Seattle Investments Help 94,000 Latin American Poor

Seattle-based non-profit, Global Partnerships (GP) is investing $4.5 million of the $20 million raised in 2010 in six microfinance institutions (MFIs), based on their social impact and financial sustainability.  The selected Latin American MFIs serve 94,000 borrowers, 72% in rural areas and 63% women.

GP focuses on investing in Latin American social enterprises -- financially-sound, mission-driven organizations that serve the people most in need, such as the rural poor.  The recipient MFIs aim for financial sustainability rather than maximum profitability, allowing them to reinvest their profits in programs to benefit people living in poverty.

GP utilizes rigorous social impact selection criteria. Consequently, the GP-funded MFIs generally combine microfinance with services addressing other dimensions of poverty, such as business, agricultural or preventative health training.

For example, new GP loan recipients are:
* CIMIXMUL (Mixed Cooperative of United Women), a Honduran cooperative serving more than 11,000 women with microcredit, financial education, specific trade skill training and access to preventative health education.
* Crediflorida, a Peruvian cooperative providing below commercial interest rates to small-scale coffee farmers, training to diversify crops and access to higher profit specialty markets.
* FONDECO, offering affordable financial services to rural farmers and women in Bolivia.

The other recipients are D-MIRO in Ecuador, FONDESURCO in Peru, and FRAC in Mexico.

"We are delighted that our investors' capital is being put to work in organizations so committed to serving people living in poverty," said Mark Coffey, chief investment officer, GP.  "Amid recent negative news about commercial microfinance in Asia, the exemplary work of these mission-focused microfinance organizations is worth highlighting."

GP's Social Investment Fund 2010 (SIF 2010) is a five-year debt fund providing affordable loans to selected MFIs that meet GP's thorough financial and social criteria.  In 2010, GP secured $20 million for its fourth Global Partnership Fund from 39 investors aiming to expand opportunity in Latin America. 

 GP spent considerable time in 2009 and 2010 designing the fund to effectively increase access to microfinance funding in Latin America.  GP further strengthened the criteria for partners, and the Managua field team performed detailed due diligence on about 40 possible microfinance partners.  The due diligence included site visits up to a week-long by the field team.

One in three Latin Americans is below the poverty line.  Forty-eight million Latin Americans could benefit from access to microfinance, according to the 2010 GP Progress Report.  Nine million do have access to microfinance.  In 2010, GP's 27 partner MFIs served 845,000 people, and attained a 98% repayment rate.

Photo credit: Lee Coursey