What is microfinance?
“Microfinance offers poor people access to basic financial services
such as loans, savings, money transfer services and microinsurance”
(CGAP). Microfinance involves lending small amounts of money
to people who do not have the necessary collateral to borrow funds
from traditional financial institutions.
What are the effects of
Microfinance helps to meet basic needs while protecting against
risks that poor households may face. Also, the majority of
borrowers are women so microfinance supports the economic
participation of women and promotes both gender equality and
What does GLOBE stand for?
GLOBE stands for GLOBAL LOAN OPPORTUNITIES FOR BUDDING
When was GLOBE founded?
The proposal for GLOBE was submitted in 2007 and after 18 months of
hard work and partnerships developed with 10 Daughters of Charity
in eight different countries: Bolivia, Ghana, Kenya, Madagascar,
Mozambique, Nigeria, Thailand, and teh Democratic Republic of the
Congo, the program and associated course were officially launched
in Spring 2009, with the first loans provided in late Fall
Who runs the GLOBE program?
GLOBE is a student-managed micro-loan program that engages students
in international microfinance while fulfilling the St. John’s
mission of helping the poor to help themselves. Participating
students work with The Daughters of Charity as program field
partners to supply, distribute, and collect funds in eight
developing countries. GLOBE is governed by a Steering
Committee chaired by the faculty instructor for the course (who
also serves as the Program Director) and including members from
across the University as well as advisors to the Tobin College of
Business and a student representative.
How do The Daughters of Charity work along
with participating students?
The Daughters of Charity assist borrower candidates to complete the
initial applications and then forward them along with their
recommendations and comments to students and the GLOBE Steering
Committee for vetting. Final loan approval and loan terms are
made by the students with the approval of the Steering
Committee. Once approved, the loan funds are wired to the
field where the Daughters communicate with and distribute funds to
approved candidates and subsequently collect loan repayments.
Do the borrowers have to have a concrete business plan before GLOBE
lends them money?
All GLOBE applicants must include on the loan application a
description of the business purpose for which the loan is to be
used, and for what the money lent will be spent. They also
indicate whether the business is a new venture or an existing
business that needs funds for expansion.
What interest rate does GLOBE charge
Loans are technically “interest-free”, however GLOBE charges a 5%
flat rate fee on all loans to help the borrower assume some of the
responsibilities that are incumbent on any borrower in a
microfinance context, albeit a very small fee in the case of GLOBE.
These Loan fees, at 5%, compare very favorably with other
microfinance programs charging interest of anywhere between 18% and
35%, and sometimes more. Having a 5% “interest” fee allows
for the education of both our students and borrowers, in addition
to providing a cushion against defaults.
How much money does GLOBE typically lend
to a borrower?
Most potential borrowers request a loan of anywhere between $60 and
$500, depending on the nature of the business being funded.
In the developing world, a small amount of money can go a long way
to ease an entire family out of poverty.
Why does GLOBE focus on the developing world?
The GLOBE program is aimed at the needs of the poor in the most
under-resourced areas of the world. Academically, the program
seeks to educate students about international issues related to
microfinance, and serves to meet the global education vision of the
University and the Tobin College of Business. While students
learn, in the context of the course, about micro-loan programs in
the U.S. including those operating right here in New York City,
GLOBE’s resources do not permit including U.S. loans in its
portfolio at this time given the larger amounts of money needed to
fund start-ups in the developed world.
How can I make a financial contribution to GLOBE?
Use the online
giving page to make your gift. On the Designation
category, select Tobin College of Business Global Microloan
Program. Any questions please email email@example.com.
How much of my donation goes directly to
At least 95 cents of every donated dollar goes directly to our
borrowers and related student fieldwork.
I am a student at St. John’s University.
How can I be a part of the GLOBE program?
Undergraduate students with a GPA of 3.0 or better and with the
appropriate pre-requisite for the course are invited to
apply. Applications are received by the Program Director and
interviews are scheduled with all candidates for a seat in the
class for the upcoming semester. Classes run every Fall and
Spring semester. Opportunities to expand the program to
include a course at the Graduate level are under
consideration. Further questions may be addressed to the
Program Director at firstname.lastname@example.org.