In 2007 Justin Ang, now a student
at the University of Pennsylvania in Philadelphia, was part of a group in
Singapore called Youth that Care that raised $20,000 to help people in
Tsunami-afflicted fishing villages in Thailand pay off a debt burden to loan
sharks so they could be free to build up small businesses.
Now Justin is the director of a
group of ten University of Pennsylvania students who will help a Chinese NGO
launch a microcredit initiative in a poverty-stricken area in the Daba
mountains of Sichuan province.
University of Pennsylvania Microfinance China Team
The students, most of them studying
at the prestigious Wharton School of Business, are members of a 700-strong
Microfinance Club at the University of Pennsylvania. For the past five years
the club has mounted an annual microfinance conference that draws students and
professionals from all over the U.S.
Under the auspices of the club,
some students have banded together to form units that have been supporting
microcredit in Africa, Latin America and Indonesia as well as China. New groups
are poised to work in India and Bangladesh. During the school year, the
students are in touch with key microfinance organizations, and in the summers
they travel to the countries to gain international experience and to provide
the groups with accounting, business and technological expertise.
These young people are part of an
exciting movement of university students across North America who are using
their expertise to help the less advantaged and to promote social
entrepreneurship at home and abroad. In Canada, a number of university
students, for example, have gone to the Middle East, Asia and Africa to
volunteer, thanks to fellowships funded through the Aga Khan Foundation.
I met members of the University of
Pennsylvania’s Microfinance China Team at the club’s April microfinance
conference where I was invited to speak about my book Saris on Scooters - How Microcredit is Changing Village India. The topic was Microfinance Plus
– meaning the beneficial spin-offs that come about because of microcredit.
Some of the students in the China
initiative are foreign students that have come to the university straight from
China, or in the case of Justin, from Singapore, but others are Americans of
Chinese heritage. All of them speak Mandarin. The one Canadian, born in Hamilton,
Ontario, but of east Indian background, speaks not only English and French but
also Gujarati and Mandarin, which he has been studying through university
In May, as an observer, I
accompanied the China Team on a stimulating 11-day visit to the Bazhong City
region in the Daba mountains of Tongjiang county in Sichuan. In three key villages, the Daba
Mountain Research Society for Ecology and Poverty Reduction has been working on
ecological issues, promoting local culture and supporting economic empowerment.
The organization’s leader is
Haoliang Zhang who used his own money in 2004 to launch the NGO after working
for a government-run microcredit program. With financial help from the China
Team, he is preparing to start a microfinance project in the region to
encourage small businesses and small farmers to expand.
The coordinator for the China trip
was Amy Liu, an impressive 19-year-old business student born in the U.S. of
Chinese parents who made sure she learned Mandarin. To sharpen her
understanding of contemporary China, next semester she will be taking business
courses in Beijing.
China Team trip director Amy Liu outlines support for a microcredit project to NGO leader Haoliang Zhang
Throughout the 2010/2011 academic
year the students in the team were in touch with the Daba NGO regarding
microfinance best practices. In May in Luojiang, a satellite
town of Bazhong City, the students gave employees at the organization tips on accounting and business practices and discussed the question of interest
So that we could learn about needs
in the targeted Daba area, which is primarily agricultural, Amy also made sure
we visited some mountain villages where the NGO will be offering microcredit. In Huaxi, a community leader
described how villagers had joined together with help from the Daba NGO to
build a reservoir that brings much-needed water to villages. “Microcredit loans, he said, “could
help producer groups of farmers work together to dry fruits and vegetables as
well as smoke meat for export outside our area.”
In Zouma village, a farmer who said
that many farmers currently grew rice and vegetables just for their families,
pointed out that land could be farmed more intensively so that the surplus
could be sold at markets beyond the villages. “To do that we’d need more labour
on the land,” he said. He lamented that increasing numbers of young farm
labourers eager for higher wages have become migrant workers in the cities, now
an estimated at 132 million across China. “We have another problem,” he said,
“The road out of the village would have to be repaired so that produce could be
We ourselves witnessed the state of
the road when the minivan that brought us from Luojiang to the village got
stuck in the mud and we had to get out to push. He added that villagers would have
to contribute about 100,000 yuan (about $15,000 U.S.) in order to obtain a
matching government amount to repair a road that is only one step up from a
muddy cow path. And the small farmers in the area don’t have that kind of
money. About 80 households, he said, use the road and could benefit.
