Swedish company Investment AB Kinnevik has committed to investing USD 10 million in MicroVest II , an equity fund focusing on microfinance and part of the microfinance investment group MicroVest Capital Funds. Additionally, Kinnevik announced the acquisition of 30 percent of shares worth USD 4 million in an Ukrainian farming company. Henrik Persson, Head of New Investments at Kinnevik, comments, “”Micro financing and farming are focus sectors for new investments in Kinnevik and we are pleased to have identified investments within these growth areas.” In October 2007, MicroCapital reported that Kinnevik invested USD 14 million in the African microfinance institution (MFI) Bayport Financial Services.
Category: Deals
MICROCAPITAL STORY: Incofin of Belgium Invests in Asomi Finance Private Ltd. in India
Incofin, a Belgian microfinance fund manager that invests in microfinance institutions (MFIs), has taken a 34 percent stake in Asomi Finance Private Ltd. (Asomi FPL) in Assam, India. Asomi FPL is an institution that undertakes microfinance, income generation and development activities in the state. Over 90 percent of its operations is devoted to microfinance, and Asomi has grown from less than 4,000 borrowers in 2005 to over 30,000 reached through 40 branches as of 2008. Incofin was established in 1992, and this is Incofin’s first investment in India.
MICROCAPITAL STORY: Bellwether Microfinance Fund Invests $480K in Equitas Micro Finance India
In May 2009, Bellwether Microfinance Fund, a private equity fund based in Hyderabad, India, reported a USD 479,600 equity investment in Equitas Micro Finance India, a Chennai based microfinance institution (MFI), to the CGAP Microfinance Dealbook, the monthly report on microfinance market transactions. The deal was denominated in local currency. MicroCapital has reported on a May 2009 USD 3.7 million investment by MicroVentures in Equitas as well as a securitization worth USD 3.0 million in March 2009.
MICROCAPITAL STORY: BlueOrchard Finance Disburses Over USD 28m to Microfinance Institutions in May
BlueOrchard Finance disbursed over USD 28 million in loans to 13 microfinance institutions (MFIs) in May. As reported to the CGAP Microfinance Dealbook, BlueOrchard Finance loaned USD 15.5 million through the Dexia Micro-Credit Fund and USD 1 million through the BBVA Codespa Microfinance Fund. BlueOrchard is also an advisor to the Microfinance Enhancement Facility, launched by the International Finance Corporation and KfW Entwicklungsbank, which disbursed its first four loans totaling USD 12 million.
MICROCAPITAL STORY: Triodos Bank Invests USD 900,000 in Microfinance Institutions in May
Triodos Bank has reported to the CGAP Microfinance Dealbook investments totaling approximately USD 900,000 this month. The bank has invested 834,000 in IMON International in Tajikistan through the Triodos-Doen Foundation, and has loaned 61,000 to BICC in Honduras through the Hivos-Triodos Fund.
MICROCAPITAL STORY: Incofin Invests USD 4.4m in Microfinance Institutions Seilanithih Limited, Apoyo Integral, and Mibanco
Incofin is a Belgium-based private social investment company that invests in microfinance institutions (MFIs) through loans, equity investments, and guarantees. In addition to its own portfolio, Incofin manages four microfinance funds – the Impulse Microfinance Investment Fund, the Rural Impulse Fund, VDK MFI Fund, and Volksvermogen. As of April 30, 2009, Incofin had invested EUR 127.8 million (USD 178.5 million) in 65 MFIs across 26 countries. In May, Incofin reported to the CGAP Microfinance Dealbook that it had offered debt products totaling USD 4.375 million to three MFIs – Seilanithih in Cambodia, Apoyo Integral in El Salvador, and Mibanco in Peru.
MICROCAPITAL STORY: International Finance Corporation (IFC) Invests over $514m in Micro Small and Medium Enterprise (MSME) Initiatives During 2008
The International Finance Corporation (IFC), a member of the World Bank Group, provides investment and advisory services to developing countries. Created in 1956, the IFC seeks to foster sustainable economic growth by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Within its Global Financial Markets sector, the IFC supports microfinance in order to promote successful and sustainable economies in low and middle income countries. The IFC provides direct and indirect investment and advisory services to the microfinance sector. Its focus is on creating and supporting commercially viable microfinance institutions (MFIs) that can attract private capital thereby responding to unmet demand for micro loans. Furthermore it seeks to demonstrate the business case for commercial microfinance and also promote it as an asset class to private institutional investors. During 2008 the IFC invested USD 513.8 million in micro small and medium enterprise (MSME) initiatives and provided USD 840,000 worth of advisory services. Following is detailed information about IFCs activities in the microfinance arena.
