2006 Annual Report

Pro Mujer provides Latin Americas poorest women with the means to build livelihoods for themselves and futures for their families through microfinance, business training, and healthcare support.

Table of Contents

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Letter from the Co-founders of Pro Mujer Letter from the Chairman of the Board and the Chief Executive Officer Where We Work Our Approach Small Loans Have an Enormous Impact Financial Services Business Training and Empowerment Health Services The Network and Pro Mujer International PM Argentina PM Bolivia PM Mexico PM Nicaragua PM Peru Main Accomplishments 2006 Financial Highlights Track Record 2001-2006 Board of Directors and Advisory Council List of Contributors

Client Story

5 6 7 8 9 10 11 12 13 14 15 16 17 18, 19 20 21 22, 23

Natividad Ramos Client of Pro Mujer Peru

Natividad Ramos is a sales representative for Avon, selling cosmetics to support her three children. Eager to grow her business, Natividad turned to Pro Mujer. At first she took out loans of aboutUS$100. But slowly, the size of her loans grew and so did her business. Her most recent loan was US$250. Higher earnings have allowed Natividad to enroll her children in school. She can also afford basic necessities such as a stove that have greatly improved the quality of life of her family. Natividad has been a Pro Mujer client for six years. She takes advantage of Pro Mujers health services, attending classes on preventive health and learning about hygiene and nutrition. Her children also visit a dentist regularly. Thanks to Pro Mujer, I can provide my children with better opportunities. One day I dream of owning my own beauty store, she says.

Letter from the Co-founders and Executive Directors

Dear Friends, We are pleased to share this annual report with you documenting the progress we made during 2006 towards unifying the leadership of Pro Mujer under our first CEO Ben Moyer, our longtime friend and board member. Ben chaired the Finance Committee of the board for six years and has first-hand knowledge of our operations. This is an important step in Pro Mujers development as an international microfinance and womens development network. Bens commitment to Pro Mujers mission makes him the ideal person to direct the future growth of the organization. Carmen will be directing our new regional office in Bolivia that will provide ongoing support and technical assistance to the Pro Mujer microfinance institutions and lead expansion to other countries in Latin America, drawing on the expertise and knowledge of the network. We see this regional office as a training hub, where we develop and implement staff training programs that will enable us to carry out the exponential expansion we are planning. Our ten-year goal is to provide our integrated financial and health services to at least two million of the 100 million of women in Latin America who live on less than 2 dollars a day. Pro Mujer is a mission-driven, not a profit-driven, institution. Our goal is to promote our clients sustainability while maintaining our own financial sustainability. We invest part of our retained earnings in health education and services that we deem essential for clients well being. We are grateful to have partners who recognize that investing in women is a longterm investment in social and economic stability, and understand the value of using microfinance institutions to promote social as well as financial capital. Thank you for your support. We need your help now more than ever as we scale up our operations to be able to provide services to the millions who so urgently need them. Thank you for you help.

Lynne R. Patterson Co-founder and Executive Director

Carmen Velasco Co-founder and Executive Director

Letter from the Chairman of the Board and the Chief Executive Officer

Dear Friends, Microfinance has been very much in the public eye in the last year. Recognition by the Nobel Peace Prize Committee of the important contribution of microfinance in poverty alleviation, the continued growth in the number of microfinance clients, the increased participation of global investors, as well as greater efficiency and higher levels of service to clients all combine to make this a most important time for our industry. Pro Mujer is at the forefront of this transformation. In November 2006, we hired our first Chief Executive Officer, who, along with our founders Carmen Velasco and Lynne Patterson, will lead our next level of growth and expansion. Our new Chief Financial Officer, Roco Cavazos, brings a wealth of experience in microfinance and banking. Our unique, integrated method of providing microfinance along with healthcare and social services has gained wide recognition as a robust approach to poverty alleviation. Our growth continues to exceed 30% and we are implementing infrastructure and technology enhancements to accelerate the reach of our services. A new office in Bolivia to support our network and a new MIS platform are examples of such investments. Our goal is to increase the number of clients from 173,000 to 625,000 in the next five years. An aggressive goal for sure, but it can be done. As long as our clients face unmet needs, we will remain committed to serving their needs and affording them the dignity to earn a living and better the lives of their families. In doing so, we will maintain our mission to serve as many women as possible with an approach that combines financial and health services. This integrated approach distinguishes us from other microfinance lenders and, importantly, helps us draw and retain clients. We are embarking on a study to capture the best practices in non-financial services, and we expect this will serve to make these offerings even better. Our staff is our most important asset, and increased capacity and measured staff growth are fundamental to continued expansion in the region. This is a very high touch business requiring close attention to the needs of clients. Each of our more than 800 employees across the Pro Mujer network strives every day to help reduce poverty in Latin America. We are committed to training our staff and enhancing the ranks of mid and upper level employees and will seek funding to increase such capacity. We are also expanding our product offerings. With support from the Bill and Melinda Gates Foundation, Pro Mujer is introducing new products such as housing loans without guarantees, loans for youth, and loans for clients living in rural areas. We are also exploring larger loans for our long term clients. While new loan products bring new challenges, we remain enthusiastic about finding new ways to serve clients with little or no access to financial or healthcare support. Additionally, we have begun to offer life insurance and expect to do a great deal more in this area in the years to come. As we look ahead, much remains to be done. We must accelerate our growth, concentrating not on what we already do, but rather on what remains to be done in a professional, business-like manner, while maintaining our not-for-profit, social driven mission. No matter what, we must never lose sight of our clients. We thank our staff and supporters for continuing to share our important mission. Our most sincere thanks,

Rita Foley Chairman of the Board

Ben Moyer Chief Executive Officer

Where We Work

Mexico

Nicaragua

Peru
Pro Mujer developed its sustainable integrated credit and training methodology in Bolivia (1990), and has successfully replicated the model in Nicaragua (1996), Peru (1999), Mexico (2001) and Argentina (2005). Over the last sixteen years Pro Mujers microfinance institutions have disbursed US$287 million in small loansranging from US$50 to $1,500with an average loan balance of US$192. Pro Mujer clients are encouraged to save. By the end of 2006, clients had saved US$10 million in individual accounts providing a financial buffer for their families in times of crises. All Pro Mujer microfinance institutions are self-sufficient, except for the newest one in Salta, Argentina, which opened its doors in November 2005.

