Opportunity International Annual Report 2002

OPPORTUNITY INTERNATIONAL and the Women’s Opportunity Fund

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.

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.

Statement of intent regarding poverty and womenOpportunity 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.

...microloans for microenterprises

Small loans and basic

business training

liberate families

from chronic poverty.

Opportunity provides loans

to poor entrepreneurs

to start or expand small

businesses. They repay

their loans so the money

can be lent to other poor

entrepreneurs, repeating

this victorious cycle.

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 fi nancial 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

fi nance 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 ChairBoard of Directors

Elizabeth S. Perdue Vice Chair Board of Directors

Polly McCreaChair Board of Governors

Christopher A. CranePresident & Chief Executive Offi cer

OPPORTUNITY INTERNATIONAL 2002 ANNUAL REPORT

Highlights of 2002In 25 developing countries, Opportunity’s microfi nance 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 fi nancial services the chance they need to improve their lives in every dimension. Opportunity makes their hard work count.

Clients (as of year end) ..............................................397,489268 percent growth since 1998

Dollars loaned.................................................$127.2 million48.5 percent growth over 2001

Loans made................................................................536,033a fi vefold increase over 1997

Average loan ...................................................................$237Up $36 from 2001 as repeat borrowers enlarge their businesses

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

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

Loan repayment rate ....................................................... 98%maintained since 2000

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

* estimated

For the fi rst time in our 32-year history, our loan program is earning a nominal profi t 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-suffi cient, 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)

Total Network 108,841 146,575 233,386 308,026 397,489

Total Network $30.3 $45.1 $63.2 $85.1 $127.2

Dollars loaned (in millions)

Total

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Latin America

Eastern Europe

Asia

Africa

20022001200019991998

Total

0

30

60

90

120

150

20022001200019991998

2


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 programs liberate families from poverty

“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 Foundation3

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

Henry George, economist, 1878

Trust Banks empower women to break the cycle of poverty

12A loan offi cer visits a poor

community and encourages 15 to 40 entrepreneurial women to form a borrowing group (Trust Bank).

3The loan offi cer conducts eight training sessions in basic business practices. Trust Bank members learn how to use business credit. They develop their own constitution.

4Members elect a president and treasurer. Leaders emerge among groups of formerly powerless women.

5They agree to guarantee each other’s loans. Each member receives a loan of about $80 and invests the money in her business.

6Profi ts increase as these newly empowered entrepreneurs buy in bulk and diversify their products and services.

7Trust Bank members meet weekly for training and support. The treasurer collects loan payments and savings and deposits them in a secure account.

8Earnings allow for more nutritious food, health care, education, and housing improvements. Usually, a portion of the profi t is reinvested in the business.

9When the Trust Bank loan is paid off, members are eligible for larger loans. Meetings continue. Members gain confi dence in their abilities and learn the power of the group.

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

Trust Banks were designed for women in the lowest levels of poverty, once considered too poor to benefi t from microcredit. Our Women’s Opportunity Fund tested, refi ned, and promoted Opportunity Trust Banks, which are now operating in 18 countries.

4

10Your contribution is repaid and loaned to another poor entrepreneur.

The cycle begins again.

Esther Nyamekye from Ghana began her batik dying business in her yard. She had one client and too little profi t 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

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 AIDS-related deaths. After its 2002 pilot in Zambia, this type of insurance is expanding to serve Opportunity programs worldwide.


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.

A neighborHigh-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.

Globally connectedBehind 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

6

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.

Transforming familiesThe 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.

Pioneering new poverty-fighting servicesA 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.

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

“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.”

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

7


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.

8

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

• The fi rst 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 fi rst 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 fi rst Opportunity International Network Gender Report was distributed worldwide.

Highlights of 2002

Dreams of a leaderMeeting Sonia Acosta in the Dominican Republic was inspiring for the participants of the fi rst 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 confi dence. 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.”

