Hope International (Christian microfinance)

HOPE International is a Christian faith-based nonprofit organization based in Lancaster, PA focused on alleviating physical and spiritual poverty through Christ-centered microenterprise development. The aim "to invest in the dreams of families in the world's underserved communities as they proclaim and live the Gospel," HOPE International now operates in 16 underserved countries and has assisted hundreds of thousands of people through over 2.7 million loans totaling more than $800 million since it began operations in 1997. Its clients also currently hold $30 million in savings.

HOPE International
Nonprofit Organization
Founded1997
FounderJeff Rutt 
HeadquartersLancaster, PA, United States
Key people
Jeff Rutt, Founder, and Peter Greer, President
ProductsFinancial Services
Microfinance
Revenue$19,365,909 (Dec 31, 2016)[1]
Total assets$20,675,528 (Dec 31, 2014)[1]
Websitehttp://www.hopeinternational.org

Need for financial services for families living in poverty

The World Bank reports that, "nearly 3 billion people in developing countries have little or no access to formal financial services."[2] According to CGAP, "people living in poverty, like everyone else, need a diverse range of financial services to run their businesses, build assets, smooth consumption and manage risks."[3] Traditionally, these families fill financial gaps by borrowing from friends and family or by borrowing from loan sharks who charge high interest rates. Oftentimes these options do not provide lasting solutions.

Microfinance, defined as "providing financial services such as small loans to poor people so they can increase their income and decrease their vulnerability to unforeseen circumstances,"[4] provides an opportunity for lasting change in even the poorest of communities. Many clients in the HOPE network are women seeking to establish sustainable means of providing food, clothing, shelter, and an education for their families. Income from businesses built in part through small loans and savings not only helps the individual client, but also benefits his or her family and subsequently strengthens the local economy.

How HOPE thinks about poverty

While many define poverty as a lack of money, food, or shelter, HOPE believes the roots of poverty run deeper. Using a model developed by The Chalmers Center, HOPE defines poverty as a result of broken relationships – with God, others, self, and the rest of creation.[5]

Entrepreneurial approach to poverty alleviation

The organization operates through one of two models depending on the country of operation.

The first method is the savings group program.[4] Savings groups are formed by a group of 10 to 50 individuals who meet regularly to make savings deposits into a common fund. Clients regularly save money to stabilize household income, provide a safety net in emergencies, start or expand businesses, or pay for household expenses such as school fees. Many groups also allow for savers to take out loans for their financing needs.

HOPE’s second model is microfinance institutions. This approach involves a group of 10-50 entrepreneurs who together receive loans from HOPE International or its local partner.[6] Each client cross-guarantees the loans of other groups members since there is no form of collateral to offer for the loan. Accountability to the group provides a powerful incentive to make regular loan repayments.

In certain HOPE-network countries, microfinance clients can also qualify for individual loans, typically for higher loan amounts than those in the group model. Clients may graduate from receiving group loans once they have proven credit-worthiness, or they may qualify from the start due to their financial situation, business success, or credit history.

New Initiatives

Larger loans: In developed nations with a higher income per capita, small and medium enterprises (SMEs) are the backbone of the economy. These businesses, which often employ multiple people and heavily impact communities, are critical for national economic progress. However, in countries with lower per capita incomes, SME businesses are noticeably missing. The large gap, often referred to as the “missing middle,” stems from both a lack of capital for SMEs and a lack of incentives for banks to offer appropriately sized loans. To meet the needs of clients whose businesses have outgrown microfinance lending, finding themselves in this missing middle, certain HOPE programs have begun piloting and rolling out SME loans.

Tracking outcomes: HOPE desires to see families impacted across four domains: material, personal, social, and spiritual. In 2014, they formed a Listening, Monitoring, and Evaluation (LM&E) team to better understand its services’ impact on clients. HOPE has invested in LM&E with the goal of listening well to clients, using feedback to inform their work. Recognizing that proving impact can be a very complex process, HOPE desires to “improve, not prove” their processes.

History

After the collapse of the Soviet Union in 1991, Jeff Rutt and the Pennsylvania-based church he attended partnered with a church in Ukraine. After failing to effectively help the Ukrainian community through handouts, and upon looking into different forms of development aid, Rutt decided to initiate a microfinance program to empower Ukrainians. The program was successful, and in 1997 Rutt established HOPE International.[5]

After further work in Ukraine, the organization began looking for opportunities to expand its operations into other countries where a need for such services had been identified. In 2004, Peter Greer became HOPE's president after spending several years at various microfinance organizations and attending graduate school at Harvard University.

Financial accountability

In addition to the contributions of clients themselves, HOPE International’s work is funded through individual donors, churches, foundations, businesses, and Homes for Hope. In the last five years, approximately 98 percent of loans in the HOPE network have been repaid. HOPE-network clients repay loans with interest, and investments remain in their local microfinance institution, stimulating the local economy and allowing for continued loan distribution.

