NEW YORK, New York — St. John’s University in Queens, New York, is home to the Peter J. Tobin School of Business. At Tobin, there is a professor going the extra mile. Dr. Linda Sama is the Associate Dean for Global Initiatives at St. John’s and the founder of GLOBE.
The Origins of GLOBE
When she was appointed Associate Dean of Global Initiatives, Dr. Sama was brainstorming ways for the Tobin School of Business to ramp up its global footprint. As a donor to KIVA, a web-based microfinance program for entrepreneurs in developing countries, Dr. Sama was inspired. She thought of the possibility that such a program could be adapted for the classroom as a student-managed microfinance fund. With her research focused on corporate social responsibility and business ethics, the inception of GLOBE was a way to marry her interests with the needs of the university. GLOBE was originally intended for students of the business school as a means of experiential learning. Now, GLOBE has opened up to students from all undergraduate colleges to participate.
While the program is primarily student-run, it would not be possible without the help of The Daughters of Charity. The Daughters of Charity are a Vincentian Order of religious women within the Catholic Church whose mission is poverty alleviation. “We couldn’t do this program without them,” Dr. Sama told The Borgen Project in an interview, “So not only do I have the mission inspiring me, but I have the working hands of the Daughters of Charity who are totally committed to the same goals of the program and they take on a lot of the work for us in the field.” The Daughters of Charity function as the link between the GLOBE program and those living in poverty.
GLOBE Around the Globe
GLOBE is currently present in seven countries and spans three continents. Kenya, Nigeria, the Democratic Republic of Congo, Nicaragua, Guatemala, Vietnam and the Philippines are all home to recipients of the loans that GLOBE provided. When an area of interest is identified, Dr. Sama will contact the Daughters of Charity in the region to establish a relationship with the Daughter and with the community that they serve. These communities often have tremendous rates of poverty. “That’s our mission, is to work with the poorest of the poor because even microfinance institutions tend to ignore them,” said Dr. Sama.
GLOBE offers a fellowship opportunity to a few select students that allows them to travel to one of the regions in which they operate. “The program’s goal is to alleviate poverty, but of course, the other prong is to educate students about the change they can make in the world,” Dr. Sama told The Borgen Project of the fellowship. When traveling, Dr. Sama and her students meet with the Daughters of Charity and potential loan borrowers to speak to them about their program. Putting a face to a name creates trust on the end of the borrowers to enter into a loan agreement. It acts as an incentive for the students when they get to meet the people they have been helping. GLOBE has seen the effects, with a steep increase in applications after a visit.
Microfinance and Global Poverty
Small monetary loans to individuals who otherwise would not have access to traditional banking or funding characterize microfinance. The Asian Development Bank (ADB) has said that “Rural women, low-income households, and the often tiny businesses they manage are all too often starved of finance in Asia and the Pacific.” Formal financial institutions often view borrowers of this description as high risk and are not keen to offer services out of fear of default. ADB also said that “Microfinance can break down these barriers. It helps low-income households to stabilize their income flows and save for future needs.”
Microfinance allows for individuals, especially women, to grow small businesses and support their families. GLOBE has been able to provide microloans to women in these exact situations. For example, women in the Philippines looking to open sari-sari stores after a typhoon decimated the fishing industry and left their husbands out of work. Or, a woman in Nicaragua who traveled to sell handmade goods in order to support her children and nephews whom she adopted after the death of her sister.
In some cases, the loans became self-sustaining at the hands of the borrower. The women in the Philippines used their loans to support their small businesses. Then, they used their profits to give out a loan of their own to other businesswomen in their community. “By their own initiative and entrepreneurial will… These folks are incredibly enterprising and creative and thoughtful. And it’s all about helping others in their communities, so it’s not competitive,” Dr. Sama told The Borgen Project, “Microfinance is particularly helpful for women… Many of our borrowers are women, probably about 82%”.
Interest Reinvested Into the Community
A distinguishing factor of GLOBE is the way in which they collect interest on the loans. “We call it ‘interest’, but we explain that it’s really a fee that we attach… But we don’t keep the interest. We’re not interested in keeping those fees, we want that to stay in the community,” Dr. Sama told The Borgen Project. She went on to explain the dual reasoning. The fee teaches the borrowers how interest would work on a loan they may potentially take out with a more formal microfinance institution in the future. It also creates an incentive for the borrower to pay the money back in the interest of helping their community.
The Daughters of Charity in the region communicate the needs of the community and the surplus funding is directed there. Funding has gone towards books for primary schools, supplies for HIV/AIDS clinics and dream centers and water filtration systems. In some regions, such as Nicaragua, the fees have allowed the program to become self-sustaining by using surplus funding to finance new loans. Dr. Sama told The Borgen Project that “Microfinance in some countries has a checkered past because there are organizations out there that are unethical in the way they operate, charging usurious rates of interest and so we want to let [the borrowers]know, we’re here to help. We’re not trying to put anyone in a cycle of debt, we really want to help them grow their business, grow their income, and make that work for them and their families, and there’s nothing punitive about it.”
GLOBE at 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, right?” said Dr. Sama, “If these other campuses could pick this up, that would be phenomenal.” Dr. Sama regularly speaks about GLOBE at conferences and has welcomed many professors and students from outside universities to observe the class. “Anyone who’s interested, I share my syllabus, I give them any information they need,” she told The Borgen Project.
Research shows experiential learning is an extremely successful teaching strategy that allows students to translate theories and knowledge to real-world applications. “I think that’s something that a lot of business schools aren’t paying as close attention to as they might – these experiential learning programs,” said Dr. Sama, “I think it gives students the best set of practical experience and the best set of real-life skills that they could possibly have. This way, when they are making loan recommendations and when they’re talking to other people about microfinance, they know what they’re talking about, they’re informed.”
Undertaking a humanitarian effort such as the fight against global poverty shows students that what they do with the education they are receiving has the potential to change people’s lives. In addition, it is an incredible teaching opportunity.
– Michelle M. Schwab