“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

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 offi cers, 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 fi eld-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.

www.womensopportunityfund.org

Beth Houle, DirectorJulie Hindmarsh, ChairDawn Feller, Vice Chair

• The Empowering Women Through Microfi nance 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.

Journeys to the heart of OpportunityMeeting 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 fi eld staff and take an in-depth look at our microfi nance 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 like-minded travelers. For more information, please call 800-793-9455 or visit our web sites: www.opportunity.org or www.womensopportunityfund.org

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.

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

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

Mary Larson (above) visits Opportunity Trust Bank member

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

On our Women’s Leadership Insight Trip, I realized

journey of discovery. Opportunity International and the Women’s Opportunity Fund host fully

to meet our clients and fi eld staff and take an Our trip to the Philippines made me proud to be

OPPORTUNITY INERNATIONAL 2002 ANNUAL REPORT

9

EASTERN EUROPEAlbania 1,822 $4,278,954Bulgaria 1,580 3,585,149Croatia 598 1,579,173Macedonia 2,616 5,078,458Montenegro 4,942 13,101,584Poland 693 1,426,423Romania 1,081 2,019,857Russia 10,788 19,924,670Serbia — 2002 startup 608 1,028,535

LATIN AMERICAColombia 18,906 $4,253,542Costa Rica 1,593 817,391Dominican Republic 3,566 2,304,463Honduras 8,250 2,473,640 Nicaragua 29,620 5,014,755Peru 1,270 532,626

COUNTRY COUNTRY COUNTRY CLIENTS DOLLARS SERVED LOANEDAFRICAEgypt 2,098 $1,750,594Ghana 26,615 4,703,847Malawi reorganizing 591,013Uganda 8,021 2,249,402Zambia 19,856 1,822,075Zimbabwe 14,205 6,839,830

ASIAEast Timor East Timor East Timor 920 $383,925India 28,485 2,161,078Indonesia 24,841 3,216,079Philippines 184,515 36,018,487

EASTERN EUROPE

Global ImpactImpact

5 SUPPORT PARTNERS THAT MARKET AND RAISE PROGRAM FUNDS

40 IMPLEMENTING PARTNERS THAT RUN OUR PROGRAMS

2 NEW IMPLEMENTING PARTNERS TO OPEN IN 2003

CLIENTS SERVED CLIENTS SERVED DOLLARSDOLLARS LOANEDLOANED

397,489 $127,155,550

10 11O P P O R T U N I T Y I N T E R N A T 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

Malawi


Uganda

Zimbabwe

Zambia

Indonesia

Australia

Ghana

Canada

United States

United Kingdom

Germany

India

Egypt

Philippines

East Timor

Honduras

Dominican Republic

Costa Rica Nicaragua

Peru

Colombia

Russia

Poland

Romania

Bulgaria

Croatia

Montenegro

Serbia

Macedonia

Albania Mexico 2003 Startup

China 2003 Startup

“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

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 profi ts and expand his business.

Board Donations

$2.2

Other Individuals

$4.3

Foundations,Corporations, Churches

$4.6

+ +

Where money comes from (in millions)

Where money goes (in millions)

$7.62Loan Funds $127.2 million loaned and recycled 397,489 clients536,033 loans

$5.20Services to Programstransformation tools and researchnew partner developmentportfolio management systems

$5.81Services to Clients client business and leadership trainingloan offi cersreaching new clients

800,000* jobssupporting 4 million* children and adults(*estimated)

Programs in 25 countries

98% loans repaid

Services to International Loan Program

$6.12Support Partnersadministrationfundraising

U.S. Government Foreign Aid

$8.3

+ Foreign SupportPartners

$12.6

= Total NewRevenue

$32.0

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

The tree of life

+

12

$4.31Working Capital Fund

$2.94Program Equity Ownershiploan portfolioclient servicessystems

13

Opportunity International–US

2002 2001 Percent change

Revenue Annual Fund $ 8,976,269 $ 7,934,538 13% Cornerstone Fund 2,171,785 — N/N Government grants 8,295,949 7,278,924 14%

Total 19,444,003 15,213,462 28%

Expenditures Program services 9,467,787 10,755,347 12% Program equity ownership 2,943,500 3,248,700 9% Supporting activities 3,802,381 4,455,931 15%

Total 16,213,668 18,459,978 12%

Total Revenue(in millions)

Cornerstone Fund

Annual Fund

Government grants

0

$5

$10

$15

$20

20022001

2000

$25

“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, WalMart Stores, Inc.

