What does FINCA stand for?
FINCA is an acronym for the Foundation for International Community Assistance. The organization’s roots are in the the Latin American agriculture sector.
What is financial inclusion?
inancial services—including credit; savings; business, education and home improvement loans—and insurance—affect our lives every day. These services are important to the poor, too, but they often can’t access them. Financial inclusion means finding ways to deliver important financial services to people of all means and backgrounds that otherwise are not reached by the financial sector.
What is microfinance?
Microfinance is the provision of financial services to poor or low-income people on terms that they can afford. It is a means of promoting financial inclusion.
What is Village Banking?
Village Banking is a methodology for delivering credit that FINCA pioneered. It entails groups of 10-20 low-income entrepreneurs who meet weekly, biweekly or monthly to provide themselves with self-employment loans as small as $50 or $100 to start or expand a business while enjoying camaraderie and mutual support for business development. Since low-income entrepreneurs don’t have the kind of collateral most commercial banks require, Village Banking group members guarantee each others’ loans. And they run a democratic organization, electing their own leaders, designing their own bylaws, keeping the books, managing funds, supervising loan repayments and enforcing penalties for non-compliance
Why does FINCA charge interest on their loans?
FFINCA was founded on the idea that the world’s lowest-income families don’t want handouts; rather, they want opportunity. They want to build and grow their small businesses through their own initiative. As an institution, FINCA is committed to a double-bottom line: creating healthy, sustainable microfinance institutions that have a positive impact on clients’ lives and livelihoods and which dedicated to remaining operational over the long term. Interest is a key part of this equation. FINCA charges interest in order to cover its costs and achieve operational sustainability. The interest charged on our loans supports our credit staff in the field, allowing us to bring services to customers, even in remote areas; enables us to borrow, re-lend and repay commercial capital, which means we can reach many more low-income customers; and ensures that we remain a reliable resource for our customers. Before we lend to customers, we provide training that ensures they understand not only our rates, but what it will mean for them and their business to invest and repay a loan. Interest rates vary greatly around the world and reflect a variety of factors, such as local regulations, the type and size of the loan, prevailing inflation rates and local costs of borrowing. FINCA endorses the Microfinance Transparency (MfT) fair pricing initiative which promotes transparent pricing standards and publishes prices of microfinance products.
What is a “sustainable microfinance institution?”
FINCA is funded through donations, social investment and loans. Donated funding comes from a variety of sources, including U.S. and international governmental development agencies, private foundations, corporations, service and religious organizations, and individual donors. Investment funding from FINCA Microfinance Holding Company LLC (FMH) is funded by socially-responsible investors including International Finance Corporation, a member of the World Bank Group; KfW, the German development bank; FMO, the Dutch development bank; responsAbility Global Microfinance Fund, an investment fund advised by the Zurich-based asset manager responsAbility Social Investments AG; Triple Jump, a Netherlands-based microfinance investment firm, and Triodos Investment Management, owned by Triodos Bank. FINCA International, Inc. is the majority shareholder.
Who funds FINCA?
FINCA International, Inc.—a 501(c)(3) nonprofit organization—funds its startup programs, social research, new product development and its majority share in FINCA Microfinance Holdings Company and country subsidiaries through donations. Funding comes from a variety of sources, including U.S. and international governmental development agencies, private foundations, corporations, service and religious organizations and individual donors. FINCA Microfinance Holding Company, LLC (FMH) is funded by socially responsible investors, including International Finance Corporation, a member of the World Bank Group; KfW, the German development bank; FMO, the Dutch development bank; responsAbility Global Microfinance Fund, an investment fund advised by the Zurich-based asset manager responsAbility Social Investments AG; Triple Jump, a Netherlands-based microfinance investment firm. FINCA International, Inc. is the majority shareholder. Once they’ve achieved sustainability, FINCA subsidiaries fund themselves. However, they will sometimes employ donated or borrowed funds to increase their loan portfolios—the amount of funds they have to lend to low-income customers.
How is FINCA different from other microfinance organizations?
Global presence: with local operations across 23 countries serving over one and a half million clients, FINCA’s outreach is among the broadest and most comprehensive of today’s microfinance networks. FINCA owns all of its subsidiaries and provides direct services to its clients. Products: FINCA offers an array of financial products tailored to local needs: small loans and savings products, insurance and remittances. In each country, we offer several types of loans that are compatible with customers’ needs and the local economy; in predominantly Muslim areas, we offer Islam-compliant financing; in Ecuador, we offer health insurance; in Uganda, we offer a unique loan program for small solar generators. We are constantly innovating to create products that will improve our clients’ businesses and quality of life. Business model: FINCA operates with a unique, integrated business model that accepts donations and investment dollars. Our approach leverages available capital and promotes greater transparency, sustainability and higher standards of business practices. Our business model allows us to achieve balanced financial and social performance that is unmatched in the industry
What are the requirements to apply for a loan?
• Be older than 21 years old. • To have their own business or be dedicated to an economic activity for at least one year. • Present identity card. • To have good credit history. • To have an asset that can be presented as loan guarantee.
Do you offer consumer loans?
No, currently our loans are only destined to finance business operations.
Do you offer loans for salaried employees?
We serve only customers who own a business or are dedicated to an economic activity
To take a loan, Can I pool income with my siblings and bring a house as guarantee?
No. You can provide guarantees of your siblings, but cannot join with them to increase your payment capacity.
Requirements for agricultural loans
Be older than 21 years old. • To have their own business or be dedicated to an economic activity for at least one year. • Present identity card • To have good credit history. • Provide collateral
Please clarify about the amount of the loan. Why do I get less than the amount I requested and you were supposed to give me?
Because the administration fee is deducted at the moment of disbursement and we don´t finance that amount. If we would finance the amount of the fee, you would have to pay additional interest on that portion.
Please provide the exact amount of the monthly installments.
The installments depend on the amount of the loan.