and save for future needs. “
Microfinance enables individuals, especially women, to develop small businesses and support their families. GLOBE has been able to provide microcredits to women in these specific situations. For example, in the Philippines, women looking to open sari-sari shops after a typhoon wiped out the fishing industry and left their husbands out of work. Or, a woman in Nicaragua who traveled to sell handmade goods to support her children and nephews whom she adopted after the death of her sister.
In some cases, the loans have become self-sustaining in the hands of the borrower. Women in the Philippines have used their loans to support their small businesses. Then, they used their profits to make their own loans to other businesswomen in their community. “On their own initiative and their entrepreneurial spirit… These people are incredibly enterprising, creative and thoughtful. And it’s about helping others in their communities, so it’s not competitive, ”Dr Sama told Project Borgen,“ Microfinance is especially helpful for women… Many of our borrowers are women, probably around 82% ”.
Interest reinvested in the community
A distinguishing factor of GLOBE is the way they collect interest on loans. “We call that” interest “, but we explain that it is really costs that we attach … But we do not keep the interest. We’re not interested in keeping this fee, we want it to stay in the community, ”Dr Sama told Project Borgen. She went on to explain the double reasoning. The fees teach borrowers how interest would work on a loan they could potentially take out from a more formal microfinance institution in the future. It also prompts the borrower to repay the money in the interest of helping his community.
The Daughters of Charity in the region communicate the needs of the community and surplus funds are directed there. The funding was used to purchase books for primary schools, supplies for HIV / AIDS clinics and dream centers, and water filtration systems. In some areas, such as Nicaragua, the fees allowed the program to become self-sustaining by using excess funds to finance new loans. Dr Sama told the Borgen project: “Microfinance in some countries has a turbulent past because there are organizations that are unethical in the way they operate, charging usurious interest rates and so we want to let [the borrowers]know that we are here to help. We’re not trying to put anyone in a cycle of debt, we really want to help them grow their business, increase their income and make it work for them and their families, and it doesn’t. nothing punitive ”.
GLOBE in other universities
At St. John’s University, GLOBE and its students are changing the world. Imagine the implications of more universities adopting versions of the GLOBE program. “Systemic change is really about replication, isn’t it? Dr Sama said, “If these other campuses could take that, that would be phenomenal.” Dr. Sama speaks regularly about GLOBE at conferences and has hosted many professors and students from outside universities to observe the class. “To everyone who is interested, I share my program, I give them all the information they need,” she told The Borgen Project.
Research shows that experiential learning is an extremely effective teaching strategy that allows students to translate theories and knowledge into real applications. “I think that’s something that a lot of business schools don’t pay as much attention to as they could – these experiential learning programs,” Dr Sama said, “I think this gives students the best set of practical experience and the best set of actual skills they could have. That way when making loan recommendations and when talking to other people about microfinance, they know what they are talking about, they are informed.
Undertaking a humanitarian effort such as the fight against global poverty shows students that what they do with the education they receive has the potential to change people’s lives. Plus, it’s an amazing teaching opportunity.
– Michelle M. Schwab