FINCA International
A Commercially Viable Approach to Poverty Alleviation
Market for Microfinance
Gap in Financial Services
Traditional financial services
100 mn
people
>$20,000/yr*
Lacks access
1.7 billion people
$1,500-$20,000/yr*
4 billion people
<$1,500/yr
*Numbers are in purchasing power parity in USD
Source of Image -- C. K. Prahalad and Stuart Hart, 2002. The Fortune at the Bottom of the Pyramid, Strategy+ Business, Issue 26, 2002
Source of Figures -- Allen L. Hammond and William J. Kramer, 2007. The Next 4 Billion.
Explaining the Gap: Perceived Risks
Perceived limitations
•Transaction costs are
high
Perceived Risks
•Property rights are not
well-established
•Clients are
geographically
dispersed
•Corruption and bribery
by local officials
•Perceived impact of
client illiteracy
+
•Absence of
information
•Limited competition
•Absent or imperfect
regulatory framework
Gap in the
Availability of
Financial
Services
Why Microfinance?
Market perspective:
• Capitalize on significant, untapped sector of financial market
• Create jobs
Social perspective:
• Provide access to services
• Improve socio-economic levels of clients and community
• Enable intangible results such as empowerment
Microfinance illustrates:
• Low-income clients are profitable
• Risks associated with the poor are perceived
• Financial systems can meet the needs of the poor
Role of Microfinance
Microfinance illustrates:
• low-income clients are profitable
• risks are perceived
• financial systems can meet the needs of
the poor
FINCA International
Module 2: Microfinance Industry Overview
Industry Overview
Origins of Microfinance
The development “industry” is fairly
recent but development tools such as
microfinance have always existed
Microfinance Timeline*
•Since the beginning of time: Informal
savings & credit groups have always existed
Development Timeline
•1500s: 1st pawn shop created by Catholic
Church as alternative to money lenders
•Late 1940s: The concept of “Development”
appears after WWII
•1700s: Irish Loan Fund System began
•1950s: Modernization (Big Push and/or
strategic investments)
•Early 1900s: Adaptations in Latin America
•1960s/1970s: Dependency Theory, ISI
policies, grassroots
development, basic needs
•1980s: Structural Adjustment
•1990s: Community Development, interest in
Sustainable Development swells,
debt relief (HIPC/Jubilee 2000)
•2000: Millennium Development Goals
•1800s: Financial Cooperative developed
•1950-1970: State-Owned Development
Finance Institutions emerged
•Early 1970s: Experimental Microcredit
programs
•1980s: Microcredit spreads and improves
•Early 1990s: Microcredit  Microfinance
•Today: Blurring of lines between MFIs and
traditional financial institutions
*Helms, Access for All, ch. 1
Industry Overview
ACCION International
First microloan in Brazil, 1973
Grameen Bank
Founded in Bangladesh, 1976
FINCA International
First microloan in Bolivia, 1984
ProCredit Holding
Founded 1998
Industry Overview
Top Credit-Led Methodologies
CREDIT METHODOLOY
GROUP
Community Lending Groups
of Groups
Models
Village
Banking
ROSCAs ASCAs CO-OPs SHGs
INDIVIDUAL
Solidarity
Group
Industry Overview
Overview of MFIs
• Range of providers
– 7,000 - 10,000 MFIs globally; exact total unknown
– 1,900+ MFIs self-reporting to MIX Market*
• Size of industry
– $60 billion in loans
– $37 billion in deposits*
• Largest 29 reporting MFIs have 50% of all loans
• Largest 16 reporting MFIs have 50% of all borrowers
• Largest 8 have 50% of all depositors
• Large variety in legal structure, mission and methodology
•MixMarket, www.mixmarket.org
Industry Overview
Overview of MFIs
