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Our Strategy
Global Partnerships expands opportunity for people living in poverty by investing affordable capital and management expertise in select MFI institutions (MFIs) in Latin America.
Our approach is unique in two ways. First, in an era when commercial capital tends to flow to the most profitable microfinance institutions (MFIs), rather than MFIs that are serving those most in need, Global Partnerships (GP) invests in microfinance partners that combine a sustainable business model with exceptional levels of social impact.
In practice, this means they focus on reaching people who have traditionally been excluded from the financial sector, such as women and the rural poor, and often offer a combination of microcredit and social services that help their clients improve their lives over the long term. They also re-invest profits back in their mission. We believe that if these MFIs are given resources to help them thrive, their clients will be the real winners.
A unique funding model
Second, we raise affordable capital to invest in our MFI partners through a funding model we call strategic philanthropy. Realizing that donated funds alone would not be sufficient to meet the demand for affordable microfinance capital, in 2005, GP launched our first microfinance investment fund, which leverages philanthropic dollars to raise resources from socially motivated individual and institutional investors. Our funds have helped us dramatically increase our impact in recent years.
In addition to microfinance investment funds, GP employs several other strategies for advancing our mission.
- A permanent regional presence in Latin America: The staff members in our Managua field office are microfinance experts who perform extensive due diligence and close monitoring of our MFI partners.
- Collaborating with our peers on microfinance innovations such as protecting borrowers from foreign exchange risk.
- Beyond microfinance: We exploring ways to leverage our partner MFIs as distribution platforms for services such as health education, business training, and agricultural assistance that help people in poverty meet basic needs beyond microfinance. Our first project is a partnership with PATH, a global health nonprofit, and Pro Mujer, a microfinance partner, to create a model for offering health programming to poor families in Latin America through the microfinance platform.
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