Wespath invests with nonprofit that helps lend to Southern Africa businesses The PSP Lending Program also provides or helps facilitate microfinance loans to individuals in developing regions around the globe who have little or no access to traditional financial services. Wespath provided loans to Shared Interest, a nonprofit that supports economic development in Southern Africa, for many years. Shared Interest provides loan guarantees to Southern African banks, which serves as a catalyst for them to lend to Black entrepreneurs, small and growing businesses, farmers and co-ops, microfinance institutions, and low- cost housing and infrastructure providers. In 2024, Wespath reaffirmed its commitment, making a $5 million loan to be deployed over the next few years. The loan is an investment in both the Fixed Income Fund – P Series and the Fixed Income Fund – I Series.
What is a loan guarantee? A loan guarantee is a commitment by a third party, in this case Shared Interest, to cover a designated percentage of the risks associated with a loan to a borrower, who does not have sufficient bank-worthy collateral. Shared Interest’s partnership with Sihlangene Bus Company in South Africa illustrates how the model works. Sihlangene, a Black and female co-operative, needed a loan to purchase 24 buses so it could operate a rural route awarded by the government. Shared Interest provided a 40% loan guarantee to the lender, which made it so the lender was willing to make the loan. Sihlangene repaid its loan of $1.7 million in less than three years. The loan helped create 55 new jobs.
What is Shared Interest? Shared Interest was established in 1994 by U.S. antiapartheid activists and socially responsible investors who were committed to ending apartheid in South Africa. Since its founding, Shared Interest has provided $34 million in loan guarantees, supporting more than 2 million people and unlocking $131 million in lending. Shared Interest has recently expanded beyond South Africa to include Eswatini, Malawi, Mozambique and Zambia.
What is a microfinance loan? Typically, these are loans of between $50 and $300. These loans provide much needed capital to individuals or small businesses to scale their businesses and create a consistent source of income for themselves or their families.
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