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Guest Post: Glory and Riches? Unraveling Microfinance’s Allure among Young Job-Seekers

Lauren_WitheyGuest blogger Lauren Withey is a research assistant for the World Resources Report at the World Resources Institute, in Washington D.C.

By Lauren Withey

It used to be that most U.S. college graduates, perhaps after spending a few years testing their penchants for various occupations or getting a second degree, would expect to settle into a consistent office job for the rest of their working lives. Attending a Microfinance Research Symposium at Georgetown University last week reminded me why such a smooth career path has become increasingly the exception rather than the rule among young job seekers today.

The Symposium was organized by FINCA International, a non-profit microfinance institution founded in 1984. Its first project was to create a group lending system – a “Village Bank” – in Bolivia. The success of this enterprise led to the growth of an extensive franchise network of these village banks, which now spans 21 countries, and serves over 700,000 clients.

The NGO’s annual Research Symposium consists of presentations by the winners of a call for papers. The papers use FINCA’s extensive client data, which is collected around the world each summer by Fellows, to advance the microfinance research agenda.

The presentations were well constructed and each addressed an important question within the growing body of microfinance literature: Can microfinance spur job growth? Are women more likely than men to spend their loans productively? Does microfinance really raise incomes of its clients over time?

But the most fascinating part of the afternoon was the overwhelming sense one developed from listening and looking around the room that microfinance is infinitely hip among do-gooder, high-achieving, globally-conscious youth today. Two of the winning presenters had been interns for FINCA. These interns, all accomplished, multi-lingual graduate students, work 40 hours a week, unpaid during while attending school.The researchers were not the only bright and motivated youth involved in the presentations – their counterparts who had done the initial data collection are also top graduate students from elite universities. These field researchers compete vigorously each year to spend a summer without pay giving a standard survey to FINCA’s clients in an assigned country.

What is it about microfinance that inspires thesis-writing graduate students to work forty hours a week without pay?

“We all want the high paying, glorious job, with the ever-sought-after ?field evaluation trips,’” quipped Susan Blake, Director of Human Resources for MicroVest Capital Management, LLC. MicroVest is one of about a dozen major “Microfinance Investment Vehicles” that serve to connect the growing field of private foreign investors with borrowers in the developing world. Such investors seek the holy grail of a double-bottom line – 99% payback rates on investments that are considered uncorrelated with capital markets, while reducing poverty at the same time.

But is Blake right? Is it a high paying, glorious job that brings all these focused, accomplished young professionals and students to such a symposium?

Not exactly. If bringing in six figures in the first years of their careers and rubbing elbows with microfinance advocates like Natalie Portman were the primary goals of these students, most would probably not think of microfinance as their ideal career. But among today’s 20-somethings, who will change jobs more often than any previous generation, it cannot be denied that there are some nice potential perks within this field. Among them?

  1. helping resolve one of the greatest problems humanity currently faces – extreme poverty;
  2. seeing the fruits of one’s labor first-hand and on a regular basis with accompanying feel-good stories;
  3. having the opportunity to work in the varied fields of economics, policy, sociology, and even anthropology;
  4. choosing between comfortable office work in the US or Europe and exciting and inspiring field work abroad;
  5. feeling confident of long-term job security as the field grows.

Indeed, by the middle of 2006, microfinance institutions looked after US $9 billion in loans outstanding and $14 billion in assets, with $1.5 billion of total equity. (see Elisabeth Rhyne and Brian Busch’s 2006 analysis for the Council of Microfinance Equity Funds. And the growth has only continued from there, with Citigroup, Deutsche Bank, Morgan Stanley, and other major financiers now in on the game.

It is a new ideal occupation that many in this restless younger generation seek. They want variety. They want to see the world. They want to feel like they are really helping someone. They want a decent salary, but striking it rich isn’t the first priority – at least at this point in their lives. There are still plenty of traditional professionals coming out of elite institutions – applying to law school and med school is as competitive as ever. But even while there is rapid evolution in microfinance that creates much uncertainty about its future, for those who value its alternative benefits, it is an enticing job option – and one that gives its employees long-term career flexibility.

Having a little money to start may help to launch one’s microfinance career amongst this top-notch field – especially in order to stay fed and housed during the unpaid internships or while volunteering abroad in an effort to develop that required second language skill, or while working toward an MBA, public policy, or international development masters degree.

But these aspiring microfinance authorities needn’t worry too much – if the latest trends in the field are any indication, there are funds out there for those willing to be a bit creative, work hard, adhere to their commitments, and reinvest wisely – regardless of their initial assets.