December 17, 2004
Portfolio Focus On: FINCA
By Calvert Foundation
The Calvert Foundation, partnering with the Foundation for International Community Assistance
(FINCA), invests in creating solutions to poverty, worldwide. Since 1999, Calvert has provided
FINCA with a loan that has been renewed—recycled, in a sense—throughout the application of many
cycles, impacting hundreds of thousands of people. FINCA Executive Director Rupert Scofield spoke
about the important role that socially responsible investors play when they make an investment on
behalf of FINCA through the Calvert Foundation.
"Calvert Foundation invested $400,000 in FINCA's Village Bank Capital Fund," Scofield said. "This
investment has been rotating three times per year, through 15 loan cycles, supplying a minimum of
26,548 clients with loans that average $226. Taking into consideration that the average client has
five dependents, Calvert's Foundation $400,000 actually has helped to touch 125,000 people
globally. Our partnership with Calvert Foundation and their investors means that a deep social
impact is being made in the lives of the world's neediest."
The Foundation for
International Community Assistance is an international organization dedicated to a mission aligned
with that of Calvert Foundation—supporting the world’s poor to help them create their own solutions
to poverty. FINCA has a continually growing network consisting of 23 programs in 22 countries on
three continents. In 2003, the organization served 225,000 active clients with a small-loan
lending portfolio of $176 million. FINCA is an anti-poverty organization aimed at creating
employment, raising incomes and reducing poverty. To do this, the organization offers small loans
and a savings program to those who are not served by “traditional” financial services. FINCA
promotes financial independence through its services and offers loans that have boasted a repayment
rate of more than 97%.
FINCA pioneered a successful model of microenterprise lending with
their system of “Village Banks.” This method is unique in the responsibility that it hands over to
borrowers who run their own community-based “banks.” There is a high level of autonomy,
independence and community in this system. FINCA extends loans to these “banks,” which are small
groups of 10 to 50 borrowers (mostly women) who form networks for mutual support. As part of this
cohesive group, members determine, in advance, what size loan they will need to begin or expand
their business, then the loan is made to the group and is disbursed based on the members’ requested
amounts. The members are then responsible for managing and collecting repayments of those loans.
The group members also save diligently, knowing they can increase the size of their next loan based
on their savings record. FINCA developed the “Village Banking® method,” and it is now used by
hundreds of organizations worldwide.
Calvert Foundation strives to make effective use of
its lending portfolio and works to make beneficial loans to institutions that are in line with the
organization’s overall mission of improving lives by helping to end poverty through investment.
For more information on FINCA, please visit their profile: Click Here
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