Your gift to help a hardworking entrepreneur will double in impact thanks to a generous World Vision partner.
VisionFund International is the microfinance subsidiary of World Vision. Mandated by World Vision, VisionFund provides governance, risk management control and specialty advice/support to all of its Microfinance Institution's (MFI's) and manages the funding of all MFIs including donations and debt financing from VFI and third parties directly to the MFIs. Both VisionFund and World Vision have strict regulations about the loaning process.
By providing loans, savings, and other basic financial services to the poor, partner MFI's help stimulate the breakdown of the poverty cycle. Small amounts of money are available because the poor don’t have large assets to borrow against. In a developing country, assets might consist of jewelry, domestic animals, building materials, things that can be easily exchanged for cash. Traditional banks are designed to help people who already have these financial assets. There are a few banks who provide microfinance products but the majority do not, as microfinance activities are expensive and small loans yield small interest rates. Therefore, banks tend to shy away from microfinance lending in developing nations.
There are three kinds of costs that an MFI has to cover when it makes a microloan – the cost of the money it lends, the cost of loan defaults, and the transaction cost. These costs are the same on a small loan and a large loan. However, by working with dedicated entrepreneurs, many MFIs are becoming profitable. The dedication and determination of clients eager to improve their living standards generally indicates a very low rate of defaults.
As an international Christian humanitarian organization, World Vision works in nearly 100 countries around the globe, combating the root causes of poverty and responding quickly when disaster strikes.
Economic development is one key facet of community transformation. To break the chains of poverty, the enterprising poor require the same resources as every determined entrepreneur - access to capital and practical training. That is why World Vision, through VisionFund International, has microfinance institutions granting loans in 42 countries.