According to Freedom from Hunger, the combined microfinance and health services offered by these five banks included “health savings, health loans, health insurance, health education, group discounts with health providers, mobile healthcare in rural villages, distribution of insecticide-treated mosquito nets, and more” [1]. Freedom from Hunger conducted research and evaluation for the duration of the project in order to qualify the impact of the offerings. Freedom from Hunger concluded that these health protection products can be offered “inexpensively” by some microfinance institutions (MFIs); “can differentiate an MFI in a crowded market, help attract new clients and enhance loyalty”; and “can carry a value for clients that exceeds the MFI’s cost of providing them, making for impressive net social value creation and contribution to social mission” [2].

Myka Reinsch, Special Advisor at Freedom from Hunger, sums up the results thusly: “Our experience has shown that well-established microfinance banks can offer valuable health-related options to their clients at low or no cost to the bank itself. In fact, our research results indicate that, in some cases, the resulting increase in client attraction and loyalty may lead to a net financial gain for the banks” [1].

To view Freedom from Hunger’s resources on microfinance and health, including the MAHP research paper, you may visit the following URL: http://www.ffhtechnical.org/resources/microfinance-health. To view Freedom from Hunger’s 12-minute video entitled “Healthy Microfinance: Innovations in Microfinance and Health Services”, you may visit the following URL: http://www.youtube.com/watch?v=zJ652vEa4Ko.

By Lindsey Shaughnessy, Research Associate

About Freedom from Hunger: Freedom from Hunger, first called “Meals for Millions”, is an international development nonprofit based in Davis, California.  Freedom from Hunger works with local partners to alleviate hunger and poverty in sixteen countries around the world. Its microfinance programs service approximately two million families worldwide. As of 2009, Freedom from Hunger reported total assets of USD 6.07 million.

About The Bill & Melinda Gates Foundation: The Bill & Melinda Gates Foundation provides grants to organizations within the United States and in more than 100 countries around the world with the aims of enhancing health care, reducing poverty and expanding educational opportunities and access to information technology. As of September 2009, the asset trust endowment totaled USD 34.2 billion. The Foundation has made commitments of USD 21.1 billion since its inception in 1994.

About Bandhan of India: Bandhan is a non-government organization that is registered with the Reserve Bank of India. Bandhan was established to address poverty alleviation and to empower women through microfinance. As of first quarter 2010, Bandhan reported to the to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 424 million, a gross loan portfolio of USD 265 million and 2,301,433 active borrowers.

About Crédito con Educación Rural (CRECER): Crédito con Educación Rural (CRECER) is a private nonprofit organization that provides credit services to women in Bolivia. CRECER’s Credit with Education product is based on the village banking methodology, where group members of a village savings and loans association (VSLA) informally pool, manage and loan capital to other group members. As of mid-year 2010, CRECER reported to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 55.2 million, a gross loan portfolio of USD 50 million, and 101,000 active borrowers.

About the Center for Agriculture and Rural Development (CARD): The Center for Agriculture and Rural Development (CARD) is a group of institutions, including a bank, that provides grants, lending, savings, training and consulting services. CARD aims to provide loans mainly to landless rural women. CARD launched the Landless People’s Development Fund in 1990 as its credit arm. As of year-end 2009, CARD reported to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 63.8 million, a gross loan portfolio of USD 46.2 million and 497,441 active borrowers.

About the Association pour la Promotion et l’ Appui au Développement de MicroEntreprises (PADME): The Association pour la Promotion et l’ Appui au Développement de MicroEntreprises (PADME), begun as the Projet d’Appui au Développement de Micro-Entreprises in 1993, is a nonprofit that operates in Benin. PADME aims to provide Beninois microentrepreneurs with capacity building grants and access to credit. As of year-end 2009, PADME reported to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 58.1 million, a gross loan portfolio of USD 36.4 million and 48,962 active borrowers.

About Réseau des Caisses Populaires du Burkina (RCPB) of Burkina Faso: Réseau des Caisses Populaires du Burkina (RCPB) is a Burkina Faso-based credit union and cooperative. RCPB offers loans, savings and funds transfer services to its members. As of year-end 2009, RCPB reported total assets of USD 223 million, a gross loan portfolio of USD 134 million and 112,166 active borrowers.

Sources and Additional Resources:

[1] Free Press Release, “Freedom from Hunger Shows How Banking and Healthcare Can Work Together for the World’s Poor”, August 30, 2010. http://www.prlog.org/10891583-freedom-from-hunger-shows-how-banking-and-healthcare-can-work-together-for-the-worlds-poor.html

Freedom from Hunger, “YouTube video: Healthy Microfinance: Innovations in Microfinance and Health Services”, April 6, 2010. http://www.youtube.com/watch?v=zJ652vEa4Ko

MicroCapital’s Microfinance Universe profile: Freedom from Hunger

MicroCapital’s Microfinance Universe profile: The Bill & Melinda Gates Foundation

MicroCapital’s Microfinance Universe profile: Bandhan

MicroCapital’s Microfinance Universe profile: Center for Agriculture and Rural Development (CARD) of the Philippines

MicroCapital’s Microfinance Universe profile: Crédito con Educación Rural (CRECER)

MicroCapital’s Microfinance Universe profile: Association pour la Promotion et l’ Appui au Développement de MicroEntreprises (PADME)

MicroCapital’s Microfinance Universe profile: Réseau des Caisses Populaires du Burkina (RCPB)

Browse the MicroCapital Universe and add your entry to the wiki at http://www.microcapital.org/microfinanceuniverse/.

