WASHINGTON, D.C., February 1, 2001 —
In a new poverty-fighting initiative, the International Finance Corporation
today announced a US$400,000 program to fund ACCION International’s technical
assistance that will benefit four microfinance institutions (MFIs) in Africa
and Latin America.
The funding is seen as the first step in an emerging long-term partnership
between IFC and ACCION, a microfinance pioneer with 27 years of experience
of helping low-income entrepreneurs gain the financing they need to generate
new income and improve their living standards. The funding from IFC’s
Small and Medium Enterprises (SME) Capacity Building Facility will support
the professional services needed to expand existing MFIs in Mozambique,
Brazil, and Guatemala and to create a new one in South Africa.
Until now ACCION has worked exclusively in the Western Hemisphere. IFC’s
support provides the funding to help ACCION to transfer its successful
models to Africa for the first time. The goal is to satisfy the credit
needs of small entrepreneurs who start their own businesses but lack access
to loans required for expansion. The technical assistance initiative
comes just as IFC has also approved its first direct investment in an ACCION
affiliate, a $1.9 million financing of Financiera Compartamos in Mexico.
IFC executive vice president Peter Woicke said the partnership with ACCION
will help IFC support microlending as a sustainable approach to fighting
poverty. IFC’s long-term objective is to help microlending institutions
such as ACCION affiliates become commercially viable in order to attract
the private capital they need to grow and operate as permanent financiers
of the poor, he added.
María Otero, president and CEO of ACCION International, said that IFC’s
participation will help ACCION leverage its capacity to reach more microentrepreneurs
around the world, leading to better lives for thousands of low-income borrowers
and their families.
In each case, technical assistance funding is drawn from the SME Capacity
Building Facility, a $7.1 million initiative to support innovative efforts
in the field of micro enterprises and SMEs that IFC launched last year.
The Facility supports up to 40 percent of the costs of pilot projects
that are unique and replicable and involve close partnership with outside
In Mozambique, where only 5 percent of the country’s estimated 100,000
microentrepreneurs have access to business credit, the funding will help
non-profit microlender Tchuma expand to serve all of Maputo Province. Its
goal is to double its number of clients and establish a savings program.
In response to the lack of formal microlending activity in South Africa’s
Northwest Province, IFC funds will help ACCION and local partner Vulindlela,
a South African development consulting firm, create an entirely new MFI.
In Brazil, IFC’s support will help transform ACCION’s group of affiliates—the
CEAPE Network—into one larger, regulated financial institution that is
expected to cover its operating costs and become profitable within three
In Guatemala, IFC efforts will help ACCION’s affiliate, Génesis, transform
from a non-profit organization to a regulated microbank, thus creating
the country’s largest private regulated MFI.
In a parallel initiative, IFC is also strengthening microfinance in Mexico
by investing in ACCION affiliate Compartamos with a 10 to 15 percent equity
investment and a five-year $1 million loan. A microlender that has
recently gone from non-profit to for-profit status, Compartamos currently
lends to 60,000 borrowers in rural and urban Mexico, many in the less developed
states of Oaxaca and Chiapas. In the next five years, the organization
expects to triple the number of borrowers it serves.
ACCION International, a private non-profit organization working in Latin
America and the Caribbean, Africa, and the United States, serves low-income
people, such as street vendors, carpenters, and seamstresses—who start
their own small businesses to survive. Since 1992, the ACCION Network
has disbursed over $3 billion in loans averaging $600 to more than 2 million
microentrepreneurs. Ninety-eight percent of the loans have been paid
The mission of the IFC, part of the World Bank Group, is to promote private
sector investment in developing countries, which will reduce poverty and
improve people’s lives. IFC finances private sector investments
in the developing world, mobilizes capital in the international financial
markets and provides technical and capacity building assistance and advice
to governments and businesses.