The China Development Bank (CDB) ended 2006 with an agreement to provide 100 mn yuan (equivalent to approximately USD 12.8 mn) in loans to the China Foundation for Poverty Alleviation (CFPA), a Chinese nongovernmental organization established in 1989. The CFPA plans to use the money to enlarge its microcredit program in the poverty-stricken Chinese countryside.
Category: Deals
Pension Fund TIAA-CREF Makes Second Microfinance Investment and Deposits USD 22mn with Community Developers åö Shore Bank and Shore Bank Pacific
TIAA-CREF has purchased multiple Certificates of Deposit (CDs) worth USD 22mn from the Shore Bank and Shore Bank Pacific, US based community development focused banks. This investment sends strong signals about TIAA-CREF’s focus towards Social Investing. As MicroCapital had reported earlier, TIAA-CREF has recently announced a USD 100 mn Global Microfinance Investment Program(GMIP) and had made its first investment by buying a USD 43 mn private equity stake in ProCredit, a microfinance institution (MFI) holding company in September 2006.
This is the single largest CD deposit made in Shore Bank and Shore Bank Pacific.
BBVA Launches a Microfinance Hedge Fund Advised by Blue Orchard and Fundacion Codespa
As reported in Citywire Fund Manager International, Banco Bilbao Vizcaya Argentaria (BBVA), a Spanish financial institution engaged in retail, private, and wholesale banking and asset management, has launched a hedge fund focused on microfinance called BBVA Codespa Microfinanzas, and provided å¥20 million in seed funding. The fund has an ethical orientation and aims to foster social and economic development in Latin American countries by promoting banking among the poor and supporting companies that would not qualify for bank loans. It will lend money to international organizations, cooperatives, and non governmental organizations that will in turn provide loans to micro companies. As reported by Jes̼s Segarra Sobral, “The managers will use derivatives to offset the socially responsible investments and will keep 15% of the fund in cash to be able to maximize market momentum.” Minimum investment in BBVA Codespa Microfinanzas is å¥50,000.
Pak-Oman Microfinance Bank Opens 20 Branches in Pakistan
According to President and Chief Executive Ozair A. Hanafi, the Pak-Oman Microfinance Bank is to set up at least 20 new branches in Pakistan this year. In addition, the bank would continue to target more than 60% of its lending in rural areas, where poverty is immense and will also be introducing a range of new products. The Bank hopes to establish “modern banking services” in Pakistan as well as instilling a “saving culture” among the poor. These saving accounts can be opened with a minimum amount and there will be no requirements of minimum balance.
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BRAC’s USD 180mn Microfinance Securitization wins Recognition from International Financing Review Asia and CFO magazine
The International Financial Review (IFR) Asia, has announced BRAC’s USD180mn securitization as the winner of the Asian award for the securitization deal of the year. IFR Asia is a Thompson publishing magazine which concentrates on the Asian Capital Markets.
This deal has also found recognition from the CFO magazine, winning one of the Seventh Annual Deals of the Year Awards. In its cover story on how global liquidity is driving financial innovation in Asia, it said about the BRAC deal “In a year when the Nobel Foundation recognized the role of micro-finance in promoting peace in impoverished nations, the securitization of US$180m in BRAC (Bangladesh Rural Advancement Committee) loans in Bangladesh becomes a more meaningful endeavor for the non-profit organization. Completed in September, the deal brought innovation to funding for the poor, introducing a commercial transaction that may be replicated in countries where micro-credit exists.”
MicroFinance Securities XXEB Sells USD 225,000 in Equity to the ResponsAbility Global Microfinance Fund
The MCM newsletter recently announced that the microfinance investment fund responsAbility Global Microfinance Fund bought USD 225,000 in shares of Microfinance Securities XXEB, a USD60 million securitization of microfinance institutions’ loans.
US Conference Circuit Finally Gains Critical Mass åö Goldman, Sachs Enters
As microfinance is still an young industry, we have not enjoyed a strong conference circuit. Although many excellent conferences have been held, the industry lacks a suite of quality, reoccurring annual gatherings. Conference offerings focused on investment have been even sparser. With four recent developments, the circuit has gained critical mass.
Most recently, Goldman Sachs has signed on as a major sponsor of the Women’s World Banking (WWB) annual conference entitled “Microfinance and the capital markets: a global exchange,” which until now had been exclusively limited to members of the WWB community. While WWB maintains a low public profile, it is one of the elite US microfinance organizations attracting high-flying Goldman. Goldman is newer to microfinance relative to other global investment banks. This conference is in New York City by invitation only and will be held January 16 & 17.
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The Gates Foundations Grants $6.7 Million to the World Council of Credit Unions (WOCCU) and $2 Million to WOCCU’s Worldwide Foundation for Credit Unions
The Bill & Melinda Gates Foundation granted $6.7 million to the World Council of Credit Unions (WOCCU) and $2 million to WOCCU’s Worldwide Foundation for Credit Unions. WOCCU will use the money to implement a Credit Union Growth Program in Africa and
Bosnian Microfinance Institution Mikronfin Receives USD 2.85 Million Loan from Dutch Oikocredit
The CGAP-MCM Newsletter reported recently that Dutch Oikocredit signed a 2-year USD2.85 million loan agreement with Bosnian microfinance institution (MFI) Mikrofin. Oikocredit has previously lent to other Bosnian MFIs such as PRIZMA.
