After arriving at Sao Paulo, our group teamed up with Brazilian students from PUC-SP to complete a case study. We were expected to create a start-up by the end of the week to provide credit to low income-families, deciding the fare interest rate to charge and the appropriate contracting conditions. On Friday, we would be presenting our start-ups at Creditas.
To come up with an apt solution, we had to take into consideration the macroeconomic drivers such as historical benchmark rates, taxes, and bank regulations. Also, from the user end, consumer behavior patterns and financial conditions of the 50% lowest income population were also key determinants.
When brainstorming, the class was divided into seven groups, each a mix of UIUC and PUC-SP students. Each group ended up with a unique solution: some used a present-discounted-value model; others tried the traditional risk-free rate + risk premium approach.
Overall, the presentations were creative and insightful, and we were all committed and passionate about our topics. In the end, group 6 won the first place. For the wining group, Caio, a PUC-SP student was awarded a trip to UIUC. (The board had to choose between Caio and Vitoria, even though both contributed significantly to the project.) As for the two UIUC students, Eric and Lexi, the prize was a helicopter ride.
When asked about the most memorable part of this case study, Emily said, “time was really tight”. Her teammate Xu Yu added, “We all put in a lot of effort. If only we had more time.” “Same with our group”, Miko replied. Even though time is limited, students were still able to gain new perspectives on Brazilian economics and that was what really matters.
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