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Entrepreneur Dedicated to Poverty Alleviation through Microfinance

Geoff Davis, President and CEO, Unitus

It would have been easy to predict Geoff Davis would become a successful entrepreneur. At the age of ten, he bought soda pop for fifty cents a can and sold it for one dollar at construction sites. At fourteen, he had a lawn mowing company. By the time he graduated from Brigham Young University with a BA in international relations, he’d started a precious gems trading company and a translation agency.

Similarly, it would have been easy to predict Davis would try to change the world. His grandfather smuggled people from behind the Iron Curtain for the United Nations after World War II and was one of the first Peace Corps administrators in Southeast Asia. His parents married in a Christian commune in the Swiss Alps before his father practiced international corporate law. Davis grew up traveling with his family to places like Tokyo, Paris, Stockholm and Tel Aviv.

Still, even Davis couldn’t have predicted that he would figure out a way to dedicate his life to entrepreneurship and improving the lives of billions of people around the world—all in the same job as president and CEO of Unitus, a nonprofit based in Redmond, Washington. One day, Davis will no doubt have time to invest in and profit from the entrepreneurial ideas in his head. For now, as he puts it, “I’d rather use my skills and talents to improve the lives of others.”

Closing the Financial Services Gap

“There are about four billion people—80 percent of the world’s population—living on two or three dollars a day and without access to financial services,” says Davis, who wants to close that gap.

The strategy he and his colleagues at Unitus have developed to do so is by accelerating the growth of high-potential emerging microfinance institutions (MFIs) through capital investments and capacity-building consulting. “If an institution is serving 10,000 entrepreneurs now,” says Davis, “we want them to be serving 100,000 or 200,000 within three to five years.”

Unitus lends selected MFIs money and catalyzes their ability to borrow from local capital markets by guaranteeing loans. Most MFIs are nonprofits when Unitus starts working with them. “We find they can access much more money if they transform into a for-profit finance company, and we help them with that process,” says Davis.

Growing 100 percent a year in an industry where growth averages 12 to 15 percent creates challenges for these MFIs; Unitus’s consulting team helps them address these challenges. Unitus currently partners with eleven MFIs, reaching more than one million entrepreneurs and their families. Davis has set a goal to reach fifteen million poor clients by 2015, by which time Unitus’s loan portfolio is expected to exceed $1.5 billion.

The Global Acceleration Model

Davis, thirty-five, discovered the world of microcredit during a summer consulting job and was so inspired by its potential that he went to Mexico to start a program.

“I thought I’d go down and teach them the basics about business but quickly learned that these entrepreneurs surviving at the bottom of the pyramid—like the woman I met who sold goat cheese and asked for a $35 loan—could put us all to shame,” he says.

Davis couldn’t imagine what a difference $35 would make. The woman explained it would buy a thermometer to pasteurize her cheese. Later, he discovered, it enabled her to double her income, which allowed the first children ever in her family to attend school.

Davis returned to California and worked a year for a bio-medical engineering company. Still interested in microcredit, he attended a 1997 global gathering of people in the field, where he met Muhammad Yunus, founder of Grameen Bank, one of the oldest and largest MFIs in the world. The meeting resulted in Davis helping open a Grameen office in Washington, DC, and starting up programs that replicate the Grameen model.

Davis was convinced that microcredit was the key to large-scale poverty alleviation but frustrated by most MFIs’ limited ability to grow. So was Mike Murray, who co-founded Unitus in early 2000. Rather than create and support a few MFIs, as Unitus had initially done, they decided to forge a new path, combining the best practices of venture capital investment banking and strategy consulting to transform Unitus into a global microfinance accelerator.

Investing in Microfinance

With a regional office in Bangalore, India, Unitus fights global poverty today by helping create large-scale, poverty-focused and commercially sustainable MFIs.

“People who borrow from these organizations really want to grow,” says Unitus board member Clair Jenkins, who chairs Unitus’s selection committee and travels the world reviewing dozens of potential MFIs a year, from which four or five are chosen to partner with. “We often think poor people are lazy. In fact, these entrepreneurs are smart and have a strong work ethic. All they need is an opportunity.”

Davis estimates that each $100 donation enables Unitus to help its partners provide life-changing financial services to an additional eighteen micro-entrepreneurs. Supporters can also make loans to Unitus’s debt fund, from which Unitus makes loans to its partners. Unitus also sponsors the Unitus Equity Fund, LP, a private equity fund investing in microfinance institutions in Asia and Latin America.

Davis sees his role largely as an evangelist, with the true impact of the acceleration strategy in its demonstration effect. Toward this end, he guest lectures at business and public policy schools and conferences throughout the world about the need to commercialize microfinance and connect microfinance institutions to capital markets.

“With his credentials, Geoff could certainly find a job that would bring him a lot more money and success of other sorts,” says board member Elizabeth Funk, president and CEO of CML Global Capital, an international real estate investment firm. “Instead he’s chosen this path, facilitating investment in microfinance and applying business principles to make a difference in the world."

© 2007 Ewing Marion Kauffman Foundation. All rights reserved.

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