For 10 consecutive years, Charity Navigator has awarded HOPE International its highest four-star rating, something fewer than 1 percent of U.S. nonprofits achieve. HOPE most recently earned a score of 100/100 in accountability and transparency and an overall rating of 92.05.

HOPE International also has a philanthropic dividend policy. As HOPE-led microfinance institutions become sustainable, they are committed to giving away 10 percent of their profits to support local Christ-centered children’s ministries.[6]

The role of faith at HOPE International

HOPE International shares the hope of Christ through its work, seeking to transform its clients both physically and spiritually. In addition to providing loans and establishing savings groups, HOPE offers biblically based business training and discipleship to its clients. Although HOPE International is a Christian organization, it works with all individuals regardless of their religion, race, gender, sexual orientation, or marital status.[7]

Countries Where HOPE International operates / Partner organizations
  • Burundi: Established in 2012
  • Dominican Republic: Esperanza International[8] partnership established in 2005
  • East Asia (country name withheld for security reasons)
  • Haiti: Program established in 2009
  • Malawi: Program established in 2013
  • Moldova: Invest-Credit partnership established in 2005
  • Peru: Comas Christian & Missionary Alliance Church partnership established in 2011
  • Philippines: Center for Community Transformation (CCT)[9] partnership established in 2007
  • Republic of Congo:[16] Program established in 2010
  • Romania: ROMCOM[11] partnership established in 2007
  • Rwanda: Urwego Bank[12]: partnership established in 2005 and transitioned to HOPE-managed in 2016: HOPE Rwanda program established in 2007
  • Rwanda SCA: Established in 2007
  • Ukraine: Program established in 1997
  • South Asia (country name withheld for security reasons)
  • Zambia: Program established in 2015
  • Zimbabwe: Partnership established in 2011; transitioned to HOPE-managed in 2017

Governance

HOPE International has a 10-member board of trustees chaired by Jeff Rutt.[17] Peter Greer was appointed as president of the organization in 2004 after working abroad with various microfinance organizations and graduating from Harvard Kennedy School.[6] Greer heads HOPE International’s 12-member executive team. Program directors also oversee the organization’s work from within its countries of operation.

Homes for Hope

Homes for HOPE, an affiliate program of HOPE International, was also established in 1998 by Jeff Rutt.[10] Through Homes for HOPE, home builders and trade partners are able to build benefit homes on a pro bono basis.[7][8] To date, the organization has raised more than $10,000,0000 in support of HOPE International, and is currently operating in nine states in the United States. In 2008, Jeff Rutt was awarded the Hearthstone Builder Humanitarian Award for his humanitarian efforts.[9]

Further reading
  • Created to Flourish by Greer and Smith
  • When Helping Hurts by Corbett and Fikkert
  • From Dependence to Dignity by Fikkert and Mask
  • Portfolios of the Poor by Daryl Collins
  • The Blue Sweater by Jacqueline Novogratz
  • A Billion Bootstraps by Smith and Thurman
  • Banker To The Poor by Muhammad Yunus
  • Dead Aid: Why Aid Is Not Working and How There Is A Better Way For Africa by Dambisa Moya
  • Give Us Credit by Alex Counts
  • Good News to the Poor: How the World’s Poor Live on $2 a Day by Daryl Collins, Jonathan Murdoch, Stuart Rutherford, Orlando Ruthven
  • The Economics of Microfinance by Beatriz Armendariz and Jonathan
  • The Poor and Their Money: Microfinance from a Twenty-First Century Consumer’s Perspective by Stuart Rutherford
  • Walking with the Poor by Bryant L. Myers
gollark: Aaargh, why are there no trades available for yellow zyuus.
gollark: 1/110412.5.
gollark: They're probably worth more as hatchlinngs.
gollark: Punch yourself in the face whenever you catch it without needing it. Soon you will stop.
gollark: Stop catching BSAs then?

References
  1. "HOPE International". Charity Navigator. Retrieved July 11, 2012.
  2. "Financial Markets and Access to Finance Advisory Services". World Bank Group. Archived from the original on 2012-05-07. Retrieved 4 March 2012.
  3. "Poverty Reduction: How and Where We Work". World Bank. Retrieved 2018-05-30.
  4. "Alissa Wachter TUL 560 – Community Economics February ppt download". slideplayer.com. Retrieved 2018-05-30.
  5. Interactive, Papercut. "When Helping Hurts | The Chalmers Center". www.chalmers.org. Retrieved 2018-05-30.
  6. http://www.hopeinternational.org/images/uploads/financials/Philanthropic_Dividend_Policy_screen_1.pdf
  7. Fanion, Rebecca. "Building Hope, Charity provides a hand up, not a handout". Central Penn Business Journal. Retrieved 16 September 2011.
  8. "Homes for Hope: About Us: Board of Directorys". Homes for Hope. Homes for Hope. Archived from the original on 18 September 2013. Retrieved 20 August 2013.
  9. Bair, Jessica. "In brief: Homebuilder honored". Central Penn Business Journal. Retrieved 21 February 2008.
  10. "History". Homes for Hope. Homes for Hope. Retrieved 28 October 2013.
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