Global Partnerships Closes $20 Million Fund Aimed At “Microfinance Plus”
Social Investment Fund 2010 will provide capital to 20 MFIs across Latin America
Seattle, Wash., – Global Partnerships (GP), a 16-year-old nonprofit that supports microfinance and other sustainable solutions to poverty, announced today that it closed its fourth social investment fund at $20 million. Over the next five years, Social Investment Fund 2010 (SIF 2010) will provide much-needed loan capital to up to 20 select microfinance institutions (MFIs) in Latin America.
“By investing in MFIs that are having exceptional impact, this fund will help hundreds of thousands of people living in poverty earn a brighter future for their families,” said Rick Beckett, President and Chief Executive Officer of Global Partnerships. “The fact that we raised $20 million in a challenging economic climate is a testament to the strength of our model.”
Like GP’s three previous funds, SIF 2010 is a five-year debt fund that will provide affordable loans to a select portfolio of MFIs that are financially sustainable and that reinvest profits in programs that benefit people living in poverty. With this fund, GP has sharpened its social criteria even further, prioritizing MFIs that reach people most in need of credit, such as the rural poor, and that provide innovative “microfinance-plus” programs, including preventive health services, business education, and assistance related to rural economic development.
Forty-one investors have contributed to SIF 2010, including the Inter-American Development Bank (IDB) and Overseas Private Investment Corp (OPIC), which both invested in two previous GP funds. Other investors include Linked Foundation and Perls Foundation; Seattle University; faith-based institutions including the Mercy Partnership Fund; and 23 accredited individual investors. The law firm Strasburger & Price provided pro bono assistance to establish the Fund.
Investors cite a range of reasons for their interest in the fund, including the combination of well-managed risk and moderate returns, the excellence of GP’s fund management and the fund’s focus on social impact.
Elizabeth Littlefield, President and CEO of OPIC, which invested $6.9 million in SIF 2010, said, “OPIC’s longstanding collaboration with Global Partnerships has yielded impressive and sustainable results for MFIs by providing vital capital to the small business owners and farmers who serve as the engine of economic activity in emerging markets.”
Elizabeth Boggs Davidsen, principal investment officer of IDB’s Opportunities for the Majority Initiative, which invested $5 million in SIF 2010, said: “We’ve been very impressed with Global Partnerships’ approach to social investment. By working with microfinance institutions to offer additional services, they are helping to bring microfinance to the next level.”
Seattle University has invested in SIF 2010 and GP’s 2006 fund because of the alignment with the University’s mis sion and GP’s rigorous due-diligence processes. “It’s a win-win. We’re doing the right thing, seeing a social return, and still getting a financial return on our invest ment,” said Ron Smith, Seattle University’s Vice President for Finance and Business Affairs. “The more you learn about GP the more impressed you are.”
GP will begin disbursing loans to new MFI partners in October of 2010. MFIs to receive initial loans include Pro Mujer in Mexico, which serves women borrowers with an integrated package of microcredit and health services and education; Fondesurco, an MFI in southern Peru that provides loans and technical assistance tailored to their agricultural clients; FRAC, a World Vision affiliate that works in some of the poorest areas of Mexico; and Comixmul, a savings-and-credit cooperative in Honduras that serves very poor women with financial and non-financial services, including training in specific trade skills and access to basic health services.
Out of the 48 million people in Latin America who could benefit from access to microcredit, only an estimated 15 percent, or 9 million, are being reached. Microfinance, especially when combined with other high-impact services, can improve the lives of borrowers who use the profits from their business to improve the living conditions for their entire household. GP estimates that over the five-year lifespan of SIF 2010, it should fund more than 200,000 microloans.
About Global Partnerships: Global Partnerships (GP) is a 16-year-old nonprofit organization that expands opportunity for people living in poverty by supporting microfinance and other sustainable solutions in Latin America. As of June 30, 2010, GP had $37.7 million invested in 27 microfinance institutions, which in turn provide microcredit and other services to more than 845,000 borrowers. Find out more at www.globalpartnerships.org.