DEAL HIGHLIGHTS: BlueOrchard Finance Invests in Three Microfinance Institutions

KazMicroFinance-Kazakhstan

BlueOrchard Finance has resumed its relationship with KazMicroFinance in Kazakhstan in August 2009, providing a new loan to the amount of USD 2 million for 18 months.

KazMicroFinance is the first client of BlueOrchard in Kazakhstan since 2006. The microfinance institution has eight regional offices which extend their services to all communities throughout Kazakhstan. It manages a loan portfolio of USD 29 million disbursed to 25,370 active borrowers, with an average loan size of USD 1,149. KazMicroFinance implements both group and individual lending methodologies.

Al Majmoua-Lebanon

BlueOrchard Finance disbursed a loan of USD 250,000 to its first Lebanese client, Al Majmoua, on 24 August 2009. The loan has a maturity of 24 months.

Al Majmoua is a non-governmental organisation (NGO) established in 1994 by Save the Children–USA and funded by the United States Agency for International Development. It registered with the Lebanese Ministry of Interior in August 1997 and became a fully autonomous NGO in January 1998. Lebanon’s microfinance market is fragmented, with 23 organizations servicing its population, of which a handful that operate according to global best practice standards. Some microfinance institutions (MFIs) target rural populations; others are more poverty-focused. Currently, only three Lebanese MFIs report to the MIX market. Five are members of the regional microfinance network, Sanabel. Al Majmoua is the largest one among them and operates in the still underserved market of Lebanon.

The MFI has a sound history of profitability (break-even net of donations since 2005). Its assets and coverage have grown steadily and it was able to maintain a good quality portfolio despite a difficult environment (political instability and war with Israel in 2006). As of July 2009, Al Majmoua has total assets of USD 13 million, a gross loan portfolio of USD 11.7 million serving 15,137 active clients through a network of 11 branches.

BlueOrchard Finance considers Lebanon as a new strategic territory and Al Majmoua as an important partner for its outreach into the region. Al Majmoua is BlueOrchard’s third active client in the Middle East.

MEMCC-Jordan

On 4 August 2009, BlueOrchard Finance disbursed a loan of USD 1 million to its first Jordanian client since 2006, the Middle East Micro Credit Company (MEMCC). The loan has a maturity of 24 months. MEMCC is considered a new strategically important partner by BlueOrchard Finance who has been present in Jordan since 2003.

MEMCC was established in January 2003 as a limited liability, not-for-profit company, wholly owned by CHF International, an international humanitarian US-based organization. MEMCC is registered with the Ministry of Industry and Trade and provides loans to micro-, small- and medium-sized enterprises, and to low-income families for home improvements. MEMCC is currently CHF’s most profitable development finance institution and one of the largest microfinance institutions (MFIs) in Jordan.

The microfinance sector in Jordan is characterized by the presence of both market-oriented and subsidized credit providers. There are presently four main categories of microcredit service providers which include private MFIs, commercial banks, governmental MFIs and NGOs.

BlueOrchard considers that MEMCC has a very good product offering and could achieve an even higher client’ base in the near future. MEMCC also enjoys strong support from CHF International, has a sound management and a stable financial performance in BlueOrchard’s opinion. As of July 2009, MEMCC has total assets of USD 19 million and a gross loan portfolio of USD 17.3 million serving 11,880 active clients through a network of 13 branches around the country.

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