While many college students were lounging on the beaches of Cancun during Spring Break, Julie Gallaway, assistant professor of economics and finance at the University of Missouri-Rolla, traveled to another part of Mexico, studying how small loans help people in a poverty-stricken area.

Gallaway visited the small town of Chalco, located outside of Mexico City, to work with Enterprise Development International (EDI), a Washington, D.C.-based non-profit firm that specializes in providing technical assistance and funds for programs in 13 different countries. The organization’s sustainable programs in Mexico boast approximately 2,500 clients.

Gallaway received a University of Missouri research grant for $11,712 to study the impact of micro-finance, also known as micro-lending. "Micro-finance consists of loans for small business, and these programs provide small-denomination loans to people who would not otherwise have access to credit because, through lack of collateral or credit history, they are considered high risk by the commercial banking community."

Though Gallaway worked with several people from Washington, D.C., who help raise donations for development groups, she also met many of the people who benefit from these loans.

Gallaway found that the majority of participants in the program were women, most working in what she calls "the informal sector of the economy, which is characterized by street vendors and other types of small, unregulated businesses."

By examining changes in incomes and assets of program participants, Gallaway determined that the program has had success attempting to alleviate poverty.

"My research consisted of evaluating the success of the (EDI) program, evaluating the assessment instrument, and coming up with ways to improve the program," Gallaway says.

Gallaway may not have had this experience if it wasn’t for UMR graduate Juan Benitez, president and CEO of EDI.

"I made contact with him because of the research area," Gallaway says. She collaborated with two other EDI staff members, program director Lawrence Locklin and Georgia Emory Smith, vice president of technical services. "They gave me the opportunity to observe an expanding micro-lending program and be instrumental in formulating policy and procedures for this program’s growth."

It’s rare for researchers to study progress in "realtime," says Gallaway, "but here we can examine it, while we usually wait for data and analyze history." Gallaway believes that similar programs from EDI could even be expanded to other countries, such as Egypt, Kazakhstan and Guatemala.

"I interviewed some of the clients in person," Gallaway says. "It was a very productive trip, and I’m hoping to do more research on the impact analysis of micro-lending in Mexico in the future. I saw firsthand how the program changes lives."