Highlights

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


14

Opportunity International Network Support Partners

Statement of Activities

Global Revenue

2002

Private Contributions 50%

Government Grants 50%

for the year ended December 31, 2002 OI–US Overseas Total

Operating activitiesRevenue Private contributions Annual Fund $ 8,976,269 $ 4,788,812 $ 13,765,081 Cornerstone Fund 2,171,785 — 2,171,785 Total private contributions 11,148,054 4,788,812 15,936,866 Government grants 8,295,949 7,775,901 16,071,850

Total revenue 19,444,003 12,564,713 32,008,716 Expenditures Program services Grants for revolving loans 3,131,820 4,486,886 7,618,706 Grants for partner lending operations and training 2,740,359 3,072,220 5,812,579 Development of partner organizations 3,595,608 1,600,525 5,196,133 Total program services 9,467,787 9,159,631 18,627,418

Program equity ownership 2,943,500 — 2,943,500 Total services to the poor 12,411,287 9,159,631 21,570,918

Supporting activities Fundraising 2,307,769 1,682,374 3,990,143 Management and general 1,494,612 637,999 2,132,611 Total supporting activities 3,802,381 2,320,373 6,122,754 Total expenditures 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 $ 2,080,682 $ — $ 2,080,682 Microfinance inst. equity ownership 2,080,682 — 2,080,682 Total non-operating activities $ — $ — $ —

*

*

* Supporting activities ratio to revenue was 19%.

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 15


Statement of Activities

2001for the year ended December 31, 2001

Global Revenue

Private Contributions 47%

Government Grants 53%

OI–US Overseas Total

Operating activitiesRevenue Private contributions $ 7,934,538 $ 4,711,960 $ 12,646,498 Government grants 7,278,924 6,964,715 14,243,639

Total revenue 15,213,462 11,676,675 26,890,137 Expenditures Program services Grants for revolving loans 3,092,041 4,989,423 8,081,464 Grants for partner lending operations and training 3,325,934 3,469,976 6,795,910 Development of partner organizations 4,337,372 554,233 4,891,605

Total program services 10,755,347 9,013,632 19,768,979

Program equity ownership 3,248,700 — 3,248,700 Total services to the poor 14,004,047 9,073,632 23,017,679

Supporting activities Fundraising 2,719,375 1,391,850 4,111,225 Management and general 1,736,556 544,565 2,281,121

Total Supporting Activities 4,455,931 1,936,415 6,392,346

Total expenditures 18,459,978 10,950,047 29,410,025

Net from operating activities $ (3,246,516) $ 726,628 $ (2,519,888)

*

*


* Supporting activities ratio to revenue was 24%.


Statement of Cash Flows 2001

OI–US Overseas Total Total

Change in net assets $ 8,231,999 $ 1,146,180 $ 9,378,179 $ 702,184 Other operating activities (6,168,324 (234,344 (6,402,668 (2,000,000Funds provided by operations 2,063,675 911,836 2,975,511 (1,297,816Investing activities (5,134,993 (405,535 (5,540,528 (2,800,000Financing activities 4,438,000 (41,054 4,396,946 4,700,000 Change in cash balances $ 1,366,682 $ 465,246 $ 1,831,928 $ 602,184

December 31, 2002

for the year ended December 31, 2002


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)

)

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)

)

