Impact Investing Issuer Spotlight: Envest Microfinance

Interview with Jon Bishop and Laura Dreese

For the past decade, for-profit microfinance company Envest Microfinance has been striving to bridge the gap between microfinance and financial markets to make access to financial services universally available. It has tapped into support from individual and institutional investors to provide sustainable financing to the world’s economically marginalized and geographically isolated populations.

Founder and CEO Jon Bishop launched Envest Microfinance in 2006 after working in microfinance and development finance. He and Director of Operations Laura Dreese explain how the group got its start and how Envest is mobilizing money that would not otherwise be invested in microfinance.

 

How did Envest Microfinance get its start?

Jon Bishop: I pursued an MBA with the intent of making positive change in the world. I’m passionate about conserving the environment, and reducing poverty goes hand-in-hand with that. There is strong evidence that widespread poverty is an obstacle to creating an environmentally sustainable economy, and I wanted to be part of the effort to create a sustainable and just economy. After business school, I managed a microfinance fund that worked in Nicaragua where I witnessed first-hand the contrast between a subsidy-based approach and a market-based approach to providing global access to credit. I founded Envest with the idea of the company being a vehicle to bridge microfinance and capital markets. Ten years later, microfinance is still vastly underfunded, and the need for it is just as great, with a huge number of people left unserved. Envest operates with the vision of bringing universal access to financial services.

Laura Dreese: In college, I interned with a microfinance institution in Kenya, and, similar to Jon’s experience, the experience greatly impacted me and convinced me that microfinance could truly be a vehicle to reduce global poverty. Envest combines the social mission of microfinance with a solid business model, thus making it a sustainable business practice.

How is Envest mobilizing capital that would not otherwise be invested in microfinance?

Jon Bishop: Envest gets its lending capital primarily from individual accredited investors who want to make a difference with their money but don’t want to sacrifice financial return. There are not many microfinance investment opportunities out there that target a 5-6% return, so many of our investors who hold Envest in their portfolios would not otherwise be invested in microfinance. Additionally we recently sold the first note in our new debt offering to Pax World, and it is being held currently in the Pax Core Bond Fund. Getting mutual funds to invest in companies like Envest is tricky, because mutual funds need all of their holdings to be priced daily – something that doesn’t automatically happen to private debt. Envest and Pax worked with a third party to provide a daily price, which enabled Pax to move forward with the purchase. We hope that this example will stimulate greater mutual fund investment in high impact companies.

What are some of the highlights of what Envest Microfinance has achieved?

Jon Bishop: We lend to 13 microfinance institutions throughout the world, so there are plenty of stories to demonstrate the life-changing nature of our loans. But we’ll focus on two cases from very different parts of the world.

Envest partners with a microfinance institution called Pana Pana that lends to a group of five women in Tuapi, a fishing village north of Puerto Cabezas on the Atlantic coast of Nicaragua. Together, these women received their first loans from Pana Pana. Before having access to credit, the women were entirely dependent on their husbands who fished in the coastal waters near Tuapi and sold their fish in Puerto Cabezas. When the five women received their loans in 2014, they were able to buy the fish from their husbands and sell it in Puerto Cabezas. While in town to sell fish, the women would buy nets, lines and other fishing equipment for their husbands. The new arrangement allowed the men to spend more time fishing. It also meant that the income entered the family via the woman, which has elevated all five of them to be equal partners with their husbands. All of these women have since opened small pulperias, think mom ‘n pop shops, in their homes. This diversified their families’ incomes and reduced the families’ exposure to the vagaries of the daily catch. The increased family income has made it easier for all five families to keep their children in school, leading to a brighter future for both their children and their country, Nicaragua.

Laura Dreese: Additionally, we just embarked on a brand new partnership with a microfinance institution called Arysh Invest that works in the shantytowns surrounding Bishkek, Kyrgyzstan. After independence from the Soviet Union in the 1990s, rural residents flocked to the capital, Bishkek, to look for work, but the city was unable to absorb them all. They then settled in shantytowns surrounding Bishkek. Since the homes in these shantytowns are unofficial and are not registered with the government, the owners are not able to access government-sponsored social services, which is very damaging. Arysh lends to these families and helps them get their houses registered with the government so that the owners can access social services. This is a great example of how access to basic financial services can unlock significant gains in the global fight against poverty.

For more information visit – www.envestmicrofinance.org

 

Contact:
Jon Bishop, Founder & CEO, Envest Microfinance Cooperative
jonbishop@envestmicrofinance.org

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