Expanding Financial Services in Developing Countries
Issue
“It is the ability to control capital that gives people the power to rise out of poverty.”
— Muhammad Yunus, Founder, Grameen Bank
Funding
Less than 4% of foundation giving for poverty in developing countries in 2007 supported expanding access to financial services
Challenge
How can we use investment as a tool to lift people out of poverty?
Strategies
- Make community investment accessible to a wide audience
- Create investment products that blend financial and social returns
- Mobilize individual investor capital to support microfinance
Case Study
MicroPlace
- Web service launched by eBay in 2007
- People invest in the world’s working poor while earning financial returns
- Calvert Foundation was the first issuer to sell investments on its site
- Funds raised by the Calvert Foundation from securities sales are invested in microfinance institutions targeted by online investors
- Calvert Foundation received $16 million in grants from private funders for start-up costs and a risk capital pool
- Funders include Omidyar Network, MacArthur and Rockefeller foundations
Results
MicroPlace’s first-year successes:
- More than 6,500 members
- More than 26,000 loans to entrepreneurs in 34 countries
- Higher than 2% average return on investment, while the S&P returned -35.97%
|
Research Sources
Microfinance: An Emerging Investment Opportunity
Deutsche Bank
12/2007
MicroPlace
Calvert Social Investment Foundation
Leading Foundations Bolster Calvert Foundation in Online Microfinance Initiative Investing in the Working Poor
1/29/2008
MicroPlace Launches Investment Website to Address Global Poverty
10/10/2007
Omidyar Network
The John D. and Catherine T. MacArthur Foundation
The Rockefeller Foundation
|
