Columbia Business School students visit SPBD Tonga in the summer of 2010 to learn and help those in need.

As business school students, it is rare that we have the opportunity to see the intersection of theory and practice. However, in January 2011 our group of four Columbia Business School (CBS) students had just that chance, thanks to Columbia’s Pangea program and SPBD.

The Pangea program, an organization sponsored by Columbia’s Social Enterprise program, allows CBS students to gain an inside understanding of microfinance in developing nations. Through separate application processes, students and microfinance lenders are chosen to participate in consulting projects that address critical organizational challenges and access to financing. In our particular case, we had the opportunity to conduct due diligence on SPBD in anticipation of funding from Microlumbia, another Columbia sponsored organization that provides capital to microfinance institutions.

During the fall semester of 2010, our group worked diligently to understand SPBD’s organizational structure, financial profile, growth plans, and competitive positioning within the South Pacific’s microlending industry. We met weekly as a team to review our progress, and had the opportunity to conduct phone calls with various members of SPBD’s management team to gain additional insight. The culmination of our project involved a week-long trip to Nuku’alofa, Tonga to witness the SPBD process in action.

During the course of our visit, we had the opportunity to meet with SPBD’s Centre Managers, Clients, and Managers, gaining tremendous insight into the direct impact that microlending has on the community’s economic growth. The ability to visit SPBD clients’ businesses and to hear first-hand stories of personal growth and wealth accumulation that have resulted from the organization’s investment in entrepreneurship brought the microfinance industry to life for us, tangibly illustrating the importance of the work we had completed over the course of the fall semester.

Our time in Tonga was undoubtedly a turning point for many of us – exposing us to the realities of life in developing nations, providing us an understanding of microfinance’s role in encouraging financial development, and leaving us with a deep appreciation for organizations like SPBD that work tirelessly to improve the quality of life for its clients and the communities in which they live.