eBay founder Pierre Omidyar and his wife Pam announced a $100 million gift to Tufts University to be invested exclusively in international microfinance initiatives. The $100 million Omidyar-Tufts Microfinance Fund (OTMF) will serve a triple purpose: demonstrate the potential of microfinance investments for institutional investors, support the Omidyars' alma mater, Tufts University, and potentially stimulate at least $1 billion in new microloans over the next decade. This $1 billion in new loans is possible, because loan capital is repaid with interest by borrowers, lent back out to more borrowers, and repaid with interest again.
"Microloans enable the poor to lift themselves out of poverty through entrepreneurship," said Pierre Omidyar. "The microfinance industry has shown that enabling the poor to empower themselves economically can be a profitable business." As the microfinance investments yield income, Tufts will retain 50 percent of the income to use for university programs. The other 50 percent will be reinvested in additional microfinance initiatives.
Microfinance clients are typically poor entrepreneurs, often women, who struggle to provide the basic necessities of food, shelter, and clothing for themselves and their families. Microloans averaging $600 (often as low as $40) enable poor entrepreneurs to grow their businesses, increase their income and lift themselves out of poverty.
http://www.omidyar.net