Bolivia

Argentina

Our Approach

Pro Mujer has confidence in women, in their values, abilities and experience. We believe that the best way to fight poverty in Latin America is to empower women by giving them access to the resources and training they need to increase their income, maintain their own health and the health of their families, and achieve greater equity in their homes, workplaces, and communities. Pro Mujer is building a network of microfinance institutions (MFIs) in Latin America that are committed to serving the most economically and socially disadvantaged women in the region by delivering an integrated package of financial and human development services in a sustainable fashion. Pro Mujer organizes women in groups of 18 to 28 each called communal banks. Prior to making the first loans, each communal bank elects a board to run the meetings and forms solidarity groups to guarantee each other's loans. Clients also develop simple business plans showing how they will invest and repay their first loans. Pro Mujer requires that all clients save a portion of their income as a buffer against emergencies and illness. The communal banks meet in neighborhood centers near clients' homes and workplaces. At the repayment meetings, Pro Mujer health staff provide ongoing education in good health practices and the importance of primary healthcare. Staff also link clients with affordable health services via alliances or, if none exist, via Pro Mujer's own clinics. Pro Mujer considers the empowerment of women a key building block in ending poverty and creating more just societies. Its growing network of MFIs shares this conviction and is committed to implementing the services that are required to change the lives of the most marginalized and impoverished families in Latin America.

Small Loans have an Enormous Impact

People living in poverty have no access to traditional sources of credit because they cannot provide the formal guarantees required by banks. Women face even greater challenges because they are often excluded from educational and economic opportunities that men traditionally enjoy and cannot find employment in the formal business sector. Over the past three decades, thanks to the development of the micro-credit industry, women have used small loans to initiate or improve their small businesses, and have shown remarkable creditworthiness with very high repayment rates. Many women undertake business activities without experience or training. Usually they start a business in order to earn enough to care for their families. These businesses are justifiably defined as subsistence businesses. However, when the loan is supplemented with simple business skills training, women have shown they can be very successful entrepreneurs who repay their loans on time. Women use the profits from their small businesses to keep children in school, access primary healthcare for their families, and improve their homes. As their businesses become more profitable, they are able to improve the quality of life for themselves and their families and in many cases send their children to universities. The women also gain increased confidence and self-esteem, which enables them to play a greater role in decision making at home, at work, and in their communities. A stable income and savings also reduces their vulnerability and enables them to cope better with emergencies. There is no question that small loans can have an enormous, far reaching impact on the lives of women, children, families and communities.

Financial Services

Pro Mujer organizes women into communal banks of 18-28 members each, providing women with initial pre-credit training on the rules of borrowing and repayment, and of saving a portion of their income during each loan cycle. Working capital loans range from US$50 to $1,500 with a term of four to six months. Loans start small, US$50 to $100, and those women who repay on time qualify for larger loans. Pro Mujer also offers loans for short-term credit needs, and loans to pay for education and healthcare, and is developing other loans and insurance products that clients need. Members of communal banks guarantee one anothers loans, so if one woman cannot make her payment one week, others in the group will pay for her. The client then reimburses the group as soon as possible. Because responsibility for repayment rests on the group, Pro Mujer experiences very few late payments. The savings collected from individual members of the communal banks is deposited in a group savings account managed by a regulated bank. Clients can access their savings on the days their communal banks meet. Besides these voluntary savings, clients must save 20% of their loans as a buffer against emergencies such as an illness or natural disaster. With access to credit and other financial products, such as insurance and savings, women can build their assets and cope better with emergencies. Rather than focusing on day-to-day survival, women can plan for the future.

Business Training

Pro Mujer equips women with more than just credit. It also arms them with the business know-how and skills they need to thrive as entrepreneurs. Pro Mujer clients are resourceful, hard working, and even tenacious. They need to be, as their day-to-day survival and that of their childrendepends on it. What they lack is business training. From day one, Pro Mujer teaches women the fundamentals of running a small business, furnishing them with the skills they need to plan and grow their enterprise. Before extending a loan, Pro Mujer shows women how to develop a simple business plan, a tool to help them make the best use of credit. After getting a loan, clients meet periodically with

members of their solidarity group to make loan payments. Pro Mujer uses these meetings and other workshops to teach women business skills, such as how to price their wares, monitor income and expenses, and stay ahead of the competition. In fact, women take part in business trainings throughout the life of their loans, learning all the different aspects of running a successful business. Along the way women gain confidence in themselves as they apply the skills to their business. They also draw advice, support, and encouragement from loan officers and other women in their solidarity groups. Pro Mujers business training is all about helping women to believe in themselves and reach their full potential as entrepreneurs.

Empowerment

Pro Mujers integrated approach, one that combines financial services and health education, empowers women and helps them acquire the resources and skills they need to build more sustainable lives. As members of a communal bank, women learn group leadership and problem-solving skills, gaining greater selfconfidence and self-esteem. Each communal bank elects a board of directors to run meetings, forms a credit committee to approve loan applications, and creates solidarity groups through which members guarantee each others loans. Members of the communal banks gain confidence in themselves as they successfully borrow and repay their loans, set up savings accounts, and help each other solve business problems and repay their loans. Pro Mujer also helps women combat domestic violence, improve communication skills, and become more aware of their rights through workshops and self-help groups.

