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FINCA Village Banking:

Creating Pathways Out of Poverty for the World’s Poor. FINCA Village Banking:. Severe Poverty Worldwide. Nearly 3 billion people—half the world—live on less than two dollars per day* The feminization of poverty is a worldwide trend as 70% of the world’s poor are women*

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FINCA Village Banking:

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  1. Creating Pathways Out of Poverty for the World’s Poor FINCA Village Banking:

  2. Severe Poverty Worldwide • Nearly 3 billion people—half the world—live on less than two dollars per day* • The feminization of poverty is a worldwide trend as 70% of the world’s poor are women* • A country with the majority of its population lacking access to financial services will not progress FINCA International, Inc. * Millennium Development Goals Report 2007, page 4

  3. How Microfinance Helps

  4. Microfinance: A Brief History 1976 1984 1997 2004 2006 2007

  5. Microfinance Industry Today • There are 3,164 microfinance organizations around the globe* • 92.3 million clients served • 66.6 million among the world’s poorest • 55.6 million are women • Approximately $2.5B annual circulation • 50% of those clients are being served by the 42 largest organizations, FINCA among them • Nearly 60% of loans are for $100-$1000 • Scale is an issue, as only 41% of MFIs have more than 5,000 borrowers *State of the Microcredit Summit 2005

  6. FINCA’s Mission • FINCA’s mission is to provide financial services to the poor so they can: • Create jobs • Build assets • Improve their standard of living These services are delivered through a global network of self-supporting institutions.

  7. Principles of Microfinance • Trust the poor • Provide a self-employment loan, not a gift • Lend to women • Encourage self-sufficiency through savings • Expect high repayment rates • Empower individuals and groups

  8. FINCA’s Clients

  9. Typical Client Profile • 72% of clients are women (91% in Africa; 91% in Latin America) • Typically 20-50 years old • Support five family members plus other relatives, neighbors and orphans • Live and work in urban, peri-urban, and rural areas

  10. Typical Businesses • Food sales • Tailoring • Small-holder agricultural businesses • Hair salons, repair shops • Household and craft production and sales

  11. What is a Village Bank? • 10-20 low-income women who take out a group loan • Loans are small • Collective guarantee • Local self-management • Loan cycles of 16 weeks • Savings mobilization • Recycling of loans

  12. Where FINCA Works Eurasia Armenia Azerbaijan Georgia Kosovo Kyrgyzstan Russia Tajikistan FINCA HQ Washington DC Greater Middle East Latin America Afghanistan Jordan Africa Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua DR Congo Malawi Tanzania Uganda Zambia Regional Hubs San Jose, Costa Rica Kampala, Uganda Kiev, Ukraine

  13. Products and Services • Credit • Village Banking loans • Small group loans • Individual loans • Savings • Voluntary savings • Mandatory savings • Insurance • Credit, health/funeral, catastrophic illness and loss of sole income earner • Services/Training • Business skills training, health education

  14. The Village Banking Campaign An international, multi-year “call-to-action” designed to harness social momentum, and mobilize the people and resources needed to alleviate poverty on a global scale.

  15. Specific Goals • Operate - 100,000 Village Banks serving one million clients and their families by 2010 • Mobilize - $200 million in support of that goal • Launch - programs in at least five new countrieswhere the business opportunity and the need for FINCA’s services are greatest • Celebrate - 25 years of providing financial services to the world’s lowest-income entrepreneurs

  16. Campaign Highlights • So far, FINCA has reached 200,000+ new clients • FINCA created an exciting partnership with MySpace, which helped promote an exclusive FINCA iTunes album • FINCA is now serving over 100,000 clients in Mexico and started operations in Jordan

  17. You Can Support the Village Banking Campaign • Make a donation • $50 can provide a first loan to a woman in Tanzania so she can purchase a used sewing machine and start a tailoring business • $100 can help a woman in Honduras buy flour in bulk, triple her output of tortillas and double her income • $500 can help a woman in Kyrgyzstan rent a stall in the market, increase her inventory and send her children back to school • Sponsor a Village Bank • A $5,000 contribution starts a Village Bank, supporting 10-20 women in new businesses • Learn more about the power of microfinance • Visit www.villagebanking.org and discover new ways you can support the campaign, and end poverty within our lifetime

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