Using Indian/Bangladeshi Model of Micro Financing to Develop Entrepreneurship amongst U.S. Prisoners Re-entering the Community Dylan Hood, Sophia Loupakos, Mary Kate Wagner
Loyola University Chicago
At the end of calendar year, it is expected that the adult prison population in Illinois will be 35.1% over rated capacity, totaling 47,054 inmates in a correctional system with a rated capacity of 32,609. There also exist 51.1 percent recidivism rates. One of the factors contributing to recidivism has been the lack of employment opportunities faced by those that have been incarcerated.
Regarding employment, a criminal past is most certainly a factor for employers in determining whether a candidate receives a callback or not. Research also suggests that when race becomes a factor, the outcome of employment becomes more prevalent. Findings have shown that while the ratio of employment callbacks for non-offenders relative to ex-offenders for whites is 2:1, the same ratio for blacks is nearly 3:1 and when compared together, the effect of having a criminal record is thus 40% larger for blacks than whites.
Micro Loans / Micro Finance are general terms used to describe financial services to low-income individuals who do not have access to typical banking serves. Popularized in Bangladesh in 1976 with the establishment of the Grameen Bank by Mohammed Yunus, they served as method of delivering credit to the rural poor. Today micro-loans are changing lives of individuals and entire communities in many lesser-developed nations than the United States. While these same micro-lending institutions are at work in the U.S., there is evidence that their presence with the ex-offender population needs to expand. One of the main aims of this research will be to travel directly to the source of micro-lending in Bangladesh and India, and to observe first hand how the system of lending works there, compare it with the existing models here in the United States, and then to survey the micro-lenders by asking the following questions: 1. What types of borrowers has been most successful using micro-finance? 2. What makes them suitable?
3. What personality characteristics or traits indicate a good borrower? 4. What can be problematic characteristics in a borrower? (Essentially, what are some red flags that someone is not a good fit?) 5. What style of monitoring is best with micro-finance borrowers? 6. What does reporting look like for the borrowers? (Bi-weekly, monthly, quarterly, etc.). 7. What are the relationships like between the lenders and the borrowers?
A second set of questions will be asked of professionals in the Residential Re-entry Center (RRC) setting. Those questions are as follows: 1. Micro-finance is a system of delivering smaller loans to a borrower to fund entrepreneurial ventures. Based on the above statement, this research seeks to determine if a model of providing loans to a select set of ex-offenders would be a ‘good idea’. What is your opinion? 2. Why do you think it is a good or bad idea?
3. Do you feel that if ex-offenders are employed and have a purpose that the rate of recidivism will decrease?
Ex-offenders are barred from jobs. There is a clear connection between employment opportunities and self-sufficiency; the difference is creating a supportive employment environment that fosters the individual. Women and men who have been incarcerated often suffer loss of identity, ability to care for their families, and in many ways, loss of full citizenship. Added to the devaluation of the individual is ingrained racism that leaves persons of color at an even greater disadvantage. With policy reform slow to evolve, innovative mechanisms such as micro-finance provide the opportunity for fostered growth and independence denied to so many. Entrepreneurship may just be the vehicle that drives the engine towards reducing recidivism. Micro-loans have been established as one vehicle that can...
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