Opportunity International Annual Report 2002

OPPORTUNITY INTERNATIONAL

and the Women’s Opportunity Fund

...microloans for microenterprises

Small loans and basic business training liberate families from chronic poverty.

Opportunity provides loans to poor entrepreneurs

The brilliance, power, and sustainability of Opportunity’s poverty solution are proven by clients like Maria Buama. She is a widow who has sold flowers, garlands, and candles from her outdoor stall for 24 years. Recently, she joined an Opportunity borrowing group in Manila. For the first time she can pay cash for her products rather than sell them on consignment. Her income has increased considerably. Now she can send her two sons to college.

to start or expand small businesses. They repay their loans so the money can be lent to other poor entrepreneurs, repeating this victorious cycle.

The Opportunity mission is to provide opportunities for people in chronic poverty to transform their lives.

Our strategy is to create jobs, stimulate small businesses, and strengthen communities among the poor.

Our method is to work through indigenous Partner Organizations that provide small business loans, training, and counsel.

Opportunity International’s commitment is motivated by Jesus Christ’s call to serve the poor.

Opportunity International serves women and men of all faiths without prejudice or preferential treatment.

Statement of intent regarding poverty and women Opportunity International–U.S. strives to reach the world’s poorest people through its microenterprise development programs. Recognizing that the large majority of the world’s poorest are women and that they contribute decisively to the well-being of their families, Opportunity makes it a priority to support programs that serve the particular needs of women.

OPPORTUNITY INTERNATIONAL 2002 ANNUAL REPORT

We are pleased to present our 2002 Annual Report. We celebrate the nearly 400,000 women and men to whom Opportunity provided the chance throughout the year to work their way out of poverty. We are grateful to our friends for contributing the capital to transform these many lives and to the Lord for blessing these efforts.

In 2002, private donations (excluding our special Cornerstone Campaign) increased 13 percent over 2001. We funded 29 percent more poor entrepreneurs in 2002 than in 2001.

For three decades, we’ve tapped into the spirit of enterprise that abounds in humble communities. We are meeting the challenge of providing full financial services along with microloans and basic business training. For example, our clients in the Philippines are opening interest-bearing savings accounts with as little as $10, enabling them to accumulate funds to finance business expansion, medical expenses, and their children’s school fees.

We strive to be excellent stewards so your gifts have the maximum impact in overcoming the root causes of poverty. Eighty-seven percent of our clients are women, who are typically among the poorest of the working poor. Around the world, we see that poor entrepreneurs, once empowered to help themselves and their families, become leaders and agents for change within their communities.

Together, we are well on our way toward our goal of serving 1 million families annually by 2007 and 2 million by 2010. We are on an audacious quest to fund 50 million poor entrepreneurs over the next 25 years. We have the methods, the track record, and the passion. Thank you for entrusting your charitable gifts to Opportunity International and for joining us in this great effort.

David L. Simms Chair Board of Directors

Elizabeth S. Perdue Vice Chair Board of Directors

Polly McCrea Chair Board of Governors

Christopher A. Crane President & Chief Executive Officer

Highlights of 2002 In 25 developing countries, Opportunity’s microfinance programs helped people who are desperately poor earn a living and transform their lives economically, socially, and spiritually. Small loans, basic business training, supportive groups, and secure savings accounts give people with no access to financial services the chance they need to improve their lives in every dimension. Opportunity makes their hard work count.

Clients (as of year end) ..............................................397,489

For the first time in our 32-year history, our loan program is earning a nominal profit after covering the cost of doing business. These earnings are reinvested in the loan fund to help more poor entrepreneurs. As we expect our clients to become self-sufficient, we expect our loan programs to become sustainable.

Globally, Opportunity’s operational sustainability is 100.46 percent!

Many programs, particularly our newer ones, require substantial funding before they are large enough to grow on their own.

Number of clients (as of year end) 400,000

268 percent growth since 1998 350,000

Dollars loaned.................................................$127.2 million 48.5 percent growth over 2001

Loans made................................................................536,033

300,000 250,000

a fivefold increase over 1997

200,000

Average loan ................................................................... $237

150,000

Latin America

Up $36 from 2001 as repeat borrowers enlarge their businesses

100,000

Eastern Europe

Average first Trust Bank loan.......................................... $79 We are reaching the poorest of the entrepreneurial poor.

Loans to women ...........................................................87.5% 85 to 87 percent for the last five years

Loan repayment rate....................................................... 98%

Asia

50,000

Africa

0

Total Network

1998

1999

2000

2001

2002

108,841

146,575

233,386

308,026

397,489

Dollars loaned (in millions) 150

maintained since 2000

Jobs ..........................................................................800,000* impacting the lives of more than 4 million* children and adults

120

90

60

30

0

* estimated

2

Total Network

1998

1999

2000

2001

2002

$30.3

$45.1

$63.2

$85.1

$127.2

OPPORTUNITY INTERNATIONAL 2002 ANNUAL REPORT

“Poverty is the open mouthed relentless hell, which yawns beneath civilized society.”

Henry George, economist, 1878

Opportunity programs liberate families from poverty People existing in severe poverty use their Opportunity microloans to open and strengthen small enterprises. Their profits increase an average of 25 to 40 percent in the first year.

Poor families use their increased earnings to break free from the ravages of poverty: • Better nutrition liberates them from chronic hunger and malnutrition • Basic medical care liberates them from treatable diseases • Improved sanitation liberates them from typhoid and dysentery • Improved housing liberates them from dilapidated shanties • School liberates their children from illiteracy • Self-sufficiency liberates them from humiliation and despair • Growing businesses create new jobs, liberating neighbors from poverty • Economic power liberates women and their daughters from oppression

“Opportunity provides a model of microfinance that not only improves the economic status of women and their families, but empowers women to help those around them—including AIDS orphans and extended family.

As a result, entire communities benefit from the loans. The Samueli Foundation invests in this program because microenterprise plays a key role in the effort to contain and eradicate AIDS in the Third World.”

