Introduction

The Dutch Catholic Development Organization Cordaid (Catholic Organization for Relief and Development Aid), with registered offices at The Hague, The Netherlands, came into being through a merger of Bilance, Caritas Netherlands and Memisa. Cordaid combines their expertise and serves all aspects of development cooperation, working closely together with local organizations:

• emergency aid
• structural poverty alleviation
• health care

The organization has a budget of approximately 160 million Euros and supports 2300 programmes annually in Africa, Asia, Latin America and Central and Eastern Europe. Cordaid receives its funding from the Dutch Government and from a group of approximately 500.000 private donors.

Finance Business Unit:
Cordaid has learned over the years that for the financing of income generating activities, grants are not always the most appropriate instrument and that there is a need for special customer-tailored financing instruments. Therefore it was decided, after a pilot phase that started in 1997, to create a separate unit, called the Finance Business Unit. This unit, composed of specialists in microfinance, was officially created on January 1, 2000.

The Finance Business Unit of Cordaid has as its mission to finance the development of financial services to the vulnerable poor engaged in economic activities in developing countries. No direct role in governance (as Cordaid as a rule does not participate in equity investments); in certain cases, technical assistance may be funded by grants, but Cordaid itself does not offer technical assistance services.

The objectives of the Finance Business Unit are:

• Promote development of Micro Finance Institutes (MFIs)
• Invest in debt securities and guarantees
• In certain situations: funding for technical assistance