Health Services

Health is a womans most precious asset, a key to her wellbeing and her success in her many roles at home, at work and in her community. Healthcare is particularly crucial for women microentrepreneurs because an illness can quickly deplete savings and threaten their livelihoods and families. For these reasons, Pro Mujer integrates health education into repayment meetings of the communal banks and links clients with affordable health services. Pro Mujer Bolivia and Pro Mujer Nicaragua manage professionally staffed health clinics on-site at neighborhood centers, offering medical services ranging from PAP smears to breast exams, STD screenings and pre- and post- natal care for pregnant women. Pro Mujer Peru and Pro Mujer Argentina work in partnership with health organizations that provide primary healthcare for clients and their families, including post-natal care and vaccinations for children. Pro Mujer Mexico works closely with government agencies to link clients with health services and health campaigns on breast cancer, hypertension, diabetes and PAP examinations. Although the model varies from country to country, Pro Mujers goal is the same to help women maintain their own health and the health of their children and families through primary healthcare, early detection of disease, and good health practices. Using microfinance as a service delivery system for health education and services is a very cost effective way of improving clients health. For as little as US$2 to $9 per client per year, Pro Mujer is raising clients awareness of the importance of taking good care of their health. As a result, lives are saved. In one region of Nicaragua, for instance, 686 women out of 9,000 who had a PAP examination were found to have pre-malignant tumors. All got medical treatment thanks to Pro Mujer.

Health is a woman's most precious asset, 6 10

The Network

Pro Mujer is a womens development and microfinance network that serves the most economically and socially disadvantaged women in Latin America by delivering an integrated package of sustainable financial and human development services. All Pro Mujer MFIs share the mission and methodology and provide the same core services, though each adapts and develops the services according to the needs of local clients. Pro Mujer is a mission-driven network and uses the profits generated from financial services to build capacity, innovate, expand coverage, subsidize health education and services, and reduce the interest rate for clients whenever feasible.

Pro Mujer International

Pro Mujer International (PMI) is the network support office with staff located in New York City and in La Paz, Bolivia. PMI staff in New York are responsible for financial management, communications, and fundraising; staff in La Paz are responsible for maintaining the high quality of financial and human development services and for providing ongoing support and technical assistance to the MFIs.

Technical Assistance
Pro Mujer International supports the MFIs in accessing capital to fuel growth, diversifying their funding sources and strengthening their financial management. PMI also monitors the financial performance of the Pro Mujer MFIs and is responsible for the financial management of PMI and the Pro Mujer Loan Fund, a source of financing for Pro Mujer MFIs.

Financial Management
Pro Mujer International focuses on strengthening existing Pro Mujer microfinance institutions (MFIs) as well as expanding Pro Mujer to new countries. The technical assistance team promotes best practices by providing training and technical support, and facilitating learning between Pro Mujer MFIs. PMI technical staff provide services in the areas of strategic planning, market analysis, product development, internal control, information systems, and human resources.

Communications
Pro Mujer International raises the networks visibility and disseminates its achievements through the media, conferences, workshops, publications and website. It disseminates information about Pro Mujer to supporters, informs the public, educates the media about microfinance, and brands the Pro Mujer message consistently in all marketing materials. Pro Mujer International also works to strengthen internal communications within the network and develop new communication channels, such as the intranet.

Fundraising
Pro Mujer International raises funds to help the network carry out pilot programs, test new ideas, and develop services for clients. By serving as the fundraising arm for the network, PMI makes its microfinance institutions more efficient, allowing them to spend more of their resources on services for clients.

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Pro Mujer Argentina

Laura Strachan Director Location Salta, Jujuy

Founded in the city of Salta in late 2005 with support from the Inter-American Development Bank, JP Morgan Chase Foundation, the Weberg Family Trust, and Banco Hipotecario, Pro Mujer Argentina now provides loans to Argentinas poorest women entrepreneurs. The organization has grown quickly in the past year in order to meet high client demand. During its first year, Pro Mujer Argentina financed the microbusiness activities of almost 4,600 women of Salta while offering competitive interest rates. The institution expects to achieve financial and operational sustainability by the end of 2008, only three years after its inception.

Human Development Services

Pro Mujer Argentina provides clients with trainings in business skills, empowerment and health at its neighborhood centers. The institution also partners with local organizations to enhance services. It builds alliances with local health organizations to set up clinics in Pro Mujers neighborhood centers. These clinics provide services such as health and dental care that few clients could otherwise afford. For example, in one neighborhood center 590 of 600 women had never been to a dentist before joining Pro Mujer. Pro Mujer Argentina also signed an agreement with the Catholic University of Salta to develop training courses for Pro Mujer clients. The courses cover basic computer technology (for clients and their direct family members over 14 years of age), management of micro-businesses, and scholarships for the children of clients to attend the university.

Sandras Story

Sandra Saldao and her husband Daniel had attempted, but had lacked the resources, to have a successful business making and selling pewter handcrafts. Pro Mujer gave the couple a loan of 200 pesos (about US$65), which they used to purchase raw materials. Pro Mujer also gave Sandra and Daniel business coaching and training, as well as valuable contacts. The couple took out two more loans, each one a bit larger than the last. They became savvier about selling their products at artisan markets. They also became more adept at sales, bookkeeping and other aspects of running a business. Slowly their business grew, and they paid back their loans. Since getting help from Pro Mujer, Sandra and Daniel have seen their weekly earnings double from 200 pesos (about US$65) to 400 pesos (about US$130). Now the couple has a thriving business. They continue to live in their hometown. And more importantly, they can provide for themselves and their four-yearold daughter.

