Micro-

Financing

Plan Canada and micro

financing support

Plan is a global movement for change,

mobilizing millions of people around the

world to support social justice for children in

developing countries.

Founded in 1937, PLAN is one of the world’s

oldest and largest international

development agencies, working in

partnership with millions of people around

the world to end global poverty.

Microfinance

Microfinance involves extending small loans,

savings and other basic financial services to

people that don’t currently have access to

capital. It’s a key strategy in helping people

living in poverty to become financially

independent, which helps them become more

resilient and better able to provide for their

families in times of economic difficulty.

Considering nearly half the world survives on less

than $2 a day, microfinance is a vital solution.

Six benefits of microfinance:1. Access Banks simply won’t extend loans to those with little or no assets, and generally don’t engage in the small size of loans typically associated with microfinancing. Microfinancing is based on the philosophy that even small amounts of credit can help end the cycle of poverty.

2. Better loan repayment rates Microfinancetends to target women borrowers, who are statistically less likely to default on their loans than men. So these loans help empower women, and they are often safer investments for those loaning the funds.

3. Extending education Families receiving microfinancing are less likely to pull their children out of school for economic reasons.

4. Improved health and welfare Microfinancing can lead to improved access to clean water and better sanitation while also providing better access to health care.

5. Sustainability Even a small working capital loan of $100 can be enough to launch a small business in a developing country that could help the benefactor pull themselves and their family out of poverty..

6. Job creation Microfinancing can help

create new employment opportunities, which

has a beneficial impact on the local

economy.

Village Savings & LoansWHO? Youth and adults

WHAT? A program that allows members to pool their money and resources and invest in each other’s initiatives, like selling rice, returning to school or buying livestock.

WHY? These projects help people lift themselves out of poverty by helping them establish successful businesses. They also teach financial literacy and reinforce the benefits of working together to benefit everyone.

HOW? At each Village Savings and Loans

Association (VSLA) meeting, the group focuses

on business and loan proposals that have been

put up for consideration. They then determine

which individuals to loan money to. After a loan

is given, it must be repaid within 3 months with a

small amount of interest

COMMUNITY BUILDING

Members also give a small amount at each

meeting to a "social fund". This fund is used

when someone in the group has sudden

unexpected expenses, like medical bills, special

food for a family health issue or other

emergency.

Hundreds of thousands of people achieve

financial stability thanks to microfinance

schemes facilitated by Plan through its

partners, helping them protect their families

from emergencies and plan for the future.

Through small loans and savings schemes,

Plan's microfinance programs offer

assistance to the very poor with a special

emphasis on access for women.

Plan’s involvement in Micro

financing

By providing access to financial resources

and the opportunity to accumulate savings,

PLAN microfinance schemes allow families

greater flexibility in managing their

resources to become more resilient and

provide for their children.

In Peru, for example, Plan’s work through

partnerships has helped 8,000 families

access financial services and receive

educational support.

One partner is Arariwa, a non-

governmental organization with expertise in

microfinance projects. Together PLAN has

helped bring village banks to rural areas of

the Cusco region and complemented

these services with educational projects on

business management and children's and

women's health.

http://plancanada.ca/microfinance

Other Micro finance institutions

KIVA

KIVA is a non-profit organization with a

mission to connect people through lending

to alleviate poverty. Leveraging the internet

and a worldwide network of microfinance

institutions, Kiva lets individuals lend as little

as $25 to help create opportunity around

the world

Kiva envisions a world where all people -

even in the most remote areas of the globe

- hold the power to create opportunity for

themselves and others.

Kiva believes providing safe, affordable

access to capital to those in need helps

people create better lives for themselves

and their families

Since Kiva was founded in 2005:

1,215,780 Kiva lenders

$600,448,550in loans

98.79% repayment rate

KIVA works with:

274 Field Partners

450 volunteers around the world

78 different countries

Total amount lent through Kiva:

$600,448,550

Kiva Users: 1,803,808

Kiva Users who have funded a loan:

1,215,780

Borrowers funded through Kiva:

1,392,680

Number of loans made through Kiva:

754,788

Kiva Field Partners: 274

Countries where Kiva Field Partners are located:

78

Repayment rate: 98.79%

Average loan size: $418.12

Average loans made per Kiva lender:

10.14

Statistics

Through Labs, Kiva provides crowd-sourced capital to relieve the

cost constraints on new ideas. And together with this new breed of

Kiva partners, Kiva is testing and developing new financial products

for borrowers worldwide.

Kiva’s approach is to see what works and share the results with a

global audience. Ultimately, the hope is to get high-impact products

to people who have been too long overlooked, and demonstrate

their success to the global market.

Challenges:

Financing Agriculture: Creating flexible financing to help farmers

overcome uncertainties.

Closing the Energy Gap: Financing renewables to replace expensive

dirty and dangerous sources of energy.

Access to Education: Loans for students with promising futures but no

credit history.

Leveraging mobile technology: Lowering costs and expanding

access with mobile-based business models.

www.kiva.org

FINCA International

FINCA’s mission is to provide financial services to the world’s lowest-income entrepreneurs so they can create jobs, build assets and improve their standard of living.

FINCA’s vision is to be a global microfinance network collectively serving more low-income entrepreneurs than any other microfinance institution while operating on commercial principles of performance and sustainability.

Organization With headquarters in Washington, DC, FINCA

reaches over 1.7 million clients through its 22 subsidiaries in Africa, Eurasia, the Middle East and South Asia, and Latin America. Our outreach is among the broadest and most comprehensive of today’s microfinance institutions.

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Approach When clients come to FINCA for a loan, most of them are

already micro-entrepreneurs. They have enough experience to know that, without additional working capital, their odds of becoming or staying profitable and productive, or of making improvements in their lives, remain low. They are looking for a business loan, much like any other entrepreneur, but at a micro level.

For these small-scale businesses, even small amounts of capital can make a dramatic difference. A business loan of a few hundred dollars can enable micro-entrepreneurs to pay wholesale rather than retail prices for the goods they resell, or to buy with cash rather than on consignment, or acquire a more modern piece of essential equipment, turning their businesses into profitable, sustainable enterprises. This small increase in purchasing power can have an immediate impact on a client’s productivity and earnings. For other clients, having a safe and trusted place to store and save their daily revenue is most critical. All of these needs are met by FINCA.

FINCA provides clients with a wide range of the financial products and services that micro-entrepreneurs need including savings accounts; group and individual loans; credit life, short-term disability, and hospitalization insurance; and money transfers. These products vary by local demand, and they are adapted to comply with local regulations and culture. Each FINCA Subsidiary is run by a local team of professionals with intimate knowledge of their market, and it is this localized, client-driven approach that has made FINCA’s global expansion possible and so effective. FINCA is firmly committed to Client Protection and fair practices and maintains strict policies to ensure compliance. Our local loan officers are trained in FINCA’s mission, and dedicated to helping clients build successful businesses while ensuring that they are protected from unnecessary risks.

FINCA providing pathways out of Poverty

http://www.fincacanada.org/