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16


Statement of Financial Position

2001

OI–US Overseas Total Total

Assets Current Cash and demand deposits $ 2,975,415 $ 2,250,263 $ 5,225,678 $ 3,393,750 Receivables 2,782,119 359,513 3,141,632 1,350,636 Other current assets 654,688 28,793 683,481 726,283 Total current assets 6,412,222 2,638,570 9,050,792 5,470,669

Long-Term Long-term investments – partners 8,379,501 59,002 8,438,503 4,250,556 Long-term investments – other — 395,369 395,369 — Property and equipment Cost 354,664 358,803 713,467 630,308 Accumulated depreciation (322,565) (231,888) (554,453) (483,026) Net property and equipment 32,099 126,915 159,014 147,282 Total long-term assets 8,411,600 581,286 8,992,886 4,397,838

Total Assets $ 14,823,822 $ 3,219,856 $ 18,043,678 $ 9,868,507

Liabilities Current Short-term borrowings $ 998,350 $ 20,461 $ 1,018,811 $ 914,378 Accounts payable 529,683 68,413 598,096 712,205 Other current liabilities 84,784 1,011,412 1,096,196 140,497 Total current liabilities 1,612,817 1,100,285 2,713,102 1,767,080

Long-Term Long-term debt 1,234,000 — 1,234,000 1,369,201 Deferred revenue — 241,999 241,999 2,255,828 Total long-term liabilities 1,234,000 241,999 1,475,999 3,625,029 Total Liabilities 2,846,817 1,342,284 4,189,101 5,392,109

Net Assets Unrestricted net assets 5,943,414 1,070,461 7,013,875 1,642,985 Restricted net assets 6,033,591 807,111 6,840,702 2,833,413

Total Net Assets 11,977,005 1,877,572 13,854,577 4,476,398

Total Liabilities and Net Assets $ 14,823,822 $ 3,219,856 $ 18,043,678 $ 9,868,507

Opportunity International Network Implementing Partners

Income Statement

Balance Sheet

for the year ended December 31, 2002


December 31, 2002

17

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 Financial expenses 88,221 982,064 431,478 54,035 1,555,799

Gross financial margin 5,250,417 8,129,567 7,564,743 4,894,803 25,839,531

Provision for loan losses 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

Net income $ (1,106,873) $ 309,657 $ 691,393 $ 230,712 $ 124,888

Africa Asia Eastern Europe Latin America Total Network

Assets Current Cash $ 2,607,552 $ 2,865,634 $ 3,386,411 $ 1,278,357 $ 10,137,954 Net loan portfolio 8,156,990 16,046,999 30,271,081 7,605,033 62,080,103 Other current assets 1,285,669 4,395,127 5,131,983 1,123,491 11,936,269 Total current assets 12,050,211 23,307,760 38,789,475 10,006,882 84,154,327

Long-Term Fixed & other L-T assets 2,528,171 4,088,794 3,011,098 1,345,414 10,973,477 Total assets $ 14,578,381 $ 27,396,554 $ 41,800,573 $ 11,352,296 $ 95,127,804

Liabilities & Net Assets/Equity Current Loan client deposits $ 768,583 $ 5,390,328 $ 418,873 $ 31,599 $ 6,609,383 Other client deposits 270,593 286,512 1,247,618 — 1,804,724 Other current liabilities 849,436 4,330,700 1,392,081 734,273 7,306,489 Total current liabilities 1,888,612 10,007,540 3,058,572 765,872 15,720,596

Long-Term Total L-T liabilities & debt 291,781 3,938,688 10,648,078 2,913,710 17,792,256 Total liabilities 2,180,392 13,946,228 13,706,650 3,679,582 33,512,852

Net Assets & Equity Total net assets & equity 12,397,989 13,450,326 28,093,923 7,672,714 61,614,952 Total liabilities & net assets $ 14,578,381 $ 27,396,554 $ 41,800,573 $ 11,352,296 $ 95,127,804


Notes to Financial Statements

Management Discussion & Analysis of Financial Statement

18

Highlights — Opportunity International-USOpportunity 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 PartnersTotal 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 PartnersAs 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.

