Washington, D.C. (PRWEB) June 13, 2006
Grameen Foundation and Global Partnerships, two leading microfinance organizations, today announced a new alliance designed to expand financial services to the poor in Latin America and the Caribbean. The alliance will give microfinance institutions (MFIs) in the region an unprecedented level of access to funding from global capital markets, as well as technical assistance, to help boost their outreach to the poor. Activities will kick-off on June 19 with a three-day Latin American “road show” to brief MFI and bank executives from four countries on the innovative financing opportunities offered by the alliance.
Headquartered in Washington, D.C., Grameen Foundation began working in Latin America in 1999, while Seattle-based Global Partnerships entered the region in 1994. Together, both organizations support 18 MFIs in eight Latin American countries that serve 250,000 clients. Over the past two years, they have worked together to prepare six MFIs for investment and high growth by providing technical assistance with business plan development and strategic planning, as well as performing due diligence evaluations.
This new alliance is targeting high potential “emerging” MFIs that are relatively small and that serve neglected populations such as the rural poor, indigenous groups, and those living in absolute poverty. These organizations typically have difficulty accessing capital markets financing due to their limited outreach, regardless of the quality of their portfolios. “Few networks have focused on developing capital market strategies for these emerging MFIs in Latin America, despite the fact that microfinance outreach is only three million in a region home to 125 million people living on less than $2 a day, and 50 million barely surviving on less than $1 per day,” said Alex Counts, President and CEO of Grameen Foundation. “Philanthropists as well as MFIs often note the insularity of U.S.-based non-profit organizations; this collaboration represents a practical approach to realizing synergies between two like-minded organizations that will allow MFIs to access multiple funding opportunities in both local and U.S. currency from a single coordinated source.”
Microfinance institutions will receive increased funding in two key ways: direct, side-by-side loans from Grameen Foundation and Global Partnerships, and facilitation of financing from local banks. Global Partnerships will offer funding through its Microfinance Fund 2006, which offers 5-year term loans. Grameen Foundation’s Growth Guarantee program facilitates loans from local banks to poverty-focused MFIs, thereby helping to integrate them into local financial systems. MFIs also benefit from a single reporting requirement, since Global Partnerships will monitor performance for both lenders. In addition, the MFIs will be able to access technical assistance from the alliance to support their growth.
Although the microfinance industry is very active in many countries, most notably Bolivia and Nicaragua, MFIs have met only about 15% of the demand for financial services by the poor in Latin America. According to Gary Mulhair, Managing Partner of Global Partnerships, “This alliance leverages the resources and expertise of Grameen Foundation and Global Partnerships in order to identify MFIs with potential for high growth. Together we can provide the full range of support these MFIs need to scale operations and increase their impact on the poor.”
About Grameen Foundation
Grameen Foundation is a global non-profit organization that combines microfinance, technology and innovation to empower the world's poorest people to escape poverty. Founded in 1997, it has established a global network of 52 partners in 22 countries that has impacted an estimated 11 million lives in Asia, Africa, the Americas, and the Middle East.
The Foundation sprang from the Grameen Bank of Bangladesh. Grameen Bank was started in 1976 by an economics professor, Dr. Muhammad Yunus, who was convinced that women could break through poverty by taking tiny loans to start or expand tiny businesses. Today, Grameen Bank serves 6.1 million borrowers. As strategic global partners, Grameen Foundation and Grameen Bank share a common vision, knowledge and success models to accelerate the microfinance industry's impact on the world's poorest people. Dr. Yunus, the founder and director of Grameen Bank, is a founding and current board member of the Grameen Foundation. For more information, please visit http://www.gfusa.org.
About Global Partnerships
Founded in 1994, Global Partnerships (GP) is a pioneer in the fight against poverty around the world through microfinance programs. Microfinance helps people work their way out of poverty by providing the first opportunity many poor people have to start and grow their own small business. GP combines financing opportunities with consulting services and the development of strategic partnerships to help MFIs make the transition to commercial capital markets and maximize their impact on poverty. GP currently works with nine MFIs that reach over 135,000 clients. GP has provided over $8 million in loans, grants, and technical assistance to MFIs since 1999.
GP's programs in Latin America are complemented by the Initiative for Global Development (IGD). Founded in the wake of 9/11 by GP CEO Bill Clapp, along with Bill Gates Sr., Daniel J. Evans, John Shalikashvili and Bill Ruckelshaus, IGD is a national network of opinion leaders united in their support for public and private initiatives that contribute to ending global poverty and building a more secure and prosperous world for all. IGD seeks to influence public policy and expand the active engagement of the private sector in effective global development efforts.