Global Partnerships announces expansion with $8.5 million microfinance fund
Seattle, WA, March, 26 2007 -
An $8.5 million microfinance investment fund just launched by Global Partnerships (GP), a Seattle-based nonprofit organization, will dramatically expand the reach of financial services to people living in poverty in Latin America.
GP’s Microfinance Fund 2006 (MFF 2006) leverages philanthropic giving with the investment of private capital. Generous individuals donated $255,000 to build the equity layer of MFF 2006. Socially motivated investors, including the Overseas Private Investment Corporation, the Inter-American Development Bank, Seattle University, ResponsAbility Global Microfinance Fund and Partners for the Common Good, as well as 19 individuals, invested $8,225,000. Orrick, Herrrington & Sutcliffe LLP, a global law firm, provided pro bono assistance to GP to establish the fund. The investment banking firm Developing World Markets assisted GP in structuring the fund and served as the investment bank.
The result: MFF 2006 will leverage philanthropic funds by a ratio of 32 to 1—bringing microfinance institutions (MFIs) 32 times more funding than would otherwise have been available to them.
Through long-term relationships with MFI partners, GP has developed a deep knowledge of MFI business models that work. This knowledge has translated to strategic partnerships throughout Latin America. MFF 2006 will expand GP’s reach to 20 partners serving 480,000 borrowers in six countries. It continues GP’s expansion into South America, with MFI partners in Bolivia and Peru. Previously GP’s efforts focused on Central America, with partners in El Salvador, Guatemala, Nicaragua and Honduras.
MFF 2006 provides GP’s MFI partners with “patient capital”—funding they can use for long periods of time with few restrictions, and thus make long-term investments in organizational efficiency and client outreach.
Microfinance is one of the most promising strategies for combating global poverty. Currently, however, only an estimated 10 percent of the people in Latin America who would benefit from microfinance are being reached. By investing capital and management expertise in high-performing MFIs in the region, Global Partnerships supports their growth so that financial services can be made available to hundreds of thousands of new borrowers.
About Global Partnerships
Global Partnerships is a nonprofit organization dedicated to expanding opportunity for poor people and providing leadership in the fight against global poverty. The organization has offices in Seattle, WA and Managua, Nicaragua.