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Pro Mujer Bolivia

Carmen Velasco Executive Director Co-founder of Pro Mujer Locations El Alto, La Paz, Cochabamba, Sucre, Tarija, Santa Cruz, Potosi, Oruro, Trinidad, Riberalta

Human Development Services

A team of doctors and nurses deliver health services at Pro Mujer Bolivias neighborhood centers. Clients pay a monthly fee of US$0.50, which entitles them to primary healthcare for themselves and their families. Services include basic primary care and PAP tests for early cancer detection. Medical services for clients children include vaccinations and treatments for respiratory infections

Established in 1990, Pro Mujer Bolivia offers loan capital and opportunities to save a portion of profits through communal banks. Bolivia is a very competitive environment for microfinance, and Pro Mujer has successfully carved out its niche as one that reaches the most marginalized women, typically those migrating from the rural areas to the poor neighborhoods surrounding major cities such as La Paz. With funding from the Bill and Melinda Gates Foundation, Pro Mujer Bolivia is developing a loan product and training program for young entrepreneurs ages 16-24 to start their own small businesses. Young adults will form communal banks based on their specific needs and abilities.

and diarrhea.

In El Alto and Cochabamba, Pro Mujer Bolivia has established day care at six neighborhood centers where clients can leave their children while they attend communal bank meetings. Pro Mujer Bolivia also operates four computer centers where clients and teenagers learn computer skills and young children learn basic skills reading, writing and math. English lessons are also available.

Pro Mujer Bolivia also offers legal education and support to women who have suffered from domestic violence, educating them about their rights and how to get help.

Adelas Story

As a Pro Mujer client, Adela Hualuque was so successful at recruiting new members to form communal banks in Bolivia that she was asked to join Pro Mujers staff as a credit officer in 1994. Initially, in 1990 she received a loan to expand her textile and childrens clothing business. Around the same time, she began recruiting new clients for Pro Mujer. Adela credits Pro Mujer with giving her the self-confidence to take on increased responsibilities and overcome the isolation that is often associated with poverty. Before I was very timid and didnt talk to people. Now I interact with people all the time. Ive seen for myself that women can advance, that we are worth something and can help ourselves, said Adela. 13

Pro Mujer Mexico

Human Development Services
Javier Vargas Director Locations Hidalgo, Mexico State, Puebla, Queretaro Pro Mujer Mexico has done an outstanding job linking clients with other organizations. As a result, clients pay less for health services and women who su er from domestic violence have access to counseling services. A youth center is helping clients and their children to overcome substance abuse problems. In addition, thanks to an agreement with the Secretary of Health for the State of Hidalgo, Pro Mujer Mexico provides clients with health services and education on breast cancer, hypertension, diabetes and PAP examinations. Pro Mujer Mexico has leveraged its educational resources by working in partnership with Mexicos National Institute for Adult Education (Instituto Nacional de Educacin para Adultos, INEA). The partnership brings literacy education to some Pro Mujer Mexico neighborhood centers and helps women complete their schooling and access other educational opportunities. Pro Mujer Mexicos human development curriculum covers topics such as gender, self-esteem and domestic violence. Because many clients face domestic violence, Pro Mujer Mexico has developed training programs aimed at helping clients identify di erent types of violence, recognize the cycles of violence, and understand why so many women are unable to escape violent situations.

Pro Mujer Mexico began operations in the State of Hidalgo in 2001. Today it provides credit and savings services to more than 18,000 women organized in communal banks in 27 di erent communities in the states of Hidalgo, Queretaro, Mexico State, and Puebla. Pro Mujer Mexico is developing and piloting a new loan product for successful clients who have a long repayment history with Pro Mujer. These women require larger loans due to the success of their business. The new product will enable Pro Mujer Mexico to retain its very best clients.

Almost all her life, Georgina Gutirrez, 56, has worked at her familys business, foregoing school at an early age to help her parents raise and sell chickens, cows and pigs. Georgina bought chickens and chicken feed with her rst loan from Pro Mujer. She sold them for US$1.70 per kilo, earning about US$3.40 for each one. Georgina used additional loans from Pro Mujer to expand her business. She now also sells rabbits, having used one loan to purchase cages. Over the years, Georgina has taken out four loans from Pro Mujer. After years of hard work, she has seen her income rise. Georgina is excited about her daughters future. She is paying for her daughter to attend a private school, and is determined to see her daughter receive a solid education. My daughter is enjoying opportunities I never had, she said.

Pro Mujer Nicaragua

Human Development Services

Gloria Ruiz Director Locations Managua, Masaya, Chinandega, Leon, Ciudad Sandino, Esteli Pro Mujer Nicaragua has developed alliances with private healthcare organizations and pharmacies. The agreements allow Pro Mujer clients access to a wide range of health services that include gynecological consultations, general medicine, family planning, counseling, electrocardiograms, and PAP examinations. Services are provided at clinics in Pro Mujers neighborhood centers in urban areas. Pro Mujer health staff also offer PAP examinations in more remote rural areas. Many clients of Pro Mujer Nicaragua receive business training in marketing, business leadership, basic accounting, and other topics. The clients explore new market channels to promote their products, identify needed technical assistance and attend local and national events such as fairs and exhibitions. Pro Mujer Nicaragua also provides gender-focused training in family planning, domestic violence, leadership and selfesteem. Other workshops focus on conflict resolution, interpersonal relations, and childrens nutrition. Some male clients also attend these sessions. Pro Mujer Nicaragua leverages its impact by training clients to become community health advocates, particularly in the areas of sexual and reproductive health. These volunteers ensure that Pro Mujers message reaches well beyond its client base into the broader community.

Pro Mujer Nicaragua is Pro Mujers first replication outside of Bolivia. It was established in 1996 with funding from USAID, which financed both portfolio and start-up expenses. Pro Mujer Nicaragua has instituted new financial controls, internal audit procedures and loan review policies, and improved its management of late payments by clients. In addition, it has piloted several new financial products and introduced a new staff incentive system, rewarding high performance with increased compensation. One of Pro Mujer Nicaraguas new products that is most in demand is a loan for clients to make improvements to their homes. Pro Mujer Nicaragua will also assist clients to obtain legal title to their property.

