The Inter-American Development Bank and Global Partnerships, a Seattle-based non-profit organization, have signed a $5 million loan, which will serve to capitalize the organization’s new social investment fund.
The Global Partnerships Social Investment Fund 2010, which raised a total of $20 million from a number of private and institutional investors, will invest in microfinance institutions that are going beyond providing working capital loans by bundling traditional microfinance lending with the provision of other services.
Luis Alberto Moreno, president of the Inter-American Development Bank, and Mark Coffey, chief investment officer of Global Partnerships, signed the agreement during the XIII Inter-American Microenterprise Forum, the biggest gathering of microfinance institutions in Latin America and the Caribbean.
The forum was in Montevideo, Uruguay.
With this project, the development bank, through its Opportunities for the Majority Initiative, said it hopes to support the regional growth of a new generation of microfinance investments with the potential to mobilize
social change among the population traditionally served by such loans.
“Through the Social Investment Fund 2010, Global Partnerships is taking microfinance to the next level and making a difference in the lives of those living at base of the socioeconomic pyramid,” said Elizabeth Boggs Davidsen, the development bank’s project team leader. “Microfinance institutions have established deep inroads into low-income populations. Adding new products to their existing network can greatly increase the impact of development interventions.”
With the support of the development bank, Global Partnerships is helping establish a new investment class in the region, in which investors receive both social and economic returns. Among the beneficiaries are Pro Mujer, which offers health screenings and education to its clientele of low-income women; FRAC, which serves in some of the poorest areas in Mexico; and Honduras-based Comixmul, which also has a female client base.
Global Partnerships, a Seattle-based nonprofit with a 16-year history of supporting microfinance projects in Latin America, has established three prior investment funds, which provide loans to a select portfolio of microfinance institutions.