Two University of Wisconsin students teamed up to create the nonprofit Madison Fund in an effort to combat the effects that recent years of economic uncertainty have had on small businesses in the community.

Co-founders and co-executive directors Alexander Rosenthal and Andrew Tapper teamed up in the fall of 2010 after Rosenthal approached Tapper to be his partner on the business, which focuses on a microfinance model of loaning.

“Microfinance is a remarkable concept,” Tapper said. “It extends credit to those who lack access, creates a strong bond between borrower and lender and fosters community development by encouraging financial literacy and independence.”

Rosenthal said he was inspired by 2006 Nobel Peace Prize winner Muhammad Yunus and his microcredit-providing Grameen Bank when he began to look into similar institutions in the United States.

After discovering many of these organizations were student-run, Rosenthal then decided to create his own, embarking on a journey spanning the better part of eight months.

Additionally, Rosenthal said his research revealed a large percentage of the Wisconsin population is underbanked and face obstacles when seeking to borrow funds.

“People are finding it extremely hard to get credit in this economy and oftentimes they are simply denied by banks for loans without any other place to go,” he said. “We found this huge demand for very small amounts of capital to start businesses and keep them running.”

Rosenthal said a main motivation of the Madison Fund is to help those seeking small loans in the Madison community and its neighboring towns.

Tapper said the business’ target clients are low-income entrepreneurs and business owners who are unable to meet traditional bank lending criteria.

Both Tapper and Rosenthal said there were no requirements outside of motivation, hard work and commitment for the Fund’s prospective clients.

“We expect that we’re going to find a lot of people lacking financial knowledge, income and with poor credit scores,” Rosenthal said. “We’re ready to work with that.”

The Madison Fund currently consists of 11 students working across a variety of fields including marketing, lending and fundraising, he said.

Tapper emphasized all of the students working with the business were volunteers and strike the right balance of priorities of keeping the business running while also being students on the UW campus.

Rosenthal said he saw the Madison Fund as a hands-on learning experience.

“Personally, I have learned far more working for the Madison Fund than I have in any of my classes,” Rosenthal said. “It’s really an inside experience you can’t find anywhere else.”

He added because the Madison Fund was student-run, volunteers have the unique opportunity to run their own projects within the business.

Students interested in volunteering for the business can get in touch with Rosenthal and Tapper by using the Fund’s website, Tapper said.

“It is a phenomenal chance to make your own changes in the Madison community,” Tapper said. “Meeting with community members and helping them fulfill their dreams is the most rewarding experience I have ever had.”

According to the business’ website, the Madison Fund officially extended its first loan on Oct. 1.