Susan Samueli, Executive Director, Samueli Foundation

3

Trust Banks empower women to break the cycle of poverty

Trust Banks were designed for women in the lowest levels of poverty, once considered too poor to benefit from microcredit. Our Women’s Opportunity Fund tested, refined, and promoted Opportunity Trust Banks, which are now operating in 18 countries.

2

A loan officer visits a poor community and encourages 15 to 40 entrepreneurial women to form a borrowing group (Trust Bank).

1

3

The loan officer conducts eight training sessions in basic business practices. Trust Bank members learn how to use business credit. They develop their own constitution.

Your contribution to Opportunity makes it possible to offer microloans and training to the poorest entrepreneurs in developing countries.

4

10

Members elect a president and treasurer. Leaders emerge among groups of formerly powerless women.

Your contribution is repaid and loaned to another poor entrepreneur.

The cycle begins again.

5

They agree to guarantee each other’s loans. Each member receives a loan of about $80 and invests the money in her business.

9

When the Trust Bank loan is paid off, members are eligible for larger loans. Meetings continue. Members gain confidence in their abilities and learn the power of the group.

6

Profits increase as these newly empowered entrepreneurs buy in bulk and diversify their products and services.

8

Earnings allow for more nutritious food, health care, education, and housing improvements.

Usually, a portion of the profit is reinvested in the business.

7

Trust Bank members meet weekly for training and support. The treasurer collects loan payments and savings and deposits them in a secure account.

4

OPPORTUNITY INTERNATIONAL 2002 ANNUAL REPORT

In Uganda and Zimbabwe 93% of Opportunity clients have lost a family member to AIDS 57% have a family member with AIDS 70% are caring for AIDS orphans 30% of our clients’ income is spent on AIDS-related expenses When AIDS strikes, family expenses increase 400%.

Opportunity provides the only known insurance available to poor African families that covers AIDSrelated deaths. After its 2002 pilot in Zambia, this type of insurance is expanding to serve Opportunity programs worldwide.

Esther Nyamekye from Ghana began her batik dying business in her yard. She had one client and too little profit to buy more material. “If it weren’t for Opportunity, I’d still be there, dying one cloth at a time,” she said. With a series of microloans, she scaled up to a three-employee retail store with 200 regular clients. A mother of seven, she is determined that her children will grow up healthy and educated. She will keep expanding her business with microloans.

5

Edith Abobo and her husband develped a mattress business with a series of small loans. They have six employees.

Building high-tech and high-touch financial services Opportunity International expects to be serving 1 million poor entrepreneurs a year by 2007 and 2 million by 2010.

This requires scaling up with speed and efficiency—without compromising the financial services poor entrepreneurs need to succeed.

banking regulations to accept client savings require this sophisticated technology. These savings earn interest and are safe from theft, fire, impulse purchases, and appropriation by family members. Savings of the poor are lent to other poor entrepreneurs.

A neighbor

Transforming families

High-tech back offices and high-touch front offices make Opportunity programs both efficient and friendly. Offices are located conveniently in or near their clients’ neighborhoods, often in simple storefront facilities. Instead of the shiny brass and glass of commercial banks, our programs invest in their clients, not in the décor. Loan officers typically use bikes or public transportation to visit their clients.

The software tracks more than loans and savings. It also measures the impact of Opportunity programs. Is family hunger and poverty easing? Are more of our clients’ children going to school? Are families moving from shacks to more secure shelters? Opportunity is committed to fueling personal, social, and spiritual transformation along with economic improvement. We can do this on a large scale by tracking specific indicators.

Globally connected Behind the lobby, state-of-the-art software connects our programs to the Opportunity Global Network and provides real-time reporting on the programs’ business and financial activities. Programs that are permitted by their country’s

Pioneering new poverty-fighting services A new development in 2002 is microinsurance to spare our clients the devastating financial consequences of extended illness of a wage earner or a death in the family.

“Through microlending, Opportunity International has delivered the priceless gifts of self-reliance and self-esteem to hundreds of thousands of hard working people in the developing world.

I think this is the best way forward in our effort to combat global poverty.”

6

Ambassador Robert D. Stuart Jr., Former U.S. Ambassador to Norway, Former Chairman & CEO, Quaker Oats Company

OPPORTUNITY INTERNATIONAL 2002 ANNUAL REPORT

Catalina Suyo used her loan to open an in-home ice-cream shop.

Manshimaa Alhassan is a sugar salesman in Ghana.

He buys sugar in bulk and repackages it in individual and family-size containers. He sells the sugar from his stall in an outdoor market. Before his Opportunity loan, he bought the sugar on credit from the supplier. The interest was so steep, he barely made a profit. Today, he nets $23 a week, which provides a steady income stream that meets his family’s basic needs.

Ruby Garcia is chairperson for her Trust Bank and has a poignant reason for promoting the loan program to other struggling women. Because of their poverty, her husband sold one of his kidneys. With her $240 loan, Ruby opened a bakery, which provides a reliable income for the family.

Her mother helps out in the business, and Ruby has two other employees.

Maria Lenon is a widow with a seven-year-old son. She is repaying her fourth loan, $200. With her loans, she has enlarged her restaurant and increased her income. Prior to joining an Opportunity Trust Bank, she was making daily payments to a lender who charged 20 percent interest a week. She makes weekly deposits into her new savings account. “Now I have a safety net—and peace of mind,” she said.

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Highlights of 2002 • The Empowering Women Through Microfinance paper was presented at the 2002 World Microcredit Summit

by Sr. Vice President Susy Cheston, and a press conference was held at the United Nations. The paper was published in the book Pathways Out of Poverty.

• The Women’s Fund raised 20 percent of the funds needed to launch the first Opportunity Trust Bank program in Mexico.

• The first Women’s Leadership Insight Trip focused on leadership development of women clients and staff in the Dominican Republic. Guests and staff documented how the Trust Bank program facilitates leadership development for women.

• The first Women’s Philanthropy Breakfast was held.

• A Peru Insight Trip was conducted with the Kennedy Family.

