1984 headquarters washington dc united states key people john hatch founder and rupert scofield president and ceo products financial services microfinance revenue 413 750 264 dec 31 2014 number of employees approximately 12 000 june 1 2016 website www.finca.org finca international is a non profit microfinance organization founded by john hatch in 1984 . sometimes referred to as the world bank for the poor 1 finca is the innovator of the village banking methodology in microcredit and is widely regarded as one of the pioneers of modern day microfinance . with its headquarters in washington d.c. finca has 23 affiliated host country institutions affiliates in latin america and the caribbean africa eurasia and the middle east and south asia . along with grameen bank and accion international finca is considered to be one of the most influential microfinance organizations in the world . 2 contents 1 background and history 2 mission 3 village banking 4 transformation of finca programs into microbanks 5 business model 6 innovations and partnerships 7 celebrity support 8 countries where finca operates 9 see also 10 references 11 external links background and history edit in 1984 hatch a fulbright trained economist and international development expert conceived a new method for delivering assistance to the poor . in an airplane high above the andes hatch was en route to a consultant assignment in bolivia when inspiration struck . he grabbed in flight cocktail napkins scraps of paper and a pen and began writing down ideas equations and flow charts as fast as he could . by the time he landed in la paz he had the outline of a radically different approach to poverty alleviation a financial services program that put the poor in charge . give poor communities the opportunity and then get out of the way he said . he called the idea village banking . 3 this approach gave the poor the opportunity to obtain loans without collateral the poor s main obstacle to accessing credit at market level interest rates . hatch first had to convince a group of usaid officers that his epiphany would pay off for the rural poor and the government of the united states whose grant dollars would fund the first projects . remarkably the officials liked his innovative idea and provided an initial grant of 1 million . hatch and his peruvian business partner aquiles lanao launched the program in five separate geographical areas of bolivia and within four weeks they had created funds in 280 villages serving 14 000 families with loans worth 630 000 . hatch s clients in bolivia were puzzled at first by village banking because it represented a significant departure from business as usual . they were intrigued enough to try it however and it was an immediate success . when hatch s client in bolivia changed its in country team the new representatives shut the program down . more cautious than the original client team the new group acknowledged the program s success but still felt that uncollateralized lending to very poor people was too risky . undeterred hatch spent the next few months training others in the village banking methodology helping open new programs throughout latin america and building the institution that would come to be known as finca international . finca incorporated in 1985 . 4 its ability to achieve financial sustainability allowed finca to make considerable expansions in the 1980s and 1990s in latin america the caribbean africa and the newly independent states of the former soviet union . in 1995 finca entered the former soviet union by establishing a village banking program in kyrgyzstan . 5 in 1997 finca co sponsored the first microcredit summit with over 2 000 policymakers practitioners and donors discussing ways to expand microcredit programs . 6 in 2000 finca became one of the first economic development organizations to enter kosovo after the june 1999 cease fire . 6 in the 2000s finca continued its penetration into the newly independent states by establishing new programs in central asia . its most recent programs were launched in afghanistan in 2004 see finca afghanistan and jordan in 2007 . in april 2009 finca kyrgyzstan became the second program to pass the 100 000 client mark . 7 mission edit the mission of finca international is to provide to alleviate poverty through lasting solutions that help people build assets create jobs and raise their standard of living . 3 today finca s reaches over 1.8 million clients worldwide including borrowers and savers . the premise of its mission is to have a systematic and generational impact on poverty by making business loans available to poor women on a massive scale . according to rupert scofield finca s president and ceo women have historically proved to be better credit risks as they tend to be more responsible perhaps from having to take care of the children . and frankly they tend to be more creative and risk taking than the men . because they manage the household money they know where the returns are in the marketplace on any given day . village banking edit pioneered by finca village banking is arguably the world s most widely imitated microfinance methodology . 8 among us based non profit agencies alone there are at least 31 microfinance institutions mfis that have collectively created over 400 village banking programs in at least 90 countries . and in many of these countries there are host country mfis sometimes dozens that are village banking practitioners as well . 8 a village bank is an informal self help support group of 9 30 members predominantly female heads of household . these women meet once a week to avail themselves of working capital loans a safe place to save skill training mentoring and motivation . loans can be as small as 50 100 and are linked to savings such that the more a client saves the more she can borrow . the normal loan period is four months and is repaid in 16 weekly installments . 