New Club Distributes Microloans

Three students have taken an initiative to start MiddPIG (Middlebury Philanthropic Investment Group), a club focused on integrating microfinance and philanthropy.

MiddPIG president and co-founder, Josh Kruskal ’15.5, wants to add Middlebury to the growing number of colleges and universities with microfinance clubs. Kruskal spent his semester off working for a nonprofit in Washington, D.C and was inspired by “issues pertaining to economic justice and social development.” An international politics and economics major, Kruskal says his goal for the group is to “spread around the wealth of the Middlebury community.”

According to the group’s Facebook page, “MiddPIG (the Middlebury Philanthropic Investment Group) seeks to advance social justice by funding the ambitions of students and entrepreneurs in the developing world.” Kruskal later clarified that the overarching term “social justice” encompasses the group’s more specific endeavor to “increase economic prosperity in regions that don’t have access to things like food, water and healthcare — basic human needs.”

By facilitating and encouraging the distribution of small loans to students as well as entrepreneurs in developing nations, MiddPIG will support disadvantaged students as they pursue degrees, in addition to individuals outside of the Middlebury community looking to kick-start or supplement their businesses. Stephanie Ovitt ’15.5, the club’s secretary and co-founder, commented in an email that “[social justice] is working to provide support for those who have the initiative and drive to improve their lives but otherwise would not be able to.”

Although the club’s acronym includes the designation “Investment Group,” Kruskal is quick to point out MiddPIG’s commitment to “social betterment” as a nonprofit organization, adding, “this isn’t Wall Street.” MiddPIG, not yet established enough to loan directly to individuals overseas, will distribute its temporary loans via two online micro-lending organizations, Kiva and Vittana.

Kiva, a nonprofit founded in October 2005, enables virtually anyone with a credit card to lend money in $25 increments to Kiva-approved borrowers in countries such as Peru and Mali. With over one-million users, Kiva has helped lend more than $400 million to borrowers across the globe, battling poverty by providing individuals with the tools to generate their own income. Kiva loan recipients receive 100 percent of the money provided by lenders, who are part of a vast network of volunteers that facilitate lending, disburse funds and collect repayment.

“Kiva has a 98.98 percent repayment rate so these aren’t risky loans at all,” says Kruskal. “We like that it’s efficient.”

While Kiva supports entrepreneurs in the developing world, Vittana, MiddPIG’s other lending outlet, focuses its resources on empowering individuals through education. Established three years after Kiva, in 2008, Vittana brings student loans to locations where similar funding is unavailable. Rather than directly investing in a start-up business, Vittana encourages economic growth by educating the next generation. Like Kiva, Vittana also allows contributors to lend in $25 increments, ensures that 100 percent of each loan reaches its intended student and has a repayment rate of over 99 percent.

Both Kiva and Vittana allow their lenders to choose the recipients of their loans based on profiles posted on their respective websites that include a student or entrepreneur’s country, requested loan amount and basic information. These profiles will allow Kruskal, Ovitt and Jordan DeBeau ’16 to choose the best candidates for MiddPIG’s loans.

Microfinance institutions like Kiva and Vittana provide an easy and reliable way to lend on a small scale, perfect for a club like MiddPIG, which will start with relatively little funding. DeBeau, MiddPIG’s treasurer and co-founder, emphasized the “micro” aspect of the group’s activities and initiatives. Hoping to receive both the SGA’s approval and $250 in funding, MiddPIG will begin its push for social justice by lending in small “$50 chunks” said DeBeau.

Kruskal also proposes a conservative beginning for the club, saying, “We’ll start small and hopefully grow into something a little more ambitious.”

For the club’s first round of loans, DeBeau plans to send out four, $50 loans, keeping the remaining $50 to “get the club on its feet.”

In regards to the club’s future, MiddPIG’s leaders hope to send out the first batch of loans before the end of the academic year with “a lot more promotion and fundraising” next year, hinted Kruskal. “We’re looking at a lot of cool, exciting initiatives [to raise money]. We want to do concerts,” he adds.

DeBeau added, “Not only does fundraising increase the amount of loans we can send out, but the rate at which we can send them out too.”

As MiddPIG pursues its philanthropic and financial goals, the club will look for more and more support from Middlebury students “We’re very excited about this project, and we hope that the campus gets excited too,” said Kruskal.

The group encourages those interested to contact MiddPIG via Facebook or email at middpig@gmail.com for more information or to get involved.