• Client Base and Circulation Large and Growing
– Exceeding 190 million clients, 128 million are poor**
– Loans to poorest impact over 600 million people
– 80% of poorest clients are women
• Large variety in loan sizes*
–
–
–
–
19 have average loans > $10,000
44 have average loans $5,000 – 10,000
331 have average loans $1,000 – 5,000
521 have loans <$500
* MixMarket, www.mixmarket.org
**Microcredit Summit Campaign, State of the Microcredit Summit Campaign Report 2011
Industry Overview
Industry Examples
Client/
Borrower
MFI
• Member of
• Grameen
•
solidarity
Bank, FINCA
group (3-15
Affiliates
•
borrowers) • Local
• Community
financial
borrower
intermediary •
(group of 15(post office,
40)
grocery
•
store)
• Individual
loan
recipient
Network
Rating
Agency
Sanabel
(Middle East)
AFMIN (Africa
Microfinance
Network)
FINCA
International
Accion
• PlaNet
•
Finance
• Planet Rating •
• MicroRate
•
• MicroFinanza •
• M-CRIL
•
• Standard and •
Poor’s
Technical
Assistance
CGAP (World
Bank)
USAID
SEEP
UNDP
Imp-Act
Also
provided by
Networks
and MFIs
Investor/
Funder
•
•
•
•
•
•
EBRD
MicroVest
ShoreCap
BlueOrchard
KFW
City Group
Foundation
• Kiva
• Oikocredit
• Calvert
Foundation
Industry Overview
Share of Market By Sector
5%
3%
7%
8% (65)
(71)
(7.7)
2%
(3.3) (2.4)
(2.5)
14%
(123)
39%
(346)
3%
32%
(284)
Banks
Coops/Credit Unions
Non-Bank Financial
Institutions
Non-Profits/NGOs
Rural
87%
(117.4)
Median Outstanding Portfolio
By Sector
Sources:
(Millions USD)**
*MicroBanking Bulletin, Issue 17, Autumn 200, 35.
Number of Institutions by
Sector*
**MicroBanking Bulletin, Issue 15, Autumn 2007, 36 (based on
median gross loan portfolio)
Industry Overview
Minimalist v. Integrated Approach
Minimalist Approach
Financial Intermediation
•Working Capital
•Fixed Asset Loans
•Savings
•Insurance
Social Intermediation
•Group Formation
•Leadership Training
•Cooperative Learning
Enterprise Development
•Marketing
•Business & Production Training
•Subsector Analysis
Social Services
•Education
•Health and Nutrition
•Literacy Training
Integrated Approach
Microfinance Industry Overview
Microfinance Models*
Organization
Relationship
Governance &
Control
Market
Segment
Main Products
Average
Loan Size
(USD)
Services
Provided to
Partners /
Affiliates
-Affiliation by
accreditation
-Autonomous
implementing
organizations
-ACCION has
limited fiduciary
responsibility
ACCION sits on
boards of some
affiliates but has
no control over
them
Medium/
High
-Solidarity
Groups
-Individual
Loans
-Housing
Microfinance
-Microinsurance
-Remittances
-Savings
Asia: $151
Africa: $1181
LAC: $951
US: $5700
-Provides
technical
assistance and
financing to
affiliates
- Assists in
transforming to
commercial
entities
-Replicator
model
-No affiliates
Limited board
representation,
control
restricted to
grant
agreements
Low
-Group Lending
-Housing
Microfinance
Estimated
$350
Provides
financial and
technical
assistance and
publications to
replicate the
Grameen
technology
*Information was compiled from available published data and our best understanding of these organizations based on industry exchanges
on such topics.
FINCA International, Inc.
Microfinance Industry Overview
Microfinance Models*
Organization
Women’s World
Banking
Relationship
Governance &
Control
Market
Segment
Main
Products
Average
Loan Size
(USD)
Services Provided
to Partners /
Affiliates
-Autonomous
implementing
partners
-Control restricted to
grant agreements
Low
-Solidarity
-Group
Lending
-Entering
Savings
Models
(i.e.:
ROSCA/
ASCA)
$275
-Multi-disciplinary
organization
-Programs receive
access to funding &
technical assistance
via accreditation.
