MICROCAPITAL STORY: International Finance Corporation (IFC) Worldwide Microfinance Investment Deals March and April 2009 of $51m and EURO 7m

The International Finance Corporation (IFC), a member of the World Bank Group, provides investments and advisory services to build the private sector in developing countries. It made the following microfinance investment deals in March and April 2009 of USD 51m and EURO 7m.

USD 4 million was invested in April by the IFC in Bai Tushum, a microcredit company in the Kyrgyz Republic. The investment should create financial opportunities for 10,000 new microentrepreneurs, especially in underserved areas. An increased range of financial products will also be developed. Bai Tushum, established in 2000, currently serves over 18,000 clients with most clients residing outside the capital. At the end of 2008 Bai Tushum had total assets of USD 66 million and a gross loan portfolio of USD 35 million.

The IFC provided a loan of up to EURO 7 million in March to Microcredit Foundation EKI in Bosnia and Herzegovina. This investment will assist EKI’s microlending program to make over 4,200 new loans by 2011 to micro and small enterprises that have little or no access to formal financial systems. Part of this loan (EURO 1 million) will support home improvement projects with a focus on energy efficiency. Currently EKI has over 53,000 clients and was originally a World Vision project before registering as a micro credit organization in 2000.

The IFC stated in April that it will invest up to USD 15 million in Azerbaijan’s AccessBank. AccessBank provides financial services to Micro and Small Enterprises (MSE) within Azerbaijan. Its mission is to be the leading provider of credit to MSE’s. This long term loan will reach underserved regions of the country and provide MSE’s with access to credit. AccessBank was founded in 2002 and is owned 100% by foreign shareholders. It has total assets of AZN 193.9 million (USD 241.3 million) and a loan portfolio of AZN 163.7 million (USD 203.7 million) as at 31 December 2008. A press release from the bank announced that USD 100 million of the loan portfolio is for micro loans where loans to customers start from USD 100. Refer to this MicroCapital story for further details on this investment deal.

A USD 5 million investment in Indonesia’s first microfinance wholesale bank, Bank Andara by the IFC during April will provide tailored financial products and services to more than 2,000 microfinance institutions (MFIs), particularly microentrepreneurs and low-income households. A recent MicroCapital story details the launch of Bank Andara and its investors.

In the Democratic Republic of Congo (DRC) the IFC announced a loan to Rawbank USD 7 million in April, to increase lending to micro, small and medium companies through local banks. The focus will also be on providing women to increase their access to banking products and improve their financial management skills to enable them to apply for loans. According to the IFC press release Rawbank had total assets of USD 226 million at 31 December 2008.

The IFC signed an agreement in April with Sogebank S.A. of Haiti to improve financing of microenterprises and small and medium enterprises (SMEs). This is aimed at improving access to financial services for 2,500 SMEs over a five year period. At this stage the role of the IFC is advisory, however they are considering a USD 4 million investment.

The IFC will make a USD 20 million investment in Paraguay’s Banco Continental through the IFC Recapitalization Fund in March. The IFC Recapitalization Fund was founded in February 2009 to support banks during the current financial crisis. The investment in Banco Continental will be in the bank’s stock and ensure continued lending to SMEs.

Created in 1956, the IFC aims to foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. According to the organization’s 2008 Annual Report, the IFC made new investment commitments of USD 11.4 billion in the 2008 fiscal year.

By Sally Levy, Research Assistant

Additional Resources:

International Finance Corporation (IFC): Home

World Bank Group: Home

IFC Press Release: IFC Recapitalization Fund made $20 million investment in Paraguay’s Banco Continental; IFC to Help Boost Financing for Smaller Businesses in Haiti;IFC Financing to Help First Global Bank Serve Needs of Jamaican Businesses; IFC Supports Peru’s First Specialized Micro-insurance Company Targeting Low-income Segments; IFC Investment to Expand Microcredit to 10,000 Entrepreneurs in Kyrgyz Republic; IFC Helps Expand Access to Finance to Microentrepreneurs in Bosnia and Herzegovina; IFC Helps Azerbaijan’s Access Bank Expand Services to Micro and Small Enterprises; IFC Helps Establish Indonesia’s First Microfinance Wholesale Bank to Serve Millions; IFC Helps DRC’s Rawbank Extend Financial Services to Smaller Businesses, Women

MicroCapital Story: International Finance Corporation (IFC) Investing USD 15m in Azerbaijan’s AccessBank to Expand Microfinance Services;

MicroCapital Story: Indonesian Wholesale Microfinance Bank Andara is Officially Launched after $5m Investment from Mercy Corps, International Finance Corporation (IFC), Hivos-Triodos Fund (HTF), and CORDAID

MIX Market: Bai Tushum; EKI;

Bai Tushum: Home

EKI: Home

AccessBank: Home

Rawbank: Home