Three Questions With Shannon Mudd
Visiting Assistant Professor of Economics Shannon Mudd has helped launch a new program at Haverford called the Microfinance and Impact Investing Initiative. Dubbed MI3, the program enables Mudd to bring speakers to campus and support student research and consulting. In the spring, for example, MI3 funded nine students to work on a project with Agora Partnerships (co-founded by Ben Powell '93) that analyzed the operations of several Central American firms to help them devise useful social impact measurements. The work was incorporated into briefs provided to potential investors and was later presented at a conference. MI3 also supported Mudd and student Yolanda Shao BMC '13 on a project for the organization Bankers without Borders that assessed a microfinance institution in West Bengal, India.
What inspired the creation of MI3?
Shannon Mudd: It was inspired by two alumnae who wanted to provide students with experiential learning opportunities that melded Haverford's ethos of service with its curriculum on market economics, business and finance. The focus is to explore how our understanding of firms and individual behavior can help us harness the discipline and resources of the market to solve critical social problems.
How does MI3 connect with the economics curriculum?
SM: Understanding how people respond to incentives, thinking through what markets may be missing, designing effective policies, assessing costs and benefits, and determining impacts are all areas in which economics can inform and guide the efforts of policy makers and social entrepreneurs. For example, microfinance, at its simplest level, provides a tiny loan to a person in poverty. It is an investment in the borrower and gives them the chance to use the money productively in a way that will allow them to repay the loan. The initial innovations of such microcredit organizations were the alternative mechanisms they developed to deal with the basic problems of assessing potential borrowers, monitoring them and ensuring they pay. The industry has recently generated a lot of controversy and uncovering its full impacts is a major goal of a number of prominent economists.
What's next for MI3?
SM: MI3 is working with Haverford's student-run Microfinance Consulting Club on a couple of initiatives, including a project to assess whether mapping technologies can help us understand what factors determine where microfinance institutions choose to locate branches. Our initial work on Uganda has been made public at hav.to/mapmicro and was recently featured on a blog at Accion's Center for Financial Inclusion. I am also very excited to be taking a group of ten students to Bangladesh in January to study the operations of microfinance on the ground. This project is jointly sponsored with the Center for Peace and Global Citizenship and Bryn Mawr College. MI3 is also working to launch a student-managed impact investing fund. It is still very nascent, but the components are starting to come together, and it could prove to be a fabulous experiential learning opportunity and get students involved in an exciting new industry.