(CNS) – A $ 20 million loan from the International Development Bank of the United States will enable a program initiated by the Pontifical Mission Societies in the United States to expand social impact investments in businesses run by the Catholic Church in Africa.
The loan from the International Development Finance Corporation to the Missio Invest Social Impact Fund will be used over four years to support agricultural, health, education and financial inclusion institutions with religious ties in the sub-Saharan region.
Known as MISIF, the fund will channel money to small and medium-sized businesses that do not have access to investments from traditional sources, Oblate Father Andrew Small, national director of Pontifical Mission Societies, told Catholic News Service.
“Nobody does that level of funding. It’s too risky, ”said Father Small.
Loans from the fund – ranging from $ 50,000 to $ 1 million – fund church-led initiatives that big investors routinely bypass, he said. Other benefits for beneficiaries include low interest rates and no collateral requirement.
MISIF also provides ongoing training and technical assistance throughout the life of the fast payback payday loans and beyond.
People receiving the loans will be “agents of change” in developing countries as their incomes stabilize, leading to poverty reduction, the priest said.
Until 2020, MISIF loans totaled nearly $ 4.5 million. Father Small said 98% of the portfolio is up to date on repayments and four loans have been fully repaid.
Loans were made to 38 agribusinesses, two microfinance institutions and one school in six countries: Kenya, Malawi, Nigeria, Tanzania, Uganda and Zambia. Borrowers include congregations of religious and priests, dioceses, seminaries, financial institutions and parishes.
“We started with agriculture because it has the biggest benefit in terms of poverty reduction,” Father Small said, adding that a wider range of institutions for health care, education and financial resources will be sought as the loan program grows.
A school extension in northern Tanzania for Masai children, a coffee farm in Kenya and a faith-based financial institution in Nigeria were among the first participants in the loan program.
Overall, the companies receiving the loans have provided 2,000 jobs and $ 3 million in income to local economies and trained 4,500 farmers in sustainable farm management practices, according to Missio Invest.
Father Small said the US $ 20 million loan will allow MISIF to reach hundreds of other faith-based businesses in a dozen more countries. The loan must be repaid, with interest, usually within six years.
MISIF was created in 2019 by Missio Invest, which the Pontifical Mission Societies formed in 2014 to work with Church-owned businesses.
The philosophy behind the formation of the loan program is based on connecting investors with the communities that carry out the missionary work of the church as envisioned by Pope Francis, said Father Small.
The priest had initially decided to create such a fund through which investors would provide “real money” to grassroots businesses working in local communities rather than depending on donors who contribute from their pool of income obtained through the priesthood. traditional investment tools with a high rate of return.
Such a social impact investment will foster what Father Small described as more sustainable development and lead to more lasting relationships that the Pope encouraged the church to initiate and maintain.
“Unless we build meaningful relationships based not on vague notions of concern and giving, but on concrete and identifiable forms of mutual concern, we will continue to stifle the action of the poor,” he said. he declares.
He compared the thought behind MISIF to Jesus’ parable of the widow mite in which the small gift of the elderly woman is described as greater than any gift from the rich person who contributes from his excess holdings.
“It’s about giving until it really matters to you, until it makes a difference to your own well-being,” he explained. “The widow expresses that she feels dependent on God and others for her future well-being. Unless we do this with the massive investment portfolios that we have amassed, it’s hard to see how we create the kind of interdependence and oneness that God offers for our happiness.
Church investors in MISIF include the Sisters of St. Louis; the American Midwestern Province of the Society of Jesus; the Missionary Oblates of Mary Immaculate; the Archdioceses of Milwaukee and Miami; the Royal English College of Saint-Alban in Spain; the Vatican Congregation for the Evangelization of Peoples; and the Pontifical Mission Societies of the United States
Father Small said he sees the program expand to South Asia by 2025, as new investors join MISIF. Projections predict loans of nearly $ 80 million by 2030.
“We need to ask ourselves how we can redesign our interdependence so as to claim a legitimate future together because we need each other in the future as we do today. I think the pandemic has shown it to us, ”the priest said.
“If we can share our bank balance as well as our profits, we will move closer to an interdependent world.”