by Christopher Maggio -

MICROCAPITAL.ORG STORY: The European Bank for Reconstruction and Development (EBRD) Increases Equity Stake in Russia’s Transcapitalbank from 25 Percent to 28.6 Percent

The European Bank For Reconstruction and Development (EBRD) is preparing to increase its ownership of Transcapitalbank, a Russian bank that provides loans to “medium-sized corporates, as well as micro and small businesses” and individuals [1,2,3] The subscription to a new issue of ordinary shares will increase EBRD’s stake from 25 percent 28.6 percent [1].

by Stefanie Rubin -

MICROCAPITAL.ORG STORY: Government of Italy Provides $9.1m to MicroFinance Investment Support Facility for Afghanistan (MISFA)

Afghanistan´s finance minister Omar Zakhilwal and Italy’s ambassador to Afghanistan, Claudio Glaentzer, have signed a bilateral agreement under which the Italian government will provide USD 9.1 million (Euro 6.4 million) to the Afghan microfinance sector. The money will be given to a trust fund within the Ministry of Finance, managed by MicroFinance Investment Support Facility for Afghanistan (MISFA), an independent agency. Under the agreement, the loans will be disbursed to poor Afghans in the western provinces of Herat, Farah and Baghdis, where Italian troops operate [1]. The agreement coincides with an announcement by Italian Defense Minister Ignazio La Russa that 400 of Italy’s 3,000 troops in Afghanistan would be withdrawn after the November 7th election [2].

by Kenny Kline -

MICROCAPITAL.ORG STORY: Bandhan India receives $32m loan from PNB

Bandhan, a microfinance institution (MFI) in Kolkata, India, received a Rs 1.5 billion loan (USD 32 million) loan from Punjab National Bank (PNB).  Bandhan plans to add a minimum of 100,000 new borrowers over the next five months.  PNB has linked the rate of the loan to its benchmark prime lending rate (BPLR), so the movement in BPLR will affect Bandhan’s cost of funds.  Currently the BPLR is at 11 percent.  The cost of the loan including a processing fee and operational cost is estimated to be 11.75 percent.  The loan will be offered for a three-year period.  Bandhan will use the funds to offer micro loans to poor women at 12.5 percent per year. [1]

by Kenny Kline -

MICROCAPITAL.ORG STORY: IFC to Raise $300m in Bond Issue in Japan Market for Microfinance Programs

The International Finance Corp (IFC) will aim to raise USD 300 million through a bond issue targeted at Japanese investors to finance microfinance programs.  This is the first time that the IFC will issue bonds with the intent to lend to microfinance institutions (MFIs).  The bond listing and sale will be arranged by Daiwa Securities.  The bond will be listed in Australian dollars and New Zealand dollars and will be restricted to Japanese retail and institutional investors.  IFC has obtained ratings of Aaa/AAA (investment grade) from Moody’s and Standard & Poor’s rating services respectively.  It is expected that IFC will invest an amount at least equal to the bond proceeds in supporting microfinance activities.  See bibliography sections [7]-[15] for Microcapital.org’s coverage of recent IFC investments.  According to Nina Shapiro, IFC treasurer and vice president for finance, the IFC is considering bond issuances in other regions as well, specifically the European bond markets.  IFC estimates that financing needed in the microfinance sector will reach USD 1.8 billion in 2010. [3][4]

by Stefanie Rubin -

MICROCAPITAL.ORG STORY: Credit Guarantee Corporation of Malaysia Agrees to Guarantee $29.6m of Standard Chartered´s Loans to Small and Medium-Sized Enterprises (SMEs)

Standard Chartered Bank Malaysia Bhd, in collaboration with the Credit Guarantee Corporation of Malaysia (CGC), has launched the “Portfolio Guarantee Scheme.” The plan calls for the CGC to act as a partial guarantor for the USD 29.6 million in loans that Standard Chartered plans to disburse to small and medium enterprises (SMEs) over the next 18 months [1].

by Christopher Maggio -

MICROCAPITAL.ORG STORY: The Central Bank of India, A Nationalized Commercial Bank, Signs Deal with Government of Orissa and State-Owned Industrial Promotion and Investment Corporation (IPICOL) for Rs 25,000 Crore (USD 5.3 Billion) Line of Credit for Micro, Small and Medium Enterprises (MSMEs) Over 5 Years