- CRS develops
materials, systems
and training to assist
programs
-Autonomous
implementing
partners and
affiliates
-Accreditation
system
-No fiduciary
responsibility
- No board
representation.
-Some
representation of
local affiliates in the
WWB Board.
- Control restricted
to grant agreements
Medium
-Credit
-Savings
-Health
Insurance
$467
Provides information
sharing,
capitalization, partial
loan guarantees, and
policy work
*Information was compiled from available published data and our best understanding of these organizations based on industry exchanges
on such topics.
Microfinance Industry Overview
Microfinance Models*
Organization
Relationship
Governance &
Control
Market
Segment
Main
Products
Average
Loan Size
(USD)
Services Provided to
Partners / Affiliates
-Autonomous
implementing
partners
-Control
restricted to
grant
agreements
Low
-Solidarity
-Savings
$75
-Multi-disciplinary
organization
-Designs and manages
community-based
projects in education,
health care and
economic
development.
-Complete
fiduciary
responsibility
- Implementing
organizations are
independent
NGOs,
subsidiaries or
branches of
FINCA depending
on local law
- Majority
representation
on all of FINCA
affiliate boards
and has
financial and
legal control
over each
affiliate.
Low
-Village
banking
-Solidarity
-Individual
$497
Provides management
oversight, monitoring,
and technical
assistance from start
up, to self-sufficiency
to transformation into
commercial entities
*Information was compiled from available published data and our best understanding of these organizations based on
industry exchanges on such topics.
Microfinance Industry Overview
Microfinance Models*
Organization
ProCredit
Relationship
Governanc
e & Control
Market
Segment
-Parent
company of
19 banks in
Latin
America,
Africa and
Eastern
Europe
-Funds
businesses
that have
been
running for
at least 3
months
High
Main Products
-Individual
-Provides
domestic/intern
ational
payments, card
services, home
improvement
loans and ebanking
services
Average
Loan
Size
(USD)
93.5%
are
$13,340
or less;
50% are
$1,400
or less
Services Provided to
Partners / Affiliates
-Invests in quality of
client through
advanced training
personnel
-Provides strategic
guidance and
management for
affiliates
*Information was compiled from available published data and our best understanding of these organizations based on industry exchanges
on such topics.
FINCA International
Module 3: Microfinance Clients
Microfinance Clients
Segmentation by Income
Microfinance can serve a range of
income levels
Target populations have sizable
combined assets
Top of
Pyramid
100 mn people
>$20,000/yr*
1.4 billion people
$3,000 - $20,000/yr*
4 - 5 billion people
<$3,000/yr *
Bottom of the pyramid:
•
Vulnerable non-poor
•
Moderate poor
•
Extreme poor
*Numbers are in purchasing power parity in USD
Source of Image -- C. K. Prahalad and Stuart Hart, 2002. The Fortune at the Bottom of the Pyramid, Strategy+ Business, Issue 26, 2002
http://www.whartonsp.com/articles/article.asp?p=389714
Source of Figures -- Allen L. Hammond and William J. Kramer, 2007. The Next 4 Billion http://pdf.wri.org/n4b_executive_summary_graphics.pdf
Microfinance Clients
Segmentation by Income
Most clients come from moderately poor and
vulnerable non-poor households
Moderate Poor – less than $2/day; Extreme poor – less than $1/day
Source: Cohen, “The Impact of Microfinance”
Microfinance Clients
Typical Microfinance Clients
• No access to formal financial institutions
• Self-employed
– Household-based, informal market, ect.
• Nearly 80% women*
• Urban clients
– Shopkeepers, service providers, artisans, street vendors, etc.
