Two Seattle area organizations announced funds today aimed at expanding the reach of financial services for the poor, while providing attractive returns for wealthy investors.
The Unitus Equity Fund closed today with $23.4 million in capital, making it the largest global equity fund in the microfinance industry fully funded with private capital. The investors are Omidyar Network, Abacus Wealth Partners and Kensington Investments.
Unitus has a unique structure in that it operates both a for-profit equity fund a non-profit grant-making arm.
Ten percent of the fund's profit will go into the non-profit arm of Unitus for grant making. Unitus provides grants to microfinance institutions that offer small loans to the working poor in Asia and Latin America.
The concept of microcredit was pioneered by Nobel Prize winning economist Muhammad Yunus. But organizations like Unitus and Omidyar Network take the concept much further by bringing in commercial capital and large investors to greatly increase the amount of money available for lending.
Seattle-based Global Partnerships today launched an $8.5 million investment fund that combines donations with private capital. Individuals donated $255,000, while a group of socially motivated investors contributed $8.2 million. The fund will be used to expand Global Partnerships' funding to 20 microfinance institutions in six countries throughout Latin America.