• A program to secure crucial feedback from clients was piloted in Ghana and Russia and begun in the Philippines. As a result of this work, key changes were made to the Common Impact Monitoring System.

• The first Opportunity International Network Gender Report was distributed worldwide.

The Women’s Fund directs funding to Opportunity global programs that empower women: • activities that promote women in leadership • training that meets the special needs of women for Trust Bank members, loan officers, and supervisors.

• Trust Bank programs that set an example of women in leadership; reach the poorest; and foster social, economic, and spiritual transformation • programs that field-test training materials and do cutting-edge research The Women’s Opportunity Fund Committee of the Opportunity International–U.S. Board of Directors directs the allocation of these funds.

Dreams of a leader Meeting Sonia Acosta in the Dominican Republic was inspiring for the participants of the first Women’s Leadership Insight Trip. Sonia, mother of four young children, used her Trust Bank loans of $122 and $153 to build up a business selling linens, shoes, and socks. Sonia told them, “My dream is to have a very big shoe store so my children can go to the university.”

More than a savvy businesswoman, Sonia is president of her Trust Bank. When asked how she met the responsibilities of this important position, she explained, “Each person is different, and you have to talk to them differently. I listen. I ask how their businesses and families are. We talk about personal and community problems.”

She said her leadership position has given her more confidence. She now speaks in front of the group and explains Trust Bank requirements to members. She also confronts members about late payments. Her work, she believes, helps to make another dream come true: “I want each woman to become a big business owner.

I don’t want to grow just for me, but for us all.”

www.womensopportunityfund.org

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Beth Houle, Director Julie Hindmarsh, Chair Dawn Feller, Vice Chair

“My company has spent thousands of dollars on leadership training for me. In a way this training is redundant. Trust Bank clients I’ve met clearly exemplify how to be a good leader and what qualities are important.”

Susan Kaminski, Women’s Opportunity Fund Supporter since 1992

OPPORTUNITY INERNATIONAL 2002 ANNUAL REPORT

Journeys to the heart of Opportunity Meeting our clients, walking through their neighborhoods, learning about their businesses, and visiting with their families turns a trip to the developing world into a journey of discovery. Opportunity International and the Women’s Opportunity Fund host fully escorted Insight Trips for people who want to meet our clients and field staff and take an in-depth look at our microfinance work.

In 2002, Opportunity hosted travelers who explored our work in Costa Rica, Ghana, Honduras, Peru, and the Philippines.

Insight Trips are scheduled for small groups of likeminded travelers. For more information, please call 800-793-9455 or visit our web sites: www.opportunity.org or www.womensopportunityfund.org

Stella Boyle talks with staff at Opportunity Microfinance Bank in the Philippines.

Our trip to the Philippines made me proud to be associated with Opportunity. To experience how Opportunity changes lives was very moving. What astounded me was how little it takes to help the poor!

I don’t see how anyone can say they cannot afford to help. We cannot afford NOT to help. I am grateful to Opportunity for transforming yet another life—mine!

Stella Boyle

On our Women’s Leadership Insight Trip, I realized that these poor women are gems just waiting in a cold dark mine for the opportunity to practice and serve as leaders and make great changes in their communities.

Mary Larson, Cofounder Gems of Hope USA Foundation Mary Larson (above) visits Opportunity Trust Bank member Margarita Neris in the Dominican Republic.

Karen Lott (left) along with her husband, Football Hall of Famer Ronnie Lott, and their children traveled to Ghana in 2002. She attended Trust Bank meetings, learning about the impact of AIDS and how Opportunity is providing poor families extra income so they can adopt AIDS orphans.

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OPPORTUNITY INTERNATIONAL 2002 ANNUAL REPORT

Russia  United Kingdom  Canada 

Poland  Romania 

Germany 

Bulgaria 

United States 

Croatia 

Serbia 

Montenegro 

Macedonia  China 

Albania  Mexico 

2003 Startup

Egypt 

2003 Startup

Dominican Republic 

India 

Philippines 

Honduras  Nicaragua 

Costa Rica 

Ghana  Uganda 

Colombia 

Indonesia 

Malawi 

Zambia 

Peru 

East Timor  Zimbabwe  Australia 

COUNTRY AFRICA

Global Impact

Egypt Ghana Malawi Uganda Zambia Zimbabwe

CLIENTS SERVED

DOLLARS LOANED

ASIA

397,489

$127,155,550

East Timor India Indonesia Philippines

CLIENTS SERVED

DOLLARS LOANED

2,098 26,615 reorganizing 8,021 19,856 14,205

$1,750,594 4,703,847 591,013 2,249,402 1,822,075 6,839,830

920 28,485 24,841 184,515

$383,925 2,161,078 3,216,079 36,018,487

1,822 1,580 598 2,616 4,942 693 1,081 10,788 608

$4,278,954 3,585,149 1,579,173 5,078,458 13,101,584 1,426,423 2,019,857 19,924,670 1,028,535

40 IMPLEMENTING PARTNERS THAT RUN OUR PROGRAMS 2 NEW IMPLEMENTING PARTNERS TO OPEN IN 2003 5 SUPPORT PARTNERS THAT MARKET AND RAISE PROGRAM FUNDS

EASTERN EUROPE

“Opportunity recognizes the need to make their work big while keeping it small; to encourage entrepreneurship while requiring accountability; to reconcile individuality with connectedness; to reach millions in chronic poverty one opportunity at a time.”

Charles V. Raymond, President, Citigroup Foundation

10

Albania Bulgaria Croatia Macedonia Montenegro Poland Romania Russia Serbia — 2002 startup

LATIN AMERICA Colombia Costa Rica Dominican Republic Honduras Nicaragua Peru

18,906 1,593 3,566 8,250 29,620 1,270

$4,253,542 817,391 2,304,463 2,473,640 5,014,755 532,626

Jacob Assan and his staff of 16 bake 2,400 loaves of bread a day in traditional ovens for their 100 retail customers in Ghana. He has built his business with Opportunity loans, the latest one for $320. He is saving to purchase a grinding mill so he can increase his profits and expand his business.