• Rural clients
– Small farmers or entrepreneurs engaged in income-generating activities
such as food processing or petty trade
• Poor or Vulnerable Non-Poor
*Among top 10 MFIs (listed In terms of total borrowers)
Source: www.microfinancegateway.com/section/faq
Source: Microfinance: An Emerging Market Opportunity
Microfinance Clients
Understanding Client Needs
(a) Life-cycle needs
•
•
•
Birth, Marriage (loans, savings)
Old Age (pensions)
Death (insurance, savings, loans)
(b) Emergencies
•
Illness, disasters, etc. (loans, insurance, etc.)
(c) Investment opportunities
•
Working capital and access to funds (microenterprise loans,
remittances and transfers)
Source: Helms, Brigit. CGAP, Access for All
Microfinance Clients
Access = Opportunity to Meet Needs
Access to financial services
Increase & diversify incomes
Build assets
Mitigate risk
Plan for the future
Make choices
Increase food consumption
Invest in education & health
Invest in housing, water, sanitation
From Everyday Survival to Planning for the Future
Microfinance Clients
Regional Trends
Growth in # of Borrowers
12
(in millions)
10
8
2004
2005
6
2006
2007
4
2
0
Africa
Eastern
Europe &
Central Asia
Latin
America &
Caribbean
Middle East
& North
Africa
Source: MicroBanking Bulletin, Issue 17, Autumn 2008, Figure 1, p. 46. http://www.mixmbb.org/Templates/CurrentIssue.aspx, accessed
April 2009.
FINCA
International, Inc.
FINCA
International,
Inc.
Microfinance Clients
Regional Trends
Percent of Women Borrowers
90
(%)
80
70
60
2004
50
2005
40
2006
30
20
2007
10
0
Africa
Eastern
Europe &
Central Asia
Latin
America &
Caribbean
Middle East
& North
Africa
Source: MicroBanking Bulletin, Issue 17, Autumn 2008, Figure 1, p. 46. http://www.mixmbb.org/Templates/CurrentIssue.aspx, accessed
April 2009.
FINCA
International, Inc.
FINCA
International,
Inc.
Microfinance Clients
Regional Trends
Average Loan Balance per
Borrower
2250
2000
1750
(US$)
1500
2004
1250
2005
1000
2006
750
2007
500
250
0
Africa
Eastern
Latin
Middle East
Europe &
America &
& North
Central Asia Caribbean
Africa
Source: MicroBanking Bulletin, Issue 17, Autumn 2008, Figure 1, p. 46. http://www.mixmbb.org/Templates/CurrentIssue.aspx, accessed
April 2009.
FINCA
International, Inc.
FINCA
International,
Inc.
Microfinance Clients
Regional Trends
Growth in # of Depositors
5
(in millions)
4
3
2004
2005
2
2006
1
0
Africa
Eastern
Europe &
Central Asia
Latin
America &
Caribbean
Middle East
& North
Africa
Source: MicroBanking Bulletin, Issue 16, Spring 2008, Figure 1, p. 17. http://www.themix.org/publication_detail.aspx?publicationID=237,
accessed June 2008.
Microfinance Clients
Industry Trends
Target Market
20000
# of Active Borrowers
18000
16000
14000
2004
12000
2005
10000
2006
8000
2007
6000
4000
2000
0
Low End
Broad
High End
Small
Business
Source: MicroBanking Bulletin, Issue 17, Autumn 2008, Figure 1, p. 47. http://www.mixmbb.org/Templates/CurrentIssue.aspx, accessed
April 2009.
Microfinance Clients
Industry Trends
Lending Methodology
# of Active Borrowers
50000
40000
2004
30000
2005
2006
20000
2007
10000
0
Individual
Individual /
Solidarity
Solidarity
Village
Banking
Source: MicroBanking Bulletin, Issue 17, Autumn 2008, Figure 1, p. 47. http://www.mixmbb.org/Templates/CurrentIssue.aspx, accessed
April 2009.
Microfinance Clients
Among the Historically Unbanked, Who Do MFIs Serve?
CHARACTERISTICS
Historically Underserved/Unbanked…
Poverty Level
“Destitute” to “Non-Poor”.
Assets
Varies by poverty level. Poor are largely landless
with simple assets such as cell phones, radios,
bicycles. Few have productive assets (tools).
