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Frequently Asked Questions
What does Global Partnerships do?
What is microcredit and microfinance?
How did Global Partnerships get started?
Where does Global Partnerships work?
What are your results to date?
How can I get involved?
Is my donation tax deductible?
How do Global Partnership’s microfinance funds work?
Why do you offer investment funds?
How does Global Partnerships select partners?
What is the average loan size made by your microfinance institution partners and what is the repayment rate?
What percentage of your partners’ loans goes to women?
What interest rate do your partners charge borrowers?
What does Global Partnerships do?
Global Partnerships (GP) expands opportunity for people living in poverty. We do this by supporting successful organizations called microfinance institutions (MFIs) that provide small loans and other financial and social services to those living in poverty. All of our microfinance partners share our commitment to social impact, including serving people traditionally left behind, such as women and the rural poor; and offering services beyond microfinance to improve the lives of those living in poverty.
Today, Global Partnerships works with 27 microfinance institutions in seven countries throughout Latin America. Through these microfinance partners we are serving around 845,00 borrowers. Keeping in mind that microcredit impacts not only the borrower, but also the borrower’s entire family, we are touching the lives of more than 3.7 million people.
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What is microcredit and microfinance?
Microfinance refers to services offered to people who have little income or collateral and no access to commercial financial services. Microfinance includes financial services such as microcredit—small business loans of $50 or $100 that are used to start or expand a business—as well as micromortgages, small savings accounts and microinsurance. Microfinance is a proven and lasting solution that empowers people living in poverty to help themselves.
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How did Global Partnerships get started?
In 1993 Northwest philanthropists and community leaders Bill and Paula Clapp had the opportunity to travel to El Salvador to visit microcredit programs when the industry was still in its infancy. Moved by the stories they heard of the transformative effects of microfinance, they were inspired to found Global Partnerships in 1994 as a family foundation. GP initially raised philanthropic contributions to provide grants, loans and technical assistance to Central American MFIs. While philanthropy continues to be essential to our work, we recognize it cannot provide the large capital gap needed to meet the demand for microfinance in Latin America. In 2002, Global Partnerships began to offer investment opportunities to help bridge the gap and provide our partner microfinance institutions with affordable capital. Our investment funds--we've launched three since 2005--leverage philanthropic contributions and raise resources from socially motivated individual and institutional investors. These funds are loaned to our MFI partners.
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Where does Global Partnerships work?
Global Partnerships works in seven countries: Bolivia, Ecuador, El Salvador, Honduras, Mexico, Nicaragua and Peru. Our work is focused where the disparity between the wealthy and the poor is greater than anywhere else in the world. An estimated 191 million Latin Americans live below the poverty line and about 1 in 6 live on less than $2 a day. Of the 48 million people in Latin America and the Caribbean who could use access to microcredit, only 9 million are being served.
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What are your results to date?
As of June 30, 2010, Global Partnerships works with 27 MFI partners serving more than 845,00 people, with $37.7 million in capital dedicated to our mission. Find out more on our Fast Facts page.
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How can I get involved?
You can support Global Partnerships with a charitable, tax-deductible contribution. Your gift will allow a woman living in poverty the opportunity to earn a living wage and provide for her family through access to microfinance. You may also wish to support GP by volunteering or by participating in a PartnerTrip--a staff-guided trip to see our programs in action in one of the countries where we work. You can also attend an event, including quarterly Breakfast Briefings at our office.
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Is my donation tax deductible?
Global Partnerships is a 501(c)(3) nonprofit organization (EIN: 82-0574491). Donations are tax deductible to the extent allowed by law. To learn how to make a donation, please visit our Donate page.
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How do Global Partnerships' microfinance funds work?
GP’s microfinance funds leverage philanthropic giving with the investment of socially motivated private capital to provide our partners with the necessary capital to reach more people living in poverty with financial and non-financial services. To date, GP has launched three microfinance funds.
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Why do you offer investment funds?
Microfinance institutions need capital to expand their services and reach more people living in poverty. While philanthropy is essential, it cannot provide the capital estimated to meet the demands for microfinance in Latin America. Global Partnerships offers investment opportunities to help bridge the gap and provide our partner microfinance institutions with affordable capital. Read more about our strategy here, and our three investment funds here.
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How does Global Partnerships select partners?
We select MFI partners who share our commitment to serving more people, including hard-to-reach populations, including women and the rural poor; providing loans to successful entrepreneurs as well as those who need their first loan; and offering services beyond microcredit to improve the lives of those living in poverty, such as health education and services, and business training. Our challenge is to identify partners who achieve the greatest possible social impact.
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How big are the loans made by your microfinance institution partners and what is the repayment rate?
All of our partners offer entry-level loans of $100 or less. Of all microloans made by our 27 partners, 98 percent are repaid in full.
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What percentage of your partners’ loans goes to women?
About 66 perent of the borrowers served through our partners are women.
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What interest rate do your partners charge borrowers?
The interest rates our microfinance institution partners varies from MFI to MFI depending on other services the microfinance organization may offer to borrowers, such as health education or screenings, but it averages about 30 percent. While these rates seem high compared to rates in the United States, keep in mind that it covers the high costs of servicing small loans, reaching people living in rural areas and providing other social and educational services. All our microfinance partners are NGOs that re-invest profits back into their programs. Furthermore, without microloans, often the only financial alternative for people living in poverty is to turn to local moneylenders who charge much higher rates of interest.
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