Cleveland – A $ 20 million loan from the International Development Bank of the United States will enable a program initiated by 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 links to churches 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 Fr. Andrew Small, national director of pontifical missionary works, told Catholic News Service.
“No one is doing that level of funding. It’s too risky,” Small said.
The fund’s loans – ranging from $ 50,000 to $ 1 million – fund church-led initiatives that large-scale 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 loan and beyond.
People receiving the loans will be “agents of change” in the developing world as their incomes stabilize, leading to poverty reduction, the priest said.
Until 2020, MISIF loans totaled nearly $ 4.5 million. 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 have included congregations of religious and priests, dioceses, seminaries, financial institutions and parishes.
“We started with agriculture because it is the most profitable in terms of poverty reduction,” Small said, adding that a wider range of health, education and financial institutions will be sought after. as the loan program grows.
A school extension in northern Tanzania for Maasai children, a coffee plantation in Kenya and a faith-based financial institution in Nigeria were among the first participants in the loan program.
Overall, the loan-receiving businesses 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.
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 communities that carry out the missionary work of the church as envisioned by Pope Francis, Small said.
The priest had originally planned to create such a fund through which investors would provide “real money” to local businesses working in local communities rather than depending on donors who contribute from their income generated through tools of traditional high yield investment.
Such a social impact investment will foster what 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, then we will continue to stifle the agency of the poor,” he said. .
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 assets.
“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 so with the massive investment portfolios that we have amassed, it is difficult to see how we are creating the kind of interdependence and unity that God offers for our happiness. “
MISIF’s denominational investors include the Sisters of Saint-Louis; the Company of Jesus’ Midwestern US Province; the Missionary Oblates of Mary Immaculate; the Archdioceses of Milwaukee and Miami; the Royal English College of St. Alban in Spain; the Vatican Congregation for the Evangelization of Peoples; and the pontifical missionary works of the United States
Small said he expects the program to expand to South Asia by 2025 as new investors join MISIF. Projections are for loans in the region of $ 80 million by 2030.
“We have 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 us that. “said the priest. noted.
“If we can share our bank balance as well as our profits, we will move closer to an interdependent world.”