African commercial microlender Blue Financial Services (BFS) has announced plans to purchase the entire issued share capital of South African microlender Credit U Holdings for the price of RND 278 million (USD 36 million). The purchase will consist of a 50 percent cash and 50 percent share offer to all Credit U shareholders, at a ratio of one BFS share for every 2.25 Credit U shares. Both companies’ shares are traded on the Johannesburg Securities Exchange.
Category: Deals
MICROCAPITAL STORY: Following Strategic Review, the Gates Foundation to Focus on Microsavings Within Microfinance Initiative
The Bill and Melinda Gates Foundation, a charitable organization that was created in 2000 with an endowment of USD 35.9 billion, plans to direct hundreds of millions of dollars to promoting savings programs designed for the poor over the coming years, reports the Wall Street Journal. Following a review of its existing microfinance grants and a broader study of its financial services strategy, the Gates Foundation decided to focus its efforts on promoting savings in the developing world.
MICROCAPITAL STORY: Nigerian Global Trust Bank Acquires Ugandan Microfinance Institution CML (Commercial Micro Finance Limited)
Nigeria-based Global Trust Bank has recently acquired Ugandan microlender CMF (Commercial Micro Finance Ltd) for an undisclosed price. Global Trust will assume control of CMF’s eight branches and six agencies as part of the deal, and CMF will change its name to Global Trust Bank Uganda. Global trust plans to continue CMF’s microlending operations.
MICROCAPITAL STORY: General Electric Consumer Finance (GE Money), based in London, supports FINCA Village Banking, based in Washington DC, with USD 1.5 million Grant
General Electric Consumer Finance (GE Money) has made a three-year commitment worth USD 1.5 million to support FINCA’s (Foundation for International Community Assistance) Village Banking Campaign. Founded in 1984, FINCA’s Village Banking aims to reach 1 million of the world’s lowest-income entrepreneurs by the end of 2010. During 2008, FINCA will use the first USD 500,000 installment of the funding to expand in Middle East, Africa, Eurasia and Asia.
MICROCAPITAL STORY: ICICI Foundation, IFMR Trust and CRISIL to Develop Rating Standards for Microfinance Institutions (MFIs) in India
The ICICI Foundation, IFMR Trust, and CRISIL have entered into a deal to rate microfinance Institutions (MFIs). The organizations believe that rating evaluations will help MFIs develop into viable commercial entities with increased access to mainstream financial investors. In the agreement, CRISIL will rate the institutions and develop rating criteria to be used by others, IFMR will provide access to enterprises working in microfinance and the ICICI Foundation will assist in the dissemination of new ratings criteria.
MICROCAPITAL STORY: HSBC Ammanah partners with Islamic Relief to Launch Microfinance Program in Pakistan
HSBC Amanah, the global Islamic banking division of HSBC group, has partnered with Islamic Relief, an international development and relief organization, to offer Islamic Microfinance in Pakistan. Islamic microfinance, just like Islamic banking, will provide financial services to devout Muslims in accordance with the Shariah, the Islamic law. HSBC Amanah will provide both training and funding for Islamic Relief’s microfinance projects, starting in Rawalpindi, Pakistan.
MICROCAPITAL STORY: Equity Bank, a Kenyan Microfinance Insitution, to Cross List on Uganda Securities Exchange after Recent Acquisition of Uganda Microfinance Ltd (UML)
Equity Bank, a leading provider of microfinance in Kenya, plans to cross-list on the Uganda Securities Exchange. This decision was spurred by the finalization of Equity Bank‘s acquisition of Uganda Microfinance Ltd (UML), which had been pending shareholder and regulator approval.
PAPER WRAP-UP: Transforming NGO MFIs: Critical Ownership Issues to Consider, by Kate Lauer
Written by Kate Lauer, lawyer and a policy advisory consultant to Consultative Group to Assist the Poor (CGAP), published in June 2008 as Number 13 of Occasional Papers, a publication of CGAP, 28 pages, available at http://www.cgap.org/gm/document-1.9.4213/OccasionalPaper_13.pdf
MICROCAPITAL STORY: IFC to Invest in LOCKO-bank, increasing funding for microfinance loans to small and medium sized enterprises (SMEs) in Russia
The International Finance Corporation (IFC) has arranged an investment of USD 65m in LOCKO-bank, a Russian commercial bank focused on small and medium enterprises (SMEs). The loan consists of two parts: a three year USD 20m loan from the IFC and a USD 45m syndicate loan.
MICROCAPITAL STORY: Hapinoy, the Sari Sari Store Chain of Philippines, Partners with Microfinance Institutions to Provide Women Franchise Opportunities
MICROCAPITAL STORY: Central Bank of Liberia Grants License to AccessBank Liberia Limited, a Commercial Microfinance Bank
Central Bank of Liberia (CBL) has granted provisional license to AccessBank Liberia Limited (ABL), a microfinance bank established in 2008, to operate as a commercial entity. AccessBank Liberia will open with an initial paid-in capital of USD 6 million, the minimum capital required by the CBL of banks operating in Liberia. AccessBank will focus on microfinance lending while also provide short and medium-term lending to small and medium enterprises.
