ACE INA Foundation, the philanthropic arm of Bermuda-based casual insurance company ACE Limited, announced that it will be making a three-year USD 720,000 grant to US based international development organization Freedom from Hunger (FFH). Established in 1946, FFH works in developing countries to provide self-help programs against hunger and poverty. The organization’s work is specifically targeted to those who live on USD 1 per day or less. FFH will use the ACE grant to bring microfinance and financial education to nearly 3 million Mexican women, through its Credit with Education program.
According to a World Bank report on rural poverty in Mexico, although only one quarter of Mexico’s population lives in the rural areas, they compose 60.7 % of the country’s extreme poor and 46.1 % of the moderately poor. It is estimated that 24 million people live in extreme poverty, and that there are 17 million microenterprises. Compartamos Banco, on which Microcapital reported several times, is the largest microfinance bank in Mexico and has increased its client base tenfold since 2001. There are 40 microfinance organizations (MFIs) in Mexico that are listed in Mix Market Information Exchange, an information platform on microfinance.
In 2005 FFH established Alcance Mexico (translated as Reach Mexico), an independent organization that provides training to MFIs and community service organizations based in Mexico. With the ACE fund, FFH will simultaneously give microcredits to Mexican women and train the local MFIs to establish Credit with Education. Implemented in 50 organizations around 16 countries, Credit with Education program provides groups of 25 women with group loans that are then divided among the women according to their business plans. The women themselves perform the loan analysis, each reviewing the other’s plans for starting or growing a business. The loan cycle lasts sixteen weeks and at time of repayment, the local staff of FFH train women on issues such as health and nutrition, business practices. According to the FFH, 90% of Credit with Education participants in Ghana, reported increased income since joining the program.
According to FFH financial report of 2007, Credit with Education program has reached 540,000 women around the world and each dollar donated to FFH mobilizes USD 27.95 in loan funds. Individuals donated USD 2,795,537 to the organization’s annual fund that attracted USD 3,583,682 in corporate and foundation gifts and in total supported USD 7,356,000 unrestricted operating revenue.
ACE Limited, a component of the S&P 500 stock index, was established in 1985 by a consortium of 34 Fortune 500 companies to provide excess liability coverage. The Company, with assets worth USD 72 billion, operates in more than 140 countries. The ACE INA Foundation supports U.S.-based philanthropy and is associated with organizations such as American Red Cross and Philadelphia Academies, Inc.
By Ipek Kuran, Research Assistant
Additional Resources:
Financial Times article – April 30, 2007
Mix Market – Freedom from Hunger
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