Global Partnerships extends operations to Mexico to provide ‘more affordable’ microfinance

US organization Global Partnerships, which provides capital and expertise to microfinance institutions (MFIs), has announced the expansion of its work into Mexico.

In October, Global Partnerships issued a $500,000 loan to Fundación Realidad (FRAC), a microfinance institution that primarily serves rural women in 11 Mexican states. (One of their programmes has helped to support a women’s collective in Mexico, pictured, to produce and sell earthenware pots.)

Microfinance is not new to Mexico − in fact it has seen rapid growth in recent years − but lack of competition has kept interest rates high, and one of the declared purposes of this investment, as Global Partnerships’ CEO Rick Beckett affirms, is to provide ‘affordable, mission-focused microcredit in Mexico’. The sector in Mexico is currently dominated by one large commercial MFI, Compartamos, which drew criticism for its public flotation in 2008 and accusations that it was managing its business to benefit its investors and not its borrowers (among the critics was microfinance pioneer Muhammad Yunus). Global Partnerships’ focus, by contrast, is on MFIs that are committed to producing high levels of social impact. With 17 branches in some of the poorest areas in the country, FRAC offers loans with an interest rate 12 percentage points below the Mexican microfinance industry median. Its client base is 82 per cent women and 87 per cent rural.

For more information
http://pndapps.fdncenter.org/link/25012222/4