What do they do? Opportunity International is a microfinance organization that provides financial services to low-income people in the developing world (close to 30 countries in Africa, Eastern Europe, Latin America, and Asia).
Does it work? We have little to go on besides our independent analysis of microfinance in general; our knowledge of Opportunity International's high overall repayment rate (one of the conditions we feel is important for microfinance programs, as explained in our independent analysis); and more detail on one of Opportunity International's programs in Mozambique. Based on this information, we would guess - without much confidence - that Opportunity International's programs are generally improving lives.
Opportunity International seeks to improve the economic well-being of low-income people in the developing-world by providing financial services: loans, savings accounts, and insurance. We have only the most general information on their programs as a whole (see Attachment B-4 Pg 6-7, which gives an overview of these three different types of services). Below we give an overview of the one region, Mozambique, that we were able to obtain more detailed information on.
The information below comes from Opportunity International’s “Credit Policy, Guidelines and Procedures” documents for its bank in Mozambique (Attachment B-3). Unless otherwise noted, our statements refer to these guidelines (i.e., they are statements about Opportunity International's stated principles, not reports about actual execution).
Opportunity International provides three types of loans:
To be eligible for any of these loans, an applicant must meet a set of requirements outlined in Attachment B-3 Pg 4. These requirements include age restrictions (applicants must be between 18 and 65 years old) and a requirement that applicants be able to own and operate a business. In addition, although Opportunity International has no formal gender criteria, it reports that 85% of its clients are women (Attachment B-4 Pg 4).
Opportunity International provides two types of savings accounts to its clients (Attachment B-5 Pg 1):
We believe, from our analysis of microfinance in general, that a microfinance program is likely to improve lives when it is serving people who face considerable economic uncertainty, lack access to traditional financial services, and are willing and able to "pay" for financial services (for example, repaying loans with interest).
Opportunity International reports a 98% repayment rate on loans made to Trust Groups (Attachment B-4 Pg 6), implying that the third of these conditions is generally being met. We have little other substantive information on its clients in general, although it did give us a more detailed picture of its operations in Mozambique (see especially Attachments B-1 and B-2). Note that most of its clients in Mozambique are generally under an "extreme poverty line" (US $1/day) that, according to one independent study, is often connected with economic uncertainty and lack of access to traditional financial services (these issues are discussed more in our general overview of microfinance).
Knowing what we know, we would guess that Opportunity International is generally improving its clients' lives, but would need far more detailed information on its operations around the world to have confidence.
Financials. The following is from Opportunity International’s 2004-2006 IRS Form 990s (available via Guidestar) and Attachment D-3.
| Year | Revenues (in thousands) | Expenses (in thousands) |
|---|---|---|
| 2004 | $28,250 | $25,363 |
| 2005 | $24,440 | $22,645 |
| 2006 | $45,201 | $29,627 |
| 2007 (est) | $37,450 | $35,825 |
As of the end of 2006, Opportunity International held $109 million in assets, the equivalent of approximately 2.5 years of operating expenses (Attachment D-2 Pg 2). This constitutes a large increase over its 2005 assets ($33 million) is likely due to the fact that revenue grew much faster than expenses that year. In 2007, expenses rose to where they are nearly in line with revenues.
Board of directors.The names of Opportunity International's Board of Directors are available in Attachment B-4 Pg 19. However, Opportunity International did not provide information on their affiliations.
We chose to award Opportunity International because:
For a donor committed to economic empowerment programs, we recommend Opportunity International with major reservations. We hope in the future to gain a far more detailed understanding of the organization (or other organizations doing similar work).
