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[January 30, 2006]

FEATURE: Ex-banker launches venture to fight poverty in Latin America+

(Japan Economic Newswire Via Thomson Dialog NewsEdge)WASHINGTON, Jan. 30_(Kyodo) _ (EDS: TWO PHOTOS ACCOMPANYING THIS STORY ARE AVAILABLE VIA E-MAIL. THE PHOTO ADVISORY IS TO FOLLOW)

Once a dedicated, industrious worker at the Bank of Tokyo, now the Bank of Tokyo-Mitsubishi UFJ, Atsumasa Tochisako was climbing the corporate ladder as an international banker with stints in Panama and Peru.

Tochisako also headed two special task forces in Tokyo to revive ailing trading companies and became the representative of the bank's Washington office before leaving it in 2003.

Now, with his financial expertise, the 52-year-old has launched a new initiative to help the fight against poverty in Latin America.

And his strategy is like no other -- a combination of remittance and microfinance, in which lenders extend small loans to poor people who are denied access to established financial institutions.

In 2003, he founded Microfinance International Corp. in Washington, which runs Alante Financial, a remittance agency operating in and around the capital.

Sending money home has always been a stressful task for immigrant workers. Although commission fees have halved to some 7 percent over the last five years, the Inter-American Development Bank still views the rate as high and imposing a heavy burden on poor people.


Microfinance International's mission, Tochisako says, is to provide remittance services at lower costs and offer money for small loans, typically around $500, to cash-strapped immigrant workers -- most of whom do not have access to financial services through conventional banks.

For its remittance services, Microfinance International charges $6 for up to $150 and $9 for between $151 and $2,000.

"I hope that building credit history through our services will enable immigrant workers to eventually take out loans from conventional banks and improve their standard of living," Tochisako told Kyodo News in a recent interview.

"Some of the money is also channeled to associated microfinance agencies in countries such as El Salvador and Bolivia for use in traditional microfinance," he said.

The market for remittance services is by no means small. An IDB study shows remittances from the United States to South America and the Caribbean totaled $45.8 billion in 2004, topping the combined amount of official development assistance and foreign direct investment to the region.

Lowering transaction costs means more money for families of immigrants. And kindness seems to matter a lot to Tochisako in running Microfinance International, capitalized at $6.1 million.

"Oftentimes, these people are not treated humanely in the United States," he said. "We've had customers come to us and cry because we were the first financial institution to treat them with respect."

Erminalda Bonilla, an El Salvadorian living in Washington, gives high marks to Microfinance International's services, which she uses to send money to her relatives in the Central American country.

"Transactions are quick and the staff is very kind," said Bonilla, who moved to Washington recently with her husband, a construction worker. "I would say the service is excellent, helping us a lot."

Tochisako said he had always wanted to use his expertise to help reduce poverty in Latin America since he studied Spanish in Mexico in the late 1970s on a company-sponsored training program.

"When I saw a wave of terrorist acts and civil wars there, I thought Latin American countries would never give hope to people at the bottom of society," he said.

"I was also frustrated by international organizations because they appeared to be spending a lot of money conducting surveys and publishing reports, rather than taking specific action to tackle poverty."

Luckily, microfinance has drawn growing attention worldwide in the past few years, with the United Nations calling 2005 the "International Year of Microfinance."

High-profile entrepreneurs and companies have shown interest, too. Last year, Pierre Omidyar, the founder of eBay Inc., contributed $100 million to start a fund that invests in microfinance, including Tochisako's company. Deutsche Bank also launched a similar fund worth $75 million.

Alongside the efforts of like-minded people, Tochisako's venture carries on -- with the hope of improving the lives of underprivileged people, not through aid but with decent financial services.

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