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Helping impoverished small business owners, one microloan at a time

Students led by Dennis Shaughnessy, executive professor of entrepreneurship and innovation in Northeastern’s College of Business Administration, have been changing the lives of impoverished people in South Africa and the Dominican Republic for the last several years.

Just don’t call it charity.

“We go into poor communities and instead of giving charity or aid, we help them improve their lives through entrepreneurship,” Shaughnessy explained. “What we do is different: Instead of telling people how to change their lives, we invest in them.”

This year marks the fifth year that Northeastern’s Social Enterprise Institute, which runs the five-week summer field programs, has been working in South Africa and the fourth in which it has been working in the Dominican Republic. Students from across the university prepare for the experiential learning opportunity with months of rigorous academic work, learning the theoretical basis for microfinance and small-scale entrepreneurship before transitioning into the field.

The Social Enterprise Institute, Shaughnessy said, is committed to building the next generation of business leaders, both here and in developing countries, through real-world programs that connect students to poor people who want an opportunity to change their lives.

“You can talk about theory, but you don’t fully understand the field until you’re there, experiencing it in real life,” said Rebecca Willet, a senior international affairs and anthropology combined major who traveled to the Dominican Republic earlier this summer with Shaughnessy’s program.

In the Dominican Republic, students use a microfinance model to help poor farmers — who in some communities live with an unemployment rate of nearly 100 percent — rise from poverty. In South Africa, the institute pairs with a nonprofit organization and the Tertiary School in Business Administration, a nonprofit business school that helps South Africans who lack access to opportunity. The goal of the students’ work there, Shaughnessy, said, is to help entrepreneurs build their own businesses, with some getting cash grants to help them grow.

Over the summer, 45 Northeastern undergraduates and 35 TSiBA students worked together over an intensive two-week span, providing consulting services to these microentrepreneurs. Students helped the impoverished business owners design websites, develop accounting systems and create business plans.

Entrepreneurs were selected based on their companies’ potential to create desperately needed jobs in their communities.

“In my co-ops at the EU Parliament, the White House and the MacArthur Foundation, I learned about social impact investing and entrepreneurship, but I had never really understood what it meant on the microlevel,” said Laura Mueller-Soppart, a senior economics and political science combined major. “But working on the ground with a microentrepreneurship, you see how this is literally changing lives.”

This July, Mueller-Soppart was paired with a South African widower who had run a boarding house and shuttle service prior to his wife’s death. He struggled to maintain the business after his wife passed away, and Mueller-Soppart helped him restructure his business and create a marketing plan.

“Before we had even left, he had already gained a new yearlong tenant,” Mueller-Soppart said.

The ventures in South Africa were all relatively small, but they have the potential to resonate on a much larger level. One man, for example, developed a system that uses worms to cheaply generate fertilizer in a country where arid terrain makes it otherwise difficult to support agriculture. The continent, moreover, does not have a single fertilizer plant, meaning the supply is usually prohibitively expensive.

Students working in the Dominican Republic also spent a week in Cuba, where they developed creative solutions for aspiring entrepreneurs.

Shaughnessy said the goal of the program is broader than helping individuals escape from poverty. By helping foster new businesses, he believes the Social Enterprise Institute can lift entire communities toward prosperity.

“We see families without food, communities where children die from malnutrition at enormous rates,” he said. “Fostering an entrepreneur can change the life of more than just one person.”