O P P O R T U N I T Y I N T E R N AT I O N A L’ S C O R E V A L U E S : R E S P E C T • C O M M I T M E N T T O T H E P O O R • I N T E G R I T Y • S T E W A R D S H I P

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The tree of life

Where money goes (in millions)

$7.62

800,000* jobs

Loan Funds

supporting 4 million* children and adults

$127.2 million loaned and recycled 397,489 clients 536,033 loans

(*estimated)

98% loans repaid Programs in 25 countries

$5.20

Services to Programs

$5.81

transformation tools and research new partner development portfolio management systems

Services to Clients client business and leadership training loan officers reaching new clients

$2.94

Program Equity Ownership loan portfolio client services systems

Services to International Loan Program

$6.12

$4.31

Support Partners

Working Capital Fund

administration fundraising

Opportunity International-US & Women’s Opportunity Fund — $19.4

Board Donations

$2.2

+

Other Individuals

$4.3

Where money comes from (in millions)

12

+

Foundations, Corporations, Churches

$4.6

+

U.S. Government Foreign Aid

$8.3

+

Foreign Support Partners

$12.6

=

Total New Revenue

$32.0

OPPORTUNITY INTERNATIONAL 2002 ANNUAL REPORT

Opportunity International–US

Revenue Annual Fund Cornerstone Fund Government grants

Highlights 2002

2001

Percent change

8,976,269 2,171,785 8,295,949

$ 7,934,538 — 7,278,924

13% N/N 14%

19,444,003

15,213,462

28%

9,467,787 2,943,500 3,802,381

10,755,347 3,248,700 4,455,931

12% 9% 15%

16,213,668

18,459,978

12%

$

Total Expenditures Program services Program equity ownership Supporting activities Total

Total Revenue (in millions) $25

Opportunity International–US’s supporting activities ratio to revenue in 2002 was 19.6%.

$20

$15

$10

$5

0

2000

2001

2002

Cornerstone Fund Annual Fund Government grants

“Opportunity International’s business-minded solution to poverty transforms lives and, therefore, has my respect and my support. Opportunity is a creative, Christian response to global poverty.”

Don Soderquist, Senior Vice Chairman & COO, WalMart Stores, Inc.

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Opportunity International Network Support Partners Statement of Activities

2002

for the year ended December 31, 2002 OI–US Overseas Operating activities Revenue Private contributions Annual Fund Cornerstone Fund Total private contributions Government grants

Total

$ 8,976,269 2,171,785 11,148,054 8,295,949

$ 4,788,812 — 4,788,812 7,775,901

19,444,003

12,564,713

32,008,716 *

3,131,820

4,486,886

7,618,706

2,740,359 3,595,608

3,072,220 1,600,525

5,812,579 5,196,133

9,467,787

9,159,631

18,627,418

2,943,500 12,411,287

— 9,159,631

2,943,500 21,570,918

2,307,769 1,494,612

1,682,374 637,999

3,990,143 2,132,611

3,802,381

2,320,373

6,122,754 *

16,213,668

11,480,004

27,693,672

Net from operating activities

$ 3,230,335

$ 1,084,709

$ 4,315,044

Non-operating activities Funds repatriated Microfinance inst. equity ownership

$ 2,080,682 2,080,682

$

— —

$ 2,080,682 2,080,682

Total non-operating activities

$

$

—

$

Total revenue Expenditures Program services Grants for revolving loans Grants for partner lending operations and training Development of partner organizations Total program services Program equity ownership Total services to the poor Supporting activities Fundraising Management and general Total supporting activities Total expenditures

—

$ 13,765,081 2,171,785 15,936,866 16,071,850

—

Global Revenue

Private Contributions 50% Government Grants

50%

* Supporting activities ratio to revenue was 19%.

Unaudited. Complete audited financial statements by KPMG are available upon request.

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OPPORTUNITY INTERNATIONAL 2002 ANNUAL REPORT

2001

Opportunity International Network Support Partners Statement of Activities

for the year ended December 31, 2001 OI–US Overseas Operating activities Revenue Private contributions Government grants

Total

$ 7,934,538 7,278,924

$ 4,711,960 6,964,715

15,213,462

11,676,675

26,890,137 *

3,092,041

4,989,423

8,081,464

3,325,934 4,337,372

3,469,976 554,233

6,795,910 4,891,605

Total program services

10,755,347

9,013,632

19,768,979

Program equity ownership Total services to the poor

3,248,700 14,004,047

— 9,073,632

3,248,700 23,017,679

2,719,375 1,736,556

1,391,850 544,565

4,111,225 2,281,121

4,455,931

1,936,415

6,392,346 *

18,459,978

10,950,047

Total revenue Expenditures Program services Grants for revolving loans Grants for partner lending operations and training Development of partner organizations

Supporting activities Fundraising Management and general Total Supporting Activities Total expenditures Net from operating activities

$ (3,246,516)

$

726,628

$ 12,646,498 14,243,639

29,410,025 $ (2,519,888)

Global Revenue Private Contributions 47% Government Grants

53%

* Supporting activities ratio to revenue was 24%.

Unaudited. Complete audited financial statements by KPMG are available upon request.

“At The Coca-Cola Company we are proud of our partnership with the Women’s Opportunity Fund of Opportunity International.

Our support of the ‘Responding to Women’s Needs Initiative’ will help fund research on women and economic development.”

