COMMON QUESTIONS
What does Envest do?
What is the end benefit to borrowers (entrepreneurs)?
How do microfinance institutions (MFIs) and the communities they serve benefit from investments?
How is Envest different from other international community investment funds?
Does Envest compete with other international community investment funds?
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What does Envest do?
Reliable estimates for the amount of microfinance capital needed to meet the global demand from every person seeking such opportunity range as high as $500 billion. This is much more than can possibly be raised through donations. And, while generosity can be its own reward, if each party invests in success, all are more likely to succeed.
Using a standard loan model, Envest offers capital directly as a loan, which the MFIs, in turn, loan in much smaller amounts to large numbers of borrowers.
At each step, borrowers repay loans with interest. All parties receive a solid return on their investment.
Lending operations will be conducted within the Natural Step framework. See Envest Values.
The above framework is the initial process for Envest's operations; however, one of the elements that makes Envest unique is its strategy of selling the portfolio it has purchased to other financial institutions and using loans from US banks to leverage social and environmental impact.
How does Envest benefit borrowers?
Envest’s primary goal is to help meet the credit needs of entrepreneurs (borrowers) in impoverished areas of the world. Envest works through microfinance institutions that specialize in meeting the needs of those entrepreneurs in their day to day operations. These microfinance institutions, non-profit organizations dedicated to providing opportunity for the poor in their communities, are actively seeking capital to expand their impact. Since many deserving entrepreneurs are currently turned away simply because of a lack of capital, any increase in capital available to microfinance institutions means that end borrowers have a greater chance of getting a loan. Capital from Envest helps smaller local microfinance institutions grow, offer lower rates for their borrowers, expand into areas where credit was not previously available and offer additional services such as education and medical care for families of borrowers.
How do microfinance institutions (MFIs) and the communities they serve benefit from international loans?
The microfinance institution (MFI) can use the capital provided by Envest to make new loans to borrowers. This allows the microfinance institution to meet the demand for more loans.
Additional capital to make new loans means that the microfinance institution can increase its revenue. Microfinance institutions are typically founded with a social mission, and some just barely break even in order to make additional services available to their most needy borrowers. With increased revenue, MFIs can expand into areas where credit was not previously available and offer additional innovative services, such as education and medical care for families of borrowers and the communities they serve.
How is Envest different from other international community funds?
Most international community investment funds make fixed-rate, fixed term loans to microfinance institutions. MFIs repay when the loans mature. As it is starting out, Envest uses this standard loan model. Offering standard loans to MFIs allows Envest to develop a preliminary relationship with MFIs before applying more complex financial instruments with greater potential social benefits, described below.
Envest collaborates with socially-conscious financial institutions including progressive community banks to further increase its reach to end borrowers and its overall potential for social impact. Additionally, Envest has reached an agreement in principal to sell loans to a socially focused investment bank. Envest will use the cash from the sale of the loans to disburse more loans to new and existing MFI partners.
Does Envest compete with other international community investment funds?
Envest’s primary mission is to make credit universally available to developing-world entrepreneurs. The current shortage of capital for microfinance entrepreneurs is so vast worldwide that every possible source of community investment funding is needed. Most funds have somewhat different constituencies, so competition for a single investor will be rare. Indeed, many international community investment funds collaborate, sharing ideas and networking to enhance value for all concerned. We are more likely to mobilize resources for the greater good if we work together.
Does Envest accept donations?
No. With our change in status from a non-profit to a cooperative, we can no longer accept donations.
