Innovative Funding

Synergy Capital Fund Will Help Raise $7.5 Million for Microfinance

After 30 years, the global microfinance industry has proven that offering financial services to the poor provides an effective way out of poverty through a sustainable business model. For the past 12 years, Global Partnerships (GP) has promoted this “wealth creation” model in Latin America by providing capital and technical assistance to profitable, povertyfocused microfinance institutions (MFIs). To help these MFIs achieve their goals of high growth, GP combines philanthropic funding and commercial investment through Microfinance Funds, which provide MFIs with sustainable sources of funding by connecting them to commercial capital markets. GP’s Microfinance Fund 2005 invested $2 million in eight MFIs, generating over 10,000 microloans to date.

GP is now laying the groundwork for Microfinance Fund 2006, a $7.5 million investment fund that will make loans to 12-15 MFIs in Latin America. In order to build this fund, we need to raise 3% of the total amount, $225,000, as equity from individual donors. Our goal is to raise this amount through the Synergy Capital Fund – working capital that will be leveraged to attract an additional $7,275,000 from individual and institutional investors. Contributions to the Synergy Capital Fund are 100% tax-deductible – 100% of all funds will be directed to Latin American microfinance institutions and matched 32 to 1 by additional investment from socially motivated lenders. Furthermore, this unique donation keeps on giving: GP can earn interest on the Fund up to 16% annually over five years, and we will reinvest all returns into our future poverty elimination work.

Most importantly, the Synergy Capital Fund is the foundation of an investment fund that has the potential to create more than 180,000 microloans over five years. It connects MFIs to commercial capital markets so they can have continued access to funding, enabling them to reach even more underserved borrowers in the future. A donation to the Synergy Capital Fund creates an impact on poverty many times its own value. Please consider donating to this Fund. Contact Jason Henning at 206.652.8707 for more information.

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