Ingrid Saunders Jones, Senior Vice President, Corporate External Affairs, The Coca-Cola Company

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Opportunity International Network Support Partners Statement of Financial Position 2001

December 31, 2002

Assets Current Cash and demand deposits Receivables Other current assets Total current assets

OI–US

Overseas

Total

Total

$ 2,975,415 2,782,119 654,688 6,412,222

$ 2,250,263 359,513 28,793 2,638,570

$ 5,225,678 3,141,632 683,481 9,050,792

$ 3,393,750 1,350,636 726,283 5,470,669

8,379,501 —

59,002 395,369

8,438,503 395,369

4,250,556 —

354,664 (322,565) 32,099 8,411,600

358,803 (231,888) 126,915 581,286

713,467 (554,453) 159,014 8,992,886

630,308 (483,026) 147,282 4,397,838

$ 14,823,822

$ 3,219,856

$ 18,043,678

$ 9,868,507

$

$

20,461 68,413 1,011,412 1,100,285

$ 1,018,811 598,096 1,096,196 2,713,102

$

Long-Term Long-term investments – partners Long-term investments – other Property and equipment Cost Accumulated depreciation Net property and equipment Total long-term assets Total Assets Liabilities Current Short-term borrowings Accounts payable Other current liabilities Total current liabilities

998,350 529,683 84,784 1,612,817

914,378 712,205 140,497 1,767,080

Long-Term Long-term debt Deferred revenue Total long-term liabilities

1,234,000 — 1,234,000

— 241,999 241,999

1,234,000 241,999 1,475,999

1,369,201 2,255,828 3,625,029

Total Liabilities

2,846,817

1,342,284

4,189,101

5,392,109

5,943,414 6,033,591

1,070,461 807,111

7,013,875 6,840,702

1,642,985 2,833,413

11,977,005

1,877,572

13,854,577

4,476,398

$ 14,823,822

$ 3,219,856

$ 18,043,678

$ 9,868,507

Net Assets Unrestricted net assets Restricted net assets Total Net Assets Total Liabilities and Net Assets

Statement of Cash Flows for the year ended December 31, 2002

Change in net assets Other operating activities Funds provided by operations Investing activities Financing activities Change in cash balances

16

OI–US

Overseas

$ 8,231,999 (6,168,324) 2,063,675 (5,134,993) 4,438,000 $ 1,366,682

$ 1,146,180 (234,344) 911,836 (405,535) (41,054) $ 465,246

2001

Total $ 9,378,179 (6,402,668 ) 2,975,511 (5,540,528 ) 4,396,946 $ 1,831,928

Total $

702,184 (2,000,000 ) (1,297,816 ) (2,800,000 ) 4,700,000 $ 602,184

Unaudited. Complete audited financial statements by KPMG are available upon request.

OPPORTUNITY INTERNATIONAL 2002 ANNUAL REPORT

Opportunity International Network Implementing Partners Income Statement for the year ended December 31, 2002 Africa

Asia

Eastern Europe

Latin America

Total Network

MED Income and Expenses Financial income

$ 5,338,638

$ 9,111,632

$ 7,996,221

$ 4,948,838

$ 27,395,329

88,221

982,064

431,478

54,035

1,555,799

5,250,417

8,129,567

7,564,743

4,894,803

25,839,531

394,255

456,927

717,198

646,885

2,215,265

Net financial margin

4,856,163

7,672,640

6,847,546

4,247,917

23,624,265

Operating expenses

5,963,036

7,362,983

6,156,153

4,017,205

23,499,377

Financial expenses Gross financial margin Provision for loan losses

Net income

$ (1,106,873)

$

309,657

$

691,393

$

230,712

$

124,888

Balance Sheet December 31, 2002 Africa

Asia

Eastern Europe

Latin America

Total Network

Assets Current Cash Net loan portfolio Other current assets Total current assets

$ 2,607,552 8,156,990 1,285,669 12,050,211

$ 2,865,634 16,046,999 4,395,127 23,307,760

$ 3,386,411 30,271,081 5,131,983 38,789,475

$ 1,278,357 7,605,033 1,123,491 10,006,882

$ 10,137,954 62,080,103 11,936,269 84,154,327

Long-Term Fixed & other L-T assets Total assets

2,528,171 $ 14,578,381

4,088,794 $ 27,396,554

3,011,098 $ 41,800,573

1,345,414 $ 11,352,296

10,973,477 $ 95,127,804

Liabilities & Net Assets/Equity Current Loan client deposits $ 768,583 Other client deposits 270,593 Other current liabilities 849,436 Total current liabilities 1,888,612

$ 5,390,328 286,512 4,330,700 10,007,540

$

Long-Term Total L-T liabilities & debt Total liabilities Net Assets & Equity Total net assets & equity Total liabilities & net assets

418,873 1,247,618 1,392,081 3,058,572

$

31,599 — 734,273 765,872

$ 6,609,383 1,804,724 7,306,489 15,720,596

291,781 2,180,392

3,938,688 13,946,228

10,648,078 13,706,650

2,913,710 3,679,582

17,792,256 33,512,852

12,397,989 $ 14,578,381

13,450,326 $ 27,396,554

28,093,923 $ 41,800,573

7,672,714 $11,352,296

61,614,952 $ 95,127,804

Unaudited. Complete audited financial statements by KPMG are available upon request.

17

Management Discussion & Analysis of Financial Statement Highlights — Opportunity International-US Opportunity International-US had a strong year in 2002.

Revenue increased 28% from 2001 to $19.4 million. This followed a 23% decline in revenue from 2000 to 2001, as private contributions decreased significantly due to the soft economy. Strong results in 2002 reflected higher private contributions as well as the inauguration of the Cornerstone Fund, our working capital fund to strengthen our financial foundation.

Expenditures declined by 12% from 2001 to $16.2 million in 2002. The largest decrease of 15% was in the support activities category due to staff reductions at the beginning of 2002. Program spending decreased at a lesser rate as Network partners reduced their demands in the move toward self-sufficiency.

Opportunity International Network Support Partners Total revenue for Opportunity International Network Support Partners grew 19% from 2001 to 2002 to $32.0 million. Total private contributions increased 26% to $15.9 million, primarily from OI-US. OI-US launched the Cornerstone Fund, a working capital fund, which raised $2.2 million in 2002. Government grants rose 13% to $16.1 million, principally from OI-US and OI-Australia.

Total program services expenditures declined 6% to $18.6 million. Grants for revolving loans decreased 6% to $7.6 million due to decreased need by the Philippines

program. Grants for partner lending operations and training fell 14%, reflecting the network’s growth toward self-sufficiency.

Program equity ownership represents outlays for direct ownership positions in Implementing Partners funded

by OI-US and its subsidiary Opportunity Transformation Investments (OTI). This funding decreased by 9% in 2002 compared to 2001.

