When we think of building a clean future, the tools that come to mind are technologies like wind turbines, solar panels, electric vehicles, and heat pumps. And all of these are essential, to be sure. But there is a tool […]
Click here to download a PDF of my complete thesis. Questions and comments are much appreciated!
My masters thesis in Environmental Studies at Brown University looks at how microfinance–the provision of small loans and other financial services to people not considered credit worthy by traditional financial institutions–can be used to advance environmental sustainability as well as social equality and empowerment in the United States. The thesis starts out by explaining the philosophical approach that I applied to problem, namely, that to create a green economy in the US we need to ensure that all segments of society are engaged on environmental issues through entrepreneurship, jobs, investment opportunities and a sense that environmental problems are relevant to people’s lives. The rest of the thesis explores how microfinance can accomplish those goals through 1) supporting ‘green collar entrepreneurs’–low and moderate-income individuals who want to start or expand green micro and small businesses, 2) by providing environmental education to all borrowers so that they are empowered to become civic leaders advocating for policy changes, organizing community events, and starting businesses that improve environmental quality, and 3) by providing loans for residential energy-efficiency and renewable energy upgrades to homeowners that wouldn’t ordinarily be able to partake in these types of programs due to problems with credit history or other barriers.
A key component of my thesis was working to develop an organization, The Capital Good Fund, that can implement these aforementioned ideas. In particular, we are working to develop “green credit builder loans,” which are loans of $100-$300 that finance the installation and purchase of low-flow showerheads, energy-efficient light bulbs and programmable thermostats. The borrower receives education on how to use the product and realize additional savings; she also sees reduced energy bills AND she gets to build her credit history as well. In addition, we are working to develop a larger loan product ($3,000-$10,000) that will cover 100% of the up-front cost of doing residential energy-efficiency projects. What’s unique about the loan is that it is structured such that the payments are equal to or less than the savings, meaning that at a minimum the loan is revenue neutral to the borrower. Lastly, we are working with our business borrowers to green their businesses and we are developing an environmental literacy curriculum that can be taught to our borrowers.
Microfinance has completely invaded my life of late. My thesis, titled ‘Green Microfinance: A Blueprint for Advancing Environmental Sustainability and Social Equality in the United States,’ is about 80% complete, and obviously deals with the various ways in which microfinance can be used for advancing environmental aims. In addition, the non-profit that I co-founded, The Capital Good Fund, is in the middle of a pilot phase, and I have been very busy speaking to and meeting with applicants. Lastly, I have been working with my business partner, Mike, and the company we founded, The Capital Good Group, Inc. so launch an innovative financing mechanism that covers 100% of the up-front cost of doing residential energy-saving upgrades and is, in effect, a microfinance program as well. I haven’t written here in a while, and I want to provide some updates on these projects, as they are all intimately related despite the fact that one is a masters thesis, the other is a non-profit, and the last is a for-profit.
The Capital Good Fund
We have made a lot of exciting progress recently. First, we just launched our new web site, www.capitalgoodfund.org. On the site, you can learn more about microfinance, see our community partners, check out the latest updates on our program, make a tax-deductible donation, download a loan application or find out how else to get involved with us. We are really excited to have the site up, and we have already received inquiries from potential borrowers through the site!