Loan to FINCA for Use in Haiti

Microfinance is clearly one of the more effective ways of enabling small-scale entrepreneurs in developing countries. We’re particularly impressed with the activities of FINCA, which has a great history of effectively providing microloans in such areas. We like supporting FINCA with donations, which help with their overhead, but we’ve wished we had a way to help provide lendable funds. And it turns out that we do.

For one of our 2011-2012 special projects, we took advantage of a special relationship between FINCA and the Greater Kansas City Community Foundation (aka Greater Horizons), where our donor-advised fund is housed. This special relationship allowed us to make a significant loan to FINCA, which they in turn will use (repeatedly) to make small loans to entrepreneurs. When our loan to FINCA comes due — after being used for 500 or more individual loans by FINCA — we’ll likely receive the entire principal back, or very nearly that, but we think those funds will have accomplished a lot in the meantime. We’ll see. We’ll also have the option to allow FINCA to continue using the funds, year-by-year, if we choose.

In addition, we had a choice of geographical areas in which these funds might be used. We chose Haiti, at least for the initial term of the loan. We had provided some short-term help (through Catholic Relief Services) after the 2010 earthquake, but we try to use the bulk of our grants to fund programs with a long-term focus and a sustainable approach. We think this FINCA project fills the bill.

Posted 5 years, 10 months ago at 5:41 am.

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