FINCA: VILLAGE BANKING
In 1984, Fulbright-trained economist and international development expert John Hatch founded the Foundation for International Community Assistance (FINCA). Its mission is to provide the poorest families, particularly those headed by single mothers, with loans to finance self-employment activities capable of generating additional household income.

Believing that the poor lack neither ambition nor skill, but simply resources, Hatch helped to conceive and launch the “village banking” method of microfinancing. Today, FINCA International manages one of the world’s leading international microfinance networks, with 22 programs operating on five continents around the world. Since its inception, FINCA has served over 1 million low-income clients in 22,000 villages. FINCA currently has over 350,000 clients with an on-time repayment rate of 97%.

The Foundation is supporting FINCA with a $1.2 million dollar grant that will fund research work in the field of micro-finance. This partnership embodies the Foundation’s vision of promoting the virtues of free enterprise, entrepreneurship and the enhancement of individual freedom and free markets.

 Through a series of unique tools and technology, FINCA has collected vital information about poverty from around the globe. Since 2003, the Foundation has supported FINCA in cost-effective data acquisition through the use of Palm Pilot devices called the FINCA Client Assessment Tool (FCAT). Interns use FCAT to conduct 10-minute interviews with poor families to document poverty levels, business profitability and improvements to living standards.  In 2006, FINCA will continue its ground-breaking research by sending research interns to 12 of FINCA’s affiliates:  Tanzania, Honduras, Peru, Mexico, El Salvador, Armenia, Azerbaijan, Uzbekistan, Kyrgyzstan, Georgia, Tajikistan and Afghanistan. 

With the support of Foundation grants FINCA has developed a poverty impact assessment tool to measure the role of microfinance in poverty alleviation; and to conduct baseline poverty assessments in 17 of its affiliate programs. As a result of these efforts, FINCA was able to show how microfinance is positively affecting the lives of poor families, not only by allowing them to earn a living, but also by giving them the financial means to access health care, education for their children, and better housing opportunities.

The next phase of the project is to build on the poverty impact research by creating a database that will catalogue and analyze the information collected monthly from FINCA field research programs. FINCA will also conduct an advocacy campaign for disseminating the project’s research findings to policymakers, think tanks, corporations, investors, students, and researchers.

www.villagebanking.org