Option 29 described in the curriculum for excellence senior phase post was described simply as: Establish a microfinance investment fund for student application.
I’ve been asked by a number of people to explain what I meant by this and how it might work.
This option has a number of threads but the starting point is founded upon a perceived need to encourage students to actively create social enterprises which will benefit their communities, and in turn,themselves.
The idea is not new and is rooted in the Grameen Bank concept, although with more of a focus upon community benefit and personal/group development, rather than tackling poverty. The scheme should certainly tackle some of the symptoms of poverty within communities.
The concept is based upon the establishment of a microfinance fund using donations from local business people and other sources – councils included. This money would be placed in a trust to which students, or other members of a community, could submit an application for a micro loan which would allow them to establish and develop their social enterprise. The only stipulation – aside from the viability of the plan – would be that the proposal must have a direct benefit to their local community.
An example we have been developing relates to an Elders Buddy Scheme. Let’s say that a student (or students) at the school applies to the fund for an interest free loan to set up the buddy scheme, which will involve families or individuals paying a minimal fee for a young person to spend 5 hours week making an evening home visit to an elderly person. The social entrepreneur/s, would use the loan – to a maximum £1000 – to pay for advertising, information materials, recruitment, training, disclosure fees, and other costs.
The microfinance fund would seek to provide additional support through a business /community mentor and a further network of relevant contacts and fellow social entrepreneurs.
Areas of possible community benefit include; early years and child care; elderly care; youth programmes; disability support; and environment.
Obviously there are numerous working details missing from this description but in order to keep this post brief and to the point I’ll focus upon the benefits to the indviduals and the community they inhabit, and the possible problems.
Here’s a list of possible benefits:
- Young people are introduced to the world of work and enterprise in a real and meaningful manner.
- Communituties would benefit from the services provided.
- Experience in developing and running a social enterprise would be highly regarded on applications for employment or further/higher education.
- Young people develop real experience in financial management.
- It gives meaning to other academic studies as they become contextualised in a world of work and social duty.
- If recognised as part of a young person’s senior phase curriculum it would enhance and deepen that experience.
- It would promote comunity engagement and awareness of young people with/about their community.
- It woukd raise the positive profile of young people in their communities.
- Encourages young people to take the next step into running businesses for themselves.
- Promotes and entrepreneurial spirit in a community/school.
And possible problems:
- Loans are not repaid
- Enterprises collapse as young people leave their communities for further study or employment
- Services to vulnerable groups are not sustained
- Existing services with full time employees are placed at risk due to competition.
- Schools do not recognise the value of the scheme and only allow high achieving students to particpate or do not facilitate time for involvement.
- The scheme does not offer sufficient support in the initial stages
- The bureaucracy of the application process is too off putting and complex.
- Funding is too short term.
- Insufficient number of financial backers.
- Works only in areas of high net worth and not in communites which might really benefit.
Comments and suggestions welcome.
What can social finance learn from microfinance
Peer to peer microfinance for young people