Rapid expansion of microfinance banks and microinsurance services enables organization to impact more than eight million people worldwide
Oak Brook, Ill. – June 21, 2007 – Opportunity International, one of the world’s largest and fastest growing microfinance organizations, today announced in 2006 audited financial results that it received record donations of $80.7 million worldwide, an 85 percent increase over 2005. Combined with capital market debt and savings deposits from its microfinance clients, the organization mobilized a record total of $293 million to deploy to the poor in 28 countries where it provides a broadening range of financial services.
This significant increase in mobilizing funds directly impacted the number of poor people receiving its loans, banking and insurance services. At year-end, Opportunity International was helping more than eight million poor, including the children, family members and employees of its clients.
“We’re pleased with these results because they demonstrate the effectiveness of microfinance as an important solution to world poverty, and because this empowers our organization to fulfill our mission to serve more of the poorest of the working poor,” said Christopher A. Crane, president and CEO of Opportunity International.
“We still have a long, long way to go,” he added, noting that the World Bank estimates that 500 million families could benefit from microfinance, but 80 percent of them have no access today. “Yet thanks to the generosity of our growing individual and corporate donor family, we have an unprecedented opportunity to scale up and expand our reach in those parts of the world where we’re needed most.”
Founded in 1971 by business entrepreneurs, Opportunity International has grown at a compound rate of 26 percent annually the past five years. The organization distributed nearly 1.5 million loans totaling $466 million in 2006 through its microfinance programs in Africa, Asia, Eastern Europe and Latin America.
Banks, Insurance Lead Growth in Serving More Clients
A key factor in the growth of Opportunity International has been the rapid expansion of microfinance banks that provide a range of financial services to the working poor. From opening its first bank in 2000, the organization now operates 17 banks or financial institutions that provide needed savings accounts, loans and other financial services. These “banks for the poor” use cutting-edge technology to lower transaction costs with smart cards, biometric fingerprint identification and mobile ATMs. Most importantly, they give the poor a safe, secure place to save their money.
The banks ended 2006 with $190 million in client savings accounts, money that previously was “dead capital” but that now is being used by Opportunity International banks as an additional source of lending to the working poor.
Opportunity International is a pioneer and world leader in developing insurance for the poor. Started only five years ago, the Micro Insurance Agency now insures 3.5 million people in 10 Asian and African countries, helping establish a financial safety net for the poorest of the working poor. With average premiums of about $1.50 per month, the agency is making affordable credit and life insurance available for the first time to those most at risk, including people infected with HIV/AIDS. The Micro Insurance Agency is expanding with a wide variety of insurance products, including a successful crop insurance program that protects rural farmers in Malawi from drought.
Opportunity International’s increasingly vast reach can be attributed to its comprehensive approach to microfinance. Currently, the organization has more than one million active loan clients, 85 percent of whom are women. These clients on average have five financial dependents (children, relatives and adopted orphans) and its research shows that for every two loans made, one new job is created.
When combined with non-duplicated insurance and savings clients, Opportunity International now benefits more than eight million individuals worldwide. 2006 results put Opportunity International ahead of schedule to meet its goal of mobilizing $1 billion over the next six years to benefit 100 million poor people by 2015.
President and CEO Crane Discusses Microfinance Industry, Opportunity Growth
In the U.S., Chris Crane has led Opportunity International for the past five years, guiding the organization through rapid growth. An accomplished entrepreneur and successful businessman, the Harvard Business School graduate brings charisma and personal commitment to the organization. He is a “hands-on” leader, traveling more than 150 days per year to meet with current and prospective donors, industry leaders and Opportunity International staff and clients. He takes no salary and pays his own travel expenses, an illustration of his commitment to volunteerism, philanthropy and the humanitarian spirit that permeates the entire organization.
“In just the past two years, our industry has been recognized, honored and funded by, among others, the United Nations, the World Bank, the Nobel Committee and the Bill & Melinda Gates Foundation, which demonstrates the effectiveness of the leading microfinance organizations operating in the developing world today. We are succeeding where so many other attempts to alleviate poverty have failed,” Crane said.
He attributes the success of microfinance to the simple principle that it offers a hand up, not a hand out, so people work themselves out of poverty and do so with pride and a sense of empowerment. “Our clients feed and educate their children, grow their businesses, hire their neighbors and many even become leaders in their communities, all of which contributes to helping break the chain of poverty,” he explained.
Crane views the role of microfinance as one critical component in the broader effort to eradicate poverty worldwide. Opportunity International believes that microfinance, while not a panacea, contributes in three fundamental ways. “In an immediate sense, microfinance helps people meet fundamental needs and secure a basic level of subsistence, the baseline of economic security,” he said. “In the short- to mid-term, access to financial resources like savings and insurance enables the success of an individual entrepreneur to benefit her or his family and community. As a long term solution, microfinance can play an integral role in a comprehensive economic development process by creating a more stable community that contributes economic and societal benefits.”
For 2007 and beyond, Opportunity International intends to focus a great deal of its resources in Africa, where more than 90 percent of the poor have little or no access to basic financial services. The organization is expanding rapidly in Ghana, Malawi, Mozambique, South Africa and Uganda. It has opened new operations in Kenya and Rwanda and is planning to expand to two or three other countries per year over the next five years.
Additional 2006 Financial and Operational Highlights
- Fund raising and general and administrative expenses ratio to revenue decreased from 22 percent in 2005 to 15 percent in 2006. The ratio as a percentage of total funds raised for the poor decreased from 7 percent in 2005 to 6 percent in 2006.
- Thanks to third-party investments, savings deposits and commercial borrowings, every $1 donated to Opportunity International in 2006 resulted in $1.63 mobilized to serve the poor.
- The loan repayment rate of 98 percent was unchanged, emphasizing the ability of the poor to manage their loans and grow their businesses with great success.
- Opportunity International’s commitment to providing financial services to the poorest of the working poor is documented by its average loan size of $172 and its average first loan size of $104 in Africa, Asia and Latin America. Amounts are higher in Eastern Europe due to greater economic growth.
- The operational sustainability of the 45 organizations that make up Opportunity International in 28 countries was 106 percent, meaning that the organizations are financially sustainable and able to broaden their reach and scope, especially into rural areas. Any funds remaining after expenses are plowed right back in these organizations to serve more poor people.
- Opportunity International now has more than 7,000 employees, a 23 percent increase from 2005.
A Historic Campaign
In 2006, the non-partisan Clinton Global Initiative recognized Opportunity International for its historic commitment to mobilize $500 million to help 50 million people. To achieve this goal, Opportunity International recently received funding from several high-profile organizations, including the Bill & Melinda Gates Foundation ($5.4 million grant), United States Agency for International Development ($1.4 million), Caterpillar Foundation ($1.2 million) and Lenovo Corporation ($1 million in computer hardware). John and Jacque Weberg, long-time supporters of Opportunity International, announced plans in 2006 to give $5 million annually for the next 10 years, the largest individual gift ever to a microfinance organization.
About Opportunity International
Opportunity International provides access to savings, small business loans, insurance and training to over five million people working their way out of poverty in the developing world. Clients in over 20 countries use these financial services to start or expand a business, provide for their families, create jobs for their neighbors and build a safety net for the future. For more information, visit http://www.opportunity.org or join the conversation at http://facebook.com/opportunityintl and http://twitter.com/opportunityintl.