Innovator details plan to fix poverty

from the Duke Chronicle

By: Naureen Khan

Stressed that you bombed your midterms?

Nothing to worry about, said John Hatch, the so-called "father of village banking," who spoke at the Fuqua School of Business Thursday evening regarding his path as a social entrepreneur and the role of students in the worldwide microfinancing movement.

Hatch, the creator of the Foundation for International Community Assistance-a nonprofit organization often referred to as the "World Bank for the Poor"-said he took an unconventional path to discovering his calling.

An alumnus of Johns Hopkins University, Hatch said he graduated with the lowest passable grade point average in the history of the school.

"You've got plenty of time to get yourself out of the free fall," he said. "And a marketable degree isn't necessarily what you need in this field."

Eventually, Hatch became one of the original pioneers of microfinancing-a system of extending loans to the poor-and developed a model of microcredit that is now widely replicated by other institutions,

With a bachelor's in history, he served a tour of duty with the Peace Corps following graduation and was later a Fulbright Scholar who worked as a landless laborer in Bolivia.

His first-hand experiences with poverty profoundly affected his outlook on the world and gave him direction, he said.

"I grew to have a profound respect for poor people," Hatch said. "We think what they do and how they live is primitive... but they are geniuses as survivors."

Before founding FINCA, Hatch worked as a consultant with various developing governments and documented dozens of foreign assistance failures that hurt rather than help their intended beneficiaries.

"I've given up on government as the only institution that's supposed to take care of [poverty]," Hatch said. "They've bungled it, and we simply can't trust them."

Frustrated with how government allocated resources to the poor, Hatch was struck with divine inspiration on a flight to Bolivia.

"I was on my second bourbon when God decided to throw at me, or maybe into my glass, the greatest idea: Why not let the poor be their own bankers?"

His address emphasized the successes already achieved by microfinancing ventures.

Over the last 15 years, 100 million of the world's lowest-income families-classified as those who makes less than $1 a day-have pulled themselves out of severe poverty thanks to microcredit opportunities, Hatch said.

Given its current growth rate, the world's microcredit movement has the potential to cut global poverty in half by 2015 and end it by 2025, he added.

There are, however, an estimated 100 million households that still do not have access to such opportunities.

Hatch stressed the responsibility of this generation to take the initiative to end world poverty.

"I like to call it the 'youth tsunami,'" Hatch said. "You are the generation that 20 to 25 years from now will occupy all the positions of power in this country. It will be you who are the ones who must ensure that humanity finally solves this millenium-old problem of [poverty]."