Impact

• South African Context
• Home loan guarantees – HIV/AIDS
• Guarantees

Sample Guarantees

• Microenterprise
• Low-cost housing & community facilities
• Small business
• Rural development

Shared Interest’s guarantee fund has used money from U.S. lenders to transform the lives of some of the poorest families in South Africa, while strengthening the institutions that serve them and their communities. The guarantees have also begun to alter the lending practices of some South African bankers and their appreciation of the country’s majority market.

How Shared Interest makes an impact?

Borrowers

Low income black South Africans of color build or improve their houses and launch very small businesses

• Supporting their families
• Creating jobs

Community lending institutions build their capital and scale up their operations

• Expanding to serve thousands more clients
• Strengthening their own operational and financial systems
• Increasing their own commercial viability

South African Financial Institutions

• Extending credit to clients who would have otherwise been considered “unbankable”
• Learning to underwrite and monitor similar loans without guarantees in the future

Banks

South African banks learn to lend to low-income communities previously considered “unbankable”.

• Building their capacity to serve low-income communities in the future without guarantees
• Strengthening the fabric of South Africa’s rural and township economies – and the South African economy as a whole

U.S. Investors

More than 400 individuals and institutions in the U.S. have lent upwards of $12 million dollars.

• All investors requesting repayment have been repaid with their interest.
• No investor has lost interest or principal as a result of a loan to Shared Interest.

Evaluation

To evaluate the impact of the first 10 years of guarantees extended by Shared Interest and implemented by its partner, the Thembani International Guarantee Fund (TIGF), the New School’s Graduate Program in International Affairs sent a team of researchers to South Africa in 2005. They found that Thembani had a significant impact on the banks, community development and micro-finance institutions (CDFIs and MFIs) with which they work. They found that banks are offering “more flexible lending terms [demonstrating] that prior positive experiences in lending to MFIs can change banks’ attitudes and make them more receptive.” They also found that Thembani-backed loans increase “the capacity and sustainability of the MFIs and intermediaries that they work with… and that their loans provided the critical element of financial independence and flexibility.” Their evaluation also demonstrated “an improvement in many financial and social indicators” of the organizations clients receiving guarantees from Shared Interest.

How Shared Interest Leverages Impact

Shared Interest works with its partner, Thembani, to identify indicators that assure the impact of its work on individuals, community development financial institutions that benefit from its guarantee, and lending banks. Thembani collects, compiles the agreed upon information and forwards it to Shared Interest every six months. In addition to annual quantitative impact surveys, Thembani conducts qualitative sampling of beneficiaries on a bi-annual basis.