The Consultative Group to Assist the Poor (CGAP) reports in its list of recent transactions that the responsAbility Microfinance Leaders Fund (rAMLF) financed USD 500,000 in loans to Thaneakea Phum (Cambodia) (TPC) on February 6, 2008, USD 303,092 to Catalyst Microfinance Investors (CMI) on February 7, 2008, USD 929,000 to ASP Financiera (ASP) on February 20, 2008, and USD 750,000 to the Foundation for International Community Assistance Azerbaijan (FINCA Azerbaijan) on February 27, 2008.
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PIONEERS IN MICROFINANCE: Village Banking Innovator Dr. John Hatch of FINCA (Foundation for International Community Assistance)
Dr. John Hatch is currently the Board Secretary and Historian at FINCA (Foundation for International Community Assistance).
MicroCapital: Was there something in your upbringing that sparked your passion for social finance that you might share with our readers?
JH: My mother was born in Costa Rica, and I learned Spanish as a kid and then went into the Peace Corps and became fluent. This draw to Latin America is where I began. So, it was family background and a Spanish-speaking mother and an early experience with the Peace Corps of seeing the poorest of the poor….
I’d been to Latin America a couple times in the summer working for uncles in Costa Rica…. My Costa Rican uncle was a representative for American products, so I’d go door-to-door selling those things. Getting people to buy a typewriter…that’s how I picked up my Spanish, and I was kind of a novelty in those days. My first sale was a Royal typewriter to the madam of a house of prostitution!
MICROCAPITAL STORY: ING Review of American International Group (AIG) and Its Partnerships with ACCION, FINCA, MicroCred, Pro Mujer, and Pak-Oman Microfinance Bank
The Dutch Bank ING published its updated 2008 study on commercial bank microfinance activity, called “A Billion to Gain? The Next Phase”. A MicroCapital review of the paper can be read here. MicroCapital is reviewing the microfinance activities of several of large international banks covered in the study, such as American International Group (AIG).
MICROCAPITAL STORY: The Netherlands Development Finance Company (FMO) Lends $1.1m to Fundación Internacional para la Asistencia Comunitaria de Guatemala (FINCA Guatemala)
The Consultative Group to Assist the Poor (CGAP) reports in its list of recent transactions that the Netherlands Development Finance Company (FMO) financed USD 1,103,100 in loans to Fundación Internacional para la Asistencia Comunitaria de Guatemala (FINCA Guatemala) on January 21, 2008.
WHO’S WHO IN MICROFINANCE: The Foundation for International Community Assistance (FINCA)
Founded by microfinance pioneer Dr. John Hatch in 1985, The Foundation for International Community Assistance (FINCA) has been active in the global microfinance industry since its first microcredit program in El Salvador for low-income women in 1986. Operating in 21 countries with 2006 total assets of USD 252 million and a stated commitment to serving the poorest of the poor, FINCA relies on its grounding in Hatch’s Village Banking methodology, which dictates that local customers are the most knowledgeable regarding the management of their own assets. The model calls for cooperatives of 30 to 60 people to form around their mutual interest in pooling funds for inter-member loans and other financial services. Cooperatives gain access to additional capital by borrowing from financial institutions as a group, and then on-lending the funds to individuals, collateral-free.
MICROCAPITAL STORY: Luxembourg-based responsAbility Global Microfinance Fund Loans $3m to FINCA Kyrgyzstan
The Consultative Group to Assist the Poor (CGAP) recent list of transactions reported Luxembourg-based responsAbility Global Microfinance Fund invested USD 3 million in loans to the Foundation for International Community Assistance (FINCA) Kyrgyzstan this past January 18, 2008.
WHO’S WHO IN MICROFINANCE: John Hatch, Foundation for International Community Assistance (FINCA)
Microfinance-pioneer Dr. John Hatch is the founder of the Foundation for International Community Assistance (FINCA) and the creator of Village Banking, a highly successful method of delivering microfinance services to the poor through neighborhood savings and loan cooperatives called Village Banks.
