MICROCAPITAL BRIEF: Visa Foundation Donates $2m to Opportunity International to Support Microfinance, Small-business Lending to Women in Africa

US-based nonprofit microfinance network Opportunity International recently secured a grant of USD 2 million from the Visa Foundation, an affiliate of US-based payments firm Visa. The goal is to facilitate Opportunity in routing an additional USD 14 million via its affiliated financial services providers (FSPs) in Democratic Republic of the Congo, Ghana, Nigeria and Uganda to micro- and small businesses owned by women. The two-year grant is to fund services for: (1) business owners and farmers, such as training in financial literacy, business management and agricultural practices; and (2) partner FSPs, such as technical assistance in developing gender-oriented policies and financial incentives for serving women, such as guarantees, interest-rate buy-downs and collateral buy-downs. A collateral buy-down – where an FSP might require a borrower to pledge collateral worth 20 percent of the loan amount – may take the form of Opportunity guaranteeing 10 percent of the loan amount, so the entrepreneur need only pledge the remaining 10 percent.

Opportunity is also piloting a system of opening bank accounts for women that they can use to buy mobile airtime and pay bills, giving them a financial record that FSPs can then use in evaluating credit risk, thus enabling the women to qualify for loans.

Simona Haiduc, Managing Director of Strategic Partnerships at Opportunity, told MicroCapital, “When it comes to long-term planning, we see the future being in digital services because they allow us to reduce costs, increase access and reach the last mile.”

During 2021, Opportunity reports having – with its partners – reached 19 million clients, of whom 84 percent are women. These organizations also lent USD 2 billion to a range of microborrowers, schools and agricultural enterprises.

The Visa Foundation, which serves as the “philanthropic arm” of US-based payments firm Visa, committed to invest USD 140 million and donate USD 60 million over five years, starting in 2020, “to support gender diverse and inclusive SMBs [small and microbusinesses] around the world.” In July 2022, Visa reported quarterly net income of USD 3.4 billion on total assets of USD 85 billion.

Sources and Additional Resources

Direct contact with Opportunity

Opportunity press release
https://opportunity.org/news/press-releases/2-million-grant-from-visa-foundation

Visa Foundation webpage
https://usa.visa.com/about-visa/visa-foundation.html

Visa financials
https://investor.visa.com/financial-information/quarterly-earnings/default.aspx

More content from MicroCapital on Opportunity
https://www.microcapital.org/?s=opportunity

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