In addition to his time spent in the classroom, Georgetown Professor Rupert Scofield is executive international director of the Foundation for International Community Assistance, a microcredit organization that reaches more than 700,000 clients in 21 countries. Trained as an agricultural economist, he has been in the business of microfinance for over 30 years, working in Latin America, Africa and Eurasia. Scofield sat down with THE HOYA to discuss new developments in microfinance, as well as how Georgetown students can get involved.

How did you come to FINCA and microfinance in general?

This is important for you to get this point … Muhammad Yunus started making microloans in Bangladesh in the late ’70s and he won the Nobel Peace Prize. I started in the early ’70s in Guatemala, so where is my prize? But seriously, I was a Peace Corp volunteer in Guatemala, and I was making $50 loans to small farmers, and I had 800 small farmers. Two things made a huge impression on me: One was that every one of those 800 [farmers] except one paid me back. I’m still trying to track him down.

Second, those $50 loans made a huge impact on the welfare of the family. They could grow better crops. They had some marketable surplus, so they had some money for medicine and the whole family nutrition improved greatly. That’s how I got into it and that’s what I have done. I’ve had a very narrow experience – you could say I found what I loved to do very early, and I have never detoured off of that.

In terms of macroeconomic analysis, how effective is microfinance?

You know, when I first ran into microfinance about 30 years ago when I was consulting for the United Nations, I thought it was the best development program that I had ever seen because it put resources right into the hands of really poor people; it empowered them to develop themselves. They didn’t have to wait for some engineer to build a dam or a road. They could just get right to work and start generating income for their families, and it also gave them the income to solve just about every other problem they had. They could take their lives into their own hands.

The question is what macroeconomic impact that they might have. The immediate impact is pretty small, but if you go to the next generation, those kids – instead of being malnourished, are healthy, and instead of being illiterate, are educated. Then, there is a massive impact on human development that translates into a really measurable impact.

In Bangladesh, women were the target group to receive loans; is this the focus today in others regions of the world?

Absolutely. Everywhere we can, everywhere where the culture permits, we focus on women. Some [countries] like Uganda used to be 99 percent [focused on women]. Actually, an interviewer from Uganda once asked me what a man had to do to get a loan: “Do they need to have a sex change?” In other countries, it is a little more balanced, like in Islamic countries. Sometimes women are not allowed to get out into the markets, and so forth, so we lend more to the men. We still lend to the women but we have to use a different model so they can work out of their houses.

Are the assumptions true that women tend to be more responsible than men and will be empowered by the process?

Definitely; you get a much bigger social payoff by lending to women. The big thing you tap into is all women want their children to get out of poverty. Fathers do too, but fathers get sucked into the whole cultural thing. They have their machismo – got to have other women, got to get drunk on a regular basis. But the women don’t; they’re not into that. Their goal is that their kids are not going to grow up poor, if they can possibly help it.

Is microlending applicable to the developed world? If I wanted to start a microlending operation in D.C., would it be effective?

FINCA’s experience was not good. We tried everything; we tried group lending, individual lending, bigger loans and smaller loans. We didn’t make a go of microlending in the United States There were exceptional cases, you know, but they were very isolated. The main problem is this is a formal economy and poor people don’t tend to be entrepreneurs. They tend to want to get a job. Being an entrepreneur of any kind in the United States or Europe is [a] much more challenging thing. You have to have a whole skill set. You have to have the marketing, a business plan. You have to have a skill. But in developing countries, there is a much easier entry into being a micro entrepreneur. Really, all you need is the capital. Here the capital is plentiful, so it’s just my view … I don’t think it’s ever going to be a big tool to fight poverty in the United States.

What is the future of microlending? Is it nationalized credit institutions or corporations?

I think we’re seeing a real commercialization of it on one hand, with lots of banks getting into it down to a certain level. But the banks generally don’t go all the way to really poor people. In fact, not generally, they never do. They like to stay at say, the level of minimum loan, maybe $1000, maybe $500. [For] the groups that are using finance as a tool of getting people out of poverty, making profits and increasing their shareholders wealth is secondary. We’re getting to that point in FINCA because we’ve created a number of finance companies and commercial banks because we had to. We got to the point where we couldn’t raise enough in donations, so we had to start borrowing money. Now, we’re at the point where we can’t borrow enough, so we started looking for investors, but it’s always going to be because we have to, not because we’re trying to make money.

How can Georgetown students get involved in microfinance?

Oh, I think there is any number of ways. They can certainly intern at any number of microfinance outfits that are right here in Washington. I mean, FINCA is just one. There’s Gramin. This is actually probably [the] world capital of microfinance, at least in the United States. We’ve got FINCA, ACCION and Gramin. Just about everybody has a [representative] office. You can intern during the school year or you can intern during the summer. We send a number of students to do our impact surveys, and that’s a terrific experience to go and actually see one of the countries and talk to the clients. I actually envy those people. They talk to more clients than I do!

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