Clarion University faculty members, Dr. Gustavo Barboza, associate professor of administrative science, and Dr. Sandra Trejos, professor of economics, recently published an article, entitled:  "Micro Credit in Chiapas, México:  Poverty Reduction Through Group Lending," in the Journal of Business Ethics, December 2009.

            In their abstract, Barboza and Trejos note that Micro Credit (MC) programs lend money to poor borrowers using innovative mechanisms such as group lending under joint liability while successfully accounting for the presence of asymmetric information in underdeveloped financial markets. MC programs have achieved what the conventional financial institutions and the government have not been able to:  lend to the poor, impressive loan recuperation, and a positive impact in poverty reduction.

            The authors analyze the performance of ALSOL, an MC program in Chiapas, México, for 2,151 participants in urban and rural areas for the time period between July 2000 and July 2001. They found that while loan recuperation is high (95%), administrative costs also remain high.  Socially responsible lenders and donors play a key role in providing continuous funding to MC programs and assisting in reducing the level of poverty.
            The Journal of Business Ethics is one of the 40 journals used by the Financial Times in compiling the prestigious Business School research rank.
            Clarion University is the high-achieving, nationally recognized, comprehensive university that delivers a personal and challenging academic experience.