FINCA's mission is to bring financial services to the world's lowest-income entrepreneurs so they can create jobs, build assets and improve their standard of living.
The village banking method has been shared widely with other voluntary agencies and development organizations. While many agencies and organizations provide small loans to low-income families, not all use the village banking method. Developed by FINCA Founder John Hatch, the village banking method is unique in the responsibility and autonomy given borrowers in running their banks and in its emphasis on community, as well as individual, development.
Loans—at market rates of interest—are the central service provided by the village banking method. FINCA offers loans, not grants, to low-income microentrepreneurs, because at the root of their poverty is lack of opportunity, not lack of desire to work. While many poor families have ideas for fostering their own employment by creating small businesses, few can access the capital they need to begin. They are excluded from conventional financial sources (e.g., commercial banks) because they lack credit ratings and assets to pledge as collateral. Even a small loan can stimulate productivity, enabling the microentrepreneur to build assets and purchase inventory at the best prices. By investing the loan and increasing his or her business as a result, the borrower reaps an additional reward—increased self-esteem through self-help.
Loans are a renewable resource, which can impact entire communities. A loan is borrowed, invested, and repaid, after which it can be used to stimulate yet another fledgling business. FINCA loans circulate throughout low-income communities until their effect is multiplied many times.
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