The European Bank for Reconstruction and Development (EBRD) has recently extended a medium-term credit line of EUR 2 million, worth about USD 2.9 million, to Union Bank, a private bank in Albania, in order to improve microcredit lending activities, especially to local small and medium enterprises (SMEs). Edmond Leka, Chairman of the Board of Directors of Union Bank said that “while much of the banking world is retrenching lending activities,” this credit line will be essential in allowing Union Bank to increase its on-lending capabilities to its clients. Until now, the ERBD has provided about USD 786 million to various infrastructural, financial, and energy-related projects in Albania.
Category: Deals
MICROCAPITAL BRIEF: The Andean Development Corporation (CAF) Approves USD 400,000 Investment in the Investment Corporation for Microfinance in Central America and the Caribbean (SICSA) to Provide Finance for Microfinance Institutions (MFIs)
The Andean Development Corporation (CAF), a multilateral financial institution, has approved a USD 400,000 investment in the Investment Corporation for Microfinance in Central America and the Caribbean (SICSA), a microfinance fund that aims to improve the “institutional capacity” of microfinance institutions (MFIs) [1].
MICROCAPITAL BRIEF: The International Finance Corporation (IFC) and the Government of Switzerland Launch Three-Year Program to Improve Financial Infrastructure for Small and Medium Enterprises (SMEs) in Azerbaijan, the Kyrgyz Republic, Tajikistan, and Uzbekistan
The International Finance Corporation (IFC), the investment arm of the World Bank, and the Government of Switzerland have launched a three-year program to improve the financial infrastructure and increase financial access for small and medium enterprises (SMEs) in four Central Asian countries: Azerbaijan, the Kyrgyz Republic, Tajikistan, and Uzbekistan [1,2,3].
MICROCAPITAL BRIEF: The European Bank for Reconstruction and Development (EBRD) Provides $5m Loan to Uzbekistan’s HamkorBank for Micro- and Small Enterprises (MSEs)
The European Bank for Reconstruction and Development (EBRD) has extended a USD 5 million credit line to HamkorBank, an open joint-stock commercial bank in Uzbekistan, to increase the availability of financial services to micro- and small enterprises (MSEs).
MICROCAPITAL BRIEF: European Fund for Southeast Europe Attracts $41m, Will Fund Microfinance in Four Additional Countries: Armenia, Azerbaijan, Georgia, Belarus
The European Fund for Southeast Europe (EFSE), a major funder of institutions that finance housing and micro- and small enterprises, recently announced that it has secured funding commitments equivalent to USD 41 million, much of which will be invested in four countries in which it will invest for the first time: Armenia, Azerbaijan, Georgia and Belarus.
MICROCAPITAL BRIEF: Small Industries Development Bank of India (SIDBI) Takes 11% Stake in Microfinance Institution Bandhan for $10.7m
Bandhan Financial Services Private Limited, a Indian microfinance institution reports that it has completed its first major equity raise with a INR 500,000,000 (USD 10.7 million) investment from the government-backed Small Industries Development Bank of India (SIDBI).
MICROCAPITAL BRIEF: SKS Microfinance Partners with State Bank of India (SBI), State Bank of Hyderabad (SBH) and State Bank of Mysore (SBM) to Integrate 600 Branches
SKS Microfinance has signed agreements to launch an integrated cash management system for 600 of its branches: 390 branches will partner with State Bank of India (SBI), 150 with State Bank of Hyderabad (SBH) and 60 with State Bank of Mysore (SBM).
MICROCAPITAL BRIEF: The Inter-American Development Bank (IDB) Approves $10m Credit Guarantee for Banco de Crédito e Inversiones (BCI), a Commercial Bank in Chile, for Lending to 80,000 Small Entrepreneurs
The Inter-American Development Bank (IDB), which provides multilateral financing in Latin America and the Caribbean, has approved a USD 10 million credit guarantee as part of a program from Banco de Crédito e Inversiones (BCI), a Chilean commercial bank, to provide loans to 80,000 small entrepreneurs [1,2,3]. The program will be carried out by BCI Nova Banca Emergente, BCI’s microfinance arm [1]. BCI will utilize credit histories and background information from some of its corporate clients that have microentrepreneurial client bases [1]. It will also utilize new management and credit technologies including electronic payments and online collection [1]. Additionally, the IDB’s Multilateral Investment Fund (MIF), an autonomous fund administered by the IDB, has provided a USD 600,000 grant to BCI to support training for lending staff [1]. The program will focus on Santiago, the Chilean capital, where an estimated one million people are unbanked [1].
