FINCA INTERNATIONAL AND DEUTSCHE BANK ANNOUNCE FIRST-EVER SINGLE MICROFINANCE NETWORK SUB-DEBT DEAL
ArmInfo
12.01.2010
ArmInfo. FINCA International, along with Deutsche Bank, today
announced that they have secured total capital commitments of $21.2
million for the FINCA Microfinance Fund B.V., the first-ever single
microfinance network sub-debt deal. The fund, which has only private
sector investors was about 100 percent oversubscribed and brings a
new pool of investors to the microfinance industry.
The FINCA Microfinance Fund is the first microfinance subordinated
debt deal to be completed since 2007 and was structured, placed and
managed by Deutsche Bank. The offering will provide FINCA affiliates
in the Democratic Republic of Congo, Mexico, Armenia, Azerbaijan,
Kyrgyzstan, Georgia and Tajikistan the financial flexibility to
on-lend an estimated $100 million in additional loan capital, as well
as make the investments in staff, branches and other infrastructure
to support its expanding microfinance lending and deposit-taking
programs. Through the facility, and based on its average network-wide
loan size of $503, the seven FINCA affiliates will be positioned to
provide an estimated 150,000 additional microloans each year to some
of the world’s lowest-income entrepreneurs.
"This new financial facility represents an important breakthrough
for both FINCA and the microfinance industry," said Rupert Scofield,
President & CEO of FINCA International. "As we approach the year of our
25th anniversary, it opens an exciting new chapter for FINCA, allowing
us to further expand our outreach to lower-income entrepreneurs,
while at the same time broadening the universe of investors for the
microfinance community as a whole. As a double bottom line event,
it’s definitely a win-win situation all round."
"FINCA International’s long term performance and commitment to a
sustainable and socially-responsible microfinance sector aligns closely
with Deutsche Bank’s own strategy and commitment to the sector,"
said Gary Hattem, Managing Director of Deutsche Bank’s Community
Development Finance Group. "This fund demonstrates the attractiveness
of that model to investors who have confidence in providing capital
to the poor for self employment where strong management models have
delivered continuing social impact and sound financial performance."
"We honored to get secured capital commitment from Deutsche Bank,"
said Yervand Barseghyan, General Director of FINCA UCO CJSC. "This
deal is not only a money investment, but also is a great opportunity
for long term co-operation with leading global investment bank in
terms of developing microfinance industry in Armenia".
Investors in the fund include mainstream pension funds and
socially-responsible private investors. "MetLife has a long history of
investing in local communities, and we are excited by the potential to
reach the very poorest through our investment in FINCA. By investing
in microfinance, we are supporting a sector that we believe has
both commercial sustainability as well as the potential to make a
significant social impact," said Dennis White, Vice President of
MetLife’s Social Investment Program.
"I view FINCA and Deutsche Bank as two of the strongest and most
socially committed actors in the microfinance sector. The FINCA
Fund puts our foundation’s capital to work in a highly leveraged
manner that will truly benefit the poor with new opportunities for
economic empowerment," said Matt McConnell, President of the Left
Hand Foundation.