COMMUNITY DEVELOPMENT INVESTING: South African Loan Fund Launched, March 1996
SOCIAL TOPICS (Archive): COMMUNITY DEVELOPMENT INVESTING
South African Loan Fund Launched
Published, March 1996
A breakfast reception at USTC on November 10, 1995 was the first opportunity for the Boston social investment community to learn about the new Thembani International Guarantee Fund (TIGF). Thembani ó the Zulu word for giving hope and encouragement ó reflects the fundís goal of enabling American and European investors to participate in economic development initiatives in low-income South African communities.
Fifty people came to hear the remarks of the new South African Ambassador to the US, Franklin A. Sonn, who provided an enthusiastic endorsement for TIGF as well as thoughtful and amusing stories about the struggle to end apartheid.
The fund is a joint project of Shared Interest in the US and RAFAD in Switzerland. Shared Interest was created by Boston-based FREESA Development Fund for South Africa. It will raise money from US investors to invest in socially screened bonds that will support loan guarantees. RAFAD has over ten years of successful experience operating loan guarantee programs supporting democratic and egalitarian economic development in Asia, Africa and Latin America.
Shared Interestís Executive Director Donna Katzin provided many details about TIGF at the breakfast. For many years Donna was at the forefront of the anti-apartheid movement in the US as Director of South African and International Human Rights Programs at the Interfaith Center on Corporate Responsibility. Robert Zevin of USTC, who presided over the breakfast, is a founding director and treasurer of Shared Interest. Reports on his earlier trips to South Africa to develop Shared Interest have appeared in previous issues of Values.
RAFAD and Shared Interest intend that the fund will encourage projects that maximize the use of local resources and the enrichment of local life. Such projects might include lending to collectives of micro-enterprises, to cooperative housing developments and to community enterprises sponsored by civic organizations that took control of the townships in the final years of apartheid.
Another important objective of TIGF is to encourage South African banks to lend to these kinds of borrowers through the enticement of guarantees and the familiarity gained from experience.
Shared Interest lenders will commit $10,000 or more for at least three years. In addition, they will agree to donate 3% a year or more of the earnings on their investment to support the substantial costs of operating the guarantee program.
While there are important risks and a return specified to be less than market interest rates, this program offers social investors a chance to contribute to the survival and success of South Africaís noble effort to build a truly just society.
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