A Letter from WCCN’s Executive Director
Carlos Arenas, WCCN Executive Director
Our transformation began three years ago as Working Capital for Community Needs (WCCN) first expanded our work beyond Nicaragua. Now we successfully work in six Latin American countries and continue to expand. During that same time, the community of microfinance investment funds also expanded its horizon and broadened its goals. Impact investing is the new name that identifies and defines the work of social funds like ours. In simple terms, impact investing is a framework that puts all the groups using financial tools for social outcomes under the same tent. WCCN happily embraces this new framework and already is lending to other social sectors besides microfinance.
When WCCN started the loan fund 20 years ago, our original role models were the Community Development Loan Funds, also called Community Development Financial Institutions (CDFI). These proliferated around the country during the 1980s and 1990s. However, as the target communities benefitting from our lending differed geographically and as the microfinance community emerged and the field specialized, we gradually distanced ourselves from the CDFI community. In recent years, that distance has closed as groups lending for social purposes reframed their work under the broader impact investing umbrella. As for social problems and their potential solutions, the concept of impact investing has no geographical borders. This evolution opens space for partnerships with the CDFI community, which would have been unthinkable a few years ago.
At the same time, space opened for WCCN to partner with U.S.-based nonprofits, co-ops and social businesses working to resolve problems in Latin America or simply doing business in that region with a social aim. WCCN welcomes this development, which allows for partnerships such as with two Madison-based organizations. WCCN’s new involvement on agricultural lending has allowed us to partner with and lend to Just Coffee, a Madison-based co-op. This loan to Just Coffee is intended as a loan to La FEM, a women’s organization in Nicaragua that produces and exports fair trade coffee that Just Coffee roasts and distributes in the Midwest. Just Coffee guarantees repayment of the loan to La FEM, a wonderful but still very small organization. WCCN also is exploring ways to partner with and support the efforts of another Madison-based nonprofit organization: Andean Health & Development, which works to provide affordable health services in a sustainable way in rural Ecuador.
We have been successfully working on microfinance for 20 years. That experience has taught us to value sound and sustainable models. Our agricultural lending has had a very promising start because we developed a lending model that removes some risks traditionally associated with this kind of lending. We are in a very creative moment of our institutional history, and we welcome your enthusiasm about the tasks and challenges ahead. We will update you as we take additional concrete steps in that direction.