Undergrads Explore Financial Inclusion in Second Berkeley Changemaker Big Ideas Class

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Xavier Aguirre Villarreal’s father is a farmer in Coahuila, Mexico. “We get to work with a lot of people from very different places in Mexico,” the senior exchange student says. That includes individuals from very poor communities in the northern state. Aguirre Villarreal’s family does its best to give its agricultural workers the best work and wages it can, but the very small towns they live in, he says, “are disconnected from the cities. They don’t have grocery stores, they don’t have big stores; they just have local stores,” like tortillerías, butcher shops, and hardware stores. 

Coahuila, Mexico (photo by Rubén Mendoza Cabrera)

Seventy-four percent of Mexicans don’t have access to credit; only a third have received education in financial matters. Their financial options are limited.

Aguirre Villarreal, who’s majoring in law at Tec de Monterrey in Mexico and minoring in business at Berkeley, came across UGBA192N.4: Berkeley Changemaker™: Big Ideas, a course on financial inclusion: “ensuring access to affordable financial services such as savings, payments, insurance and credit in both the developing world and in more developed markets like the US.”

“I’ve always wanted to make a change in these communities,” Aguirre Villarreal says of his father’s workers, “and I thought it would be a good idea to take this class and maybe develop a project to implement in Mexico.” 

“A perfect cauldron for producing actionable solutions”

The social entrepreneurship course, the first topic-oriented curricular offering of the Big Ideas program, is a partnership with the Center for Social Sector Leadership at Berkeley Haas School of Business. It is an integral part of the Berkeley Changemaker™ initiative, a campus-wide initiative designed to activate undergraduates’ passions for social change and help them develop a sharper sense of who they want to be and how to make that happen. The Big Ideas Contest is a UC-wide innovation ecosystem, housed at Berkeley’s Blum Center for Developing Economies, that provides training, networks, recognition, and funding to interdisciplinary teams of students with transformative solutions to real-world problems. The course ran the first eight weeks of the Spring 2022 semester and was taught by Joe Dougherty, a partner at the social-impact consultancy Dalberg Advisors and an instructor at Haas.

“Financial inclusion doesn’t get the recognition it should as a vehicle for improving well being and lifting people out of poverty,” said Big Ideas Director Phillip Denny. “This class is a perfect cauldron for producing actionable solutions, what with Berkeley students’ passion for improving the world, Joe’s deep expertise in this field, and the resources of Big Ideas, Berkeley Changemaker, Haas, and the Center for Social Sector Leadership.” 

“I couldn’t agree more,” added Rich Lyons, chief innovation and entrepreneurship officer and part of the Berkeley Changemaker team. “The financial inclusion focus makes room for progress across all three sectors — private, public, and civic — and the changemaking skills this course develops are pivotal.”

The course follows Fall 2021’s first-ever Berkeley Changemaker: Big Ideas class, taught by Jorge Calderon, in which teams of students identify a social or environmental problem, develop an impactful solution to implement through a business model, and ultimately pitch their startup concept to a panel of expert judges.

Going forward, the topics of spring-semester Berkeley Changemaker™ Big Ideas classes will change year-to-year based on student priorities. For the first year, “we looked at the student interest in the Big Ideas categories and noted financial inclusion was getting more and more interest,” said Nora Silver, a Haas professor and founder and faculty director of the Center for Social Sector Leadership.

The goal is to maximize learning and social impact.

“It seems to me that there are a number of ways to learn information,” Silver said. “One I favor is learning by doing, so anything experiential has a learning advantage to it. And since there are many ways to learn how to do something, why not learn it over a topic in which you have interest or concern? It was from that orientation that the idea emerged to have a class in which students learn how to have a positive social impact on an issue they cared about.”

“Really important life skills”


It turned out the right instructor to teach making a social impact also had deep experience in financial inclusion. Dougherty has spent much of his career working in financial inclusion in developing countries, and has taught undergrad and graduate courses at Cal for several years.

In addition to covering financial inclusion in the US and low- to middle-income countries — what it is, how financial systems work, how people get excluded, what can be done about it — the class covers the three C’s of any Berkeley Changemaker™ class: communication, collaboration, and critical thinking. Early in the semester, students started working in teams, which culminated in final presentations where they shared either an idea for a financial-inclusion program or an assessment of an existing system or business. Dougherty brought in guest speakers in the financial inclusion field, including Cal alum Radha Seshagiri, director of Bay Area nonprofit SaverLife, and Courtney Cardin, co-founder of Aura Finance.

“It’s pretty awesome for students so we can get in touch with these successful people,” said Xeyu Wu, a junior studying civil engineering whose group did an analysis of TomoCredit, a credit card with no interest, fees, or required credit history.

Only a minority of Dougherty’s students were business majors: others came from STEM fields, political science, and development studies. “It was like a breath of fresh air to start this class,” Dougherty said. “The students were really engaged, really asking good questions. They’re a really diverse group, coming from several countries and lived experience related to the financial inclusion space.” 

Financial inclusion is a very timely topic, he added. “Just in the last decade, the number of people who were served by a formal financial institution has skyrocketed because of technology. From a financial inclusion point of view, it’s a tremendous opportunity because it means the transaction cost for financial service providers has dropped radically and allows them to serve people affordably.” 

Students also learned fundamentals for themselves, given that basic financial literacy is not typically taught at any level of schooling. “People get well into their 20s without knowing how compound interest works,” Dougherty said. “People get into their 50s without knowing how compound interest works! These are really important life skills that people are not always given an opportunity to learn.”

“Really puts you in the shoes of people who are excluded”


Aguirre Villarreal’s group project was called NamaCard, with “nama,” he said, a Nahuatl word that can mean “protect” or “progress.” People in small towns in Mexico, like those who work for his family, would use NamaCard at their local stores much like a debit or credit card. 

Given how difficult it is for many Mexicans to access credit, NamaCard won’t require a credit check. “We are trying to incentivize these marginalized communities, inside these little towns, to migrate from a cash system to a card system,” Aguirre Villarreal said.

By using machine learning to analyze users’ social media and their spending with the card, NamaCard would begin to build a credit score that users can then leverage in the larger financial system. And as they build their credit score, a user can access perks from their bank, such as a better credit line or an in-app financial-education class about, say, stocks or investing. It would be a positive feedback loop, where building credit unlocks better financial education, which informs better financial action.

In Mexico, Aguirre Villarreal explained, in order to receive a deposit from someone, a place has to be registered as a bank. NamaCard would partner with a bank like Banamex, which would act like a community development financial institution, lending money to local businesses like tortillerías, butcher shops, and hardware stores, from which card users could then withdraw and deposit money, making their lives easier. (These actions would be backed up by a mobile authentication process). And a fee paid by these stores that accept NamaCard would allow the stores to see customer spending trends, which could help make the businesses more targeted and efficient.

Amid learning the ins and outs of insurance and savings, credit and loans, and all the steps needed to build a financial startup — and putting that to use in the setting of a small town in Mexico — what stuck with Aguirre Villarreal the most was the hardship and exclusion faced by everyday Americans. 

“I was really shocked by the situation around the world,” he said of financial exclusion and insecurity, “but I was most shocked about the situation here in the US. Being Mexican, we have always looked to the US as a successful country; I believe most people around the world have this view of the US.” The reality, he learned, was that nearly half of Americans cannot pay a sudden bill over $400.

“The class really puts you in the shoes of people who unfortunately are excluded or banned from financial systems,” he said. “You get to think about how lucky we are. That was what I most liked about the class.”