by Greg Casey -

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.

by Ryan Benson -

MICROCAPITAL STORY: FINCA Azerbaijan to Increase Microlending to Farmers

FINCA Azerbaijan has announced plans to increase microlending to farmers in an effort to support food security in the face of an emerging world food shortage. Currently, 30 percent of the nonprofit’s loan portfolio represent agricultural microenterprises, about USD 17 million. In his statement announcing the plan, FINCA Azerbaijan Director Jeff Flowers indicated that the increase in farm crediting is intended to ensure food security, but he did not offer any projections on the size of the increase.

by Ryan Benson -

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.

by Anthony Busch -

MICROCAPITAL STORY: responsAbility Global Microfinance Fund (rAGMF) of Luxembourg Lends a Total of $3.25m to the Foundation for International Community Assistance (FINCA) in Azerbaijan, Kyrgyzstan, and Georgia

The Consultative Group to Assist the Poor (CGAP) reports in its list of recent transactions that the responsAbility Global Microfinance Fund (rAGMF) financed USD 750,000 in loans to the Foundation for International Community Assistance Azerbaijan (FINCA Azerbaijan) on February 27, 2008, USD 1 million to FINCA MicroCredit Company (FMCC) of Kyrgyzstan on March 17, 2008, and USD 1.5 million to FINCA Georgia on March 19, 2008. The transaction to FINCA Azerbaijan is not to be confused with a separate responsAbility Microfinance Leaders Fund (rAMLF) loan taking place on the same date for the exact same amount, which was reported on by MicroCapital here.

by Stephen Son -

MICROCAPITAL STORY: Finethic Microfinance S.C.A. of Luxembourg Lends $1m to Microfinance Institution (MFI) FINCA Armenia and $1m to MFI FINCA Kyrgyzstan

The Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) reports that Finethic Microfinance S.C.A., a Luxembourg-based microfinance investment company, has issued loans of USD 1 million to microfinance institution (MFI) FINCA Armenia and USD 1 million to MFI FINCA Kyrgyzstan.

by Anthony Busch -

MICROCAPITAL STORY: responsAbility Microfinance Leaders Fund (rAMLF) of Luxembourg Lends $500k to Thaneakea Phum (Cambodia) (TPC), $303k to Catalyst Microfinance Investors (CMI), $929k to ASP Financiera (ASP), and $750k to the Foundation for International Community Assistance Azerbaijan (FINCA Azerbaijan)

The Consultative Group to Assist the Poor (CGAP) reports in its list of recent transactions that the responsAbility Microfinance Leaders Fund (rAMLF) financed USD 500,000 in loans to Thaneakea Phum (Cambodia) (TPC) on February 6, 2008, USD 303,092 to Catalyst Microfinance Investors (CMI) on February 7, 2008, USD 929,000 to ASP Financiera (ASP) on February 20, 2008, and USD 750,000 to the Foundation for International Community Assistance Azerbaijan (FINCA Azerbaijan) on February 27, 2008.

by Anthony Busch -

MICROCAPITAL STORY: Three Microfinance Institutions (MFIs) Account for Over Half of Azerbaijan Micro-finance Association’s (AMFA) Total Loan Portfolio for the First Quarter of 2008

According to ABC.AZ, a business information portal, the Azerbaijan Micro-finance Association (AMFA), a supportive organization for a network of 22 microfinance institutions (MFIs) and downscaling commercial banks in the country, has released first quarter 2008 performance statistics for its members. Accounting for 53 percent of AMFA’s total loan portfolio of USD 424.3 million were CredAgro, the Foundation for International Community Assistance Azerbaijan (FINCA Azerbaijan), and the Micro Finance Bank of Azerbaijan (MFBA) whose combined portfolios totaled USD 228.1 million.

by Jake Keller -

MICROCAPITAL STORY: Nigerian Government Creates $426m Microcredit Development Fund

Nigerian President Alhaji Musa Yar’Adua announced the creation of an N50 billion (the equivalent of over USD 426 million) microcredit development fund to be administered by the Central Bank of Nigeria (CBN). The new fund will be used to provide existing microfinance institutions (MFIs) with funding for credit creation and operational expenses.

by Jake Keller -

MICROCAPITAL STORY: SKS Microfinance Raises $37 Million in Equity Sale

SKS Microfinance of Hyderabad, India, recently raised 147 Crore Rupees, the equivalent of over USD 37 million, through its third round of equity sales in recent months. Investors include Silicon Valley Bank (SVB) of California, Columbia Pacific, Sequoia Capital of California, Vinod Khosala of California, and Odyssey Capital.

by Amy Rennison -

MICROCAPITAL STORY: Bank of Southern Sudan Launches Facility to Encourage Microfinance with Support from International Donors led by the World Bank

The Bank of Southern Sudan (BoSS) has launched an initiative to encourage more microfinance institutions (MFIs) in Southern Sudan. Called the ‘Microfinance Development Facility’, it will award a total of USD 1 million to successful MFI applicants in the first quarter of 2008.

by Steven Craig -

MICROCAPITAL STORY: Mexican Microfinance Lender Financiera Independencia SAB Plans Initial Public Offering

Financiera Independencia, a Mexican microfinance institution (MFI) founded in 1993, has announced plans in a recent prospectus for a public offering of up to 20 percent of the company through primary and secondary offerings in Mexico and international markets. According to estimates on CNNMoney.com, the offering will raise up to 3.26 billion Mexican pesos or equivalent USD 305.6 million through the sale of 136 million shares which includes a provisional over-allotment of 17.7 million shares. Financiera Independencia will use net proceeds from the primary offering to fund new lending, expand its branch network, and for other corporate development initiatives.

by Amy Rennison -

MICROCAPITAL STORY: BRAC, Bangladesh’s Largest Microfinance Institution, Launches USD 90 Million Bond to Provide Lending to the Agricultural Sector

The Bangladesh Rural Advancement Committee, known as BRAC, has announced plans to issue a Tk 700 crore (USD 90 million) zero coupon tax free bond, with which it will loan money to small and tenant farmers in the Bangladeshi countryside. BRAC plan to issue the bond, known as the ‘BRAC Bond for Agricultural Funding,’ in either December 2007 or January 2008, with Citibank, N.A. Bangladesh acting as lead arranger.

by Amy Rennison -

MICROCAPITAL STORY: Deutsche Bank Places a EUR 60 million (USD 84 million) Securitization of Subordinated Microcredits, the First to be Given an External Credit Rating

Deutsche Bank, a global investment bank based in Germany, has launched “db Microfinance-Invest Nr. 1,” the world’s first externally rated securitization of subordinated microcredits. These subordinated loans will benefit 21 microfinance institutions (MFIs) in developing and emerging market countries.