Thanks to a substantial investment from The Africap Microfinance Fund, The Union Trust Bank (UTB) will be launching a new microfinance unit this month, making it the first commercial bank in the country to initiate microfinance activities. The $1 million investment consisted of Subscription Redeemable Preference Shares. UTB will also be receiving more than $300,000 in technical assistance. UTB is the first indigenous bank in Sierra Leone. No further information regarding its financial performance is publicly available.
Category: Deals
MicroCredit Enterprises Supports Microfinance Investment with a $500,000 Guaranteed Loan to Cambodian Rural Economic Development Initiatives for Transformation
MicroCredit Enterprises has approved a three-year guaranteed loan of $500,000 to the Cambodia Rural Economic Development Initiatives for Transformation (CREDIT).
United Nations Development Programme Supports Microfinance Investment in Zimbabwe with $110,000
Zimbabwe’s Ministry of Small and Medium Enterprises (SME) Development received USD $110,000 from the United Nations Development Programme (UNDP) for lending to informal enterprises. 3 organizations åö Sedco, Punditso Microfinance, and Women Savings and Credit Union åö will disburse the funds to 10 microfinance institutions.
International Finance Corporation Makes $5 Million Debt Investment in Financiera Nicaraguense de Desarrollo SA, a Nicaraguan Microfinance Institution
The International Finance Corporation (IFC) will loan $5 million to Financiera Nicaraguense de Desarrollo S.A. (FINDESA), a Nicaraguan microfinance institution (MFI). The two-part financing åö a senior loan of $2 million and a subordinated convertible loan of $3 million åö will aid FINDESA’s transformation to a commercial bank.
MIBANCO of Peru Receives $29 million Microfinance Investment from IFC
Banco de la Microempresas S.A., or MIBANCO, will be receiving a long term loan up to $29 million from The International Finance Corporation (IFC). The loan was disbursed in both U.S. dollars and Peruvian soles. While the IFC has worked with MIBANCO for more than five years, this is the first local currency disbursement in the country by the IFC. By allowing MIBANCO to provide longer term loans in the local currency, this will help to mitigate foreign currency risk.
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Grameen Bank and Global Partnerships Form Unique Alliance to Bring Microfinance Investment to Latin American and the Caribbean
The Grameen Foundation and Global Partnerships recently announced a new alliance that is designed to expand microfinance services in Latin America and the Caribbean. This alliance represents an unusual pattern of systematic co-investment from multiple non-profits, and a positive event for the industry.
International Finance Corporation & International Development Association Establish $25 Million Loan Facility with Société Générale & Credit Lyonnais for Microfinance Investment in Madagascar
The World Bank’s International Finance Corporation (IFC) and International Development Association (IDA) will assume half the portfolio risk in a USD $25 million deal with the local arms of two French banks, Société Générale and Credit Lyonnais, to provide loans to small and medium size enterprises in Madagascar. The IFC will guarantee $6 million while the Government of Madagascar will guarantee the remaining $6.5 million, which it will receive in loans from the IDA.
Update on Omidyar-Tufts Microfinance Fund: Ensuring Sound Microfinance Investment
According to The Tufts Daily, the Board of Trustees of the Omidyar-Tufts Microfinance Fund has taken initial steps to outline an investment plan for the $100 million gift donated to Tufts University from eBay founder Pierre Omidyar and his wife Pam, who also co-founded the Omidyar Network. The endowment, originally made in November 2005, is intended exclusively for microfinance initiatives. The Board plans to diversify the fund through both direct and indirect microfinance investments in multiple countries, utilizing a variety of currencies and investment-fund managers.
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Developing World Markets’ $60 million Securitization Offers First Rated Microfinance Collateralized Debt Obligation
Developing World Markets (DWM) is a U.S.-based investment advisory group founded in 1994 which focuses on emerging markets. It recently sponsored the securitization loans to about thirty microfinance institutions in fifteen countries. According to the press release, the transaction is channeling approximately $60 million of international capital to micro-entrepreneurs in Latin America, Eastern Europe, Southeast Asia and Africa.
European Investment Bank Expands Microfinance Investment in Tunisia with $950,000 Loan to Enda Inter-Arabe
The European Investment Bank (EIB) will provide a long-term loan of 1,250,000 Tunisian dinars (close to USD $950,000) to Enda Inter-Arabe, a Tunisian-based microfinance institution (MFI). The loan falls under EIB’s Facility for Euro-Mediterranean Investment and Partnership (FEMIP), an umbrella for EIB’s operations in the Mediterranean region since 2002, and may be accompanied by technical assistance.
