MICROCAPITAL BRIEF: Bill & Melinda Gates Foundation Grants $3m to World Vision for ‘Access to Rural Savings in Ethiopia’ Project

World Vision has received a USD 3 million grant from the Bill & Melinda Gates Foundation to help launch its Access to Rural Savings in Ethiopia project. World Vision expects the three-year project to reach up to 250,000 new savers via “mobile banking units carrying laptop computers, PDAs [personal digital assistants], a teller and a savings officer.” Four savings products, including a child savings account, will also be offered in 30 locations where World Vision’s affiliate microfinance institution (MFI), WISDOM, has an active branch.

“This new program will provide a template for scaling up savings services in other World Vision affiliated microfinance institutions throughout Africa and beyond,” said Anthony Storrow, regional business development manager of VisionFund International, a subsidiary of World Vision that is providing technical support for the project. “VisionFund International aims to transform at least seven of its affiliates into deposit-taking institutions within five years, potentially reaching four million new clients with savings services,” he added.

By: Stefanie Rubin, Research Assistant

About the Bill & Melinda Gates Foundation:

The Bill & Melinda Gates Foundation provides grants to organizations within the United States and in more than 100 countries around the world with the aim of enhancing health care, reducing poverty and expanding educational opportunities and access to information technology.

As of September 2009, the asset trust endowment totaled USD 34.17 billion. USD 21.08 billion in grants has been committed since the foundation’s inception.

The Bill & Melinda Gates Foundation’s Financial Services for the Poor initiative focuses on providing people with secure places to save money. To support this initiative, the foundation works with financial organizations to increase access to technology (point of sales devices, automated teller machines, etc.) and forge partnerships between mobile phone companies, banks and microfinance institutions. It also supports the startup and growth of new banks in difficult markets.

About World Vision:

World Vision is a private Christian relief, development and advocacy organization dedicated to alleviating poverty. It is active in three areas: providing immediate disaster relief; developing long-term, sustainable programs; and sponsoring children in need. According to World Vision’s 2008 Review, the organization served over 100 million people across 98 countries in 2008. During FY2008, its total revenue was USD 1.1 billion (p5), and it provided USD 314.6 million in aid for relief and rehabilitation, community development, and Christian impact and leadership projects (p5). USD 208.4 million was provided for child sponsorships, USD 219.3 million for gifts-in-kind and USD 132.6 million for other international relief and development programs (p5). Total operating expenses during this period amounted to USD 1.13 billion.

World Vision began implementing microfinance programs in 1993 and has since established 47 microfinance institutions (MFIs). In 2003, it created VisionFund International, a wholly-owned subsidiary, to manage its MFIs.

About WISDOM:

WISDOM was founded in Ethiopia in 1999 and is an affiliate of World Vision. According to the MIX Market, the microfinance information clearinghouse, as of 2008, WISDOM had a gross loan portfolio of USD 8.5 million, 56,735 active borrowers, total assets of USD 9.5 million and USD 2.1 million in deposits. It had a return on assets of 0.10 percent and return on equity of 0.25 percent.

About VisionFund International:

VisionFund International was created in 2003 as a wholly owned subsidiary of World Vision with the purpose of managing its microfinance institutions (MFIs). In FY2008, VisionFund had 47 affiliate MFIs, with an overall portfolio of USD 397 million, more than 604,000 active borrowers and borrower deposits totaling USD 11.6 million.

Currently, VisionFund fully owns five MFIs: VisionFund CREDO of Georgia with an outstanding loan portfolio of USD 27.2 million and 20,069 clients; AgroInvest of Serbia with an outstanding loan portfolio of USD 21 million and 14,948 clients; AgroInvest of Montenegro with an outstanding portfolio of USD 66.7 million and 22,568 clients; Azercredit of Azerbaijan with an outstanding loan portfolio of USD 14.5 million and 18,067 clients; and lastly, VisionFund Cambodia has an outstanding portfolio of USD 19.8 million and 82,344 clients.

Additional Resources:

Source Article: World Vision Press Release: “World Vision Launches New Savings Opportunities for Ethiopia’s Rural Poor,” http://www.worldvision.org/content.nsf/about/20100113-savings-grant?Open&campaign=12281721

Bill & Melinda Gates Foundation: http://www.gatesfoundation.org/

World Vision International 2008 Review: http://www.wvi.org/wvi/wviweb.nsf/C5C75B86935DAAA88825758900751799/$file/WVI_2008_Annual_Review.pdf

The MIX Market: WISDOM: http://www.mixmarket.org/mfi/wisdom/data

VisionFund:

VisionFund 2008 Annual Report:

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