by Christopher Maggio -

MICROCAPITAL BRIEF: The International Finance Corporation (IFC) and the Government of Switzerland Launch Three-Year Program to Improve Financial Infrastructure for Small and Medium Enterprises (SMEs) in Azerbaijan, the Kyrgyz Republic, Tajikistan, and Uzbekistan

The International Finance Corporation (IFC), the investment arm of the World Bank, and the Government of Switzerland have launched a three-year program to improve the financial infrastructure and increase financial access for small and medium enterprises (SMEs) in four Central Asian countries: Azerbaijan, the Kyrgyz Republic, Tajikistan, and Uzbekistan [1,2,3].

by Christopher Maggio -

MICROCAPITAL BRIEF: The International Finance Corporation (IFC) to Provide $3m to AB Microfinance Bank Nigeria Limited

The International Finance Corporation (IFC), the investment arm of the World Bank, has announced that it will provide a loan worth NGN 450 million, the equivalent of over USD 3 million, to AB Microfinance Bank Nigeria Limited, a Nigerian microfinance institution (MFI) [1,2,3]. In turn, AB Microfinance Bank will provide loans to “microenterprises and low-income entrepreneurs in Nigeria” [1]. The tenor of the loan is five years, and is denominated in Nigerian Naira [1]. This will eliminate foreign exchange risk for AB Microfinance Bank, thus allowing the MFI “to offer long term Naira products to its customers” [1]. In October of 2008, the IFC provided AB Microfinance Bank with a NGN 150 million loan, the equivalent of over USD 998,000, which was used to help the MFI begin operations [1].  AB Microfinance Bank Nigeria Limited was created in 2008 by Access Microfinance Holding AG, an investor in MFIs, and Impulse Microfinance Investment Fund, a fund managed by Incofin Invesment Management [3,4,5].

by Christopher Maggio -

MICROCAPITAL BRIEF: Indian Microfinance Technology Provider ‘Financial Information Networks and Operation’ (FINO) Receives $15m in Equity Capital from HSBC Private Equity, Intel Capital, and the International Finance Corporation (IFC)

Financial Information Networks and Operation (FINO), an Indian company that provides technological products to microfinance institutions (MFIs), banks, and insurance companies, has received a INR 70 crore infusion, the equivalent of over USD 15 million, in private equity funding from HSBC Private Equity, the equity investment arm of the Hong Kong bank; Intel Capital, the investment arm of the American semiconductor producer; and the International Finance Corporation (IFC), the investment arm of the World Bank [1,2,3,4,5]. Details of how much was invested by each organization were not made available. Rishi Gupta, Chief Financial Officer of FINO, has stated the capital will be used to help “meet the demand” for various products including servers and biometric cards that store transaction records [1]. The transaction was advised by Avendus Capital, an investment bank based in India [1,6]. In an apparently separate transaction, HSBC and Intel have purchased the stake of FINO formerly owned by Legatum, an investment group based in Dubai [1,7]. Legatum originally bought this stake in 2007 for USD 4.5 million, as reported by MicroCapital [1,8]. According to Mr. Gupta, HSBC and Intel purchased the stake for a “far higher,” though unspecified, price [1]. The percentage stake that HSBC and Intel now have is also unspecified.

by Christopher Maggio -

MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Provide Kotak Mahindra Bank of India with Trade Financing Line of $51m to Lend to Small and Medium Enterprises (SMEs) Involved in International Trade

The International Finance Corporation (IFC), the investment arm of the World Bank, is set to provide a trade financing line of USD 51 million to Kotak Mahindra Bank, an Indian commercial bank, to lend to small and medium enterprises (SMEs) involved in international trade [1,2,3]. The line is part of the IFC’s Global Trade Finance Program, a USD 3 billion program intended to allow banks to “deliver trade financing by providing risk mitigation in new or challenging markets where trade lines may be constrained” [4]. Kotak Mahindra is the first Indian bank to be supported under this program [1]. MicroCapital has reported on the participation of other banks in this program, including Bank Respublika of Azerbaijan [5]. Dipak Gupta, the Executive Director of Kotak Mahindra Bank, has stated the importance of the line in allowing the bank to provide “a wider base of short-term foreign-currency trade finance products” [1].

