FINCA takes an integrated approach to financial inclusion through its unique structure and the comprehensive way in which resources are leveraged to best serve our clients.
There are four primary facets to this approach:
- Financial intermediation through the provision of loans, savings and insurance products tailored to local needs;
- Social intermediation typified by the financial literacy training and support embedded in the group and Village Bank loan programs;
- Enterprise development; and
- Social service impact by leveraging the FINCA network to provide support in the areas of education, health, nutrition and financial literacy training.
FINCA International, Inc. is the founding organization of the network’s 22 microfinance institutions (subsidiaries). In 2010, FINCA established a holding company structure through the creation of FINCA Microfinance Holding Company LLC (FMH). FMH was created to facilitate access to socially-responsible capital to deepen our presence in existing markets and enter new, underserved markets in a sustainable fashion. Enormous care was taken to protect FINCA’s poverty alleviation mission during the creation of FMH. Structural formats and governance policies were put into place to ensure continued adherence to FINCA’s mission and client focus.
FMH supports activities for which grant funding is typically not available, and for which reaching scale cannot be achieved through organic growth. Such activities include:
- The transformation of microfinance subsidiaries into fully-licensed financial institutions offering clients a broader array of products and services including savings and insurance products;
- Entrée into new markets (e.g., Pakistan in 2013; Nigeria in 2014); and
- The development of a global information services infrastructure (core banking, disaster recovery/business continuity, security and data) and human resources (training and uniform customer service.)
FINCA’s partners in FMH are a group of leading, socially-responsible investors that share FINCA’s poverty alleviation mission. Partners include The International Finance Corporation (IFC), KfW Bankengruppe, FMO, responsAbility Global Microfinance Fund, ASN-Novib (Managed via Triple Jump) and Triodos Investment Management. No employee or Board member of FINCA will be allowed to invest or have an equity interest in, or benefit financially from, FMH, as specifically defined in the legal documents establishing FMH.
FINCA’s unique business model combines the heart and soul of a nonprofit organization—FINCA International—with the business acumen of a for-profit business—FINCA Microfinance Holding Company—to generate optimal impact and reach millions more people with life-changing financial services.