MICROCAPITAL STORY: Hyderbad-based Spandana Microfinance Seeks to Raise Rs 300 Crore (USD 63.7 million) by June
According to a press release in The Economic Times of India, Spandana Sphoorty Financial Ltd. is set to raise Rs. 300 Crore (USD 63.7 million) in equity funding and is currently in talks with over two dozen investors. The deal would raise the company’s valuation to Rs. 1,800 Crore (USD 382.2 million). Spandana intends to use the funds to expand and strengthen its capital adequacy ratio. The Reserve Bank of India (RBI) raised its capital adequacy requirements (CRAR) for non-bank financial institutions last August, requiring institutions to meet a 12 percent CRAR by April 2009 and a 15 percent CRAR by April 2010. Spandana’s CRAR stood at 19.5 percent last fiscal year. To read a MicroCapital story on the RBI’s new regulations, click here. Currently Mumbai-based JM Financial holds an 18 percent stake in the microfinance institution, private equity fund Valiant holds 11 percent, Lok Capital has a 5 percent stake and another 15 percent is held by senior employees, with this round of funding their stakes will be diluted.
MICROCAPITAL STORY: Share Microfin Seeks to Raise USD 50 Million From International Finance Corporation (IFC) and Others
SHARE Microfin, a microfinance institution (MFI) based in Hyderabad, India, has announced that it intends to raise USD 50 million in equity funding. According to the press release on VCCircle, the International Finance Corporation (IFC) is considering investing, and the MFI is currently in talks with other investors. If the transaction proceeds it will be one of the biggest Indian microfinance transactions after SKS Microfinance‘s USD 75 million deal in November last year. To read a MicroCapital story about that deal, click here. With the funding, SHARE will expand in states such as Chhattisgarh, Uttar Pradesh, Madhya Pradesh, Uttranchal, and West Bengal. No other information regarding the deal or potential investors was available at the time of this release.
MICROCAPITAL STORY: SKS Microfinance Raises Rs. 75 Crore (USD 15.8 million) Debt and Lists Bonds on Bombay Stock Exchange
Hyderabad-based microfinance institution SKS Microfinance has issued one-year 10 percent bonds, raising Rs. 75 Crore (USD 15.8 million). The bonds, which will be listed on the Bombay Stock Exchange (BSE), were placed with Standard Chartered Bank’s Foreign Institutional Investments. Standard Chartered was the sole book runner and lead arranger for the issue. The funds will be used by SKS to extend loans to new and existing borrowers.
CGAP Microfinance Dealbook: April 2009 Transactions
The CGAP Microfinance Dealbook publicizes microfinance capital market transactions in an effort to bring greater transparency to the industry. This information is made freely available as a public service. Parties to microfinance transactions are encouraged to submit their deals to this effort. The following deals were collected for April 2009:
CGAP Microfinance Dealbook: March 2009 Transactions
The CGAP Microfinance Dealbook publicizes microfinance capital market transactions in an effort to bring greater transparency to the industry. This information is made freely available as a public service. Parties to microfinance transactions are encouraged to submit their deals to this effort. The following deals were collected for March 2009:
MICROCAPITAL STORY: Islamic Development Bank (IDB) Grants $10m Loan to the Development and Employment Fund (DEF) of Jordan
The Islamic Development Bank (IDB) has extended a USD 10 million soft loan to the Development and Employment Fund (DEF) in Jordan to develop microfinance in the country. The IDB consists of 56 countries that are all members of the Organization of the Islamic Conference and contribute to the bank’s capital. In addition to facilitating trade among member countries, the IDB grants loans and provides funding for social and economic development projects in member countries. Because the financial operations of the IDB are intended to be consistent with Shariah law, the IDB also provides technical assistance and training in Shariah banking practices. For more information on the how Shariah law affects banking practices in general and microfinance in particular, see this MicroCapital Paper Wrap-Up. The IDB was founded at the Conference of Finance Ministers of Muslim Countries in Jeddah in December 1973 and commenced operations in October 1975. The DEF is a public government fund that commenced operations in 1991 with the objective of promoting independent employment and developing the small business sector. Initially under the government’s Industrial Development Bank, the DEF has been independently managed since 1992.
