Over the next seven years, we tested our model in multiple sites throughout Colombia and verified that it was indeed replicable. A partner in Ariguani developed an agreement that we continue to use to clearly outline expectations and responsibilities. We developed specific criteria for approving new loan funds (value of loans issued to date is at least twice the value of funds sent for loans, less than 5% of loan funds are on accounts with no payments in the last six months, loan funds are fully invested in micro-loans rather than sitting in a bank account.) We held several workshops in Colombia where loan administrators could share best practices.
Colombia Project team members attended Micro-Credit Summits in Cartagena, Colombia in 2009 and Merida, Mexico in 2014 where we learned how The Colombia Project fit into the larger micro-finance efforts around the world. In 1997 John Hatch (RPCV Colombia), founder of FINCA International, joined with Dr. Muhammad Yunnus of the GRAMEEN Bank and Sam Daley-Harris to establish the Micro-Credit Summit Campaign. They established aggressive goals for bringing affordable loans to the world’s poorest entrepreneurs. By 2010, there were 3600 MFIs with current loans of over 205 million dollars. It was natural to wonder if The Colombia Project was even needed since at that point it averaged under $50,000 in loans each year to just 200 borrowers. Sessions at those Micro-Credit Summits brought clarity to our mission. At those Summits, we learned that even though we were small, our model addressed important service gaps.
- SMALL LOANS: By definition, a micro-loan can be up to $50,000. At the Summit we learned that administrative costs are about 30% of the value of a loan at the high end, but 150% of the value of loans under $100. For this reason, most MFIs cannot afford to manage many small loans. The Colombia Project model, on the other hand, has virtually no overhead since our loan portfolios are managed by grassroots organizations that already have their expenses covered. As of 2019, our loans average from $27 to $623 with the average being $233.
- REMOTE COMMUNITIES: Because MFIs rely on interest earnings to cover overhead, they need volume and therefore concentrate on population centers. The challenge of reaching remote communities was a topic of multiple sessions at the 2014 conference. By this time, we had learned that our model worked best in small communities.
- HANDICAPPED: John Hatch congratulated the 2014 Summit delegates on reaching multiple Millenium Development Goals but challenged them to find ways to reach remote communities and handicapped people. The Colombia Project had started a program in 2013 with a Rotary Club in Barranquilla, Colombia to exclusively serve families that included at least one handicapped person. Older sites in the interior of Colombia also included services for the handicapped.
With this new understanding gained through the Micro Credit Summit, in late 2014 The Colombia Project evolved to TCP Global, opening the first loan sites outside of Colombia in Guatemala, Niger and Peru in 2015. In 2016, the National Peace Corps Association (NPCA) agreed to serve as the 501c3 for TCP Global, accepting donations through the Community Fund. By 2017, the value of annual loans had increased to over $100,000.
For more information, please see our detailed history here.