MICROCAPITAL STORY: UPS to Issue Grants Totaling USD $1m to Microfinance Organizations ACCION International, Opportunity International and FINCA International
United Parcel Service (UPS), a global package delivery service founded in 1907, has created a Centennial Grants Fund in honor of UPS’s 100 year anniversary. UPS’s fund has issued USD 1 million to three microfinance organizations that support micro-entrepreneurs across the globe. ACCION International will receive USD 400,000, Opportunity International will receive USD 390,000 and FINCA International will receive USD 210,000. The creation of the Centennial Grants Fund is the first time UPS has dedicated such a large portion of its corporate philanthropy to microfinance and micro-lending.
MICROCAPITAL STORY: iTunes, Independent Online Distribution Alliance (IODA) and Natalie Portman Team Up for ‘Big Change: Songs for FINCA’ Compilation, Proceeds to Benefit International Microfinance Organization FINCA
Independent Online Distribution Alliance (IODA), a digital distribution company for the independent music community and one of Fortune magazine’s 25 Breakout Companies of 2005, has collaborated with actress Natalie Portman (of ‘Star Wars’ and ‘V for Vendetta’ fame) to compile tracks for a 16-song benefit compilation called ‘Big Change: Songs for FINCA.’ The compilation is currently available for download at the iTunes Store for USD 7.99. This is the first-ever charity album offered by iTunes. Net proceeds will benefit the Village Banking Campaign, FINCA’s charitable fund raising campaign.
MICROCAPITAL STORY: European Fund for Southeast Europe (EFSE) Provides USD 4.7 Million Loan to FINCA Kosovo
Here is another story coming courtesy of the Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) and the MIX, the microfinance information clearinghouse. In a series of three installments, the European Fund for Southeast Europe (EFSE), an investment fund focusing on economic development, has loaned USD 4.7 million to FINCA Kosovo, a microfinance program of the Foundation for International Community Assistance (FINCA), a US-based humanitarian organization. The three parts of the entire loan investment include USD 2.7 million for the FINCA Kosovo’s micro loans to micro and small entrepreneurs (MSEs), USD 1.3 million for the program’s housing microfinance, and USD 671,265 for the program’s rural microfinance.
MICROCAPITAL STORY: Actress Natalie Portman and Queen Rania Al-Abdullah of Jordan Launch FINCA’s Charity Drive
An announcement was made at an event at New York University that FINCA (Foundation for International Community Assistance) will be launching its Village Banking Campaign, an initiative to supply the unmet demand for financial services to millions of low-income individuals.
FINCA International, established in 1984, is a nonprofit agency that works with several countries across the world, possessing an asset base of USD 133mm as of 2005, according to their annual report. They are often recognized for architecting the concept of Village Banking, a major form of microfinance. The method entails group lending, in which the group in question essentially works together as an alternative to collateral, each member accountable for the other.
Hivos-Triodos Lends USD 1 mn to FINCA Ecuador and USD 800,000 to Edpyme Crear Tacna in Peru
Another story courtesy of the CGAP/MIX capital markets newsletter. Hivos-Triodos, a microfinance fund based out of the Netherlands, made two loans to microfinance institutions (MFIs) in Latin Americr worth a total of USD 1.8 mn. The first of the two loans is a USD 1 mn investment in FINCA Ecuador, which was established in 1994 “to provide financial services and products to the lowest income families in Ecuador.” It reported to MIX marke, the microfinance information clearinghouse, as having a gross loan portfolio of USD 27.9 mn and USD 25 mn at the end of 2006.