8 as with many other microcredit methodologies village banking eliminates collateral the poor man s obstacle to receiving commercial bank loans as a loan prerequisite . instead it relies on a system of cross guarantees where each member of a village bank ensures the loan of every other member . this system gives rise to an atmosphere of social pressure within the village bank where the cost of social embarrassment motivates bank members to repay their loans in full . the admixture of cross guarantees and social pressure makes it possible for even the poorest people to receive loans . this method has proven very effective for finca yielding a repayment rate of over 97 % in its worldwide network . 9 market interest rates apply to village bank loans usually matching what local commercial banks charge their customers 8 but usually only a tiny fraction of the usurious rates charged by local moneylenders . the capital for these loans is provided by finca with on time weekly installment repayments collectively guaranteed by all members i.e. a shortfall by one member must be covered by other group members . village banks are highly democratic self managed grassroots organizations . they elect their own leaders select their own members create their own bylaws do their own bookkeeping manage all funds disburse and deposit all funds resolve loan delinquency problems and levy their own fines on members who come late miss meetings or fall behind in their payments . 8 worldwide finca s 23 affiliates have about 12 000 staff of which the majority are field staff loan officers and supervisors . each loan officer attends the monthly meeting of each of her 10 15 village banks to coach its leadership committee and monitor the bank s activities . in addition to motivation and adult education the loan officer supervises client attendance monitors bookkeeping accuracy checks the accuracy of the current week s loan and savings collections and checks when the deposit receipt of the previous meeting . in turn each village bank is managed by its elected officers a president who leads the bank s democratic decision making process secretary who takes attendance and keeps minutes and a treasurer responsible for accurately handling all cash transactions . finally each village banker has her own passbook and her recorded balances of loan payments and savings deposits must always be the same as those recorded in the treasurer s record for each client . 8 transformation of finca programs into microbanks edit to expand access to capital many of finca s subsidiaries have transformed into licensed regulated micro deposit taking institutions i.e. microbanks in order to mobilize savings from its clients . 10 access to client deposits will afford finca programs greater independence from donor and government funding attract private investment and improve financial sector stability . finca international which is a nonprofit organization will retain majority ownership of these transformed institutions through finca microfinance holding company llc to ensure that the banks remain focused on finca s mission to serve the world s poor . business model edit in 2010 finca transformed its business model by launching finca microfinance holding company llc . the first of its kind socially responsible investment partnership for microfinance . 11 finca operates with a unique integrated business model that accepts donations and investment dollars . its approach leverages available capital and promotes greater transparency sustainability and higher standards of business practices . the new business model allows finca to achieve balanced financial and social performance that is unmatched in the industry . innovations and partnerships edit while the original village bank credit and savings program remains the core product in the african programs finca has partnered with leading insurance companies to offer health and life insurance products health care and business interruption coverage in response to the aids crisis occurring in africa . finca uganda which is a world pioneer in microinsurance has partnered with aig to provide life insurance to ensure that the death of a village bank member does not result in hardship for the other village bank members or the family of the deceased as the client s loan is paid off . generous funding from the bill and melinda gates foundation is making it possible for finca and the johns hopkins university bloomberg school of public health s center for communication programs to provide hiv aids prevention education by using finca malawi s established network of village bank groups . 12 in most countries in africa mobile phone use and point of service payment technologies are widespread . finca is applying new technologies and approaches to reach clients in new ways improve their services and bring down costs . for example finca has launched mobile banking and agency banking in many of the african subsidiaries to reach the remote and allow clients to easily access their accounts . 13 in eurasia finca s product offerings have expanded to include larger individual loans collateralized by office or specialized equipment vehicles or property . on january 24 2004 usaid finca and visa international launched a major public private partnership that aims to bring new efficiency and security to microfinance clients in the developing world utilizing electronic payment products . the partnership has tested how visa solutions can provide finca and its clients both cost and time saving processes allowing finca to expand its outreach to more of the world s poor by minimizing loan transaction times for both clients and microfinance providers ; lowering transaction costs for processing loans ; providing microfinance clients more secure access to their loan capital ; reducing the possibility of cash theft ; expanding the variety of financial service products available to finca s clients ; and introducing a new market segment to participating commercial banks . 14 in november 2006 finca afghanistan received a 10 million grant from usaid as part of an 80 million rural microfinance