Financial Statement PresentationThe 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 InstitutionsOn December 31, 2002, eight of the Implementing Partner organizations were for-profit, regulated micro-finance institutions: Opportunity Microfinance Bank (OMB) in the Philippines; Opportunity Microfinance India (OMI); Opportunity Bank Montenegro (OBM); PSHM in Albania; Opportunity Microfinance Romania (OMRO); Opportunity

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 AssetsSupport 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 AffiliatesAs 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.

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Laura AllenHinsdale, IL

Dennis ChorbaVice President (retired)Georgia GulfAtlanta, GA

Christopher A. CranePresident & CEOOpportunity International–U.S.San Diego, CA

Peter S. DaleyChief Executive OfficerGraymalkin, Inc.Purcellville, VA

Kwabena DarkoChief ExecutiveDarko Farms & Co., Ltd.Kumasi, Ghana

E. Bruce DunnSr. VP & Principal (retired)Stein, Roe & FarnhamChicago, IL

Dawn Parsons FellerExhibiting ArtistHinsdale, IL

Emory A. GriffinProfessorWheaton CollegeWheaton, IL

James W. HamiltonSenior Counsel (retired)Paul, Hastings, Janofski & WalkerLaguna Beach, CA

Craig HammonExecutive Vice PresidentCURE InternationalEssex, MA

Julie HindmarshClinical InstructorJohns Hopkins School of NursingBaltimore, MD

Richard A. HoefsPartner (retired)Arthur Andersen & CompanyFitchburg, WI

Richard U. JelinekManaging DirectorPerformance Catalysts, LLCWellesley, MA

Kurt A. KeilhackerManaging DirectorTechFund CapitalSaratoga, CA

Peter KingGroup CEO (retired)Van Leer Corp.Sydney, Australia

Polly McCreaLong Lake, MN

Robert McCrea Management ConsultantLanscape, Inc.Long Lake, MN

Jeffrey S. MeyerVice PresidentBaillie Lumber Co.Hamburg, NY

Gary MooreFounderGary Moore & Co.Sarasota, FL

Theodore D. MoserDirectorMercer Management ConsultingOakland, CA

Donald L. PalmerPresidentPalmer Automotive GroupIndianapolis, IN

Elizabeth S. Perdue, Vice ChairPartnerJenkins & GilchristChicago, IL

Karen PrudenteUnited Methodist ChurchNew York, NY

Jane Siebels-KilnesChairman & Chief Investment OfficerGreen Cay Asset ManagementNassau, Bahamas

David L. Simms, ChairPartnerThe Bridgespan GroupBoston, MA

Jill Dailey SmithMarketing Research & Planning ConsultantRiver Forest, IL

Nathaniel SuttonPresidentSutton FordMatteson, IL

Peter ThorringtonCOO & PresidentUTI Worldwide Inc.Rancho Dominguez, CA

Linda ValentineHinsdale, IL

Mary Beth VogelzangVogelzang & Associates (retired)Denver, CO

Alfred Ward Communities in Schools (retired)Chicago, IL

Terrence A. WatsonExecutive Vice PresidentBank of AmericaCharlotte, NC

Alfred A. WhittakerChair EmeritusPresident (retired)Bristol-Meyers Int’l Corp.Fort Meyers, FL

Dr. Raymond BakkeExecutive DirectorInternational Urban Associates

Dr. Tony CampoloProfessor & AuthorEastern University

Doris ChristopherFounder & ChairmanThe Pampered Chef

Millard FullerFounderHabitat for Humanity

Rev. Theodore Hesburgh, C.S.C.President EmeritusUniversity of Notre Dame

Ambassador Swanee HuntDirector of Women & Public PolicyHarvard University

Jack KempFormer Secretary of Housing & Urban Development Dr. Martin MartyProfessor & AuthorUniversity of Chicago