Johanas Story

For Johana Vallecillo, a Pro Mujer loan helped to grow her business. But a PAP test saved her life. Johana, a 33-year old mother of three, had not had a PAP test in three years when she decided to have one at a Pro Mujer health clinic. The test detected the early stages of cancer. Pro Mujer referred her to a nearby hospital where she was treated with chemotherapy. Today she educates others in her community about the importance of preventive healthcare, making sure everyone she knows undergoes a PAP test. Everyday I thank God for my children and that I am alive and able to be with them, and also for my health, she said.

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Pro Mujer Peru

Human Development Services

Naldi Delgado Director Locations Puno, Juliaca, Ilo, Tacna, Moquegua Pro Mujer Peru was established in 1999, building on the knowledge and lessons learned in Bolivia and Nicaragua. The institution offers clients a variety of credit products, the principal ones being working capital loans, seasonal loans and education loans. All loans are made through communal banks. Pro Mujer Peru is also developing and piloting a new loan product for the most successful clients, and one for agro-commercial entrepreneurs in rural areas. Rural loans are offered on market days when farmers gather to sell their animals and produce. After three loan cycles, clients with high repayment rates can apply for seasonal loans to take advantage of special events such as the Christmas season. Education loans allow clients to invest in their future and the future of their children. Pro Mujer Peru acts as a facilitator rather than a direct service provider of healthcare services. The institution negotiates reduced rates with public and private health service providers. Based on their needs, clients choose a provider of health services. Pro Mujer Peru works closely with the providers to organize regular health campaigns, making medical staff available at neighborhood centers to offer vaccinations, PAP smears, dental care and other services. These campaigns educate clients about the importance of healthcare and how to access services. Pro Mujer Perus health educators follow up with clients undergoing medical treatment. Pro Mujer Peru also collaborates with MINSA (Ministry of Health) to help women and their families cope with alcoholism and domestic violence. Students from the Universidad Andina Nstor Cceres Velsquez provide legal assistance on matters such as domestic violence, claims of paternity rights and alimony. In partnership with the Ministry of Education, Pro Mujer Peru also provides day care in Juliaca and Tacna, offering educational activities for the young children of clients. The Ministry of Education supplies the teachers and educational materials.

Alejandrinas Story

Alejandrina chewed coca leaves to ease her hunger pains. But her six childrenRenso, Eduardo, Erika, Victor, Angel and Isabelneeded food, and Alejandrina had no money to pay for it. Unable to find a job, she started a business, making and selling miniature dolls representing characters from Peruvian culture. But Alejandrina could not sell enough to put food on the table. Then she heard about Pro Mujer on the radio: women just like herpoor women with no collateralwere getting small loans and coaching to start or expand a business. She signed up, and soon began taking part in business trainings. She drafted a simple business plan, and got a loan to buy clay, ribbons, feathers, and other materials to make dolls. Today, Alejandrina earns enough to support her family. Her weekly earnings have almost tripled, jumping from US$11 to about US$31. She dreams of someday owning a retail store.

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Main Accomplishments

In 2006, the Pro Mujer Network Built on a Remarkable Record of Success:

Launched a multiyear effort to develop new loan products for underserved groups, thanks to a US$3.1 million grant from the Bill & Melinda Gates Foundation. Pro Mujer Bolivia was awarded the Grameen Foundations 2006 Pioneer in Microfinance Award. Pro Mujer Peru received its first loan guarantee from the Grameen Foundation, leveraging US$600,000 to fuel its plans to reach more than 72,000 poor women by 2009. Pro Mujer Bolivia, Pro Mujer Nicaragua and Pro Mujer Peru received high ratings for efficiency and loan portfolio quality from MicroEnterprise Americas, a publication of the Inter-American Development Bank (IDB). Pro Mujer Peru was also recognized for its success in reaching the very poor. Pro Mujer Nicaragua won the prestigious 2006 Financial Transparency Award from the World-Bank-based Consultative Group to Assist the Poor (CGAP). Pro Mujer Peru and Pro Mujer Bolivia received Merit Recognition awards for 2006. The competition recognizes institutions that excel in transparent financial disclosure. Pro Mujer Mexico and its clients were recognized by Banamex (part of Citigroup) at the Premio Banamex a la Microempresa 2006. Pro Mujer Argentina was featured in the 2006 Social Action Report from the Argentine Banco Hipotecario.

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Pro Mujer International Combined Statement of Financial Position

December 31, 2006 and 2005 (expressed in US dollars) Assets Current Assets Cash and cash equivalents Investments Accounts Receivable Loans receivable, net of allowance for bad debt of $817,859 $656,011 or 2005 and 2004, respectively Grants receivable Property and equipment, net of accumulated depreciation and amortization of $833,770 and $605,026 for 2005 and 2004, respectively Other assets Total Assets 2006 2005

$7,937,071 169,522 616,026 26,074,788 2,589,583

$4,034,833 119,866 238,730 19,255,406 -

1,551,498 476,282 3 $39,414,770

1,340,498 165,394 2 $25,154,727

Liabilities and Net Assets Liabilities Notes payable Accounts payable and accrued liabilities Total liabilities 18,099,231 Net Assets Unrestricted Temporarily restricted Permanently restricted Total net assets 21,315,539 Total Liabilities and Members Equity 3 $39,414,770 2 $25,154,727 15,238,204 9,916,523

$16,089,065 2,010,166

$8,067,891 1,848,632

16,294,101 4,647,294 374,144

13,781,668 1,120,282 336,254

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Combined Statements of Activities and Changes in Net Assets

Years Ended in December 31, 2006 and 2005 (expressed in US dollars) Financial Revenue - Interest From loans From cash and cash equivalents 2006 9,486,723 166,334 9,653,057 Financial Expenses Interest expense Gain on translation (928,970) 49,927 (879,043) 8,774,014 ( 414,619) 8,359,395 2005 6,335,736 101,311 6,457,047 (364,847) 67,337 (297,510) 6,159,537 (272,683) 5,886,854

Net financial revenues, before allowance for loan losses Allowance for loan losses Net financial revenues, after allowance for loan losses

Donations and Other Revenue Grants and contributions Net assets released from restrictions Other revenue

5,879,655 596,785 6,476,440 14,835,835

2,709,014 460,798 3,169,812 9,056,666

Operating income, net

Program and Supporting Expenses Credit training program Management and general Fundraising Total program and supporting expenses Net Revenue Net assets beginning of year, as restated Net Assets, End of Year

5,401,590 2,917,453 439,457 8,758,500 6,077,335 15,238,204 21,315,539

4,938,418 1,212,232 205,287 6,355,937 2,700,729 12,537,475 15,238,204

A complete copy of our financial audit, performed by Gelman, Rosenberg & Freedman is available upon request.