MICROCAPITAL STORY: CreSud SpA Invests $900K in Comixmul of Honduras, UMF Arariwa of Peru, and Proempresa Edpyme of Peru
CreSud SpA, a socially responsible Italian private investment company, has reported three microfinance investments in the past three months to the CGAP Microfinance Dealbook, a monthly report on microfinance capital market transactions. In February 2009, CreSud SpA granted a loan of USD 250,000 to Comixmul of Honduras. In March 2009, CreSud SpA loaned USD 250,000 to Unidad Microfinanza Arariwa (UMF Arariwa) of Peru. In April 2009, CreSud SpA closed an equity investment of USD 400,000 in Proempresa Edpyme of Peru. CreSud SpA invests in companies with a minimum portfolio of USD 500,000 and three years of operational history. As of 2006, 88 percent of CreSud SpA’s investments were in Latin America and the Caribbean.
MICROCAPITAL STORY: responsAbility Global Microfinance Fund (rAGMF) Makes Loans to Caritas del Peru, MiBanco of Peru, Proempresa of Peru and FIELCO of Paraguay in March 2009 totaling $10.5m
In March 2009, responsAbility Global Microfinance Fund (rAGMF) reported four loans to the Consultative Group to Assist the Poor (CGAP) Microfinance Dealbook, a monthly report on microfinance capital market transactions. responsAbility is a Switzerland-based asset management firm that connects social investors with microfinance institutions (MFIs). Three loans were made to Peruvian MFIs Caritas del Peru (USD 500,000), MiBanco (USD 7.5 million) and to Proempresa (USD 1 million (in local currency)). A Loan was also granted to FIELCO of Paraguay of USD 1.5 million. These loans were made through responsAbility’s Global Microfinance Fund (rAGMF) which invests either directly in MFIs or indirectly through microfinance investment vehicles.
MICROCAPITAL STORY: MicroVentures Reports Investments in Equitas Microfinance of India and Sahayata Microfinance of India, Caritas del Peru and Fondesurco of Peru
During March and April MicroVentures, a microfinance investment vehicle, reported four loans to the Consultative Group to Assist the Poor (CGAP) Microfinance Dealbook, a monthly report on microfinance capital market transactions. Two equity investments were made to Indian microfinance institutions (MFIs) Sahayata Microfinance Ltd and Equitas Microfinance Ltd in March of USD 3.7 million and USD 4.4 million respectively. MicroVentures also granted loans to Caritas del Peru of USD 1 million and to Fondesurco of Peru of USD 750,000 during April.
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.
MICROCAPITAL STORY: Oikocredit Loans $2.3m to Microfinance Institutions Kitunda SACCO, Intellekt, FMFB Tajikistan, and PMRCA Perelik
For the month of April, the Netherlands-based Oikocredit Ecumenical Development Cooperative Society, a microfinance funding source, reported four loans to the CGAP Microfinance Dealbook, a monthly report on microfinance capital market transactions. Oikocredit granted a one-year USD 75,000 loan to the Kitunda SACCO in Tanzania, a four-year loan of USD 91,000 to Intellekt of Russia, a three-year loan of USD 2 million to the First Microfinance Bank of Tajikistan (FMFB), and a three-year USD 132,000 loan to PMRCA Perelik in Bulgaria. Oikocredit provides loans to about 500 microfinance institutions in 70 countries around the world. Between January and March 2009, Oikocredit provided USD 19.2 million in new loans in 69 countries. The organization currently funds 758 projects of which 501 are microfinance projects, the rest involving other types of social service. Through microfinance alone, Oikocredit claims to reach 16.8 million people. Oikocredit distributes its funding as follows: 40 percent in Latin America, 14 percent in Africa, 27 percent in Asia, 18 percent in Central and Eastern Europe, and 1 percent elsewhere. In November, MicroCapital reported that USAID and Oikocredit would partner together to contribute USD 36.2 million to microfinance institutions (MFIs) over the next ten years.