The Honorable E. N. PelaezFormer Ambassador, The Republic of the Philippines

The Honorable Fidel V. RamosFormer President, The Republic of the Philippines

The Honorable Paul SimonFormer United States Senator

Paula ZahnAnchor, American MorningCNN


Board of Advisors Board of Directors

Christopher A. CranePresident &Chief Executive Officer

Beth HouleDirector, Women’s Opportunity FundVice President, Marketing Strategy

Rick JohnChief Financial OfficerVice President, Finance & Administration

Mark LutzSr. Vice President, Marketing

Dennis RipleySr. Vice President, Programs

Connie StryjakVice President, Human Resources

Management Team

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.

20

Board of GovernorsDan & Jeanie ArdellCorona del Mar, CA

Lynne M. BaabSeattle, WA

Clark & Tina BainEdina, MN

Stephen M. BarneyLong Grove, IL

Warren BeachBarrington, IL

James R. BergmanLaguna Beach, CA

Elaine D. BirdsongGray, GA

Michael BontragerCochranville, PA

Bruce BoydHighland Park, IL

Richard L. BrackettNew York, NY

James L. BramlettRobbinsville, NJ

Bill & Karen BrownEden Prairie, MN

Arthur & Manijeh BrueggemanLaguna Hills, CA

Scott BrueggemanChicago, IL

J. & Joanna BurnettMarietta, GA

Allan J. CamaisaLa Jolla, CA

Duncan CampbellPortland, OR

Robert B. CarterBethesda, MD

Nancy M. ChaseSolana Beach, CA

Linda CherneEdina, MN

Susy Cheston & Artie Harris*Takoma Park, MD

Brian G. ClarkMahwah, NJ

Ross ClemengerNanaimo, Canada

Jodie & Dennis Clements*Seminole, FL

Marge Coahran*Toronto, Canada

Doug CogswellSouth Barrington, IL

Nichole & Miles CookAtlanta, GA

Gary CooperSarasota, FL

Anne Coughlan & Charles JamesonWilmette, IL

Wendy & Jim Cox*Edina, MN

Mike CumminsOrlando, FL

Janice D. Dailey*Tequesta, FL

Ted DeGrootLas Vegas, NV

Suzanne & Steve Diamond*Carmel, CA

Lyn DickeyNorthbrook, IL

Charles & Diane DokmoColorado Springs, CO

Richard H. DriehausChicago, IL

Lindsay A. DuffKerrville, TX

James W. Duncan Jr.Easton, MD

Kathleen A. DuryeaLos Gatos, CA

Dan & Polly DyerGermantown, MD

Karol D. Emmerich*Edina, MN

Ann Field*Scottsdale, AZ

David & Terri FishMonument, CO

Betsy FlintSamueli Foundation, CA

Paul & Melissa FogelbergMinnetonka, MN

Elizabeth Foster & Michael Walsh*Chicago, IL

Cynthia E. Frost*Barrington, RI

Jill & Tim GeoffrionDeephaven, MN

David & Diane GetschBloomington, MN

Judy & Greg Golz*River Forest, IL

Bill & Mary HallSan Clemente, CA

Julie HallWinnetka, IL

Promod HaqueSaratoga, CA

James Hardee Jr.Wilmette, IL

Jan Long Harris & Paul Harris*River Forest, IL

Gretchen & Ted Harro*Palatine, IL

Don A. HayesTampa, FL

Randy & Patty HaykinSan Francisco, CA

Otis & Barbara HealyLaguna Beach, CA

Paul & Lois HeissMequon, WI

Wendall W. HirschfeldAustin, TX

Elizabeth HogueBurtonsville, MD

Nancy K. HughesTemecula, CA

Linda & Jim Hunt*Spokane, WA

Ted & Marietta JohnsSan Diego, CA

Rebecca & Marshall JohnsonAlpharetta, GA

Deepak & Christina KamraMenlo Park, CA

Patrick D. KearnsAdairsville, GA

Jeff KeenanSeattle, WA

