Gave Small Loans, Received Big Payments

When the microcredit-institution Banco Compartamos was noted on the stock exchange, the American NGO called Accion became wealthy. The NGO’s director, Maria Otero, was awarded a large bonus when she changed jobs, and became Secretary under Hillary Clinton in the US State Department.

According to calculations made by independent experts Compartamos has had effective interest rates well over 100% and up to 195% at the most, on some of their loans. This is much higher than advertised.

The well reputed researcher and blogger Chuck Waterfield wrote about interest rates at 105%. Read Waterfield's blog here

Another respected researcher and microfinance-blogger, David Roodman found effective interest rates as high as 195% when he used his calculator on the loans by Compartamos. Read roodman's blog

Compartamos’ level of interest rates, has been widely debated in the microfinance community. The bank today has a large number of clients. Many are doing well, but some have problems financing the cost of their debts.
Yet, some people made a lot of money on the banking adventure with Compartamos.

In 2007, Banco Comprtamos’ owners decided it was time to note the company on the stock exchange. In this process, the American NGO Accion made a fortune. Accion, who held a large portion of shares, sold one third of their ownership and cashed in. The organization has so far made around 150 million dollars profit on the investment.

Became rich

ACCION still has investments in 29 different microfinance institutions (MFIs) in a total of 22 countries. Most of the money generated by the sale of Compartamos-share have been reinvested in other projects.

Many of the people who work for Accion are voluntary, and others do their job at very low wages. But going through the public tax papers from the organization, we discover that one person received a very high salary, and also a huge extra payment after the transactions with Compartamos.

This person is Accions director over many years, Ms Maria Otero. Accion’s board wanted to give her a little extra reward when she left the NGO to enter a new position as Secretary in the US State Department.

NRK have gone through the Accion Tax papers (990-forms) over the last 8 years before Otero changed jobs. This is public information as referred to US legislation.

Maria Otero made more than 1 million US dollars in the years 2008 and 2009.
With the NGO Accion, the director’s salary has been over $ 200.000 for several years. But in Otero’s case, there is a big extra payment when she leaves the organisation. Accion’s spokeman Mr Bruce Macdonald explains that the reason in related to pension.

The 990-forms show that there is already a pension savings program at Accion. The extra money for Otero in 2009, was a special gesture from the board, only to Otero.

No comments

Thus, Hillary Clintons’ Secretary has been well rewarded after the debt portifolio of the poor Mexican women was publicly traded.

Ms. Otero does not want to give further comments on the agreement she reached with Accion when she left the microfonance NGO. But she does stand behind the explanation NRK has received from Accions spokesman.