University of Maine business and economics student Rachel Hathaway, who spent a summer internship in 2009 helping impoverished people in Bangladesh access small business loans,will return to the country to continue her work after graduation in May as an MBA student and Fulbright Scholar.
The Millinocket native will spend three months this summer in intensive study in Bangladesh for her thesis. In February 2012, she’ll return under the Fulbright Program to continue microfinance research with the Grameen Bank and BRAC microfinance institution in Bangladesh, and working to help street children and orphans in the city of Dhaka in Bangladesh for a year and a half.
Hathaway studies the phenomenon of entrepreneurial micro-loans from microfinance institutions as a way to extend business opportunities to millions of people who lack access to traditional financial markets, “thus allowing them to rise above the cycle of abject poverty,” she says.
Microfinance institutions are providing a new business structure, which takes the standard for-profit model and marries it with agendas for societal betterment according to Hathaway. Micro-loans are empowerment tools that help poor people start small businesses, operating on the assumption that lack of opportunity is the main barrier to creating a better and solvent life, she says.
In Bangladesh, where nearly half of the population of 160 million lives in poverty, microfinance institutions, specifically the Grameen Trust bank, have provided microloans to more than 8.3 million people, the vast majority of them women. The bank was started in the country by Muhammad Yunus, considered the founder of the microfinance movement. Yunus is a 2006 Nobel Peace Prize winner and in 2009 received the United States Presidential Medal of Freedom.
Hathaway’s academic research will include an in-depth study of three established microfinance institutions, Grameen, BRAC and ASA, to see what underlying drivers are most successful in terms of borrower outreach. Then , through the use of qualitative analysis and econometric modeling, she aims to create a MFI hybrid model that incorporates the best mix of financial and social intermediation principles.
During her first visit to Dhaka, the ninth largest city in the world with 12 million residents, Hathaway and a companion provided food, education and doctor visits for impoverished children living in the slums and on the streets. In continuation of these efforts, she has founded a non-profit consulting firm, Seeds of Change, with a mission of social change though education, empowerment and economic development.
“Our aim is to extend opportunities to at-risk street children and women in the developing world so that they might overcome the barriers created by poverty and oppression,” says Hathaway, who learned this month about her Fulbright scholarship.
Written by George Manlove
Image Description: Racehl Hathaway