Total supporting activities declined 4% as a result of cutbacks at the beginning of 2002 in the US as a response to fundraising challenges throughout the last two years. This was partially offset by growth at other Support Partners. The fundraising and administration ratio compared to revenue was 19% for 2002 compared to 24% for 2001.

Non-operating activities relate to funds repatriated from Montenegro for equity ownership in the new bank.

Opportunity International Network implementing Partners As a whole, Network Implementing Partners in 2002 reached 100% operational self-sufficiency for the first time. As shown on the Income Statement for Implementing Partners, revenue exceeded expenses on a global basis. This was a major step in fulfilling the strategic goal of sustainability for all Network partners.

Notes to Financial Statements Financial Statement Presentation The financial information included on these pages was derived from the financial statements of independent organizations. The Support Partner statements reflect the results of operations, financial position, and cash flow of the combination of the five independent partners in developed countries, without regard to ownership positions in certain Implementing Partners. The Implementing Partner statements present a combination of the results of operations and financial position of the 40 indigenous Implementing Partners also without regard to ownership issues. These statements are unaudited.

Audited statements for the partners are available upon request.

Regulated Microfinance Institutions On December 31, 2002, eight of the Implementing Partner organizations were for-profit, regulated microfinance institutions: Opportunity Microfinance Bank (OMB) in the Philippines; Opportunity Microfinance India (OMI); Opportunity Bank Montenegro (OBM); PSHM in Albania; Opportunity Microfinance Romania (OMRO); Opportunity

18

International Stock Savings Bank, Novi Sad, in Serbia; Moznosti in Macedonia; and Zambuko Trust Ltd. in Zimbabwe. The only reason any of our organizations are for-profit is to achieve bank status, allowing us to provide many services, such as savings, that banks can offer to the poor. Local laws require banks to have a for-profit status.

Any profits are returned to the program and used to help the poor.

Unrestricted Net Assets Support Partners’ total unrestricted net assets increased to $7.0 million at the end of 2002. The increase reflected equity ownership in Implementing Partners that converted to formal financial institutions.

Equity Ownership in Affiliates As referenced above, Opportunity International-US and OTI receive certain grants restricted for investment in microfinance institutions. Investments are currently held in OMB, OBM, PSHM, Novi Sad, and Zambuko Trust Ltd.

OPPORTUNITY INTERNATIONAL 2002 ANNUAL REPORT

Board of Advisors

Board of Directors

Dr. Raymond Bakke Executive Director International Urban Associates

Laura Allen Hinsdale, IL

Dr. Tony Campolo Professor & Author Eastern University Doris Christopher Founder & Chairman The Pampered Chef Millard Fuller Founder Habitat for Humanity Rev. Theodore Hesburgh, C.S.C. President Emeritus University of Notre Dame Ambassador Swanee Hunt Director of Women & Public Policy Harvard University Jack Kemp Former Secretary of Housing & Urban Development Dr. Martin Marty Professor & Author University of Chicago The Honorable E. N. Pelaez Former Ambassador, The Republic of the Philippines The Honorable Fidel V. Ramos Former President, The Republic of the Philippines The Honorable Paul Simon Former United States Senator Paula Zahn Anchor, American Morning CNN

Dennis Chorba Vice President (retired) Georgia Gulf Atlanta, GA Christopher A. Crane President & CEO Opportunity International–U.S. San Diego, CA Peter S. Daley Chief Executive Officer Graymalkin, Inc. Purcellville, VA

Richard U. Jelinek Managing Director Performance Catalysts, LLC Wellesley, MA

David L. Simms, Chair Partner The Bridgespan Group Boston, MA

Kurt A. Keilhacker Managing Director TechFund Capital Saratoga, CA

Jill Dailey Smith Marketing Research & Planning Consultant River Forest, IL

Peter King Group CEO (retired) Van Leer Corp.

Sydney, Australia

Nathaniel Sutton President Sutton Ford Matteson, IL

Polly McCrea Long Lake, MN

Peter Thorrington COO & President UTI Worldwide Inc. Rancho Dominguez, CA

Kwabena Darko Chief Executive Darko Farms & Co., Ltd. Kumasi, Ghana

Robert McCrea Management Consultant Lanscape, Inc. Long Lake, MN

E. Bruce Dunn Sr. VP & Principal (retired) Stein, Roe & Farnham Chicago, IL

Jeffrey S. Meyer Vice President Baillie Lumber Co. Hamburg, NY

Dawn Parsons Feller Exhibiting Artist Hinsdale, IL

Gary Moore Founder Gary Moore & Co. Sarasota, FL

Emory A. Griffin Professor Wheaton College Wheaton, IL James W. Hamilton Senior Counsel (retired) Paul, Hastings, Janofski & Walker Laguna Beach, CA Craig Hammon Executive Vice President CURE International Essex, MA Julie Hindmarsh Clinical Instructor Johns Hopkins School of Nursing Baltimore, MD Richard A. Hoefs Partner (retired) Arthur Andersen & Company Fitchburg, WI

Theodore D. Moser Director Mercer Management Consulting Oakland, CA Donald L. Palmer President Palmer Automotive Group Indianapolis, IN Elizabeth S. Perdue, Vice Chair Partner Jenkins & Gilchrist Chicago, IL Karen Prudente United Methodist Church New York, NY Jane Siebels-Kilnes Chairman & Chief Investment Officer Green Cay Asset Management Nassau, Bahamas

Linda Valentine Hinsdale, IL Mary Beth Vogelzang Vogelzang & Associates (retired) Denver, CO Alfred Ward Communities in Schools (retired) Chicago, IL Terrence A. Watson Executive Vice President Bank of America Charlotte, NC Alfred A. Whittaker Chair Emeritus President (retired) Bristol-Meyers Int’l Corp.

