Making the Grade

March 22, 2011

March Madness is a phenomenon that grips the attention of sports enthusiasts throughout the U.S. from early March until early April, while the rest of us suffer through television reruns.

At Penn State University, however, there's a new form of "madness" that has nothing to do with college basketball and plenty in common with microfinance. The university yesterday announced a Microfinance Madness challenge program to bolster what is believed to be the first-of-its-kind assistance fund that offers microloans to help students through temporary financial hardships.

The challenge - announced just days after Penn State was eliminated from the NCAA Basketball (March Madness) finals - offers a two-to-one match for contributions to the revolving credit fund. All donations for amounts up to $100,000 are being matched by a 1973 Penn State alum, Tom Sharbaugh and his wife, Kristen Hayes.

Sharbaugh, a Philadelphia attorney and the idea man behind the university's microcredit student loan program, is hopeful the match campaign will boost recognition for this innovative microcredit program among an estimated 165,000 dues-paying members of the Penn State Alumni Association.

"Donors are seeing the power of grassroots giving and the recipients - who will pay back the loans in full at below-market rates - can use the $1,500 to $2,000 to overcome unexpected hardships, stay in school and receive their diplomas," he said.

"Like so many others, we associated microfinance with developing countries," added Hayes, "and those successes abroad inspired us to apply the same principles here in the U.S. for Penn Staters."

More than 800 million adults with bank accounts live on less than $5 a day

_{-Financial Access Initiative}