Center for Social Innovation

Published: April 04, 2009

 

When Stanford Graduate School of Business students Scott Raymond and Katherine Boas returned from a December 2006 service learning experience to Thailand and Cambodia, they brought back more than souvenirs and class credit. What they created volunteering with a program that helps to alleviate poverty in Thailand has now been duplicated at microlending organizations around the world.

 

The trip was to study the interrelated issues of economic development, gender, human trafficking, and HIV/AIDS in Southeast Asia. But it was meeting Thai politician and social entrepreneur Mechai Viravaidya and learning about his organization, Population and Community Development Association (known as PDA), that led to development of a toolkit for microfinance practitioners that eventually will be used in countries around the world.

PDA is a microlender that provides villagers with loans free of the stringent collateral requirements of traditional banks. It also requires loan seekers to participate in a comprehensive education and mentoring program to help grow their businesses into profitable enterprises. Viravaidya calls it the “Barefoot MBA.”

PDA’s Director of Corporate Social Responsibility, Tatanat Puttasuwan, describes the four-step program: “Step one the entrepreneurs are taught in a classroom style about business fundamentals. The second step is to show the illustration of how businesses are conducted or production processes established. We bring in peer barefoot business people to provide instruction to a new group. Step three would be for the group to get out and observe a business with their coach or mentor. And the fourth step is to take out a loan from the village development bank or the microcredit fund that we or the donors provided at a low interest rate, and then go out and build the business.”

Viravaidya told Raymond and Boas that he could use help strengthening PDA’s classroom curriculum. Back at Stanford they teamed up with their faculty adviser, business school lecturer Rick Aubry, to develop lesson plans for the Thai entrepreneurs at PDA.

Raymond says the curriculum uses story-telling to get the point across about making best choices based on business needs. “[One] story has two business people in the same situation. Person A does whatever the local status quo is, and Person B, in the same situation in the same business, does one thing differently. Person B does that different thing because he knows something; he understands the lesson.” The teacher guides a discussion about the two approaches and how the students can relate to it and make their business more like the second person. “The lesson is to make better business decisions and ultimately achieve better business and personal outcomes,” Raymond says.

One story used is that of Kulap and Tola, who each have a profit of 1,000 baht from selling rice. Kulap spends her money on a new mobile phone. She already has a phone but likes the new one because it has new colors and features. Tola spends hers on a used bicycle that can take her goods to market and her sick daughter to the hospital. The discussion asks the questions: “Who is spending wisely and who is not? What do you buy with your profits? And, what would you do differently now?"

PDA’s Puttasuwan says the curriculum was tested and piloted in several villages and then rolled out in northeastern Thailand. “Right now we are conducting full-scale Barefoot MBA programs starting with step one, which was contributed by the Stanford students.”

With the positive responses they received, Raymond and Boas started to think big. Inspired by their studies and activities with the Center for Social Innovation, they decided to develop the Barefoot MBA curriculum as a toolkit that could be distributed quickly and efficiently to other microfinance organizations.

They presented their work for PDA’s Barefoot MBA Program at the Schwab Foundation for Social Entrepreneurship’s annual Social Enterprise Summit in January 2008. As a result, several organizations focused on alleviating poverty through microfinance expressed interest in adapting it. The curriculum has been used in Guatemala and in Uganda. Nonprofits in India, the Philippines, New York and the San Francisco Bay Area have made inquiries as well.

 

Raymond and Boas both graduated from Stanford Graduate School of Business in 2007 and hold full-time jobs in the corporate sector. The seeds they planted during their MBA years, inspired by PDA’s work and the programs of the Center for Social Innovation, have reaped great rewards for entrepreneurs who want to learn business skills in a timely and relevant manner.

Related Stuff

Service Learning Initiative

Enhancing Business Education for Rural Entrepreneurs

Barefoot MBA curriculum

Interview with Mechai Viravaidya

- Sheela Sethuraman

• Microfinance