The students tossed around how they
might find loan money to build the road with repayment from profits from the
businesses that would benefit, but eventually this idea was abandoned. “We have
to promote things that are feasible,” said Justin.
We also heard from a self-help
group called Huaxi Women’s Health and Ecology Promotion Group that have formed
a drum, song and dance troupe. The group, which performed for us, charges small
fees for presentations but cannot charge enough to become a viable commercial
“If we had money for microcredit,”
said the women, “we’d like to start a kindergarten and an old people’s
Women want microcredit loans to start a kindergarten and old people's home
Articles in a May 19 issue of the
official China Daily describe how the exodus of people leaving villages to
work in city factories have left small children and old people without the
extended family network that used to take care of them.
A well-known demographer at a
university in China estimated that eight million youngsters under the age of 18
out of a total of 74 million “left-behind” children live alone in the
We saw evidence of the needs of
youth in the Daba area when we visited two schools that had invited the
Pennsylvania students to speak to some grade seven classes on the subject of
health awareness and interest rates. I spoke on my experience in India
researching and writing about women taking small microcredit loans.
In the first school, with 1640
students studying up to Grade 9, 600 were boarders because so many of their
parents had left the area to work.
In another article in the same
issue of the China Daily, the director of an institute of gerontology in China
said that by 2013 senior citizens will top 200 million and that more nursing
homes will be required.
The Chinese women also talked about
what they could do if they had their own warehouse. “We would fill it with
cheap rice and noodles as well as clothing and household goods and sell them,”
said one woman who already runs a small variety-goods business.
The enthusiasm and focus of these
women reminded me of women I met in India from very modest backgrounds who
started out by taking small loans to buy an animal or start a tea-stall.
Over time, by creating cooperatives out of their small self-help groups, they
were able to start a full-fledged dairy (with them as shareholders) and an
embroidery company selling to high-end India.
Mr. Zhang was sensitive to the
women’s ideas, but said that a kindergarten and old people’s home would require
more money than a start-up microfinance program could offer. “I would like to begin by
supporting businesses that are already running, including farmers who want to
expand their produce, and then build from there,” he said.
Microcredit, which could do a lot
to expand business opportunities in rural China, took off after 1993 when
Professor Du Xiaoshan, called the father of Chinese microcredit, ran a
“research action” experiment using the Grameen model, with funding from the Ford
foundation and other international sources. Later the government initiated
programs, and about ten years ago, rural credit cooperatives and rural banks
began offering small loans along with the Postal Savings bank of China.
Commercialization has proliferated
with the arrival of financial conglomerates that have set up regional branches
in rural China. However, NGOs, many supported with
money from international sources, have had a good track record.
Mr. Zhang would like to eventually
operate a microcredit fund of between 200,000 and 500,000 yuan (up to about
According to Justin, “the China
Team foresees a partnership with the Daba NGO extending over the next five to
“In our final discussions with
Daba,” he said, “we arrived at a plan to launch a three-year pilot fund with
targeted 90-95% repayment of all loans by year three once the appropriate
funds, estimated at 100,000 RMB or U.S. $15,000, have been raised.”
The goal of the China Team is to
make sure the Daba NGO establishes a sustainable microfinance framework. Now,
however, the challenge faced by the students is to find that $15,000 seed
Justin and his group of friends
were able to raise even more than that in Singapore. With the resourcefulness I
saw during the trip among the members of the China Team who care about China
and want to spur development, I am sure Mr. Zhang will not be disappointed.
Author Sheila McLeod Arnopoulos
Sheila McLeod Arnopoulos, co-winner of a Governor-General's Literary Award in French for Le Fait Anglais au Quebec, is the author of four books, including a novel. Her latest book, Saris on Scooters -- How Microcredit is Changing Village India, published in English and French, was a finalist for the National Business Book Award. In May she visited an NGO in China with a group of University of Pennsylvania students who are promoting microcredit in China.
Photograph of Sheila McLeod Arnopoulos by Toby Gilsig; other photos by Sheila McLeod Arnopoulos.