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Pro Mujer Track Record 2001-2006

2001 Bolivia (1990)* Number of Clients** Number of Communal Banks Gross Loan Portfolio Client Savings Average Loan Balance Portfolio at Risk > 30 days Nicaragua (1996)* Number of Clients** Number of Communal Banks Gross Loan Portfolio Client Savings Average Loan Balance Portfolio at Risk > 30 days Peru (1999)* Number of Clients** Number of Communal Banks Gross Loan Portfolio Client Savings Average Loan Balance Portfolio at Risk > 30 days Mexico (2001)* Number of Clients** Number of Communal Banks Gross Loan Portfolio Client Savings Average Loan Balance Portfolio at Risk > 30 days Argentina (2005)* Number of Clients** Number of Communal Banks Gross Loan Portfolio Client Savings Average Loan Balance Portfolio at Risk > 30 days Total Number of Clients** Number of Communal Banks Gross Loan Portfolio Client Savings Average Loan Balance Portfolio at Risk > 30 days 20 35,808 1,516 $3,841,470 $2,366,096 $110 0.40%

2002 41,609 1,778 $4,524,725 $2,812,123 $143 0.20%

2003 49,750 2,095 $5,586,663 $3,575,826 $146 0.20%

2004 63,547 2,704 $7,150,438 $3,992,745 $147 0.10%

2005 82,737 3,617 $11,156,000 $4,515,000 $173 0.50%

2006 81,517 4,241 $13,561,700 $5,035,512 $183 0.30 %

12,501 474 $629,385 $333,028 $60 0.76%

16,028 407 $1,006,871 $471,024 $96 0.70%

15,825 515 $1,424,437 $668,462 $109 0.40%

17,413 610 $1,920,648 $777,756 $136 0.13%

14,830 618 $2,543,000 $980,000 $205 0.27%

19,641 908 $3,275,758 $1,360,332 $190 0.18 %

8,348 328 $685,161 $349,121 $69 0.00%

14,352 521 $1,313,289 $629,625 $105 0.00%

20,096 764 $2,049,802 $873,960 $116 0.00%

24,863 1,017 $2,708,599 $1,221,343 $118 0.00%

30,101 1,298 $3,416,000 $1,544,000 $122 0.00%

35,876 1,626 $5,597,626 $2,039,856 $166 0.00 %

2,567 93 $231,141 $47,376 $90 0.00%

6,596 252 $574,021 $205,902 $98 0.00%

11,872 489 $1,248,814 $561,740 $123 1.17%

15,733 603 $2,750,000 $746,000 $212 1.00%

18,008 825 $4,062,340 $1,416,131 $260 1.71%

520 20 $52,000 $4,000 $101 0.00%

4,598 185 $411,288 $139,733 $119 0.20 %

56,657 2,318 $5,156,016 $3,048,245 $109 0.39%

74,556 2,799 $7,076,026 $3,960,148 $128 0.23%

92,267 3,626 $9,634,923 $5,324,150 $131 0.18%

117,695 4,820 $13,028,499 $6,553,584 $137 0.19%

143,921 6,156 $19,917,000 $7,789,000 $174 0.45%

159,640 7,785 $26,892,648 $9,991,564 $191 0.43%

*Start year of Microfinance Institution (MFI). **Number of Clients includes borrowers and savers.

Board of Directors
Executive Directors and Co-Founders Lynne Randolph Patterson (New York) Carmen Velasco (Bolivia) Chairman of the Board Rita Foley Vice Chairman Gail S. Landis Evercore Asset Management, LLC Secretary P. Gregory Hess Schiff Hardin LLP Treasurer * Ben Moyer Wainwright Investment Counsel Founding President Ruth B. Cowan American University Honorary Past President Peter H. Johnson Developing World Markets, Inc. Honorary Past President Rosemary Werrett G7 Group Helen E. Clement Peter W. Greenough Greenough & Company, Inc. William K. Kirst J.P. Morgan Securities, Inc. Mayu Hume President of the Peru Board * Ben Moyer resigned from the Pro Mujer Board in November 2006 to become Pro Mujers first Chief Executive Officer. Rebecca Mendoza Pfizer Mauricio Pags Rosario Prez Maria C. Richter Ann Schroeder Latin Source/Global Source Denise Simon HSBC Halbis Partners (USA), Inc Monique Skruzny MBS Value Partners Maryann B. Sudo Luis A. Viada The McGraw-Hill Companies Ambassador Linda Watt Strategia, Inc. Board Presidents of PM MFIs Carlos Alfaro President of the Argentina Board Mara OKeefe President of the Mexico Board

Advisory Council
Carmen Bez Omnicom Group Leslie Benning Benning International Jos Cancela Hispanic USA Helen E. Clement Elaine Edgcomb The Aspen Institute Arminda Mindy Figueroa Scholastic Entertainment Linda de Jess-Cutler The Bravo Group Clara Lipson Financial Planning Association Karen Lithgow Western Union Bonnie Lunt Bonnie Lunt Management Mary Jane ONeill Carmen M. Segarra Citigroup Teresa Segarra Changing Our World

Board Advisors
Jonathan Morduch Professor Wagner Graduate School of Public Service, New York University Thomas Studwell Legal Counsel Charles Waterfield Microfinance Advisor/Consultant

