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November 02, 1999
DEVCAP Shares the Wealth with the World's Poorest
One billion people are living in extreme poverty, earning less than 75 cents a day. DEVCAP Shared
Return Fund brings them microenterprise development and hope.
SocialFunds.com --
How can an investor make a difference in the world? Since 1991, Development Capital Fund (DEVCAP),
a Baltimore, Maryland, based non-profit organization, has provided the Shared Return Fund, a unique
mutual fund that provides credit, small business services, and other assistance to
microentrepreneurs in developing countries. Through sharing a portion of their total returns,
investors support sustainable development in the world's poorest nations.
DEVCAP is a partnership between Catholic Relief
Services (CRS), the global representative of the U.S. Catholic community providing relief and
development programs in more than 80 countries, and Seed Capital Development Fund, Ltd, providing
technical and financial assistance in developing countries. Through the Shared Return Fund, DEVCAP
brings economic success to and dignity to communities served by its parent organizations.
"DEVCAP is unique in that our shareholders' contributions are used to provide loan capital for
microentrepreneurs in developing countries," said Sabrina Heyward, Marketing Coordinator. "Our
shareholders elect to share 10 to 100 percent of their annual return, with microenterprise
programs." DEVCAP shareholders have contributed over a half million U.S. dollars, to date.
DEVCAP's Shared Return Fund (DESRX) is an indexed portfolio of socially screened securities
based on the Domini Social Index (DSI), and managed by Domini Social Investments, with total assets
over 14 million U.S. dollars. Like the DSI, the fund has successfully tracked S&P 500 results since
its inception, with a three-year average annual return of 23.98 percent and a five-star Morningstar
rating for a three-year period.
Capital is hard to come by for the hundreds of millions
of the world's working poor who run small businesses, bakeries, market stalls, weaving enterprises,
etc. Those who want to initiate or develop their own micro businesses face outrageous interest
rates by any measure. Most banks and other financial institutions ignore their needs, considering
them bad risks, and they fall prey to local loan sharks that charge exorbitant rates.
DEVCAP's Shared Return Fund provides a very different experience for microentrepreneurs. Small
loans, between 50 and 500 U.S. dollars, are enough to make industrious entrepreneurs
self-sufficient, providing more nutritious food, health care, and access to education for their
families.
"Amounts are spread over large numbers who borrow amounts as small as $50 in 6
month cycles," said Heyward. "Village banks are created and nurtured to service the poorest
business ventures that are unable to obtain loans or credit through commercial lending
institutions."
In turn, the recipients of DEVCAP's loans have proven to be responsible and
trustworthy clients. On-time repayment rates have been impressive, with very few defaults.
Community solidarity and loyalty provides the "social collateral" that guarantees loan repayment.
For example, in 1994 DEVCAP launched the Thaneakea Phum "Village Banking" Project in
Cambodia, a country where the annual per capita income is 287 U.S. dollars. This community-based
credit and savings program, as of the December 1998, included 311 operational village banks serving
19,827 clients with an outstanding loan portfolio of 846,270 U.S. dollars, increasing the incomes
and employment opportunities for poor rural women.
Other contributions have provided loan
capital to village banks in Nicaragua, El Salvador, Senegal, Uganda, Kenya, Bulgaria, and Vietnam.
DEVCAP targets its loans to the poorest of the poor, with an emphasis on women, disproportionately
the victims of abject poverty, in an effort to improve family life.
The Shared Return
Fund stands in stark contrast to traditional welfare and aid programs, which fail to provide a
tangible path away from dependency. The U.N., the World Bank, and USAID have all recognized that
microlending is the most effective recent innovation to tackle world poverty and provide economic
growth, DEVCAP's fund is an exemplary vehicle for such aid.
DEVCAP's Shared Return Fund
may appeal to many investors who want investments that closely reflect their values. But according
to Heyward, DEVCAP is a critically important addition for "the investor who wants to share his or
her investment gains to help others in third world countries in a way that allows self-improvement
and self-sustaining growth."
©
SRI World Group, Inc. All Rights Reserved.
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