MICROCAPITAL STORY: ACE INA Foundation, Based in Philadelphia, Makes Three-Year USD 720,000 Grant to Freedom From Hunger’s Credit with Education program in Mexico
ACE INA Foundation, the philanthropic arm of Bermuda-based casual insurance company ACE Limited, announced that it will be making a three-year USD 720,000 grant to US based international development organization Freedom from Hunger (FFH). Established in 1946, FFH works in developing countries to provide self-help programs against hunger and poverty. The organization’s work is specifically targeted to those who live on USD 1 per day or less. FFH will use the ACE grant to bring microfinance and financial education to nearly 3 million Mexican women, through its Credit with Education program.
MICROCAPITAL STORY: Austrian Development Bank Oesterreichische Entwicklungsbank Makes $56m Equity Investment in Microfinance Investor European Fund for Southeast Europe
A new player to microfinance investment, Austria’s recently established development bank OeEB (Oesterreichische Entwicklungsbank) announced it will invest EUR 33 million (USD 56 million) of equity capital in Luxembourg-based EFSE (European Fund for Southeast Europe). EFSE reports that the Austrian bank will invest in all three levels of risk offered by the fund, including A-Shares (senior capital), B-Shares (mezzanine capital) and C-Shares (first-loss). OeEB is the first EFSE investor with funds allocated to all of its risk levels.
MICROCAPITAL STORY: Ecobank Completes its Takeover of Kenya’s East African Building Society (EABS) Bank
Ecobank Transnational Incorporated (ETI), a Pan African bank based in Togo, acquired a 75 percent stake in Kenya’s East African Building Society (EABS) Bank. The transnational changed the bank’s name to Ecobank Kenya Limited and appointed businessman Peter Kanyago as the new chairman. The Pandit family, founders and the single largest shareholders of EABS, will retain 25 percent representation in Ecobank Kenya Limited. Although the value of the deal was not disclosed, it was estimated to total USD 18,6 million (KES 1.3 billion).
MICROCAPITAL STORY: France’s Agency for Development Lends $4.7m to Jordan-based Société Générale de Banque – Jordanie to Support Jordanian Microfinance Institutions Tamweelcom and MEMCO
In its continued support of Jordan’s development efforts, France’s Agency for Development (AFD) loaned EUR 3 million (USD 4.7 million) to commercial bank Société Générale de Banque – Jordanie. The Jordanian bank plans to re-lend the capital to microfinance institutions (MFIs) Tamweelcom and Middle East Microcredit Company (MEMCO), allocating USD 2.8 million to Tamweelcom and USD 1.9 million to MEMCO. AFD’s financing is intended to help expand the geographical outreach of microfinance in Jordan, and to develop new microfinance products and services.
MICROCAPITAL STORY: Annexum, Real Estate Investor Based in Netherlands, Launches Dutch Microfund
Dutch real estate investment company Annexum launched Dutch Microfund, a microfinance investment fund specifically targeted at the private and institutional investors. Dutch Microfund offers private investors the opportunity to invest in microfinance institutions (MFIs) directly or indirectly, through partners and mandates. The investment options are loan, equity and collateralized debt obligations (CDO). The average expected return is 7%-9% given a minimum investment of USD 1,561 (Euros 1000).
MICROCAPITAL STORY: Unitus Launches $56m Microfinance Fund; Key Stakeholders Include Legatum, Omidyar Network
Seattle-based Unitus Equity Fund has raised USD 56 million that it plans to invest solely in commercial microfinance institutions throughout the world. Key stakeholders in the private equity fund include Legatum Group and Omidyar Network, each investing USD 20 million. The remaining USD 16 million was provided by an undisclosed source. Omidyar’s investment in the fund comes in the wake of an April 2008 MicroCapital report that Omidyar awarded a USD 9 million grant to Unitus, a nonprofit that is affiliated with the private equity fund. Omidyar’s grant supported Unitus’ three year expansion plan.
MICROCAPITAL STORY: Mercy Corps Buys a Commercial Bank in Bali to Service the Microfinance Sector in Indonesia
Mercy Corps, a global relief organization, announced the creation of a ‘bank of banks’ (BoB), a commercial bank that will partner with other microfinance institutions (MFIs), in Indonesia. The MAXIS (Maximizing Financial Access and Innovation at Scale) program, developed by Mercy Corps to build BoB and provide technical asistance, received USD 19.4 million from Bill & Melinda Gates Foundation‘s Financial Services for the Poor initiative. The total capital supporting the creation of Indonesia’s first microfinance wholesale bank adds up to approximately USD 33 million, with funding from investors such as International Finance Corporation (IFC), a member of the World Bank Group, and the Hivos-Triodos Fund, a joint initiative of the Humanist Institute for Development Cooperation (Hivos) and Triodos Bank, based in Netherlands.