Manju Puri, J.B. Fuqua Professor of Finance
“In my class, I often tell students, at least two or three times in your life, you are going to go through a crisis. I don’t think they expected to have another one quite so soon. But it is important to point out some differences. In the Great Recession, a lot of the focus was around banks. There was a lot of concern about banks, the way that they had been lending, securitization. There was a lot of debate as to what is the right approach. Should we have stimulus? Should we be spending? Should we be rescuing? Should we be bailing out the banks? The current crisis is very different, the origins are different. Banks are not heart and soul at center here. We have the coronavirus and everything else that is going on. It is unprecedented times. But it is very different.”
“Unlike previous crises, where there was a lot of debate as to should we be doing stimulus? This time around, comparatively, there is agreement that yes, we do need to do a stimulus. We do need to do a bailout. There may be disagreement on the details. But this is particularly true of small businesses, which are the heart and soul of our economy, and which have been affected disproportionately in today’s world.”
“Let’s talk a little bit about small businesses. Initially there was the $349 billion, in the PPP (Payment Protection Program). It ran out in two weeks. Congress has just passed another $310 billion in funding for PPP. There has been a lot of criticism that among the small businesses, it has been the larger small businesses, the more well-connected small businesses, the ones with strong relationships to banks that have gone in front of the queue. I think 176 publicly traded companies got more than $650 million in PPP loans. The smaller of the small businesses, the ones that are struggling, that really needed the funds, there is a sense that they got left out. Part of the challenge and the opportunity is what can we do about it?”
“So one of the questions is could tech happen? Could tech help? Put it in the context of fintech (financial technology). Instead of having existing banks or borrowers in charge of these programs, could we have augmented technology to have small businesses do this online? Alternatively, perhaps with fintech, could we have been more efficient? Could we have been more equitable? Thinking about some of these things, these are both the opportunities and the challenges, that in today’s world. How do we harness all of this?”
“This is a time of massive business disruption. We can all agree on that. There has been an emergence of tech to do business. This was an ongoing trend, but it has accelerated at this time. In finance, when we think of fintech and we think of distance-based lending or credit scoring or other things, there is clearly opportunity.”
“For the last three years, every time I have taught my class, ‘Raising Capital and Fintech’ I have had at least one group of students start a fintech.”
“So again, it is a challenge and an opportunity. There are new skillsets. There are new ways of thinking. There is new ways of looking at tech. There is entrepreneurship. And I think of an MBA as an investment in these skillsets. Given everything that is happening, it’s a good time to make those investments.”
