Seven things you should know about Michael Schlein
Michael Schlein is chief executive of Boston-based Accion, one of the largest microfinance organizations in the world, offering small loans to impoverished people to help them get an education, or start or expand a business. An MIT graduate and former investment banker, he has helped the nonprofit expand to its current size, operating 63 microfinance institutions in 32 countries. He spoke with reporter Megan Woolhouse about Accion’s most recent efforts, the risks of microlending, and his current role as a financial market evangelist.
1Accion recently has expanded, offering a broader array of financial products, from savings accounts to insurance plans in places that are often politically unstable, lack a banking culture, or rely on money lenders who charge steep interest rates.
“We want to build markets and private enterprise. We’re taking risks no one else would take. Some are successful, and generate a return.”
2Schlein said he met a woman living in Brazil who spent half her day traveling to a market to buy material to make a dress to sell, but with a $3oo loan through Accion was able to buy enough material to last two weeks. That allowed her to sell material to other women, dedicate more time to her business, and generate more income.
“We take for granted ATMs or mortgages to buy a home, but all of those things are unavailable to about 2.5 billion people. The lives of the poor are much harder in part because they lack these financial tools.”
3Schlein lives in Brooklyn Heights in New York and commutes to Boston, when he’s not traveling. He has visited 79 countries, including most recently Myanmar, formerly Burma. As much as 90 percent of the country’s 61 million people lack access to financial services, and about 60 to 70 percent of people do not have access to electricity.
“It’s been cut out of the world’s development for 50 years and is now just opening up. They’re going through absolutely thrilling but daunting political changes. You have a sense of enormous opportunity, but there’s a caution, a fear.”
4About one-third of Accion’s $37 million annual budget comes from donations; the rest comes from consulting fees and the interest it charges. Schlein said about 97 percent of Accion’s microloans are repaid in full, although there are pockets of instability in some countries where repayment rates sometimes fall lower. He said the nonprofit also has an educational component that teaches borrowers about the risks associated with buying on credit.
“We’ve seen over-indebtedness in the developed world. There’s no question credit is a powerful tool.”
5Accion has worked in Latin America, Africa, India, China, the Philippines, and elsewhere. Schlein said attitudes toward banking vary greatly from culture to culture.
“In Latin America, it’s a much more credit-oriented culture and we are actively introducing savings in those markets. Africa is far more savings-oriented, so we develop savings and introduce credit.”
6Donations to Accion did not slow during the recession, or when the US credit market crashed in 2007.
“People who are interested in philanthropy and supporting international development continue to be interested in exactly that.”
7Schlein, 53, said he worked for CitiGroup bank in New York managing a group of 100 “chief country officers” for the bank before taking a job at Accion.
“I’ve spent my whole life preparing for this job.”