Gender
Disproportionately female.
Income Generation
High participation in informal sector & agricultural
sector.
Location
High numbers urban but poorest are largely rural.
Access
Limited or no access health, education, financial
services, infrastructure.
Other Categories
Displaced persons, retrenched workers.
Source: Private Sector Microfinance, Alan Doran (Oxfam), 2008
http://www.oxfam.org.uk/resources/downloads/FP2P/FP2P_Priv_Sector_Microfinance_BP_ENGLISH.pdf
MFI Clients…
Microfinance Clients
Summary: Key Trends
– Overall, increase in growth rate of # of borrowers (23%)
– Highly concentrated growth – 25% of MFIs surveyed by MIX adding at least 42% of
additional borrowers
–
–
–
–
7% growth in number of depositors
Steady growth in percentage of women borrowers to about 64.4%
Increase in average loan balance to $563 in 2006
Average of 23,431 borrowers/MFI
– Greatest scale in Vietnam (556,038 borrowers/MFI)
– Lowest in Barbados (384 borrowers for the 1 MFI in Barbados)
– In regions where FINCA operates (all except East Asia/Pacific), average of 16,738
borrowers/MFI
– Low market penetration, at an average of 7% of borrowers/poor
– Industry-wide, highest # of active borrowers at low end of market
– Solidarity lending methodology attracting highest # of borrowers
Sources: MicroBanking Bulletin, Issue 16, Spring 2008, http://www.themix.org/publication_detail.aspx?publicationID=237, accessed June
2008; and Gonzalez, Adrian, 2007. “How Many Borrowers and Microfinance Institutions (MFIs) Exist?” Microfinance Information
Exchange (MIX), Washington, D.C. http://www.themix.org/publication_detail.aspx?publicationID=215, accessed June 2008.
FINCA International
Module 4: Overview of FINCA International
FINCA International
Mission Statement
MISSION
The mission of FINCA
International is to provide financial
services to the world's lowestincome entrepreneurs so they can
create jobs, build assets, and
improve their standard of living.
FINCA International
Vision Statement
VISION
To become the leading global
microfinance institution by
providing financial services to
more than one million clients
annually by 2010, while operating
with the highest commercial
principles of performance,
transparency and sustainability.
FINCA is successfully achieving its vision without sacrificing the fundamental
mission of serving the poorest of the productive poor
FINCA International, Inc.
FINCA International
Social Performance Definition
FINCA defines social performance as:
1. expanded access to financial services, primarily among
underserved, low-income people and communities;
2. increased employment and incomes;
3. improved living standards;
4. empowerment and the achievement of personal aspirations
among our clients and in their families;
5. acting responsibly and equitably towards all stakeholders,
and the communities of which we are a part.
Map of the Network
FINCA Africa
Global Headquarters
Washington, DC, USA
Regional Hubs Offices
LAC
Africa
GME
Eurasia
Miami, FL, USA
Kampala, Uganda
Amman, Jordan
Istanbul, Turkey
Latin America
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Africa
DR Congo
Malawi
Tanzania
Uganda
Zambia
GME
Afghanistan
Jordan
Eurasia
Armenia
Azerbaijan
Georgia
Kosovo
Kyrgyzstan
Russia
Tajikistan
FINCA Operations
Business Model
Target Market: entrepreneurs on the lowest rung of the economic ladder
Ownership: FINCA wholly owns and manages its worldwide network
Management by local teams with intimate knowledge of local market
Reporting: Encourages greater transparency & achievement of higher
business standards
Compliance: Meets rigorous commercial market guidelines, and
social/financial expectations of international donor community
 This permits FINCA to leverage capital for rapid expansion
Funding: Integrates donations and investments to maximize loan capital
FINCA Operations
Business Model – Structure
HQ consolidates key
functions associated with
governance, strategy, audit
and controls.
