November 1, 2006

UM Prof Changes the World
through Microfinance

Microfinance – the very word stirs up images of long lists of numbers on a page or complicated math theorems used to explain equally complex economical principles. But for Dr. Sergio Castello, professor of global business and economics at the University of Mobile, it is about changing the future for people in some of the world’s poorest nations.

For four years Castello has served as a consultant for the Inter-American Development Bank, which is a microfinance agency that focuses its attention on the Latin American regions. Recently he wrote a chapter in “An Inside View of Latin America Microfinance” published by the Inter-American Development Bank. Castello describes how technology is being an aide in helping financial institutions more easily distribute loans in the non-developed countries.

Simply put, the driving force behind microfinancing is the desire to help ease the severity of poverty around the world, according to Castello. In practice it involves the extension of loans by microfinance agencies to the financially disadvantaged with business ideas who have no credit and are unable to obtain a loan in the traditional manner.

“All of this is done in the hopes that these loans will help push people to take incentive in improving their situations,” Castello said

Because these people with ideas lack credit and are unable to deposit collateral for a loan, microfinancing gives them an opportunity they would never have otherwise, Castello explained.

“The end result is that not only are the people able to financially improve their lives, but in repaying the loan they are being taught how to help themselves and no longer be dependent,” he added.

Castello teaches undergraduate courses in global business, micro and macroeconomics, money and banking and global finance, and master’s in business administration courses in managerial economics and global business in the UM School of Business.

The University of Mobile is a private university affiliated with the Alabama Baptist State Convention. Students are enrolled in undergraduate and graduate programs in the College of Arts and Sciences, School of Business, School of Christian Studies, School of Education, School of Nursing, Center for Performing Arts and Center for Adult Programs. For more information about UM, visit the website at www.umobile.edu or call the Admissions Office at 251-442-2273.

By Matt Pike, senior, humanities and theology major