Spotlight: Envest Microfinance Cooperative

Envest Microfinance Cooperative is a for-profit, Certified B Corporation that raises capital from accredited U.S. investors and lends it to microfinance institutions (MFIs) in developing economies across the globe.

These MFIs then use that capital to make microloans to individual borrowers who lack access to credit from traditional banking sources. Each microloan typically averages about $650—a relatively small amount of money by most people’s standards—but the impact on the lives of the people who borrow it can be immense.

According to Umaizi, the unmet demand for credit in the world’s lowest-income communities is about $320 billion, but a 2017 study by the International Finance Corporation based in Washington, D.C., revealed a credit gap of $5.2 trillion when including micro, small and medium-sized enterprises. Envest strives to fill that gap by connecting micro-borrowers with the capital markets, which it believes are the only viable sources for satisfying global demand at scale.

Currently, Envest partners with 19 independent MFIs in 11 countries, including Honduras, Nicaragua, Panama, Peru, Moldova, Uganda, Kenya, Zimbabwe, India, Kyrgyzstan and Tajikistan. These MFIs are often the only lenders who will provide credit to people in the low-income communities they serve.

Pana Pana is one of those MFIs. It serves the north Caribbean coast of Nicaragua (the second-poorest country in the western hemisphere), and it is the only MFI in the region that concentrates on providing business microloans to people on the lower end of the socioeconomic spectrum. Located in Puerta Cabezas, Pana Pana has been serving this community since its founding in 1991. Women comprise about 70% of its borrowers, and many are Miskito, which is the indigenous population of the region. The Miskito have their own language and traditions, and like many indigenous people, they face pervasive and persistent discrimination. On top of that, they often struggle to conduct business with lending entities because many of them don’t speak Spanish. Luckily, the loan officers at Pana Pana (which means “mutual help” in Miskito) speak their language and can help them access the credit resources they need.

In Tuapi, a small Miskito village near Puerta Cabezas, many of the men fish the waters off the coast and sell their catch at the local market. The time it takes for them to sell their wares, however, is valuable time away from their boats. Five women in the community saw an opportunity and worked as a group to get a small loan from Pana Pana. This allowed them to buy the fish from their husbands and sell it at a profit at the market. As a result, the men were able to dedicate more time to fishing, which increased their income, and the women were elevated to equal partner status when it came to earning money for their families. The women used the profits not only to pay off the loan, but also to open small shops in their homes, which further increased and diversified their sources of income. This, in turn, made it easier for them to put food on the table and keep their children in school.

This is only one of many stories about the impact Envest’s microfinance fund has had in some of the world’s poorest communities. Ending poverty in all its forms is the first of the 17 Sustainable Development Goals established by the United Nations in 2015. Together with caring, responsible investors, Envest is helping to make this goal a reality.

See full 2021 Social Impact Report – Natural Investments.

This publication is distributed to clients and friends of Natural Investments, LLC (NI). NI is an investment adviser registered with the SEC. It is for educational purposes only and is not intended to contain recommendations or solicit sales of any specific investment. Authors, representatives, or related persons of NI may own securities mentioned in here.

Photo credits:

Shanti is a borrower of Envest’s partner NEED MFI, headquartered in Lucknow, India. Shanti is on her fourth loan cycle with NEED for the purposes of funding her enterprise, providing boxes of sweets to her community. Women comprise 99% of the NEED’s borrowers. 

Dina has been an Arariwa borrower for 7 years, an Envest partner in Cusco, Peru. She used to only have a few chickens. Now she has around 80 small animals including cows, turkeys, and guinea pigs.  She said it’s been much easier to send her kids to school given a higher income thanks to the supplemental farming loans; additionally, she has learned how to “save for life.” 

Leonard is a borrower of Envest’s partner Rafode, headquartered in Kisumu, Kenya. Leonard is the chairman of the Sondu riders group of borrowers. He uses a boda boda (motorcycle) as his main income source driving people and goods and has a small clothing stand. His first loan allowed him to purchase additional inventory for his clothing stand, and his second loan is currently being used for solar home improvements. He enjoys the quality of his lights and notes the greatest benefits are improvements in health by replacing kerosene, and that his kids can read when it is dark. 

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