The Central Bank of India, a nationalized commercial bank has plans to extend Rs 25,000 crore, the equivalent of over USD 5.3 billion worth of credit over five years to micro, small and medium enterprises (MSMEs) in the east coast state of Orissa [1,2]. The credit comes after the Central Bank signed a deal with the government of Orissa and the Industrial Promotion and Investment Corporation (IPICOL), a state-run organization that “[operates] the State incentive schemes to large and medium industries under the Industrial Policy of the Government” [3,4]. Prior to this, the Central Bank of India had only made investments worth Rs 3,000 crore, the equivalent of over USD 644.8 million, in the Orissa state [1].

by Kenny Kline -

MICROCAPITAL.ORG STORY: EBRD Becomes Shareholder in Tajikistan’s Agroinvestbank

The European Bank for Reconstruction and Development (EBRD) is acquiring 25 percent plus one share stake in Agroinvestbank of Tajikistan for up to TJS 50 million (USD 12 million).  Agroinvestbank and EBRD have worked together previously through the EBRD Tajik and Micro and Small Enterprises Framework (TMSEF), the EBRD Trade Facilitation Programme (TFP), and the EBRD Tajik Agriculture Finance Framework (TAFF). [4]

by Kenny Kline -

MICROCAPITAL.ORG STORY: USAID Launches Partnership With Grameen Foundation With $162.5m Credit Guarantee

The U.S. Agency for International Development (USAID) and Grameen Foundation announced a new private-public partnership to support local currency financing to microfinance institutions (MFIs) throughout the developing world. To launch the partnership, the two parties signed a Memorandum of Understanding to formalize the agreement, and entered into a USD 162.5 million join guarantee agreement aimed to help MFIs gain greater access to financing. The twelve-year program is the largest credit guarantee to date under USAID’s Development Credit Authority, and also marks the first time that a non-governmental organization will serve as the facilitator. Grameen Foundation will manage the credit risk of the pool and vet the microfinance institutions who would like to access the funding, while both organizations will issue joint guarantees together. [1]

by Kenny Kline -

MICROCAPITAL.ORG STORY: MFX Solutions Closes First Currency Hedge Transaction; $4 million Currency Swap With MicroVest

MFX Solutions Inc., a company providing currency hedging solutions designed specifically for microfinance, closed its first hedging transaction, a USD 4 million currency swap with MicroVest I, LP. The cross-currency swap transaction allowed MicroVest I, a Washington DC-based microfinance investment fund, to make a USD 4 million, 3-year loan in Columbian pesos to Fundacion Mundo Mujer, a Columbian-based microfinance institution. [3]

by Radhika Chandrasekhar -

MICROCAPITAL.ORG STORY: PT Bank Tabungan Pensiunan Nasional Tbk (BTPN) in Indonesia receives $70m financing from International Finance Corporation

Indonesia’s PT Bank Tabungan Pensiunan Nasional Tbk (BTPN) received a USD 70 million financial package from the International Finance Corporation (IFC). The package includes an option to covert USD 15.9 million from debt to equity and a USD 54.1 senior loan or “prime rate” loan. IFC has also committed to help BTPN raise more funding throughout the next three years. [1]

by Christopher Maggio -

MICROCAPITAL.ORG STORY: International Finance Corporation (IFC) Purchases Bonds Worth 11.5 Billion Colombian Pesos (USD 6.2 Million) to be Loaned by Remittance Distributor ‘Giros y Finanzas’

International Finance Corporation (IFC), the investment arm of the World Bank, has invested in Giros y Finanzas, a remittance distributor and loan provider based in Colombia, by purchasing bonds worth 11.5 billion Colombian pesos, the equivalent of over USD 6.2 million [1,2,3]. The investment will mainly be used to provide loans to clients who receive remittances (money transfers from friends or family in other areas or countries) through Giros y Finanzas for the purposes of small business development or home ownership [1].

by Radhika Chandrasekhar -

MICROCAPITAL.ORG STORY: Equitas Micro Finance India Receives $21.6m Loan from Small Industries Development Bank of India (SIDBI)

A recent article from The Economic Times stated that Equitas Micro Finance India, a microfinance institution (MFI) based in Chennai [2], received a USD 21.6 million (Rs 100 crore) loan from Small Industries Development Bank of India (SIDBI). Equitas’ Managing Director, P.N. Vasudevan, stated that the loan is repayable over four years, and that the MFI intends to raise USD 21.6 million more from other lenders. [1]