WBLALC students learn finance by lending money to third-world entrepreneurs

Students learn finance by lending money to global entrepreneurs.
Abby Kirkpatrick, Victor Just, Tim McGraw and WBLALC principal Gretchen Harriman.

Sometimes the real world is the best classroom. Business and technology education instructor Tim McGraw has introduced his students to innovative, hands-on experiences in fundraising, microfinance and real-world economics. McGraw’s pioneering approach to economics education has enlightened learners, benefited local and global small businesses, and drawn recognition from the nonprofit education initiative izzit.org.

An economics project idea hatched in McGraw’s mind last spring when a fellow teacher at White Bear Lake Area Learning Center detailed his participation with Kiva, a nonprofit organization whose mission is to alleviate poverty by connecting people through micro-lending. The concept of microfinancing is to lend small amounts of money to the world’s poorest citizens so they can start successful businesses. McGraw obtained an educational video on the topic from izzit.org called Pennies A Day, which depicts an entire Bangladeshi village escaping poverty by obtaining loans through microfinance. “The video was the perfect kick-start tool for a new economics project concerning global service learning and microfinance,” says McGraw.

McGraw’s plan was to give a lecture on poverty, show the video and then raise money his students could use to initiate actual microfinance loans through Kiva. “I’d already been planning a craft fair at the school,” McGraw says. “We would raise money by renting space to crafters and selling concessions at the craft fair. Last fall, we raised $1,050 after expenses.”

Craft sale funds were deposited with Kiva, and McGraw’s students were tasked with researching potential loan applicants on Kiva’s website; the group acts as the middleman, with organizational contacts in 64 countries. Each student was instructed to choose two people they wished to lend money to in increments of $25. Then students created posters to show each loan applicant’s story. For example, Maria in Honduras might sell apples and would like money to purchase a new apple cart. A poster would include a picture of Maria and a student-written paragraph about why he or she wanted to lend money to Maria. The posters were displayed throughout the building and at the district office.

McGraw was assured that all loan applicants are vetted and 99 percent of loans are paid back. McGraw figured, “If we do lose a little, it didn’t cost us anything out of pocket. And we’re still doing a lot of good for people.”

Initial $25 loans were made to 40 different people. The extra $50 was donated to Kiva. With astonishment in his voice, McGraw says, “We began to be paid back almost immediately. And each time our account reached $25, we would loan that amount to the next person on our list.” McGraw’s four participating economics classes ended up loaning $1,700 to more than 60 people in 32 different countries.

McGraw’s global learning service and microfinance project may be as groundbreaking as microfinance itself. When McGraw asked Kiva what other schools were doing similar projects so he could learn from them, he was told White Bear Lake Alternative Learning Center was the first school to set up a project lending account with Kiva.

The folks at izzit.org also took notice. Each year, izzit.org holds a global teacher of the year competition. McGraw submitted his name and project idea and was named one of five runners-up. “I won a little money, a full educational video library and a jacket,” says McGraw. “It’s kind of cool.” 

In Their Own Words
White Bear Lake Area Learning Center students share their thoughts on Kiva.

“I believe this project is making a huge impact on people all around the world. I’ve learned I can help change the world.” ~Kaitlyn Lerdahl

“I felt good about helping the less fortunate. Even if it’s just one person, this made me feel like I was making a difference.” ~Amanda Carlson

“People deserve to prosper and live fruitful lives. I’ve learned that many people in the world are impoverished and need a helping hand.” ~Brody Schille 

The White Bear Lake Area Learning Center is hosting another craft sale September 28 from 9 a.m. to 3 p.m. Proceeds will continue to fund microfinance projects around the world.