Global Commercial Microfinance Consortium Issues First Tranche of Loan to Moldovan Microfinance Institution MicroInvest
MicroInvest of Moldova, a non-bank financial institution, received the first tranche of a USD952,000 loan from the Global Commercial Microfinance Consortium (GCMC), according to the CGAP-MCM Newsletter. This was the first transaction between the two institutions.
European Microfinance Company Access Holding AG Announces Intent to Go the ProCredit Way. Various Development Banks and Omidyar Tufts Microfinance Fund Purchase Equity in the Newly Founded Company.
In a press release, recently formed company Access Holding AG, announced that prominent microfinance investors, KfW, the European Investment Bank (EIB), the International Finance Corporation (IFC) and the Omidyar-Tufts Microfinance fund have each 19.2% of the company’s equity. The founding company LFS Financial Systems GmBH together with its employee investment company, MicroAssets, hold the remaining 23.2% equity.
The press release informs, “Access Holding’s strategic objective is to build up a network of commercial microfinance banks, with common principles and under a common management.” The IFC investment summary says, “Over time, AccessHolding aims to transform into a controlling parent company of a global network of microfinance banks with a common brand identity”.
This proclaimed strategy seems to be very similar to what ProCredit Holding has been executing to considerable attention from the capital markets. Procredit Holding AG, has, over the past decade or so, with the aid of funding from multilateral institutions, scaled up into a network of nineteen microbanks with a USD 2.3 billion loan portfolio spread across 670,000 loans of which 95 percent are USD 12,500 or smaller. ProCredit microbanks are spread across Eastern Europe, Latin America, and Africa. Recently, ProCredit was in the news as TIAA-CREF, one of the largest pension funds in the United States purchased USD 43 million of preference equity in the company.
Philippines Government and Catholic Church Launch $350,000 Microfinance Insitution
The Philippines government launched a new microfinance institution called First Micro-Finance Bank with funding from the Catholic Church. According to a news release, its organizational structure and lending policies are modeled on the Grameen Bank.
Uganda Microfinance Limited Recipient of $240,000 Credit Line from Incofin
Another deal coming to us this month courtesy of the CGAP-MIX Capital Markets MCM Newsletter, Uganda Microfinance Limited (UML) recently received a $240,000 line of credit from Incofin. UML was established in 1997 as a commercial microfinance institution by a local Ugandan and an American citizen. According to year end 2005 data from Microfinance Information eXchange (MIX), it has 31,145 clients who have taken out loans totaling $11.3 million. In addition, it has total assets worth $16.5 million, return on assets of 4%, and a debt to equity ratio of 295%.
Continue reading “Uganda Microfinance Limited Recipient of $240,000 Credit Line from Incofin”The Philippines’ Planters Bank Gets $2 Million Loan From Microfinance Investor ShoreCap International
News coming to us courtesy of the CGAP-MIX MCM Capital Markets Newsletter, Planters Bank received a $2 million loan from ShoreCap International. Planters Bank is a private development bank founded in 1961 in Manila, Philippines. According to its website, its products are targeted specifically to small and medium enterprises. As of year end 2005, it had outstanding loans of $440 million and assets worth $740 million. In addition, its debt to equity ratio was 218% and net income was $6.9 million.
Continue reading “The Philippines’ Planters Bank Gets $2 Million Loan From Microfinance Investor ShoreCap International”Microfinance Institution Kenya Women Finance Trust Receives $600,000 Line of Credit from Incofin
Another deal coming to us this month courtesy of the CGAP-MIX Capital Markets MCM Newsletter, the Kenya Women Finance Trust (KWFT) received a $600,000 line of credit from Incofin. KWFT is a microfinance institution based in Nairobi, Kenya, and was founded in 1982. It provides loans to women by forming groups of borrowers, or Kiwas, which promote loan repayment. According to year end 2005 data from the Microfinance Information eXchange (MIX), KWFT has 62,790 borrowers and a total loan portfolio of $20.1 million. In addition, it has assets of $33.1 million, debt to equity at 211% and return on assets of 3.61%.
Egyptian Microfinance Institution DBACD Extended $2.5 Million Loan from BNP Paribas; $2 Million Guaranteed by Grameen-Jameel Initiative
Another deal coming to us this month courtesy of the CGAP-MIX Capital Markets MCM Newsletter, the Dakahlya Businessmen’s Association for Community Development (DBACD) received a $2.5 million loan from BNP Paribas, thanks to a $2 million guarantee from the Grameen-Jameel Initiative. Egypt-based DBACD is a non-profit microfinance provider that began in 1995. It has individual and group microloan programs targeted at families that earn less than $4 per day. At July 2006, according to the Microfinance Information eXchange (MIX), DBACD had 63,288 clients and a loan portfolio worth $9.7 million. Debt-to-equity was 64.6%, while assets stood at $18.4 million and had a return of 4.9%.
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Oikocredit Lends $1.9 Million to Bosnian Microfinance Institution PRIZMA
Oikocredit made a three-year, $1.9 million loan to Bosnia-based PRIZMA. PRIZMA was established in 1997, following a long conflict with Serbia. The microfinance institution provides loans averaging $707 to 15,805 clients, according to MIX Markets’ 2005 data. In addition, it had assets of $11.5 million and a loan portfolio totaling $11.2 million, with a debt to equity ratio of 96% and return on assets of 2.7%.
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Indian Microfinance InstitutionåöESAF receives USD 1 million loan from Oikocredit
News coming to us courtesy of the CGAP-MIX MCM Newsletter, Evangelical Social Action Forum (ESAF), a Christian NGO with 81-90% percent of its operations in microfinance, was granted a 6 year, USD 1 million loan by Oikocredit.
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