Gates Foundation Provides $15.4 Million to Opportunity International To Help Build Microfinance Bank
Wednesday, February 21, 2007
Opportunity International, one of the world’s largest microfinance organizations, today announced it has received a $5.4 million grant and a $10 million loan from the Bill & Melinda Gates Foundation. The $15.4 million of capital will fund start-up microfinance banks to serve the poor in Rwanda, Uganda, Kenya and the Democratic Republic of the Congo (DRC), as well as expansion of its banking operations in Ghana. Opportunity International operates banks or financial institutions in 28 countries and is the world’s largest microfinance bank organization serving the very poor.
“We thank the Bill & Melinda Gates Foundation for providing its second significant grant to Opportunity International, which will enable us to more quickly provide critical financial services to the poorest of the working poor in Africa,” said Christopher A. Crane, president and CEO of Opportunity International. “We are working toward the day when all poor Africans who need a loan to grow their business, a safe place to deposit their savings or an insurance policy to protect their family’s assets have access from an organization that is dedicated to their needs and well being.”
The $5.4 million grant is the second to Opportunity International from the Bill & Melinda Gates Foundation. In November 2005, the foundation gave $2.2 million over three years to fund rural banks in Malawi and Mozambique. The new grant is made in combination with a $10 million loan for program related investment (PRI), which will be repaid over 10 years at 1 percent interest.
Opportunity International will use the low-cost PRI loan during the second or third year of operations at its new banks, a time when it is typically difficult for microfinance banks to attract enough customer savings or commercial debt to generate growth. PRI funds used as intermediate loans strengthen the bank’s balance sheet, making it more attractive to external commercial lenders, while also greatly increasing the amount of loan money available to poor entrepreneurs.