The Overseas Private Investment Corporation (OPIC), a US government agency that supports private sector development, has approved USD 250 million in loan guarantee facilities each in Egypt and Jordan for local banks that lend to small and medium-sized enterprises (SMEs), microfinance institutions (MFIs), non-banking financial institutions (NBFIs) and “other approved borrowers.”
CHF International and the Middle East Investment Initiative (MEII), two US-based nonprofit organizations that promote financial services in developing countries, have been selected as the field partners for the initiative and will be responsible for selecting financial institutions and developing credit standards. The US Agency for International Development (USAID), a government agency that provides international economic and humanitarian assistance, is granting USD 20.7 million for this purpose. USAID will also provide technical assistance to the lending institutions.
The guarantees from OPIC, which are described as “long-term,” make up the first part of a USD 2 billion financial support package that was pledged by US Secretary of State Hillary Clinton during her visit to Egypt and Tunisia in March 2011. According to OPIC President and CEO Elizabeth Littlefield, long-term credit is “essential for stability, growth and job creation in the MENA [Middle East and North Africa] region.”
USAID offers a suite of resources aimed at improving the outcomes of microenterprise development research and practice at http://microlinks.kdid.org/
By Rohan Trivedi, Research Associate
About The Overseas Private Investment Corporation (OPIC):
The Overseas Private Investment Corporation (OPIC) is an agency of the US government that was established in 1971 as a development finance institution. OPIC works with private-sector firms in the US to identify opportunities in emerging markets and create an enabling environment for private enterprise in developing countries. OPIC provides financing through direct loans as well as guarantees, political risk insurance and investment funds. As of September 30, 2010, OPIC reports total assets of USD 7 billion deployed in approximately 150 countries.
About The United States Agency for International Development (USAID):
The United States Agency for International Development (USAID) is a government agency that provides international economic and humanitarian assistance. It focuses on areas such as economic growth, agriculture, trade, health, democracy, conflict prevention and humanitarian assistance. Under the Development Credit Authority (DCA), it provides credit guarantees that cover up to 50 percent of defaults on wholesale loans made by private financial institutions to institutions that lend on a retail basis to underserved borrowers. The proposed USAID budget for 2011 is USD 18.8 billion.
About CHF International:
CHF International (CHF) is an international development organization founded in 1952 that works in post-conflict, unstable and developing countries. CHF partners with communities in efforts to help them to improve and direct their lives and livelihoods. CHF is a politically neutral, non-profit organization. CHF Development Finance International LLC, a limited liability company registered in the US state of Maryland and majority-owned by CHF International, was created to house the commercial ownership of financial institutions in which CHF has an equity position.
About The Middle East Investment Initiative (MEII):
The Middle East Investment Initiative (MEII) is a nonprofit organization that partners with public and private institutions to deliver financial services in the Middle East and North Africa, with a focus on the Palestinian territories. MEII was established in 2005 by the Aspen Institute Middle East Strategy Group, with support from the Overseas Private Investment Corporation (OPIC), a US government agency that support private sector development, and the Palestine Investment Fund (PIF), a private investment company. Financial information is not currently available on the organization.
Sources and Additional Resources:
[1] OPIC Press Release: “OPIC Board Approves $500 Million For Small Business Lending in Egypt and Jordan”, http://www.opic.gov/news/press-releases/2009/pr070111
MicroCapital.org story, June 27, 2011: “MICROCAPITAL BRIEF: USAID, VEGA/IESC Announce Second Phase of ‘Lebanon Investment in Microfinance’ Program”, https://www.microcapital.org/microcapital-brief-usaid-vegaiesc-announce-second-phase-of-“lebanon-investment-in-microfinance”-program/
MicroCapital.org story, April 18, 2011: “MICROCAPITAL BRIEF: International Finance Corporation (IFC), Arab Monetary Fund (AMF) Launch ‘Arab Secured Transactions Initiative’ to Boost Lending to Small and Medium-Sized Enterprises”, https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-arab-monetary-fund-amf-launch-arab-secured-transactions-initiative-to-boost-lending-to-small-and-medium-sized-enterprises-smes/
MicroCapital Universe Profile: Overseas Private Investment Corporation (OPIC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Overseas+Private+Investment+Corporation+%28OPIC%29
MicroCapital Universe Profile: United States Agency for International Development (USAID), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=United+States+Agency+for+International+Development+%28USAID%29
MicroCapital Universe Profile: CHF International, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=CHF+International
MicroCapital Universe Profile: Middle East Investment Initiative (MEII), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Middle+East+Investment+Initiative+%28MEII%29
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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