Marquette University-based humanitarian organization Global Brigades is spinning off a for-profit microfinance firm with the backing of four founding investors, including Jim Sartori of Plymouth-based Sartori Cheese and Jim Stollberg of Brookfield-based Gemini Global Advisors.
The founders of the spinoff, called Eskala – based on the Spanish verb “to climb” – said Wednesday its initial seed round raised over $1.2 million and its current loan portfolio is more than $800,000. Its goal is to empower 18 million people in rural Central American communities by creating and investing in banking cooperatives.
“Why a for-profit?” said Shital Vora, chief executive officer of Global Brigades. “We want to harness the power of capitalism to help others. It’s something we call ‘banking for good.’ A for-profit allows us to issue shares of Eskala to our cooperative partners and also attract impact investors who want to do good while sharing in the financial upside as we grow. We couldn’t do either through our current Global Brigades not-for-profit structure.”
Eskala said its model is based on providing investment and loan capital to banking co-ops, ensuring majority ownership is maintained by local co-op members and issuing each banking co-op shares of Eskala.
Global Brigades was founded in 2003 by Marquette students and today says it is the world’s largest student-funded humanitarian organization, sending medical, dental, public health and environmental brigades to Honduras twice annually. More recently it expanded its brigades to Panama.
Vora said Global Brigades has discovered over the past 18 years that three factors contribute to a community’s self-sufficiency: access to health and dental care, access to clean drinking water and access to capital.
Before launching Eskala, Global Brigades helped residents create 136 banking co-ops that provided more than 12,000 loans to local businesses. Eskala founders said it can now expand its efforts to provide access to capital beyond just making loans.
“Through equity exchanges, we create a true win-win for communities that previously lacked the banking infrastructure to grow their economies,” said Sartori, chairman of Sartori and a Marquette alumnus. “Eskala is the first social enterprise to include its target communities as significant shareholders and the first to make equity investments in banking cooperatives at scale.”
“By investing in community-run co-op banks, Eskala allows us to invest in the rural communities and small businesses that need it the most,” Sartori added. “At the end of the day, we’re going beyond just loaning money to local entrepreneurs. We’re giving them access to capital that will provide them the power to innovate – to think bigger about their businesses – and to prosper. Now, a coffee-bean farmer in Honduras can do more than just survive; he can grow his business and create a nest egg for his family’s future.”
In addition to Marquette alumni, Eskala plans to engage with current Marquette students through its commercial banking program. Stollberg, founder and president of Gemini Global Advisors and a Marquette alumnus, noted that three of the four founding Eskala impact investors are Marquette graduates and all investors are Wisconsin natives.
“Impact Investors, what we passionately call those who invest with community impact in mind and not just financial profit, are the engine that drives Eskala,” he said.