Fort Meyers, FL

Management Team Christopher A. Crane President & Chief Executive Officer Beth Houle Director, Women’s Opportunity Fund Vice President, Marketing Strategy Rick John Chief Financial Officer Vice President, Finance & Administration Mark Lutz Sr. Vice President, Marketing

Elbe Izaguirre, father of four, is a Trust Bank member in Honduras. He opened his printing business in May 2002 and used his Trust Bank loans for equipment.

One of his machines is 60 years old. He is building a credit history so he can obtain larger loans and expand his business. Elbe’s wife helps in the enterprise.

Dennis Ripley Sr. Vice President, Programs Connie Stryjak Vice President, Human Resources

19

Board of Governors Dan & Jeanie Ardell Corona del Mar, CA

Jodie & Dennis Clements* Seminole, FL

Lynne M. Baab Seattle, WA

Marge Coahran* Toronto, Canada

Clark & Tina Bain Edina, MN

Doug Cogswell South Barrington, IL

Stephen M. Barney Long Grove, IL

Nichole & Miles Cook Atlanta, GA

Warren Beach Barrington, IL

Gary Cooper Sarasota, FL

James R. Bergman Laguna Beach, CA

Anne Coughlan & Charles Jameson Wilmette, IL

Elaine D. Birdsong Gray, GA Michael Bontrager Cochranville, PA Bruce Boyd Highland Park, IL Richard L. Brackett New York, NY James L. Bramlett Robbinsville, NJ Bill & Karen Brown Eden Prairie, MN Arthur & Manijeh Brueggeman Laguna Hills, CA Scott Brueggeman Chicago, IL J. & Joanna Burnett Marietta, GA Allan J. Camaisa La Jolla, CA Duncan Campbell Portland, OR Robert B. Carter Bethesda, MD Nancy M. Chase Solana Beach, CA Linda Cherne Edina, MN Susy Cheston & Artie Harris* Takoma Park, MD

Cynthia E. Frost* Barrington, RI Jill & Tim Geoffrion Deephaven, MN David & Diane Getsch Bloomington, MN Judy & Greg Golz* River Forest, IL Bill & Mary Hall San Clemente, CA

Wendy & Jim Cox* Edina, MN

Julie Hall Winnetka, IL

Mike Cummins Orlando, FL

Promod Haque Saratoga, CA

Janice D. Dailey* Tequesta, FL

James Hardee Jr. Wilmette, IL

Ted DeGroot Las Vegas, NV

Jan Long Harris & Paul Harris* River Forest, IL

Suzanne & Steve Diamond* Carmel, CA

Gretchen & Ted Harro* Palatine, IL

Lyn Dickey Northbrook, IL

Don A. Hayes Tampa, FL

Charles & Diane Dokmo Colorado Springs, CO

Randy & Patty Haykin San Francisco, CA

Richard H. Driehaus Chicago, IL

Otis & Barbara Healy Laguna Beach, CA

Lindsay A. Duff Kerrville, TX

Paul & Lois Heiss Mequon, WI

James W. Duncan Jr. Easton, MD

Wendall W. Hirschfeld Austin, TX

Kathleen A. Duryea Los Gatos, CA

Elizabeth Hogue Burtonsville, MD

Dan & Polly Dyer Germantown, MD

Nancy K. Hughes Temecula, CA

Karol D. Emmerich* Edina, MN

Linda & Jim Hunt* Spokane, WA

Ann Field* Scottsdale, AZ

Ted & Marietta Johns San Diego, CA

David & Terri Fish Monument, CO

Rebecca & Marshall Johnson Alpharetta, GA

Brian G. Clark Mahwah, NJ

Betsy Flint Samueli Foundation, CA

Ross Clemenger Nanaimo, Canada

Paul & Melissa Fogelberg Minnetonka, MN

20

Elizabeth Foster & Michael Walsh* Chicago, IL

Deepak & Christina Kamra Menlo Park, CA Patrick D. Kearns Adairsville, GA

Jeff Keenan Seattle, WA

Bruce McLagan Hinsdale, IL

Robert H. Keller Madison, WI

Elizabeth McMeekin & Philip Moses* Takoma Park, MD

Victoria Gifford Kennedy* Milton, MA Terry Koch Kearny Alliance, AZ Timothy D. Krause Cypress, CA Jonathan Lach Westport, CT Linda Lair Apache Junction, AZ Mary Larson* Cohasset, MA Pam Leiter & Phil Faraci* Highland Park, IL Loida Nicolas Lewis New York, NY Joe & Terry Littel Madison, WI Lester & Doris Loucks York, PA Edward F. & Barbara Lukes Wolcott, CO Philip & Nancy Lundman Fredonia, WI Mark Lutz Glen Ellyn, IL Patti J. Lyons Honolulu, HI David H. McAlpin Jr. Skillman, NJ Cole McCombs Inverness, IL David & Cyndi McCrane* Angwin, CA Polly McCrea, Chair Long Lake, MN Alfred A. McDougal Chicago, IL Mary Anne McGuire & Donald H. McComber* Oakville, CA

Peter & Anne McNerney Edina, MN Connie C. Mehn Lake Forest, IL Lydia Miller* Chicago, IL Nicole Moore Edina, MN Owen Moran Northbrook, IL Janet & Richard Morrow* Glenview, IL Robert O. Naegele III Minneapolis, MN Alan W. Nash Houston, TX Hilton & Jean Neal Oconomowoc, WI Carol & Grant Nelson* Hudson, WI Michael & Jane Newton Philomath, OR Harold Nielsen Kenyon, MN Kathryn Nyquist* Chicago, IL Richard O’Donnell Houston, TX Thomas Oswald Edina, MN Ronnel S. Parker Sr. High Point, NC Robert Perry Houston, TX Roger Post Monterey, CA Diana & Bruce Rauner* Winnetka, IL William Reichardt East Syracuse, NY

Nancy McIntosh McLean, VA

Art & Connie Riemer Brookfield, WI

John P. McKay SAJE Foundation, CA

Ross C. Robbins Chicago, IL

OPPORTUNITY INTERNATIONAL 2002 ANNUAL REPORT

Foundations, Corporations, Churches Mary Rodino & David Himelick* Oak Park, IL William F. Roeder Jr. Vienna, VA Roy L. Rogers Los Altos Hills, CA Leah Taylor Roy & Peter Roy* Cohasset, MA Craig S. Rozean Rancho Santa Margarita, CA Norman Rubash Evanston, IL Michele Ruby San Jose, CA

