How we Started
In 1984, founder John Hatch saw that lack of capital was keeping poor Bolivian farmers poor. Traditional loans were too large and too expensive, and without collateral, the farmers couldn’t borrow.
So he came up with an idea; if the farmers formed groups to share a loan and guarantee repayment, they could access the funds they needed to invest in their farming operations. It was the dawn of what we know today as microfinance.
The idea proved versatile and revolutionary.
In urban and rural areas, and in economies as diverse as Guatemala City and Kitunda, Tanzania, Village Banks allowed those with scarce resources to borrow, invest and grow their businesses. They also allowed women—who were routinely denied credit—to build enterprises that kept food on their tables and their children in school.
Remaining true to its original idea, FINCA has become a global network of secure, sustainable microfinance institutions and banks that help low-income families create jobs, build assets and improve their standard of living.
In 2011, FINCA International created the FINCA Microfinance Holding Company LLC (FMH) to manage its microfinance subsidiaries. Six outstanding partners joined in this endeavor as minority shareholders of FMH: IFC (International Finance Corporation), a member of the World Bank Group; KfW, the German development bank; FMO, a Dutch development bank; Zurich-based responsAbility Global Microfinance Fund; Triple Jump, a Netherlands microfinance investment firm; and Netherlands-based Triodos Bank. FMH is a “double bottom line” company dedicated to delivering both sustainable financial performance and social impact.
The FMH partnership brought capital, financial leverage and business acumen to FINCA’s microfinance operations. This is especially important as the microfinance landscape evolves to include new technologies and new expectations from clients, regulators and traditional supporters. Since 2011, the partners’ capital has helped expand FINCA’s lending to clients and has supported the ongoing transformation of FINCA’s microfinance subsidiaries into licensed financial institutions that can offer a full range of essential financial services, including savings accounts. It has also enabled FMH to borrow additional funds from the capital markets, as needed to support our growth and client needs.
Today, the breadth and reach of our responsible financial services continues to grow and evolve to meet new needs and new opportunities. FMH has gone beyond traditional microfinance by leveraging the power of new technology, such as mobile phones and agent banking, to make banking more affordable and accessible. FMH aims to put banking in the hands or around the corner from our customers, no matter where they live.
On January 1, 2017, FMH officially launched FINCA Impact Finance, the global services company of the FINCA network.