MICROCAPITAL BRIEF: Samsung Group Opens First Branch of $860m Miso Microcredit Foundation in Korea
Samsung Group has opened the first branch of the Miso Microcredit Foundation. The Miso Microcredit Foundation, also known as the “Smile Microcredit Foundation,” is a government-led microcredit lending program in Korea that plans to raise KRW 2 trillion (USD 1.69 billion) over the next 10 years. KRW 1 trillion (USD 848 million) has been donated from six non-financial companies, including Samsung Group, Hyundai-Kia, SK, LG, Posco and Lotte; and another KRW 1 trillion (USD 844,000) has been pledged from 18 financial institutions including Kookmin, Woori, Shinhan, Hana and Industrial Bank of Korea, as well as government-run institutions such as the Korea Development Bank, Daegu Bank and Busan Bank.
MICROCAPITAL BRIEF: Eton Park Capital Management Announces Plans to Invest $54.5m in Mexican Microfinance Institution Financiera Independencia
Eton Park Capital Management and Financiera Independencia (FI), a Mexican microfinance institution (MFI), have signed an agreement by which Eton Park will subscribe for 70 million shares of FI for MXN 700 million (USD 54.5 million).
MICROCAPITAL BRIEF: Alitheia Capital, Goodwell Investments BV and JCS Investments Announce First Close of $60m Equity Fund for Microfinance in Nigeria and Ghana
Alitheia Capital, Goodwell Investments BV and JCS Investments have announced the first close of a USD 60 million equity fund focused on microfinance in Nigeria and Ghana. Investors include Dutch development bank FMO and a number of Dutch high net-worth individuals and institutional investors. Further financial details have not been released.
MICROCAPITAL BRIEF: Inter-American Development Bank (IDB) Provides $17.5m Loan Facility to Dominican Commercial Bank ‘Banco BHD’ to Lend to Small and Medium Enterprises (SMEs)
The Inter-American Development Bank (IDB), which provides multilateral financing in Latin America and the Caribbean, has extended a USD 17.5 million loan to Banco BHD, a commercial bank based in the Dominican Republic, in order to “strengthen its capital position and expand its long-term lending to the corporate sector, including small and medium-sized enterprises (SMEs)” [1,2,3]. The facility is made up of a USD 5 million loan with a five-year tenor and a USD 12.5 million loan with an eight-year tenor [1]. The USD 12.5 million loan will be extended in conjunction with an unspecified third party [1].
MICROCAPITAL BRIEF: The International Finance Corporation (IFC) to Provide $3m to AB Microfinance Bank Nigeria Limited
The International Finance Corporation (IFC), the investment arm of the World Bank, has announced that it will provide a loan worth NGN 450 million, the equivalent of over USD 3 million, to AB Microfinance Bank Nigeria Limited, a Nigerian microfinance institution (MFI) [1,2,3]. In turn, AB Microfinance Bank will provide loans to “microenterprises and low-income entrepreneurs in Nigeria” [1]. The tenor of the loan is five years, and is denominated in Nigerian Naira [1]. This will eliminate foreign exchange risk for AB Microfinance Bank, thus allowing the MFI “to offer long term Naira products to its customers” [1]. In October of 2008, the IFC provided AB Microfinance Bank with a NGN 150 million loan, the equivalent of over USD 998,000, which was used to help the MFI begin operations [1]. AB Microfinance Bank Nigeria Limited was created in 2008 by Access Microfinance Holding AG, an investor in MFIs, and Impulse Microfinance Investment Fund, a fund managed by Incofin Invesment Management [3,4,5].
MICROCAPITAL BRIEF: Bai Tushum and Partners, a Microfinance Institution (MFI) Based in the Kyrgyz Republic, Agrees to Adopt ‘FinnOne’ Banking Software from Nucleus Software Exports Limited
Bai Tushum and Partners, a microfinance institution (MFI) based in the Kyrgyz Republic, has agreed to a deal with Nucleus Software Exports Limited, a banking software company, to adopt FinnOne, Nucleus’s group of applications that support the business affairs of financial institutions [1,2,3,4].
