Virtually unknown only a few years ago, microloans are now a proven tool to help improve the lives of millions of individuals in developing countries all over the world. Now, a next generation is building on the experience and success of “traditional” microfinance to offer new services along with loans. Insurance, pension accounts, and other financial services are natural outgrowths for microlenders, but some are branching into even more diverse fields, such as job training and health screening.
The IDB’s Opportunities for the Majority initiative is now working with Global Partnerships, one of the institutions leading the way in what might be called “Microfinance 2.0.” The IDB is currently structuring a $5 million loan from the Opportunities for the Majority facility to the Global Partnerships Fund 2010 to support its social investment work with microfinance institutions in Latin America.
Global Partnerships, with offices in Seattle, Washington, and Managua, Nicaragua, has a strong track record of partnering with a variety of microlenders. Its new fund will work with some 20 institutions in 11 Latin American countries to introduce new services to their low-income and rural clients.
One such service is a microinsurance plan, piloted by the Salvadoran organization Apoyo Integral. Through a partnership with the Spanish insurance company Mapfre, it has been offering its clients life and health insurance plans for about $3.40 per month. Now, with Global Partnerships’ participation, this program can be replicated elsewhere in the region.
Another new service that will be supported through the 2010 Fund is a health screening system that began in Nicaragua through the work of a local microlender, Pro Mujer, and a Seattle-based health NGO, PATH. This project sends nurses and trainers to Pro Mujer’s cooperative banks to offer cervical cancer screenings and other diagnostic services. 10,000 women have already been tested, and as many as 700 lives have been saved through early detection. Again, with Global Partnerships’ support, these lifesaving screenings will now be available to thousands more Latin American women.
In the words of IDB project team leader Elizabeth Boggs Davidsen, “The projects financed by this fund may serve as models that can be repeated throughout Latin America, showing that it is possible to simultaneously finance loans to low-income entrepreneurs, develop new technologies and have an impact in breaking the cycle of poverty.”
