Although many of the biggest banks have cut back on lending money recently, Acumen Fund is still lending not only to people who have poor credit, but also to those with no credit at all.
Jacqueline Novogratz, founder and chief executive officer of Acumen Fund and author of "The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World," spoke Tuesday night in Geneen Auditorium at the Fuqua School of Business to a crowd of about 100.
Novogratz was presented with the 2009 Center for the Advancement of Social Entrepreneurship's Leadership in Social Entrepreneurship Award following her presentation on Acumen Fund's mission of making loans to people and communities in the developing world. Past recipients of the CASE Award include Muhammad Yunus, founder of Grameen Bank, and Wendy Kopp, founder and president of Teach for America.
"Traditional charity and aid alone will not solve the problems of poverty," Novogratz said. "We create systems of dependence. The markets alone will also not solve the problems of poverty."
Novogratz said she founded Acumen because she believed there must be another way to bring poor people the goods they need in a sustainable fashion.
After earning her MBA from Stanford University, Novogratz said she pursued a typical career in banking with Chase Manhattan Bank. A few years into her career, she had an idea that eventually led to the founding of Acumen, but Novogratz was rejected when she first proposed the idea to her superior.
Novogratz founded Acumen Fund in April 2001 to help bring basic goods and services to some of the world's poorest people. Acumen operates with a purse of about $40 million to provide for the basic needs of some of the most impoverished people in the world. It funds loans to people and communities, allowing them to work their own way out of poverty.
Many years and many meetings later, Novogratz's Acumen is operating in South Africa, East Africa, India and Pakistan and making loans that are changing lives. Its main focus is to lend in the housing, health and water sectors.
"We wanted to figure out how to get public services using private innovation to the poor in a way that will change their lives," Novogratz said.
Acumen uses what Novogratz describes as "patient capital" to "bridge philanthropy and the markets." In this way, Acumen raises philanthropic capital to invest in and lend to non-profit and for-profit companies.
Novogratz's speech was highlighted by Acumen success stories-stories such as its investment in A to Z Textile Mills, a manufacturing firm in Tanzania. Acumen partnered A to Z with Sumitomo Chemical, a Japanese firm that had developed a revolutionary new mosquito net to protect against malaria. Novogratz said Acumen's vision was to bring this technology from Japan to the parts of the world that needs it most-Africa.
Acumen identified the entrepreneurs at A to Z as best suited to carry out a large-scale manufacturing operation and made an initial investment. Almost seven years later, A to Z produces 20 million nets a year at a factory that employs hundreds of women and men, adding substantially to the local economy.
But Novogratz noted that increasing income was not the most important aspect of Acumen's work. She said some loan recipients still stay in "poverty" for some time after receiving their loan, yet they are still happy.
"Dignity is more important to the human spirit than wealth," Novogratz said.
Novogratz closed her speech with a statement of encouragement to the business students in attendance. She said changing the world is possible if a person pursues his or her own goals.
"I dream of a world where every human being has access to basic goods and services," she said.
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