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Mennonite Economic Development Associates' Global Investment Fund has been called "the Mother Teresa of all investments". While this term is not used by MEDA itself to describe the new venture, the fund is an attempt to mix business and high-minded altruism. It aims to provide people with a chance to invest in ventures that help the poor in low income countries.
"Ethical investments" (also called Socially Responsible Investments) have been around for a long time. They avoid companies that some people find morally offensive. For example, a typical screen would keep investment funds out of companies that produce liquor, tobacco or weapons. Some funds also screen out companies that are known polluters or have a history of poor labour relations.
Recently, some funds have become more proactive, seeking out the "good" instead of screening out the "bad". However, MEDA sees the GIF as a third way, a "proactive alternative investment". Basically, anything it invests in has to be socially beneficial as well as hold the promise of being profitable.
An earlier version of the fund operated for some time under the ownership of MEDA with few outside investors. Now it has grown and is open to anyone who shares its goals and is willing to take a reduced return for their money in exchange for the good work it will do. Work is under way to register the fund with securities commissions in Canada and the US.
Investors have two ways to connect with the GIF. They can make a tax-receiptable contribution or they can deposit $1,000 or more in the fund and earn a rate similar to that of a guaranteed investment certificate. In 1998, the fund paid 3.5 percent. This year it is paying 4 percent, and next year, 5 percent. The fund is more like a bond than a mutual fund, and currently stands at $3.5 million US, which has come from MEDA donations, investment income, companies, churches and individuals.
The GIF portfolio includes CHISPA, the MEDA-created micro-credit institution in Nicaragua; the San Luis Cooperative in Bolivia; a cocoa cooperative in Cameroon; a handicrafts producer in Nicaragua; an Ontario-based water purification company that develops transportable drinking water for third world countries; and a Toronto company that sells wind-up radios and flashlights from a South African company employing disabled people.
GIF also has pledged $200,000 for a new plant in Paraguay that will extract starch from manioc.
MEDA release
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