BlueOrchard Finance and Morgan Stanley Partner in $106 Million Landmark Financing Deal for Microfinance Investment
BlueOrchard Finance and Morgan Stanley concluded a $106 million structured finance deal, backed by a pool of loans to 22 microfinance institutions (MFIs) from 13 different nations: Mongolia, Bosnia, Colombia, Peru, Bolivia, Mexico, Nicaragua, Ecuador, Azerbaijan, Albania, Georgia, Russia and Cambodia. These BlueOrchard Loans for Development (BOLD) represent the first public collateralized debt obligation (CDO) of loans for MFIs; before now, most MFIs subsisted on charitable donations from the West.
World’s First Microcredit Securitization: $180 Million Deal Between Bangladesh Rural Advancement Committee, RSA Capital, Citigroup, Netherlands Development Finance Company, and KfW Entwicklungsbank
The Bangladesh Rural Advancement Committee (BRAC) will receive 12.6 billion Bangladesh Taka (USD $180 million) in financing over six years, thanks to a microcredit securitization structured by RSA Capital, Citigroup, the Netherlands Development Finance Company (FMO), and KfW Entwicklungsbank (KfW). 1 billion Bangladesh Taka (USD $15 million) will be disbursed to BRAC every 6 months, with a maturity of 1 year.
During the transaction, a special purpose trust was created to purchase BRAC’s receivables from its microcredit portfolio and issue certificates to investors. FMO will purchase one-third of the certificates while Citibank, backed by a FMO guarantee and a KfW counter-guarantee, will purchase another one-third. The remaining one-third will go to Citibank, N.A. Bangladesh and two other Bangladeshi banks.
Commercial Microfinance receives EUR 500,000 from Impulse Microfinance Investment Fund
Commercial Microfinance Limited (CMF) of Uganda was founded in 2000. As of year end 2004, it had over 42,000 active borrowers, with a gross loan portfolio of $3.9 million. Assets totaled $6.7 million, with a return of 7.06%. Total equity reported was $1.2 million with a debt to equity ratio of 480.51%.
Banco Opportunidade de Mozambique Sells Shares Worth $274,000 in Microfinance Investment Deal with Oikocredit
Banco Oportunidade de Mozambique (BOM) was founded in 2004, part of the Opportunity International Network. As of year end 2005, the bank’s outreach extended to 2,611 active borrowers. No other information on its financial performance is currently available.
International Finance Corporation Makes $5.4 Million Debt Investment in Microfinance Institution (MFI) Fundación Mundo Mujer in Colombia
The International Finance Corporation loaned 13.8 billion Colombian pesos (USD $5.4 million) repayable in five years to Fundación Mundo Mujer (FMM), a Colombian non-profit established in 1989. FMM reported a gross loan portfolio of $45.4 million, total assets of $50.1 million, total equity of $25.6 million, return on assets of 12.97%, and return on equity of 24.79% to the MIX Market last year. FMM, with its client base of 60% women, is an affiliate of Women’s World Banking, a global network of 24 MFIs.
Oikocredit Microfinance Investment in Samoa: $256,100 to South Pacific Business Development
The South Pacific Business Development (SPBD) is a non-profit organization founded in 2000 in Samoa. Year end total assets were $750,286 with a reported return of -9.10%. The gross loan portfolio totaled $506,012 and was composed of 2,331 active borrowers. Since inception, SPBD has issued 11,176 loans, totaling $3.5 million. SPBD is an affiliate of the Grameen Bank worldwide microfinance network based in Bangladesh and is partially funded by Grameen Trust, a US-based non-profit.
International Finance Corporation Makes Its Largest Ever Investment in the Middle East and North Africa with $100 Million Loan to BankMuscat of Oman
BankMuscat SAOG of Oman will receive an International Finance Corporation (IFC) long-term subordinated loan of $100 million, the largest investment by the IFC in the Middle East and North Africa region. The loan will bolster BankMuscat’s long-term mortgage financing as well as its small- and medium- enterprise (SME) portfolio.
Oikocredit Grants Loan of $1.04 million in Microfinance Investment Deal with Phillipines’ ASKI
ASKI (Alalay Sa Kaunlaran Sa Gitnang Luzon, Inc.), a non-profit organization founded in 1987 in the Philippines recently received a loan valued at 55 million Phillipine pesos (PHP) from Oikocredit. The loan is repayable in 5 years and equivalent to about US$1.04 million.