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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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