by Stefanie Rubin -

MICROCAPITAL BRIEF: International Finance Corporation (IFC), European Commission and Netherlands’ Ministry of Foreign Affairs Launch ‘Global Index Insurance Facility’ to Expand Access to Microinsurance

The International Finance Corporation (IFC), European Commission and Netherlands’ Ministry of Foreign Affairs recently announced the launch of the Global Index Insurance Facility (GIIF), a reinsurance vehicle aimed to mitigate catastrophic risks in developing countries. Index-based insurance provides policies that pay a set amount in the event of a measurable occurrence of a natural disaster, e.g. an earthquake registering a certain magnitude or a drought that has lasted for a certain number of days. The objective of the Facility is to “assist in the development of a truly global market for index-based insurance instruments” by providing four main functions: market intermediation, risk pooling, limited holding of risk or “risk warehousing,” and market development.

by Hio Kyeng Lee -

MICROCAPITAL BRIEF: International Finance Corporation (IFC) Hosts Forum on Corporate Governance Standards in Eurasia

International Finance Corporation (IFC) in consortium with other international financial institutions hosted a two-day workshop on Corporate Governance in Tbilisi, Georgia, this week attended by over 40 participants from 13 countries.  During the workshop, IFC in association with the Georgian Stock Exchange and the Association of Banks of Georgia (ABG) have developed a voluntary corporate governance code to help banks and businesses introduce international standards and increase confidence in the banking sector.  The voluntary code would set standards of corporate governance higher than that which is currently stipulated by national law. The corporate governance code covers procedural rules for decision making and monitoring the efficiency of a bank’s performance, including, rules on the establishment of internal controls and risk management. Reportedly, the majority of banks which are members of the Association have already embraced the code.

by Stefanie Rubin -

MICROCAPITAL.ORG BRIEF: International Finance Corporation (IFC) Set to Invest $7.5m in AU Financiers of India

The International Finance Corporation (IFC), the investment arm of the World Bank, plans to invest USD 7.5 million (INR 350 million) in AU Financiers Pvt Ltd., a non-banking financial company (NBFC) headquartered in Jaipur, India. AU Financiers, which raised USD 4.3 million (INR 200 million) earlier this year from private equity fund Motilal Oswal Venture Capital, is planning to raise an overall funding of USD 14 million (INR 650 million). Further financial details are unavailable. The company provides microfinance, agri-finance, insurance, vehicle financing and personal loans to rural and semi-urban areas in the Indian states of Rajasthan, Maharashtra and Gujarat and plans to expand its services to other states. According to the IFC project description, AU Financiers “will fund its growth and expansion through a mix of equity capital, bank loans and securitization assignments.”

by the MicroCapital Team -

MICROCAPITAL BRIEF: International Finance Corporation (IFC) Takes $1.1m Equity Stake in Belstar, Microfinance Division of Hand in Hand of India

International Finance Corporation (IFC), a member of the World Bank Group, has agreed to provide equity of USD 1.15 million to Hand in Hand’s microfinance arm, Belstar Investment and Finance Limited. Hand in Hand is an NGO that is involved in efforts such as reducing child labor and malnutrition and improving solid waste management. The financing is intended to enable Belstar to obtain support from other investors and IFC Advisory Services will help Belstar improve risk management, staff training and product range.

by Christopher Maggio -

MICROFINANCE PAPER WRAP-UP: IFC Reports on Its Activities: Access to Finance (A2F) Highlights Report 2009

Published by IFC, 40 pages, available at: http://www.ifc.org/ifcext/gfm.nsf/AttachmentsByTitle/A2F-HighlightsReport2009/$FILE/A2F-HighlightsReport2009.pdf

