The Foundation for
International Assistance (FINCA) International was founded in 1984 by John
Hatch with the idea that giving loans to entrepreneurs in poor communities
will be more effective if the funds are left to the management of entrepreneurs
themselves. FINCA developed a
microcredit methodology known as village banking. The idea came from the fact that in
developing countries, small-scale entrepreneurs find it hard to develop their
business because they lack resources and therefore, it is difficult for them to
provide collateral to get loans. Village
banking tries to stop this vicious cycle by having the village member
cross-guarantee each other in place of collateral, resulting to a system where
social trust, and pressure, is at play to make the members become responsible
debtors.
Now, FINCA
supports over one million clients, mostly mothers. Overall, their clients have an average of 97%
repayment rate – a feat that beats even commercial loan records. FINCA’s business model has set global
standards in micro-finance. The main objective is to break the
intergenerational cycle of poverty through the business model they have
improved over the years. The model is open to donations and investment
dollars under a transparent and sustainable framework.
Supporting FINCA through
donations can be done online. They also offer honor and memorial cards
where supporters can send out e-cards after giving donations. Help can
also be extended by giving a loan through their Lend a Hand
Program. One can choose a borrower basing on the borrower’s business,
the amount of loan needed and their story. The money given for the loan
once paid by the first borrower will be used by the next borrower. Loan
terms are, at the minimum, 16 weeks. The money given does not only help
one client but could extend to at least three clients in a span of one year.
