Innovative partnership enables U.S. individuals to invest in small and medium enterprises in the region
The Inter-American Development Bank (IDB) and Calvert Foundation announced today the lauch of the Inter-American Opportunity Facility (IOF), a groundbreaking $20 million investment partnership designed to reduce poverty and promote economic growth at the base of the economic pyramid.
The IOF will provide debt financing to socially responsible financial institutions to support activities including small business lending, education, housing development, and agricultural cooperatives across Latin America and the Caribbean. Individuals can invest in the initiative through Calvert Foundation’s online investment platform, Vested.org ($20 minimum), through a brokerage account, or directly with Calvert Foundation ($1,000 minimum).
The partnership between the IDB and the Calvert Foundation will efficiently deliver capital at scale, and serve as a model of collaboration between development finance institutions and the private sector. Through the IDB’s extensive on-the-ground network and sourcing and underwriting expertise, and the Calvert Foundation’s ability to provide flexible, impact-oriented capital, the Facility delivers more investment, at faster speeds, to communities where it is needed.
“The IOF is a great example of the type of collaboration and innovation that’s required to channel new flows of capital to solve development challenges, and move from billions to trillions to meet the Sustainable Development Goals – not just in Latin America and the Caribbean, but around the world,” said IDB Executive Vice President Julie T. Katzman.
The private sector of the IDB will be originating and monitoring the investments. The Inter-American Investment Corporation (IIC) and Multilateral Investment Fund (MIF), members of the IDB Group, are contributing a total of $2 million in equity.
Calvert Foundation will invest $18 million in senior debt, raised through the sale of their Community Investment Note. The Note is a fixed income security available in a range of rate and term combinations, and has a 20-year track record of 100 percent repayment of investors’ principal and interest.
“This partnership illustrates Calvert Foundation’s new strategy in action: focusing on what we do best and leveraging the strengths of complementary partners. Partnering with the IDB allows both of our organizations to raise and deploy capital more effectively, resulting in greater social impact than each could have created on our own,” said Jenn Pryce, President and CEO of Calvert Foundation. “We’re excited to partner with the IDB, and to engage Hispanic communities in the U.S. as prospective impact investors.” Pryce also highlighted support from key partners including the MacArthur Foundation, as well as IdEA, the International diaspora Engagement Alliance, a public-private partnership with the U.S. Department of State and USAID.
The first borrower is Bogotá-based Bayport Colombia, which provides unique financial services to underbanked public employees as a means of improving their quality of life.
About the IDB
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region. Within the IDB Group, the Inter-American Investment Corporation promotes development in the region with a special emphasis on small and medium-sized enterprises. Similarly, the Multilateral Investment Fund supports economic growth and poverty reduction in the region by encouraging private investment and advancing private sector development.
About Calvert Foundation
Calvert Foundation is a nonprofit impact investing institution that enables people to invest for social good. Through its flagship Community Investment Note®, Calvert Foundation enables people to invest in a portfolio of more than 100 nonprofits and social enterprises worldwide. In Calvert Foundation’s 20-year history, 15,000 investors have collectively invested more than $1 billion in these organizations. Investor dollars empower women, fund the development of affordable housing, finance small businesses, increase access to healthcare, support fair trade cooperatives, and create numerous other social impacts.
- John Ferriter