The International Financial Corporation, the investment arm of the World Bank, has published its annual Access to Finance Highlights Report for 2009. The report covers the efforts of the IFC to expand and improve financial access. Some of the main highlights include:

by the MicroCapital Team -

KNOW A FUND: Microfinance Enhancement Facility, An Interview with Mark Berryman of the International Finance Corporation (IFC)

The Microfinance Enhancement Facility (MEF) is a microfinance investment vehicle that was established this year in response to the global credit crisis to refinance loans to well-established microfinance institutions (MFIs). MEF was founded by the International Finance Corporation (IFC) and KfW Entwicklungsbank. IFC, a member of the World Bank Group, made new investments totaling USD 16.2 billion in fiscal 2008. IFC’s microfinance investment activities reached nearly USD 1.3 billion in 2009 through over 160 projects in over 60 countries. Mark Berryman, of IFC’s Global Financial Markets Microfinance Group, recently spoke with MicroCapital:

by Kenny Kline -

MICROCAPITAL.ORG STORY: IFC to Raise $300m in Bond Issue in Japan Market for Microfinance Programs

The International Finance Corp (IFC) will aim to raise USD 300 million through a bond issue targeted at Japanese investors to finance microfinance programs.  This is the first time that the IFC will issue bonds with the intent to lend to microfinance institutions (MFIs).  The bond listing and sale will be arranged by Daiwa Securities.  The bond will be listed in Australian dollars and New Zealand dollars and will be restricted to Japanese retail and institutional investors.  IFC has obtained ratings of Aaa/AAA (investment grade) from Moody’s and Standard & Poor’s rating services respectively.  It is expected that IFC will invest an amount at least equal to the bond proceeds in supporting microfinance activities.  See bibliography sections [7]-[15] for Microcapital.org’s coverage of recent IFC investments.  According to Nina Shapiro, IFC treasurer and vice president for finance, the IFC is considering bond issuances in other regions as well, specifically the European bond markets.  IFC estimates that financing needed in the microfinance sector will reach USD 1.8 billion in 2010. [3][4]

by Christopher Maggio -

MICROCAPITAL.ORG STORY: International Finance Corporation (IFC) Assists FORUS Bank in Russia With Hedging of Currency and Interest Rate Risk

According to a press release from the International Finance Corporation (IFC), the investment arm of the World Bank, is assisting FORUS Bank, a microfinance institution (MFI) in Russia, with hedging of currency and interest rate risk [1,2,3]. Together, they have performed currency and interest rate swaps worth over USD 13 million [1].

by Christopher Maggio -

MICROCAPITAL.ORG STORY: International Finance Corporation (IFC) Supports Transformation of Kyrgyz Republic’s Bai-Tushum From Microcredit to Microfinance Company With the Intention Becoming a Deposit-Taking Instituion

The International Finance Corporation (IFC), the investment arm of the World Bank, has aided Bai-Tushum and Partners of the Kyrgyz Republic in transforming from a microcredit to a microfinance company [1,2,3]. This transformation will allow Bai-Tushum to provide more services to its clients beyond just small loans [1]. Namely, Bai-Tushum and Partners has now applied for a deposit-taking license from the National Bank of the Kyrgyz Republic in order to offer “deposit, savings, and related services to the public” [1]. Microcapital reported on the early stages of this effort in August 2009 [4].

by Christopher Maggio -

MICROCAPITAL.ORG STORY: International Finance Corporation (IFC) Purchases Bonds Worth 11.5 Billion Colombian Pesos (USD 6.2 Million) to be Loaned by Remittance Distributor ‘Giros y Finanzas’

International Finance Corporation (IFC), the investment arm of the World Bank, has invested in Giros y Finanzas, a remittance distributor and loan provider based in Colombia, by purchasing bonds worth 11.5 billion Colombian pesos, the equivalent of over USD 6.2 million [1,2,3]. The investment will mainly be used to provide loans to clients who receive remittances (money transfers from friends or family in other areas or countries) through Giros y Finanzas for the purposes of small business development or home ownership [1].