Robert H. KellerMadison, WI

Victoria Gifford Kennedy*Milton, MA

Terry KochKearny Alliance, AZ

Timothy D. KrauseCypress, CA

Jonathan LachWestport, CT

Linda LairApache Junction, AZ

Mary Larson*Cohasset, MA

Pam Leiter & Phil Faraci*Highland Park, IL

Loida Nicolas LewisNew York, NY

Joe & Terry LittelMadison, WI

Lester & Doris LoucksYork, PA

Edward F. & Barbara LukesWolcott, CO

Philip & Nancy LundmanFredonia, WI

Mark LutzGlen Ellyn, IL

Patti J. LyonsHonolulu, HI

David H. McAlpin Jr.Skillman, NJ

Cole McCombsInverness, IL

David & Cyndi McCrane*Angwin, CA

Polly McCrea, ChairLong Lake, MN

Alfred A. McDougalChicago, IL

Mary Anne McGuire & Donald H. McComber*Oakville, CA

Nancy McIntoshMcLean, VA

John P. McKaySAJE Foundation, CA

Bruce McLaganHinsdale, IL

Elizabeth McMeekin & Philip Moses*Takoma Park, MD

Peter & Anne McNerneyEdina, MN

Connie C. MehnLake Forest, IL

Lydia Miller*Chicago, IL

Nicole MooreEdina, MN

Owen MoranNorthbrook, IL

Janet & Richard Morrow*Glenview, IL

Robert O. Naegele IIIMinneapolis, MN

Alan W. NashHouston, TX

Hilton & Jean NealOconomowoc, WI

Carol & Grant Nelson*Hudson, WI

Michael & Jane NewtonPhilomath, OR

Harold NielsenKenyon, MN

Kathryn Nyquist*Chicago, IL

Richard O’DonnellHouston, TX

Thomas OswaldEdina, MN

Ronnel S. Parker Sr.High Point, NC

Robert PerryHouston, TX

Roger PostMonterey, CA

Diana & Bruce Rauner*Winnetka, IL

William ReichardtEast Syracuse, NY

Art & Connie RiemerBrookfield, WI

Ross C. RobbinsChicago, IL

Mary Rodino & David Himelick*Oak Park, IL

William F. Roeder Jr.Vienna, VA

Roy L. RogersLos Altos Hills, CA

Leah Taylor Roy & Peter Roy*Cohasset, MA

Craig S. RozeanRancho Santa Margarita, CA

Norman RubashEvanston, IL

Michele RubySan Jose, CA

Vasu B. RupaniTokyo, Japan

Jeffrey P. RyanHong Kong, China

John SageSeattle, WA

Thomas SchmittHudson, WI

Betty Scholten*Mt. Rainier, MD

Barbara & Walter Scott*Northfield, IL

Anne SeipLos Gatos, CA

Pauline K. Selby Indianapolis, IN

Charles R. S. ShepardPlacitas, NM

Kim SimmsBoston, MA

Tom & Darla SkeltonRaleigh, NC

Gregory W. SlaytonPalo Alto, CA

Richard N. SpalholzHuntington, NY

Angelo SpotoRockford, IL

Gretchen B. StengelMedina, WA

Scott StephensonAtlanta, GA

Malcolm B. Street Jr.Fort Worth, TX

Philip & Julia StyrlundApple Valley, MN

Lois & Bill Swanson*St. Helena, CA

Mark & Kimberly ThompsonMinnetonka, MN

Charles Todd Jr.Columbia, IL

Timothy H. UbbenGlencoe, IL

Julie & Paul UmbargerMinneapolis, MN

Richard Van der MolenOak Park, IL

Linda & Ken Vander Weele*Vienna, Austria

Mark & Kathy VaselkivBaltimore, MD

Searl VetterWassnaar, Netherlands

Ken & Karen VolpertSt. Davids, PA

Carol WaitteLos Gatos, CA

Kimberly WatsonCharlotte, NC

John P. & Jacque WebergScottsdale, AZ

Scott A. WeichtEdina, MN

Frank H. WheelerLafayette, IN

Laurence F. WhittemoreGreenwich, CT

Robert WieczorowskiWashington, DC

Ken & Peggy WilliamsIrvine, CA

Jay & Diane WissinkMinnetonka, MN

Janet & Philip Yancey*Evergreen, CO

Ruth & Jim Youngsman*Mt. Vernon, WA