Carla Skodinski Van Beuren Management Monique Skruzny MBS Value Partners Silvia Surez 21

Contributors 2006
Visionaries $400,000 and above
Anonymous The Bill & Melinda Gates Foundation The Weberg Trust Helen D. Buchanan Jos Cancela Hispanic USA Helen E. Clement Ruth B. Cowan Daniel and Aurelia Cristofano Elizabeth Eiss Rita Foley GE Energy Financial Services Goldman Sachs Virginia Green Amy Hagedorn Susan Henshaw Jones Peter H. Johnson William R. Kelly Charles Marshall MCJ Foundation MEX-AM Cultural Foundation, Inc. Morgan Stanley Frannie and Ben Moyer Oswald Family Foundation Rosario Perez Ann Schroeder Leila Shakkour LLL Foundation Denise Simon Carla Skodinski Carol and Charles Stocking Maryann Sudo Alvaro Tafur The International Alliance for Women Trull Foundation Luis A. Viada Linda Watt Rosemary and Noel Werrett Patricia and George White Elizabeth and Steven Edersheim Elaine and Paul Edgcomb Eileen Fisher, Inc. Therese Esperdy Howard Finkelstein Joan Ganz Cooney Connie Gelb and Scott Otteman Peter Greenough and Christine Bates Edward Groves and Jennifer Choe Jane Hartley John and Mary Ann Hollihan Guillermo Jasson Mike Kauffman Jennifer and Tim Kingston William and Cristina Kirst Jessica Ladd and William Haskell Dorothy Largay Leila and Jayron Larijani Ted and Carol Levy Bonnie Lunt Bonnie Lunt Management Gary and Gigi Mankoff Nancy Marsh Diana Martinez and Theodore Merz Larry McCaffrey Mark McMahon and Roberto Moreira Meadwestvaco Foundation Eduardo and Gillian Mestre Barbara and Nicholas Millhouse Mindich Family Foundation Carolyn Molina Jonathan Morduch Peter Neumeier Thomas and Charlene O'Neill Mary Jane and Mike O'Neill Ellen Pack Maury and Pat Pages Palladium Capital Management Pfizer Roger Rindge Sandra Roe Fund Zachary Rosen Isabella Salman Greg Sawers Josie Sentner Rick Sergel and Susan Bagget Silver Family Foundation Monique Skruzny Nancy Smith David and Lynn Sobocinski Valerie Solomonoff Jack Stadler The Ironwood Foundation Alan and Debbie Steckler Antonia Stolper George Stonbely Silvia Suarez Patricio and Griselda Suarez-Buyo Frederick and Mary Sykes The McGraw-Hill Companies Community Partners Employee Giving Campaign

Ambassadors $25,000$100,000
American Jewish World Service New York Community Trust Wallace Special Projects Fund John F. and Mary A. Geisse Foundation The SEEP Network The Hurlbut-Johnson Charitable Trusts JPMorgan Chase EMCB Emerging Markets Charity Benefit Woodcock Foundation

Supporters $500$999
James and Lorraine Abruzzo Marci Alboher and Jay Goldberg Beverly Alexandre John Archer Virginia and Thomas Baxter Candace Beinecke Freya and Richard Block Family Foundation Andrew Brown Sila Calderon Joyce Chang Mary and Harry Chung The Cobb Family Foundation Roberta Connolly and Arthur M. Miller Christine Cook Jack and Laura Corkey Eugene and Joan Daly Jenice and Richard Delano Buzz and Liz Doherty Miguel Dueas Marfe Ferguson Arminda Mindy Figueroa The Ginda and Benji Fisher Charitable Trust Katherine Fitzhugh Stuart Gilbert Martha and David Goss Alejandro Gutierrez Henry and Christine Happel Kelly Hindley Craig Horsley Maria de Jesus Hume Jane Janeczek Andrew Jessop Marjorie Kean and Jim Ferri Kite Family Foundation Lillian Kraemer Leanne Lachman Teresa LaRocco Eric Lomas Shelley Longmuir Helen Lowe Frank Madonna Chris and Brenda Major Charles Manatt Juliet Mattila Annette McEvoy Elizabeth Means and Charles Gardner Rebecca Mendoza Morgan and Elizabeth Mitchell

Partners $10,000$24,999
Alumni of Students for 60,000 American International Group, Inc. Anonymous Atkinson Foundation Christina and Charles Bascom Bessemer Trust Cogan Family Foundation Stephen and Joanne Downes Western Union Foundation Green Fund Gruber Family Foundation Darrell and Linda Hinson HSBC Bank USA, N.A. JPMorgan Chase Foundation Gail Landis and Victor Bernstein Lopez Low Foundation Maria C. Richter Sarita Kenedy East Foundation, Inc. Simpson Thacher & Bartlett LLP Standard and Poor's The Rohatyn Group, LLC West Foundation, Inc. Tinker Foundation

Benefactors $1,000$4,999
Abernathy MacGregor Group Maria Elena and Andres Anker Anonymous Brian Arbogast and Valerie Tarico Arkin Family Foundation Avrum Katz Foundation Elizabeth Beinecke Leslie Benning Benning International Jack and Maryvonne Bittner Bobolink Foundation Benjamin Bratt and Talisa Soto Barbara Brindeldolph and Nat Stoddard Ciara Burnham Chester and Ellen Clark Lenore Cooney Kathleen Corbet JoAnn Corkran and Randy Ezratty Elizabeth Dater

Patrons $5,000$9,999
Jean Anderson AnJel Fund Carmen Baez Omnicom Group Barclay Investments, Inc. Booz Allen Hamilton