Philip & Julia Styrlund Apple Valley, MN

Affinity VideoNet

Lois & Bill Swanson* St. Helena, CA

Aileen V. and Redman Callaway Fund

Mark & Kimberly Thompson Minnetonka, MN Charles Todd Jr. Columbia, IL Timothy H. Ubben Glencoe, IL Julie & Paul Umbarger Minneapolis, MN Richard Van der Molen Oak Park, IL

Vasu B. Rupani Tokyo, Japan

Linda & Ken Vander Weele* Vienna, Austria

Jeffrey P. Ryan Hong Kong, China

Mark & Kathy Vaselkiv Baltimore, MD

John Sage Seattle, WA

Searl Vetter Wassnaar, Netherlands

Thomas Schmitt Hudson, WI

Ken & Karen Volpert St. Davids, PA

Betty Scholten* Mt. Rainier, MD

Carol Waitte Los Gatos, CA

Barbara & Walter Scott* Northfield, IL

Kimberly Watson Charlotte, NC

Anne Seip Los Gatos, CA

John P. & Jacque Weberg Scottsdale, AZ

Pauline K. Selby Indianapolis, IN

Scott A. Weicht Edina, MN

Charles R. S. Shepard Placitas, NM

Frank H. Wheeler Lafayette, IN

Kim Simms Boston, MA

Laurence F. Whittemore Greenwich, CT

Tom & Darla Skelton Raleigh, NC

Robert Wieczorowski Washington, DC

Gregory W. Slayton Palo Alto, CA

Ken & Peggy Williams Irvine, CA

Richard N. Spalholz Huntington, NY

Jay & Diane Wissink Minnetonka, MN

Angelo Spoto Rockford, IL

Janet & Philip Yancey* Evergreen, CO

Gretchen B. Stengel Medina, WA

Ruth & Jim Youngsman* Mt. Vernon, WA

Scott Stephenson Atlanta, GA

Jerry Zamzow Houston, TX

Malcolm B. Street Jr. Fort Worth, TX

*Women’s Opportunity Fund supporters

A.G. Foundation

Gordon V. and Helen C. Smith Foundation

Perception Research Services International

Grace Presbyterian Church

Peter Cornell Trust

Gracia Foundation

Peter & Elizabeth C. Tower Foundation

Albert and Tricia Nichols Foundation

Griffin, Kubik, Stephens & Thompson, Inc.

American Airlines

Hardee Foundation

American Council of Learned Societies

Harris Foundation for the Living Environment, Inc.

Aristos Group

Heather Knolls of Hamilton LLC

Richard H. Driehaus Foundation

The Helmerich Trust

Robert and Margaret Thomas Foundation

Baillie Lumber Co., Inc. Bethany Presbyterian Church Bergman Family Foundation Bradley-Turner Foundation, Inc. The Brinson Foundation Calvary Lutheran Church Caterpillar Foundation Charitable Gift Fund Chester Foundation Christ Presbyterian Church Christel DeHaan Family Foundation Citigroup Foundation Clemens Family Charitable Gifts Connemara Fund Consuelo Zobel Alger Foundation Cornerstone Foundation The Covenant Foundation The David Weekley Family Fund of the Greater Houston Community Foundation

Heritage Valley Foundation The Hoglund Foundation Household International International Foundation International Service Agencies JP Morgan Chase Foundation James Huntington Foundation

Pipe Vine, Inc. RBL Foundation

Robert W. Galvin Foundation Rockdale Foundation SAJE Foundation Salomon Smith Barney Charitable Trust, Inc. The Samueli Foundation Sand Hill Group Foundation Satrum Foundation

John F. and Mary A. Geisse Foundation

Schwab Fund for Charitable Giving

The Joseph P. Kennedy, Jr. Foundation

SG Foundation

JP Morgan Private Bank

Someone Cares Charitable

Karis Foundation

St. Andrew’s Presbyterian Church

The Kearny Alliance

Stuart Family Foundation

Kenneth F. & Harle G. Montgomery Foundation

Stewardship Foundation

Lake Forest/Lake Bluff Morning Rotary Club Levi Strauss Foundation Loucks, Inc. Lundman Family Foundation, Inc.

Debley Foundation, Inc.

M.E. Foundation

Dr. Scholl Foundation

MacAllister Machinery Co.

Earle M. Combs & Virginia Combs Foundation

McDougal Family Foundation

Emelco Foundation

Memorial Drive Presbyterian Church

Faith, Hope & Love Foundation

Phoebe W. Haas Charitable Trust

Sutton Ford TLC – LC, Inc. Union Church United Methodist Church– Women’s Divison United Methodist Church of St. Helena USAID United Way of Delaware, Inc. United Way of King County United Way of the Bay Area The Viva Foundation

Mennonite Foundation, Inc.

The Waitte Foundation

Fieldstead and Company

Mercy Ventures

First Fruit, Inc.

Microsoft Corporation

W.B. and Sue T. Turner Foundation

First Presbyterian Church of Evanston

Nationwide Insurance Enterprise Foundation

First Rate Investment Systems

Nelson G. and Vera C. Hicks Charitable Foundation

William H. Hurt Foundation

Foundation for Christian Stewardship

Nike, Inc.

Woodale Church

Oswald Family Foundation

World Serve

Paul F. & Lois K. Heiss Family Foundation, Inc.

The Zimmer Family Foundation

Fremont Bank Foundation Gems of Hope

Editor: Carol Stigger • Designer: Sue Lundin • Printer: Graphix Products, Inc.

Weberg Foundation Whittier Trust Company

21

The best way to help poor children is to create jobs for their parents

and the Women’s Opportunity Fund 2122 York Road, Suite 340 Oak Brook, IL 60523 800.7WE.WILL or 630.645.4100 www.opportunity.org www.womensopportunityfund.org