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MFI Websites
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| World Vision Websites
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VisionFund manages the donated funding World Vision sets aside for microenterprise loans. Using equity from the donated funding, VisionFund is able to borrow more funds internationally. VisionFund lends or donates these total funds to local microfinance institutions in more than 47 countries worldwide. The global microfinance institutions are then able to extend the monies to individual entrepreneurs.
Credit officers in each community carefully select clients with an enterprising spirit, trustworthiness, a good work ethic and a sound business idea. Borrowers are given loans at reasonable interest rates. As businesses succeed and loans are repaid, funds are re-loaned to others to provide more opportunities. In cooperation with World Vision, those with limited business skills can receive training and mentoring to prepare them to launch their business and become a voice for positive change in their communities.
Individual loans made by VisionFund controlled Microfinance Institution's are handled in the following three methods:
Community Banks
These loan circles create an opportunity for the poorest entrepreneurs to obtain credit. Self-selected groups of 20-30 borrowers agree to cross-guarantee each other’s loans. The group screens potential borrowers and tracks each repayment, building their leadership and sense of pride along the way. Weekly meetings offer accountability and support, and build business skills. Loans typically range from US $50-500.
Solidarity Groups
Designed for more experienced entrepreneurs with larger enterprises, Solidarity Groups have fewer members than Community Banks, with an average of three to six people who guarantee each other’s loans. Members who make repayments on time become eligible for larger individual loans. Loan sizes range from US $300-800.
Individual loans
Clients who have either grown their businesses successfully through a Solidarity Group or have medium-sized businesses qualify for individual loans ranging from US $500-5000. Loans typically require either two guarantors or collateral. Borrowers often create a multi-year business plan in consultation with their loan officer.
VisionFund is responsible for providing funding and services for 46 microfinance institutions in 46 counties. Our focus is on furnishing governance, finance controls/risk management, funding for economic development, and support for microfinance institutions in business operations.
A loan from VisionFund starts a cycle of positive events, as shown in the diagram below. Click on one of the cycle stages to find out how a small loan can impact an individual, their family, and their whole community.
Follow the cycle to see how an individual and a community are impacted by one loan:
1. A struggling entrepreneur applies for a microloan
While many of the working poor have the ideas and ability to create a small business, few can access the capital they need to begin. Because they are asset poor and in need of only small loans, banks will not lend to them. With little savings to access they are trapped in poverty. The only credit available to them is often from local money lenders who charge exorbitant interest rates. To successfully apply for a VisionFund loan the poor entrepreneur must demonstrate trust worthiness, a good work ethic and a sound business idea. Through VisionFund a community bank is formed from a group of chronically poor entrepreneurs who mutually guarantee each other's loans.
2. Business training
Before the client receives their first loan VisionFund gives them 4-6 months training in saving, handling credit and in basic business. Clients must prepare a sound business case prior receiving a loan.
3. Microloan is given
A loan can be as little as USD$200. With this money a client can buy some seed or stock, or to fertiliser to increase crop yields, or basic equipment to operate a small trading enterprise (e.g. a sewing machine for shoe repairs).
4. Business is created or expands
Profits made from the sale of crops or merchandise can then be used to buy more seed or stock, or to start a new business such as tailoring.
5. Coaching
Clients continue to receive coaching in business as well as agricultural or trading practices as part of the development program.
6. Business thrives
With a loan, entrepreneurs can improve farming, open a hairdressing salon, sell handmade clothing and handicrafts or run a small convenience stall, to name a few. These businesses create jobs and generate additional goods and services and the whole community benefits.
7. Families gain self sufficiency
Families are now able to support themselves and provide food for themselves all year round. The burden of borrowing money from local money lenders at high rates of interest is broken.
8. Children impacted
Parents are able to give their children more nutritious food and the family health improves. Parents have enough money to send their children to school.
9. Loan repaid and money recycled
The poor are a good credit risk, repaying their loans 97$ percent. Once the client has repaid their loan they can take out a bigger loan to continue to expand their business. Repaid loans are recycled to help other poor entrepreneurs to grow their businesses. VisionFund builds a bridge between commercial loan capital and the credit-worthy poor so they can lift themselves out of poverty.
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