MICROCAPITAL BRIEF: World Vision UK, VisionFund International Prepare for El Niño Response in Africa with $3m “Returnable” Donation from UK Government’s Department for International Development (DFID)

The UK government’s Department for International Development (DFID) recently awarded a “returnable” grant of GBP 2 million (USD 3 million) to World Vision UK, a branch of US-based NGO World Vision International, and VisionFund International, a microfinance organization owned by World Vision, to help families in six African countries recover from anticipated severe weather caused by El Niño, a phenomenon of warmer than average waters in the eastern Pacific Ocean.

With drought in western and southern Africa and flooding in eastern Africa expected in early 2016, VisionFund will provide the money from DFID to its subsidiary MFIs in Kenya, Malawi, Mali, Rwanda, Tanzania and Uganda. The funding is slated for loans to help rebuild businesses damaged by the severe weather in order to re-establish people’s economic autonomy. The grantees have agreed to return the money to DFID on an undisclosed time schedule.

“This ‘hand up’ rather than ‘hand out’ approach empowers individuals to recreate their livelihoods and restore independence. From a financial perspective, it can reduce the amount of grant aid needed to help communities recover economically while additionally attracting commercial funding to allow greater scale in the recovery response,” said Scott Brown, VisionFund International’s President and CEO.

As of 2015, VisionFund International has a loan portfolio of USD 474 million outstanding to approximately 1 million borrowers in 32 countries. World Vision International raised USD 1 billion in cash and in-kind gifts during 2014 and serves approximately 100 countries as of 2015.

By Kevin van den Brink, Research Associate

About World Vision International

World Vision is a US-based Christian humanitarian organization dedicated to working with children, families and their communities worldwide to “reach their full potential” by tackling the causes of poverty and injustice. World Vision serves poor people worldwide regardless of religion, race, ethnicity or gender. The organization operates microfinance institutions through its subsidiary VisionFund International. VisionFund International seeks to improve the lives of children in the developing world by offering small loans and other financial services to families living in poverty. World Vision raised USD 1 billion in cash and in-kind gifts during 2014 and serves approximately 100 countries as of 2015.

About VisionFund International

VisionFund, a US-based nonprofit organization, offers financial services to families living in poverty in the developing world through a network of microfinance institutions in 32 countries in Asia, Africa, Latin America and the Caribbean, the Middle East and Eastern Europe. Its services include small loans and business training and support. VisionFund is part of US-based World Vision, a Christian relief, development and advocacy organization. As of 2015, VisionFund has a loan portfolio of USD 474 million outstanding to approximately 1 million borrowers.

Department for International Development

Formed in 1997, the Department for International Development (DFID) is the unit of the UK responsible for carrying out overseas development work. Its main spending areas include government and civil society, health, economic growth, education, and humanitarian assistance. As of 2014, DFID reported an outgoing donation total of EUR 9.4 (USD 10.3 billion).

[1] Information provided directly to MicroCapital by VisionFund International

MicroCapital Universe Profile: World Vision International

MicroCapital Universe Profile: VisionFund International

MicroCapital Universe Profile: Department for International Development

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