UK's DFID Awards World Vision UK £2 Million 'Returnable' Grant to Fund VisionFund's El Nino Response in Africa

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Families devastated by what is predicted to be particularly severe El Niño weather patterns in six African countries are to benefit from small loans to rebuild their livelihoods, following a £2 million ‘returnable grant’ from the UK Government's Department for International Development (DFID) to aid agency World Vision UK and its microfinance partner, VisionFund International.

Vedaste, of Rwanda, is now employed as a carpenter and is able to help support his family. When people like Vedaste are able to develop their small businesses, families can be positively impacted.

“This ‘hand up’ rather than ‘hand out’ approach empowers individuals to recreate their livelihoods and restore independence," explains Mr Scott Brown, VisionFund International’s President and Chief Executive Officer.

With anticipated drought in West and Southern Africa and potentially severe flooding in East Africa, VisionFund will use the funds to provide additional resources to its MFIs in Kenya, Uganda, Rwanda, Tanzania, Malawi and Mali in order for them to issue recovery loans to their clients. These loans will be targeted at suitable individuals affected by El Niño, and may be larger and over a longer period than typical microfinance lending. The loans are to help rebuild businesses destroyed by flooding and drought in order to restore economic independence to families, and provide economic stimulus to communities, as quickly as possible.

It is anticipated that VisionFund’s recovery loans will help restore the livelihoods of around 18,000 families, impacting approximately 40,000 children. The UK Government's Department for International Development (DFID) has granted additional funds of £200,000 to manage and measure the project’s impact and capture learnings for the industry on the role of microfinance in disaster response.

In appropriate contexts, recovery lending can complement traditional humanitarian assistance as it focuses on specific economic groups within the community. World Vision and VisionFund will work closely together to ensure that Vision Fund’s recovery lending approach is closely aligned and integrated with World Vision’s immediate humanitarian response. Once individuals are ready to rebuild their businesses or start entrepreneurial activities, they may apply to VisionFund’s MFIs for a recovery loan. It is another tool to help communities recover and VisionFund ensures that any financial risk has been properly assessed for those who receive a loan.

VisionFund pioneered recovery lending on a smaller scale in the Philippines with great success. In the aftermath of Typhoon Haiyan, VisionFund issued over 4,600 recovery loans and 96 percent of clients surveyed stated that the loans were helpful in restoring livelihoods with 49 percent saying they had fully recovered as a result of the loans.

Mr Scott Brown, VisionFund International’s President and Chief Executive Officer, explains: “This ‘hand up’ rather than ‘hand out’ approach empowers individuals to recreate their livelihoods and restore independence. From a financial perspective, it can reduce the amount of grant aid needed to help communities recover economically while additionally attracting commercial funding to allow greater scale in the recovery response.”

Mr Mark Bulpitt, Head of Humanitarian and Resilience Team, World Vision UK, said: “Recovery lending enables families to get back on their feet. We see tremendous opportunity for microfinance networks to integrate more with humanitarian organisations to help us provide an even more robust response to disasters.”

About VisionFund
VisionFund, World Vision’s microfinance arm, has been improving the lives of children in the developing world for more than a decade. By offering small loans and other financial services to families living in poverty, its clients develop successful businesses, enabling their children to grow up healthy and educated.

Last year, VisionFund MFIs provided 1.3 million loans at a 98% repayment rate, with nearly three-quarters of these going to women, and over half to clients actively involved in farming. In 2015, close to four million children were impacted through its lending network located across more than 30 countries in Africa, Latin America, Asia, the Middle East and Eastern Europe. http://www.visionfund.org or follow us on twitter @visionfund

About World Vision
World Vision is one of the world’s largest Christian relief, development and advocacy organizations dedicated to working with children, families and communities to overcome poverty and injustice. Spanning over sixty years, its 45,000 staff and volunteers in nearly 100 countries have been committed to improving the lives of children, while working with the world’s most vulnerable people, regardless of religion, race, ethnicity or gender. http://www.wvi.org or follow us on twitter @worldvision

About the Department for International Development
The Department for International Development (DFID) leads the UK’s work to end extreme poverty. DFID is ending the need for aid by creating jobs, unlocking the potential of girls and women and helping to save lives when humanitarian emergencies hit. https://www.gov.uk/government/organisations/department-for-international-development or follow us on twitter @DFID_UK

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Brad Stave
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since: 06/2009
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