Hubs provide regional
centers of management &
technical expertise
Affiliates have flexibility at
program & client level
Policy & Strategy, HR,
Accounting, Fundraising, IT,
Reporting, Audit, Capital
Markets, Legal
Headquarters
Regional Hubs
Africa
Eurasia
LAC
Affiliate
Operations
GME
Regional Training, Program
Planning & Monitoring,
Product Development,
Audit & Control
Core operations,
implementation of all
functions listed above
FINCA International
Products and Services
•
•
•
•
•
•
Credit
Village Banking loans, small group loans, individual loans
Savings
Autonomous accounts, cash collateral,
deposits
Insurance
Life/loan insurance
In R&D: Health and other microinsurance
Services and training
Ad hoc training through partnerships including business skills training
and health education
Innovative Delivery Mechanisms
Smart cards, VISA partnership (electronic payment technologies in pilot
phases within Latin America), Shariah-compliant microfinance services
in GME
FINCA International
Products – How a Village Bank Works
Group
Group Loan
Repayment
Interest
Savings
Loan Capital
Village Bank
Individual Loan
Client
•Food
•Health Care
•Education
Sales
Income
Customers
Self-Employment
Activities
FINCA International
FINCA Portfolios: By Loan Type and Region
Clients (,000s)
Portfolio (,000s)
$135,318
$629,452
169,187,026
217,428,809
VB Clients
Individual Clients
VB Clients
Source: FINCA Global Statistics, Nov 2009
Individual Clients
FINCA International Product Examples
Product
Terms
Guatemala
Village Banking Loan
Tajikistan
Individual Loan
Georgia
Solidarity Credit Group
Borrower
VB's from 10+ Members
3-15 members, usually adult
women and mothers
Urban and rural clients
Interest
Rate
4% Flat/month
24-36% Declining/year
36% Declining/year
Fees
None
1% upfront fee rate
2% (3% w/o collateral)
Loan Size
Ave: Q1,600 (USD 210)
Typically: GEL300-400
(USD170-225)
Ave: TJS 2,231 (USD 550)
Loan Term
4 months and 6 months
3 months to 12 months
Initial loan – 2 to 12 months
2nd cycle – up to 14 months
3rd cycle – up to 18 months
Repayment
Two weeks or Monthly
Four weeks, 30 days
Four Weeks
Penalties for
Delinquency
As defined in Group Rules
.5% (Applies to principal
payment due)
• Day 1-3: 10% of late principal
• Day 4-10: 5% of late principal
• Day 11+: 1% of late principal
Eligibility
Adult (18+) with existing
business
• Citizen with valid passport or
ID
• Member-decided
• Adult (18+)
• Good credit history
• Existing business for 3 months
Personal property
• No collateral
• One guarantor necessary
• Mutual guarantee within
SCG
Loans up to $1000 only w/ guarantor
Movable business/household assets
Immovable business/household assets
Gold collateral
Collateral /
Guarantees
FINCA International
Loan Amounts
•
•
•
•
The average loan amount to our clients is US$641
In most markets, FINCA loan sizes are below their peer groups.
82% of loans are through village banks.
Women comprise 67% of our clients.
Region
Africa
Latin America
Eurasia
Middle East
Total
Average
Disbursed
$344
Average
Outstanding
$241
588
1,111
514
641
382
776
385
511
Source
FINCA Global Statistics, December 2010
FINCA International
Network Statistics
Africa
Latin
America
Eurasia
Middle
East
CLIENT OUTREACH STATISTICS
Active Village Banking Groups
Active Village Banking Clients
Active Individual Loan Clients
11,116
170,529
23,672
23,951
225,714
17,567
56,014
245,258
78,314
5,720
16,382
2,531
Total Active Clients
% Village Banking Clients
% Women
194,201
88%
58%
243,281
93%
87%
323,572
76%
47%
18,913
87%
92%
PORTFOLIO STATISTICS
Village Banking Loans Outstanding
Individual Loans Outstanding
Total Loans Outstanding
22,649,705 76,519,873 122,647,131 5,248,146
24,191,645 16,440,845 128,674,346 2,034,944
46,841,350 92,960,718 251,321,477 7,283,090
Source: FINCA Global Statistics, Feb 2010
FINCA International
Network Profitability
Region
Indicator
Africa
YTD Net
Operating
Margin
OSS
Profit Margin
Portfolio Yield
ROA
Latin America
$ 1.29 mm $-3.32 mm
% Variance
vs. FY08
Total
Eurasia
GME
$8.36mm
$-3.49 mm
$ 2,83 mm
107%
105%
97%
112%
42%
103%
0%
5%
-7%
10%
-131%
2%
1%
84%
62%
41%
42%
50%
4%
3%
-2%
4%
-15%
1%
1%
Source: FINCA Global Statistics, Dec 2009
Microfinance Clients
Why Women?