Jerry ZamzowHouston, TX

Affinity VideoNet

A.G. Foundation

Aileen V. and Redman Callaway Fund

Albert and Tricia Nichols Foundation

American Airlines

American Council of Learned Societies

Aristos Group

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

Debley Foundation, Inc.

Dr. Scholl Foundation

Earle M. Combs & Virginia Combs Foundation

Emelco Foundation

Faith, Hope & Love Foundation

Fieldstead and Company

First Fruit, Inc.

First Presbyterian Church of Evanston

First Rate Investment Systems

Foundation for Christian Stewardship

Fremont Bank Foundation

Gems of Hope

Foundations, Corporations, ChurchesGordon V. and Helen C. Smith Foundation

Grace Presbyterian Church

Gracia Foundation

Griffin, Kubik, Stephens & Thompson, Inc.

Hardee Foundation

Harris Foundation for the Living Environment, Inc.

Heather Knolls of Hamilton LLC

The Helmerich Trust

Heritage Valley Foundation

The Hoglund Foundation

Household International

International Foundation

International Service Agencies

JP Morgan Chase Foundation

James Huntington Foundation

John F. and Mary A. Geisse Foundation

The Joseph P. Kennedy, Jr. Foundation

JP Morgan Private Bank

Karis Foundation

The Kearny Alliance

Kenneth F. & Harle G. Montgomery Foundation

Lake Forest/Lake Bluff Morning Rotary Club

Levi Strauss Foundation

Loucks, Inc.

Lundman Family Foundation, Inc.

M.E. Foundation

MacAllister Machinery Co.

McDougal Family Foundation

Memorial Drive Presbyterian Church

Mennonite Foundation, Inc.

Mercy Ventures

Microsoft Corporation

Nationwide Insurance Enterprise Foundation

Nelson G. and Vera C. Hicks Charitable Foundation

Nike, Inc.

Oswald Family Foundation

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

Perception Research Services International

Peter Cornell Trust

Peter & Elizabeth C. Tower Foundation

Phoebe W. Haas Charitable Trust

Pipe Vine, Inc.

RBL Foundation

Richard H. Driehaus Foundation

Robert and Margaret Thomas Foundation

Robert W. Galvin Foundation

Rockdale Foundation

SAJE Foundation

Salomon Smith Barney Charitable Trust, Inc.

The Samueli Foundation

Sand Hill Group Foundation

Satrum Foundation

Schwab Fund for Charitable Giving

SG Foundation

Someone Cares Charitable

St. Andrew’s Presbyterian Church

Stuart Family Foundation

Stewardship Foundation

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

The Waitte Foundation

W.B. and Sue T. Turner Foundation

Weberg Foundation

Whittier Trust Company

William H. Hurt Foundation

Woodale Church

World Serve

The Zimmer Family Foundation

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

*Women’s Opportunity Fund supporters 21


and the Women’s Opportunity Fund

2122 York Road, Suite 340Oak Brook, IL 60523800.7WE.WILL or 630.645.4100www.opportunity.orgwww.womensopportunityfund.org

The best way to help poor

children is to create jobs for

their parents

Opportunity International Annual Report 2002

Documents

Transcript of Opportunity International Annual Report 2002