Two years after it was formed in 2010, the General Development Initiative (GenDev) at Washington and Lee University is ready to move to a new stage in its development and is seeking investors and new members.
The organization was founded to create an experiential learning tool that is created, owned and operated primarily by W&L students. As the university's first microfinance club, it provides small loans (microloans) to people in developing countries who don’t have access to credit. "The idea is to create small businesses that also do a lot of good in the world," said junior Kane Thomas, president of GenDev, and a double major in Chinese and international relations, from Shoreline, Wash.
GenDev has been successful to date in making microloans through third-party lenders online, achieving 100 percent return on investment. But the long term goal has always been to make direct investments in projects the club has identified. According to Thomas, the time has now arrived to take that step, beginning with projects the members would like to finance in Ecuador and the Dominican Republic.
Investors receive a low rate of interest on their investment, and GenDev puts all its profits back into other loans. "If you have a high interest rate when you're starting a business it can stifle productivity, and if you're just paying off your debt there's no way you can succeed," said junior Mark Faubion, director of international development for GenDev, and a double major in politics and Spanish with a minor in Latin American and Caribbean studies, from Dallas, Texas.
In addition to investors, GenDev is looking to recruit more W&L students as members, since one of the club's aims is to provide a bridge between W&L's Williams School of Commerce, Economics, and Politics to other majors on campus.
"We have 10 members right now, but two are abroad, and as we expand we're going to need more people on board," said sophomore Daniel Raubolt, executive secretary for GenDev and a business and accounting major from Acworth, Ga. "One of the most important things we are looking for is dedication. We're trying a lot of new ventures and new ideas, so we want people who are going to stick with it, and who are leaders and go-getters."
The club members stressed that although they are interested in all majors, they are particularly looking for people with any experience in microfinance or who have connections in developing countries. Students with an interest in gaining experience in grant writing, fund raising or advertising are also highly sought.
Members of the club said they have learned a great deal from their involvement in GenDev, including the challenges of coordinating with people overseas and especially in terms of language and culture. They have all also learned about the concepts of microfinance, such as who is a good target, who they shouldn't lend to, and what the warning signs are. For example, literature and empirical evidence show that women with children are the best recipients of microloans since they are more likely to invest in the overall welfare of the household and to repay loans.
Sophomore Eleanor (Ellie) Bold is GenDev's director of communications and a double major in psychology and journalism and mass communications, from Beachwood, Ohio. The club funded her visit to Ecuador this summer where she found projects suitable for financing, some immediate and some more long term.
Village 235, on the outskirts of the capital Quito, is so named because it was the 235th station for a railroad that used to pass right by the village. The railroad is being rebuilt — it is currently half an hour from the village — and will stretch all the way to the coast. So the village is seeking $1,000 to buy seeds and equipment to grow more pineapples and papayas to transport to market by rail. "The pineapples are delicious," said Bold, who sampled the produce of the village during her visit. "We're looking for investors in this project over the next six months, and we hope to have pineapples and papayas growing within 18 months."
In the long term, the villagers would like to build a coffee-processing plant to produce their own coffee. Although this would be a larger investment, the villagers are confident it would be successful, based on the model of another village 45 miles away that received such funding. "As of right now, our focus remains on microloans, so this would be very far down the road," said club president Thomas. "But we're committed to international development, so we don’t want to limit the scope of our program."
On a more personal scale, Faubion has identified a project in the Dominican Republic where the microloans would go to individuals rather than a village.
A free private school provides the equivalent of a high school education to 30 children who wouldn’t be educated otherwise. However, there are no opportunities for these students to capitalize on their education once they graduate since they have no access to capital. To rectify that, the owner of the school plans to run a contest whereby students develop business plans, for example selling fruit from a street stall. The best three or four business plans would receive microloans of $250 through GenDev.
"I'm excited about it," said Faubion. "It is speculative at this point but everything seems to be going in the right direction, and the loans are small enough."
In addition to international projects, GenDev is working with the International Rescue Committee in Charlottesville, which helps area refugees rebuild their lives. Some women refugees formed a cooperative to make and sell their handiwork such as scarves, bags, mittens and household decorations. Although GenDev is not providing financing for the women, since the cooperative received a grant, members are providing their time.
Haley Miller is the director of domestic development at GenDev, and a senior economics major with a minor in Latin American and Caribbean studies, from Windsor, Colo. She helped design an eight-lesson business literacy course for the women's cooperative, which was conducted through a translator. "We also helped them sell their goods at various craft fairs. and they've reinvested the money they made into buying more looms, yarn and other materials," said Miller. "We'll be working with the cooperative again this year, and we're also looking for other people within the refugee community who may need microloans."
While GenDev functions as a school organization, it is also a corporation recognized by the state of Virginia and is currently seeking non-profit status. Sophomore Bayan Misaghi, GenDev's chief financial officer and a double major in economics and mathematics, from Charleston, W. Va., is leading that effort. He is also a key figure in assessing the risks involved in giving microloans.
"As W&L's first microfinance organization, this is a learning process," said Misaghi. "We're always experimenting and tinkering with ideas. But I think it is important for a group that is moving forward like we are to have little or no fear of failure."