Overview
Community investing is not only a tool for engaging in the development of U.S. communities; it is also a way to become active in other parts of the world. There are a vast number of U.S.-based and non-U.S.-based Community Investment Institutions (CIIs) that invest in the development of small enterpreneurs, families, and communities in other nations. They focus their loans, guarantees, and equity investments abroad to microfinance institutions and small- & medium-size enterprises, often issuing or guaranteeing smaller loans to communities and individuals in need.
While in the U.S. we focus primarily on rebuilding communities, international CIIs have a broader mission as they pioneer individual and community enterprises and neighborhood infrastructure development in countries emerging from years of conflict and war. Foundation for International Community Assistance (FINCA) has provided some of the first long-term and sustainable economic development aid to Kosovo, Haiti, Uzbekistan, and Afghanistan, all nations in need of capital to rebuild after political unrest. Shared Interest, a U.S.-based fund, works in South Africa to redress the economic legacy of apartheid, by guaranteeing loans for small- and micro-enterprises and affordable housing to black South Africans, primarily women. Many CIIs are aiding the people of recently democratized nations in Latin America in their efforts to establish small businesses and become economically independent. For information on the impact of community investing in other nations, see International Impact.
International investments do differ from domestic investments, largely due to foreign exchange rates and the stability of the country’s economy and government. Many CIIs that lend directly overseas integrate foreign exchange risk management measures into their lending strategies, diversify their loans across different organizations, and closely supervise their borrowers. International community investments also differ from domestic investments in that investment dollars go further due to the higher value of the U.S. dollar in other countries. A loan guarantee of $1,000 for a 2-year period in Africa can leverage local funds to launch 3.16 microenterprises and create 3.59 jobs. This compares to the same investment in the U.S. financing 40% of 1 microenterprise and creating less than one job, according to the Community Investment Impact Calculator.
Microenterprise loans are most often the vehicle for international community investing because they provide the large self-employed population often prevalent in developing nations with the skills, capital, and credit to start and expand their businesses. Small and medium enterprise (SME) loans are another vehicle that helps create small businesses and jobs, as well as develop the middle class, in poorer countries. There are well-established networks that track international CIIs, and have established benchmarks and other industry enhancements, such as Microrate and the Mix Market.
International Community Investment Vehicles (Coming Soon)
Use our Community Investment Database to find international investment options by country.
Research and Resources
ACCION International's Publications
Publications on the microfinance industry, including ACCION's InSight Briefing Series
CGAP’s "Focus Note 30: The Market For Foreign Investment in Microfinance: Opportunities and Challenges"
Findings of a survey and research on commercially-oriented microfinance funds
Enterprising Solutions Global Consulting's "The Potential For Social Investment in Microfinance and Small Enterprise in Developing Countries" and "Towards Sustainable and Responsible Investment in Emerging Markets"
Grameen Foundation USA’s "Tapping the Financial Markets for Microfinance"
White paper exploring the opportunities and challenges microfinance institutions face in tapping capital markets for financing their growth
Microcapital
Research center aiming to provide objective and candid information on microfinance
Microfinance Gateway
Leading source of information for and about the microfinance industry, including research and publications, discussion groups, and the latest news, events, and job opportunities
Microfinance Information Exchange
Provides information services, data sourcing, benchmarking, and monitoring tools to the microfinance industry