22

Contributors 2006
Mark Morrill and Marilyn Greenberg Charles Stewart Mott Foundation Matching Gift Program Nomi Ghez Foundation Barbara O'Connell Elizabeth O'Donnell Gavin Parfit Nancy Pedot Robert and Judy Perl Andrea Petroni Francisco Pujol Sara Rioff Gretchen Schaffner Ana Teresa Segarra Martha Sproule Alice Starr Thomas Studwell Julie Vigdor Anita Volz Wien Stephen Wallenstein Penny Zuckerwise Deborah Brooks Stanley and Lynn Brooks Melonie Brophy Mary Rose Brusewitz Tabor Butler Annelore and Henry Butler Cheryl Cameron Rosa Maria Carbonell Gloria and Ulrich Caro Deborah Caro Kerry Carr Marcy Chambers Elizabeth and Jay Chandler Irma Clemente Lorenza Cocco Roberta and Richard Cocco Alexandra Connell Enid Coverdale Jane Creel Maureen Crow Andy Cummins Patricia Dahl Alun Davies Anke Dening and Paul Volker Patricia Di Silvio Martha Dipaolo Kimberly and Scott Donaldson Violet Edersheim Kari and Kamal Elias Claude Erbsen Amalia Estenssoro Michael Evans William Farrell Edward Feighny Jesse Ferro Michael Fieldman Jerramy Fine Joseph Flores Lydia and John Foley Linda and Mike Foley Lili Forouraghi Maria Forte Anne Gallagher Sergio Galvis Bethzaira Garcia Karen Garrison Nancy Gerson Leslie Gilstrap Penny and Ed Glassmeyer Dale and Lois Good Sascha Graham Melanie Grisanti and Gordon McLeod Olivia Ha and Ludovic Grandchamp des Raux Birgitta Hanan Mary Jane and Kenneth Hellyar Tim Herrmann Laura Hill Steven and Elizabeth Hirsch Diana Holmes Jane Hughes Turnbull Bernard Hulin Kay E. Jackson Lesley Jackson Susan Jenkins Andrei Jezierski Jane Johnson Elizabeth Johnson Gail Jones Margaret and Fred Karsten Judith Keefer Katie Kelly Thomas and Sharon Kennedy Rushworth M. Kidder Donald Kilpatrick and Karen S. Lavine Joan Kosan Sandra Kresh Karen Kurrasch Louise Ladwig Kathleen Lapier Nancy Leff Katharine Legg Jay and Robin Lewis Dana Lightman Victor Lipko Clara Lipson Tracia Luh Mariella Mahan Susan Mainwaring Roberts Ravi Malhotra Cynthia and Michael Maloney Philip Manheim Susan Marx Richard and Margaret McCann Robin McDonald Patricia McEveney Daniel and Teresa McGovern Mary McKinley Ragnhild Melzi Ana Menendez-Tuckman Andrea Merenyi Paul Meyer Robert Meyjes Chris and Nancy Michalski Middlesex Financial Company, LLC Phyllis and Sherry Moe Roger Mooney Jill Murray Eric and Lizbeth Negrin Margot Nones Elizabeth Norton Maureen O'Neill and Floyd Weinstock Kathleen O'Sullivan Donna Peek Ilse Pitts Barbara Plimpton Cynthia Poett Portland Financial Planning Group Lynn Povich Janet Prystowsky Audra Query Sean Quigley Anika Rahman Eugene L. and Susan M. Roberts Carey Roberts Sherry Robin Victoria and Mark Rockman Rachel Rosen Bob and Lisa Rosenbloom Miles and Susie Rubin Melanie and Robert Sabelhaus Barbara and Ira Sahlman Leslie and Ricardo Salmon Anita and Jack Samet Norman and Christine Saunders Lisa Schineller Karl Schmidt Linda Schoenthaler Helen Shan Sisters of Saint Dominic Herschel Sklaroff Barbara Slonevsky Barbara and Constantino Stamatelos Susan Stautberg Linda Steck and David Rosen Samuel Stern Cynthia Stone Tom and Bonnie Strauss Katherine Styponias Raquel Suarez Francine Suarez Evelyn Sugar Christy Swanson Virginia Sykes Shifra Teitelbaum Elena Andrea Tulloch Mary and James Valentine Frances Varron Marsha and David Veit Rafael and Diana Vinoly Gretel and J.D. Von Pischke Lauren Wedeles Angela Weeks Florence Weicker Erika Weinstein Vera Weintraub Joy and Thomas Werner Maria C. Wirth Paula Wittbrodt Andrew and Carolyn Wright Lily Yip Christine Zivkovic Luanne Zurlo

Friends $100$499
Judith S. Abrams Valeria Achoa Michael Adams Adedayo Adedeji Lilyan Affinito Teri Agins Cristina Almeida Ambac Financial Group,Inc. Harold Amer Madeline Amgott Jane Andrews Alyce Andrews Robert Annibale Anonymous Karin Atala Susan Atkins and Eben D. Shapiro Laure Aubuchon Edith Aviles Mary Lou Barney Jacqueline Barry Thomas Beadleston John Beatty Theresa El Behrendt David Bergerson Ronald Berman Leonard Birnbaum Heather and Peter Boneparth Stacey Bouchard Patricia Boyle William and Gloria Breuninger William Broadbent Maureen Broderick

Photos from Pro Mujer. Special thanks to Consuelo Lopez. Designed by www.ruconcept.com. Environmentally printed by www.gregbarberco.com

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Offices
New York, USA Lynne Randolph Patterson Executive Director & Co-founder 240 W. 35th Street, #404 New York, NY 10001 Tel: 212-952-0181 promujer@promujer.org La Paz, Bolivia Carmen Velasco Executive Director & Co-founder agarcia@pro-mujer.org Pro Mujer Argentina Federico Kirschbaum Finance and Administration infopma@pro-mujer.org Pro Mujer Bolivia Vivianne Romero Director lapaz@pro-mujer.org Pro Mujer Mexico Javier Vargas Director info@promujer.org.mx Pro Mujer Nicaragua Gloria Amelia Ruz Director pmnica@promujer.org.ni Pro Mujer Peru Naldi Delgado Director promujerperu@promujerperu.org.pe

www.promujer.org