Microfinance: A Ladder Out of Poverty

July 28, 2014—Growing up in the small Oregon town of Cornelius wasn’t easy for Juan Gonzalez (C’15). His mother was often unemployed. His father worked as a landscaper and barely made ends meet.

“Much of my childhood was spent helping my father and watching him struggle with his small business,” Gonzalez said.

So when it came time to pick a college, Gonzalez wanted to get as far away from Cornelius as possible. Washington, DC, seemed distant enough. But going far away ultimately brought Gonzalez back to the issues he struggled with as a child.

“At Georgetown, I realized I was passionate about poverty and wage issues because of the experiences I had growing up,” he said.

During his time at Georgetown, the economics and government double major felt inspired to tackle these big problems. That’s how in the spring semester of 2014 he ended up in Pune, India—7,000 miles from his Oregon home.

“I wanted to experience something completely different, and India was definitely different,” Gonzalez said.

At a population of just over eight million, Pune, in the Maharashtra state, is the seventh largest city in India. It’s known as an educational hub and as such attracts students from all over the world.

While studying abroad, Gonzalez got to roll up his sleeves and work at an internship at the microfinance company Parvati Swayamrojgar (PSW). The company provides people in urban slums access to credit to pursue small business opportunities.

One common start-up, Gonzalez explained, was a food stand for which people needed capital to buy things like pots and pans and raw ingredients. They could also access credit for things like home renovation and education.

Through his internship, Gonzalez got a window into the lives of the most needy in Pune. Part of his job was to visit the slums and talk with people about what kind of capital they needed. He said the experience was life changing.

He interviewed 25 people about their lives and found that despite their crushing poverty, their generosity was often overwhelming. Inevitably in every home he went into Gonzalez was offered food, water, and sweets.

“Visiting these people’s homes was a humbling experience. You saw that for them, life wasn’t all about iPhone 5s and the latest technology,” he said. “I thought I grew up in poverty, but I saw real poverty there and it inspired me to do something about it.”

Not only did Gonzalez see real poverty in these slums, but he also saw what could happen when people are given an opportunity to succeed. Most of the people he worked through PSW had perfect credit scores. And accessing credit was the first rung on the ladder out of poverty.

“I was always amazed to see that people in extreme poverty will work extremely hard for opportunities,” he said. “The money that came from microfinancing wasn’t a handout, which is why it’s so great.”

Interning in India and seeing the issues people face from the ground level inspired Gonzalez to stay on the path of economic justice. When he returned from India, he began an internship with Mercy Corps, an international development organization based in Washington.

As an intern with their policy and advocacy team, Gonzalez is grateful for the grassroots work he did in Pune.

“Working in the field has made this a whole lot more fruitful,” he said.

 —Lauren Ober