MICROCAPITAL BRIEF: MoneyGram International to Extend Money Transfer Services to Two Cooperative Banks in India, Abhyudaya Co-op Bank Limited and Thane Janata Sahakari Bank Limited
MoneyGram International, a U.S. financial services company, will soon extend its money transfer services to two cooperative banks in India, Abhyudaya Co-op Bank Limited and Thane Janata Sahakari Bank Limited [1,2,3,4]. This brings the total number of banks in India offering MoneyGram’s money transfer services to 18, with Abhyudaya and Thane Janata Sahakari being the first cooperatives to do so [1]. MoneyGram has offices in New Delhi and Mumbai, and this deal will extend the company’s reach to “smaller cities and towns in the states of Maharashtra, Karnataka, and Gujarat” [1]. According to the World Bank, Indian remittances in 2008 totaled USD 52 billion [1].
MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Provides $6m Line of Credit to Bank Respublika, a Commercial Bank in Azerbaijan
The European Bank for Reconstruction and Development (EBRD), a financial institution “owned by 61 countries and two intergovernmental institutions,” is providing a USD 6 million line of credit to Bank Respublika, a private commercial bank in Azerbaijan [1,2,3]. The line of credit will be used by Bank Respublika to provide loans to micro, small, and medium enterprises (MSMEs) in Azerbaijan [1]. The loans will be have both medium and long-term tenors [1]. The EBRD has previously provided loans to Bank Respublika totaling USD 27 million [1]. MicroCapital reported another, more recent, EBRD investment in Azerbaijan in December of 2009; a USD 10 million loan to AccessBank, a microfinance institution (MFI) [4]. The repayment, however, is to be in the AZN value of the loan, the equivalent of over AZN 8 million [4].
MICROCAPITAL BRIEF: Overseas Private Investment Corporation (OPIC) Provides $25m Loan to ProCredit Holding to Lend to Micro, Small, and Medium Enterprises (MSMEs)
The Overseas Private Investment Corporation (OPIC), an “independent U.S. government agency” that provides services to facilitate foreign investment to “less developed countries,” has approved a loan of USD 25 million to ProCredit Holding, “a [German] parent company of 22 development-oriented banks” operating in Latin America, Eastern Europe and Africa with a gross loan portfolio of EUR 3.3 billion, the equivalent of over USD 4.9 billion, as of the end of 2008 [1,2,3]. This loan will be used by ProCredit to expand their loan provision to micro, small, and medium enterprises (MSMEs) [1]. MicroCapital reported on a 2005 loan from OPIC to ProCredit worth USD 30 million [4]. OPIC also made a USD 3 million loan to a ProCredit microfinance institution (MFI) in Moldova in 2005, and a USD 5 million loan to ProCredit Bank in Ukraine in the same year [5,6]. OPIC Acting President Dr. Lawrence Spinelli has commented on the importance of the latest loan in terms of allowing ProCredit to “diversify its capital base” [1].
MICROCAPITAL BRIEF: Indian Microfinance Technology Provider ‘Financial Information Networks and Operation’ (FINO) Receives $15m in Equity Capital from HSBC Private Equity, Intel Capital, and the International Finance Corporation (IFC)
Financial Information Networks and Operation (FINO), an Indian company that provides technological products to microfinance institutions (MFIs), banks, and insurance companies, has received a INR 70 crore infusion, the equivalent of over USD 15 million, in private equity funding from HSBC Private Equity, the equity investment arm of the Hong Kong bank; Intel Capital, the investment arm of the American semiconductor producer; and the International Finance Corporation (IFC), the investment arm of the World Bank [1,2,3,4,5]. Details of how much was invested by each organization were not made available. Rishi Gupta, Chief Financial Officer of FINO, has stated the capital will be used to help “meet the demand” for various products including servers and biometric cards that store transaction records [1]. The transaction was advised by Avendus Capital, an investment bank based in India [1,6]. In an apparently separate transaction, HSBC and Intel have purchased the stake of FINO formerly owned by Legatum, an investment group based in Dubai [1,7]. Legatum originally bought this stake in 2007 for USD 4.5 million, as reported by MicroCapital [1,8]. According to Mr. Gupta, HSBC and Intel purchased the stake for a “far higher,” though unspecified, price [1]. The percentage stake that HSBC and Intel now have is also unspecified.