Switzerland-based Symbiotics Intermediates a USD 3 mn Loan from Microfinance Loan Obligations to Foundation for International Community Assistance (FINCA) Azerbaijan
Another story courtesy of the CGAP/MIX Capital Markets newsletter. The Foundation for International Community Assistance (FINCA) in Azerbaijan received a USD 3 mn loan from the Microfinance Loan Obligations, S.A. through the intermediary of the Switzerland-based facilitator, Symbiotics. FINCA Azerbaijan is a microfinance institution (MFI) that was established in 1998 to “provide financial services to the world’s poorest families.” According to MIX market, the microfinance information clearinghouse, FINCA Azerbaijan has USD 20.9 mn in total assets and a gross loan portfolio of USD 19.2 mn spread throughout nearly 50,000 active borrowers (as of 31 December 2006). Microfinance Loan Obligations does not report to the MIX market. Symbiotics is an investment intermediary that has facilitated over USD 150 mn in loans. Symbiotics also provides investment services to fund managers and investors specializing in microfinance.
MicroCredit Enterprises Provides Loans to Microfinance Institutions Cambodia-based Hattha Kaksekar Limited, Azerbaijan-based Finance for Development, and FINCA Peru
MicroCredit Enterprises (MCE) announced the approval of three new loans to microfinance institutions (MFIs), total USD 1.4 mn to Hattha Kaksekar Limited of Cambodia with USD 600,000, Finance for Development LLC in Azerbaijan with USD 700,000, and FINCA Peru with USD 150,000.
British Petroleum and the European Bank for Reconstruction and Development Provide $6 Million in Loans to Azeri Microfinance Providers Rabitabank and FINCA Azerbaijan
British Petroleum (BP), the international petroleum corporation, on behalf of its Azeri subsidiaries, and the European Bank for Reconstruction and Development (ERBD) recently signed an agreement to support “private sector development” in Azerbaijan. BP will contribute USD 5.25 million to a three-year program while the EBRD will co-finance operations with an amount at least matching BP’s contribution. The money will come in the form of low interest loans and will support two local microfinance institutions (MFIs), Rabitabank and FINCA Azerbaijan. Each institution will initially receive a loan of USD 3 million which it will on-lend to local micro-enterprises. The program will be implemented through the EBRD’s Azerbaijan Micro-Small and Medium Enterprise Facility, and BP’s Regional Development Initiative (RDI, page 42), which has the goal of creating effective access to commercial finance in the countries in which it operates.
Swiss reponsAbility Global Microfinance Fund Loans USD1 Million Russian Microfinance Institution, ZAO FINCA
The CGAP-MCM Newsletter recently reported that FINCA International LLC, Russia (ZAO FINCA) received a USD2 million loan from the reponsAbility Global Microfinance Fund. The investment in FINCA Russia was the fund’s first transaction in Russian rubles and currently composes 2.5% of the funds portfolio. Previously, the fund has also invested in two other Russian microfinance institutions (MFIs), the Russian Women’s Microfinance Network (RWMN) and FORA.
responsAsibility Global Microfinance Fund Loans FINCA Kosovo USD400,000
As reported by the CGAP-MIX MCM Newsletter, FINCA Kosovo has recently received a USD400,000 loan from the responAsibility Global Microfinance Fund. This marks the fund’s second investment in Kosovo’s microfinance sector- the first being an investment in Agency for Finance in Kosovo (AFK), which alone composed .37% of the net asset value of the fund’s portfolio.
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responsAbility Global Microfinance Fund Makes Nearly $3 Million Microfinance Investment: Loans to FINCA Azerbaijan, Credo Foundation of Georgia, Constanta Foundation of Georgia, MicroInvest of Moldova
responsAbility Global Microfinance Fund loaned $2,902,000 to microfinance institutions in Eastern Europe and Central Asia. responsAbility, established in 2003 under Luxembourg law, is classified as a private investor and open-ended investment fund. In July 2006, it reported a total fund volume of $70.2 million as well as microfinance and free trade investments of $65.5 million. MicroCapital recently reported on responsAbility’s $800,000 investment in BlueOrchard Loans for Development.