Socio-economic reasons:
* Greatest Segment of Poor (~70%)
* Restricted access to education and productive resources
* Greater spending for benefit of household
Macroeconomic role in overall economic growth
* Gender inequalities hinder growth in developing countries
* Tend to spend more of the increased income on poverty-reduction,
especially for their children, than poor men.
– “Better poverty-reducers” and “drivers of development”
Lower-risk borrowers
* Better repayment rates reported from Malaysia to Malawi
* Highly motivated savers
* Higher likelihood to reinvest in income-generation rather than spend
only on consumption
http://www.fwa.org/community/microfinance.htm 13.Nov.2006
------- http://www.villagebanking.org/faq.htm#women -------- http://www.microcreditsummit.org/papers/empowering_final.doc
Sustainable banking with the poor, Johanna Ledgerwood – World Bank – p. 41
Managing Director, CASHPOR Technical services, Malaysia, http://www.fao.org/docrep/004/AC154E/AC154E03.htm
Elissa McCarter, Director of the Office of Development at CHF International www.seepnetwork.org/files/5759_file_WOMEN_AND_MICROFINANCE_McCarter.doc
Profile of FINCA Loan Clients
Target Client
Typical Client
Prerequisite
Has a business
Has a business
Demographics
•Resides in an urban, peri-urban or rural
setting.*
•No gender preference
•No age preference (in general clients are
between 18 and 60 years old)
•Lives in an urban area
•Married Female
•41 years old
•Household size of 5 members or less (typically
between 2-5)
•Children are grown and not of school age
•2 income earners per household
Access
Restricted access to financial services,
education, and other resources
Education
35% have less than 8 years
31% 8-11 years
34% 12 years or more
Poverty Level
In the bottom 1/2 of the population living below
the local currency national poverty line.*
When such info is not available, two
approaches:
–Low income countries: target those with
<$1/day daily per capita expenditure
(adjusted for purchase price parity)
– Middle income countries: target those
whose DPCE falls below 25% of the per
capita Gross National Income.
Typically between $1 - $4/day in daily per capita
expenditures
Other
Shares FINCA’s mission goals.
Knows and shares in our mission
FINCA and Microfinance
Profile of Typical FINCA Businesses:
• Typically one business operating for one year or more
• Commercial enterprises such as:
–
–
–
–
–
–
–
selling food
tailoring
small-holder agriculture
trading
hair salons
pharmacies
transportation
– crafts
• They support their families, and often others in the
community (relatives, neighbors, orphans)
Source: FINCA International Strategic Plan, 2006
FINCA and Microfinance
Maria Lucía Ramirez – FINCA Ecuador Client
“I’m so grateful because
FINCA trusted me. Now I
can improve my life and
the life of my family.”
Señora Ramirez was able to take out a $200 loan and buy wool to make and sell
sweaters on the local market.
F/Jordan client builds a better future
Tamam used a US$300 loan to buy beehives and
honey collection equipment.
She runs a successful beekeeping business with 60
beehives and is a vital
contributor to her family’s
well-being
Tamam received the 2009
Citigroup award as one of
FINCA Jordan’s most
successful clients
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