May 21, 2010 | Read Time: 1 minute
In the first year of the Schwab Charitable Microfinance Guarantee Program, donors set aside $10-million from their gift funds to guarantee small loans to poor entrepreneurs in developing countries.
As of March 31, the Grameen Foundation had closed guarantee transactions based on Schwab Charitable-backed commitments to benefit an estimated 116,468 borrowers in Egypt, Indonesia, and the Philippines.
Through the program, donors can recommend that up to 10 percent of the money in their donor-advised accounts be set aside for 24-36 months to guarantee microfinance loans. The money remains invested for the entire period and is applied to the guarantee only if the microfinance program has losses in excess of reserves.
Because microfinance loans are repaid by borrowers over relatively short time frames and then loaned out again, Schwab Charitable estimates that the initial $10-million in guarantees will result in more than 300,000 loans.
The Schwab Charitable Fund ranked No. 10 on The Chronicle’s most-recent list of the 400 charites that collect the most from private sources.
