21 April 2010: John Hatch on FINCA International and Village Banking
The event will be held in English.
Date: 21st April 2010
Time: 19:45 – 20.45. Followed by Networking drinks.
Village banking is arguably the world’s most widely-imitated microfinance methodology and has been introduced by FINCA, a U.S. non-profit microfinance institution (MFI) whose purpose is to provide financial services to the world’s poorest families. Village Banking is a unique and transparent method of micro-finance that puts small loans as small as $50 in the hands of very poor families through community financial associations in which loans are guaranteed by the recipients themselves: A village bank is an informal self-help support group of 20-30 members, predominantly female heads-of-household.
The fact that village banking brings people together regularly in large groups offers institutions an efficient opportunity to provide additional, valued non-financial services. It is said that Village banking is particularly well suited for rural areas and that it tends to reach deeper than other microfinance methodologies.
How do Village Banks work? How are the Village Banking Programs managed and financed? What distinguished Village Banking??
All these questions will be discussed in the next MF Club meeting thanks to the presence of the founder of Village Banking, a program that can help lay a firm foundation that currently serves more than 740,000 clients in 21 countries.
Dr. John Keith Hatch is an American economic development expert and a pioneer in modern day microfinance.
After studying History from Johns Hopkins University where he obtained his BA, Hatch joined the Peace Corps in 1962 where he held different positions (from volunteer to director) in Colombia and Peru. This experience allowed him to get in touch with cooperatives and credit unions in the agricultural sector. Dr Hatch further specialized and obtained an MA in Economic History (1970) at the University of Wisconsin–Madison and a PhD in Economic Development (1973). In between (1970-71) a Fulbright grant allowed him to document traditional farming practices in Peru and experience community development in poor regions.
For the next 12 years he worked as a consultant in the design, management, and evaluation of mostly agricultural projects seeking to benefit the poor, eventually completing over 55 assignments in 28 countries of Latin America, Africa, and Asia. The gaps of this experience led him to the outline of a radically different approach to poverty alleviation: a financial services program that put the poor in charge. In 1984, Hatch finally created his own nonprofit agency -the Foundation for International Community Assistance (FINCA). He was inspired with the idea of FINCA.
The story of FINCA-which has been called a “World Bank for the Poor” and a “poverty vaccine for the planet”-is quite remarkable. FINCA currently operates over 800 village banking programs worldwide in 21 countries. Since 1984 the Agency has assisted over 1MM families, lending over $360 million (in 2007) to the world’s poorest families with a repayment rate of 98%, while also generating enough income to completely cover the operating costs of the field programs themselves.
Over 22 years with FINCA, Hatch served as president, and as chief of party for programs in El Salvador and Guatemala; he retired as FINCA’s director of research in 2006. Today, Hatch continues as a FINCA board member, advisor, speaker, lecturer, and fundraiser. He is continuing his research on the impact of Village Banking and is active in FINCA’s annual student symposium and research awards competition.
Hatch is also co-founder of the Global Microcredit Summit and the Alliance of Students Against Poverty (ASAP). In 2009 he received the Sargent Shriver Award for Distinguished Humanitarian Service by the National Peace Corps Association.