Domestic, Feature, International, Private education, Public education, Required, Students, Technology, University & College - Written by on Tuesday, February 7, 2012 6:00 - 1 Comment

US College Students Transform The Domestic Microfinance Industry With Digital Tools

 Rohan Matthew speaks to colleagues. Image courtesy of The Intersect Fund


By Ravi Kumar

NEW YORK – The micro-finance movement was set back by the financial crisis in recent years, but it’s moving forward on college campuses by young student-entrepreneurs using online tools to review and issue domestic micro-finance loans.

When Rohan Matthew, 25 was an undergraduate at Rutgers University, he wanted to decrease the level of inequity between the rich and poor in New Brunswick, New Jersey. Matthew grew up in Ohio and moved to New Jersey in 2001 with his parents.

Matthew co-founded the Intersect Fund in November 2008 with a $1,000 bank grant and offices in a church basement. His goal was to help local entrepreneurs in New Jersey – from hot dog vendors who need $2,000 to a soup kitchen – launch and sustain small businesses. The Intersect fund has so far raised over $1 million from private donors and corporate grants. In addition to providing small loans ranging from $500 to $5,000, it offers a business boot camp, one-on-one strategy consulting, QuickBooks training and help with taxes to its clients.

Matthew and his team have worked with more than 200 small business owners and have given micro-loans to more than 80 local entrepreneurs totaling roughly $90,000. Matthew said more than 90% of entrepreneurs have paid back the loans so far.

His group is not alone, microfinance organization Kiva is expanding its programs on campuses such as with Point Loma Nazarene and Davidson College’s Microfinance Club. It aims to get more professors to teach about micro finance on campuses and to use the Kiva platform in microfinance investing clubs. Meanwhile, MFI Connect lists a growing roster of U.S. colleges that have microfinance clubs or programs.

A 2009 study for the Charles Steward Mott Foundation, the Microenterprise Fund for Innovation, Effectiveness, Learning and Dissemination (FIELD) at the Aspen Institute found 11 microfinance organiztions working domestically in the U.S. and led by college students who want to help others. That is a heartening sign to the microfinance industry as the global financial crisis from 2008-2011 took some of the energy out of Wall Street banks that had started investing in the space and which had created a more difficult overall environment both for lenders and borrowers.

“While the microfinance industry has been around for years, campus-based MFIs are fairly new on the scene,” writes Lyn E. Haralson, in an article for the Federal Reserve Bank of St. Louis. “With the appropriate support, this industry niche could have tremendous impact and break down the barriers that often exist between college campuses and the communities in which they exist.”

Matthew, who had no background in business before launching his fund, realized there needs to be a better network of university students who would help their local community of the university nationwide. The “University is a bubble,” Matthew said, during a phone office from his office in New Brunswick. He added that there is a tremendous inequality between the resources at the university and the local community Matthew said the situation is similar in many university towns and cities.

Hoping to help local residents of university towns, college students who had launched similar non-profit startups met at Rutgers in the fall of 2009 to launch Campus Microfinance Alliance “with a mission to raise awareness, provide technical assistance, and create networking opportunities for student-powered microfinance organizations.”

Today, the Campus Microfinance Alliance is a group for nearly a dozen student-run microfinance groups. Together, these groups have lent more than $350,000 to entrepreneurs across the U.S. “We realized that we have to build our network, and most importantly spread the network,” says Matthew.

According to its website, the alliance “serves as laboratories for innovation in domestic micro-finance and training ground for a new generation of social change leaders.” The alliance hosts annual conference and awards grants to its members along with providing on-site and online technical assistance to its members. So far, they have had three annual conferences.

The traditional way of microfinance is “very labor intensive,” said Matthew. “When someone has time sensitive needs, then they need the money right away.” Micro finance Alliance group uses web-based loan application officer that allows them to receive proposals for loan remotely from local entrepreneurs.

Matthew said that within hours of loan application is submitted, officers at the microfinance alliance can give instant feedback on whether they can approve the loan or need further information. Once, the application is pre-approved, the system generates information, and then loan officers review and if possible approve the loan request. Then the system automatically generates Google Document. The officers review the document again, and then the money is directly wired to entrepreneurs account.

Microfinance alliance uses Zoho Suite. According to Tech Crunch, it is “a web- based software suite comprised of document, project and invoicing management tools, that allows integration with a Microsoft product.”

It is a cloud-computing platform that allows users to build and run applications online. Zoho is very user friendly allowing its users to review information from iPads or other devices to instantly review prospective borrowers information.

According to TechCrunch: When you migrate entire databases from Microsoft Access to Zoho creator, you are able to retain your database structure and data while being able to still create a collaborative database app in Zoho. Once imported into Zoho Creator, the entire application or parts of it can be shared with several users.

Matthew says Zoho has been very helpful allowing the intersect fund to review applications online and make decisions faster. Even though the microfinance industry has been slow in adapting with technology, now the microfinance industry is changing.

Jennifer McDonald, Saving Advisor of Women’s World Banking says that the use of technology will allow the microfinance institution to provide services at a lower cost. She said there is a huge potential in using the mobile phones as well. Like everywhere in the world, individuals in poor community may not have access to computer but they usually have access to smart phones. The Intersect Fund has yet to explore the use of mobile phones for its operation.

Nonetheless, it is the use of online applications that has made the work of microfinance easier says Matthew.

Youths like Matthew, empowered by technology, have ambitions that might change the domestic microfinance industry and the stark contrast between haves and have-nots in America.

He says his goal is “To make microfinance as common on college campus as a fraternity.”



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Mar 3, 2012 13:05

Fellow Campus Microfinanciers!

YOU can help send microfinance to the White House!

The White House has recognized the outstanding work of The Social Entrepreneurs of Grinnell (SEG) – a student-directed microfinance nonprofit based in Grinnell, IA – by selecting it as one of 15 finalists in its Campus Champions of Change Challenge. Winning this competition will bring huge exposure to the campus microfinance movement through an event in Washington DC and a spot on MTV’s program “The Dean’s List.”

Please vote by March 3 to send microfinance to the White House at

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