Greta Bull, IFC Regional Business Line Leader, said, “IFC seeks to improve access to finance for smaller businesses by providing needed technical assistance to local financial institutions. IFC is eager to continue supporting financial institutions like FinTerra with programs that help them build sound portfolios. A press release from IFC states that the technical assistance will include advanced credit risk management tools designed to serve lower- to middle- income borrowers. As of March 2007, FinTerra’s total assets were USD 42.7 million and total equity was USD 5.1 million.

About International Finance Corporation (IFC):

A member of the World Bank Group, the International Finance Corporation (IFC) uses loan and debt securities, equity investments and guarantees with the intent of alleviating poverty. It invests in financial institutions and other companies in emerging markets as well as providing technical assistance. The IFC has 182 member countries that ‘collectively determine its policies, and approve investments.’ In fiscal year 2009, its new investments totaled USD 14.5 billion.

About FinTerra:

FinTerra is a Mexican non-bank financial institution that began operations in 2004. It specializes in lending to small and medium-sized enterprises (SMEs) in the agricultural and agribusiness sectors. As of March 2007, the company’s total assets were USD 42.7 million and total equity was USD 5.1 million.

By Matthew Fox, Research Assistant

Sources and Additional Resources

International Finance Corporatio (IFC): Press Release August 19, 2010: http://www.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/FE0E5DFC029168AF8525778400583C3B?OpenDocument

MicroCapital Universe: International Finance Corporation (IFC): http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+(IFC)

MicroCapital Universe: FinTerra: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FinTerra

Browse the MicroCapital Universe and add your entry to the wiki at: http://www.microcapital.org/microfinanceuniverse/

The funding will allow CAF’s microfinance institution clients to access medium-term credit without exchange rate risk. Under the financing facility, CAF clients will be able to access credit in Bolivian bolivianos with semi-annual repayments.

The new facility is part of CAF’s local currency program that has delivered the equivalent of USD 34 million to Peru, USD 10 million to Mexico and USD 20 million to Colombia.

By Jennifer Shevock, Research Associate

About CAF (Andean Development Corporation):
The Andean Development Corporation (CAF) is a multilateral financial institution owned by 16 shareholder countries and 14 private banks from Latin America and the Caribbean, as well as Spain and Portugal. It was established in 1970 in Caracas, Venezuela. It provides loans for purposes such as microfinance, infrastructure and health in Latin America and the Caribbean. It also provides financial advisory services and technical services. CAF reported total assets of USD 15.9 billion as of December 31, 2009.

Sources and Additional Resources:
“New program to Support Microfinance Institutions in Bolivia” August 16, 2010. http://www.caf.com/view/index.asp?ms=19&pageMs=69892&new_id=72771

MICROCAPITAL BRIEF: “Andean Development Corporation (CAF) Approves $5m Line of Credit for Caja Rural de Ahorro y Credito (CRAC) Nuestra Gente to Support Micro and Small Enterprises in Peru” August 3, 2010. http://www.microcapital.org/microcapital-brief-andean-development-corporation-caf-approves-5m-line-of-credit-for-caja-rural-de-ahorro-y-credito-crac-nuestra-gente-to-support-micro-and-small-enterprises-in-peru/

MICROCAPITAL BRIEF: “Andean Development Corporation (CAF) and National Mutual Guarantee Fund for Small and Medium-sized Enterprises (FONPYME) Launch ‘Quality Improvement’ Project for Small and Medium-sized Enterprises in Venezuela” June 22, 2010. http://www.microcapital.org/microcapital-brief-andean-development-corporation-caf-and-national-mutual-guarantee-fund-for-small-and-medium-sized-enterprises-fonpyme-launch-quality-improvement-project-for-small-and-medium/

MicroCapital Universe: CAF (Andean Development Corporation): http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Andean+Development+Corporation+%28CAF%29

Browse the MicroCapital Universe and add your entry to the wiki at: http://www.microcapital.org/microfinanceuniverse/

The project is supported by Pepsico, a US-based global food and beverage company, whose Mexican business unit Sabritas will provide technical assistance to the farmers in the program and commit to purchasing the sunflower oil produced. It is expected that 850 farmers will benefit.

No financial information is available for Agrofinanzas.

By Jennifer Shevock, Research Associate

About the Inter-American Development Bank:
The Inter-American Development Bank (IDB) is a US-based multilateral finance institution established in 1959 that operates in Latin America and the Caribbean. IDB works with governments, companies and non-governmental organizations (NGOs) to provide both loans and grants to support small and medium-sized enterprises (SMEs), health and education, among other sectors. It also provides technical assistance and research in these areas. Its Board of Executives is elected by 48 member countries, 26 of which are in Latin America and the Caribbean. IDB reported total assets of USD 84 billion as of December 31, 2009.

Sources and Additional Resources:
“IDB guarantees 2,000 microloans of Mexico’s Agrofinanzas” August 17, 2010. http://www.microfinancefocus.com/news/2010/08/17/idb-guarantees-2000-microloans-of-mexico%E2%80%99s-agrofinanzas/

MicroCapital Universe: Inter-American Development Bank: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Inter-American+Development+Bank+%28IDB%29

Browse the MicroCapital Universe and add your entry to the wiki at: http://www.microcapital.org/microfinanceuniverse/

According to MIX, “Performance benchmarking is a comparative exercise that standardizes raw data and groups institutions to provide a tool for meaningful comparative analysis.” MIX adds that “Managers and practitioners find benchmarking useful in evaluating their institution’s performance within the spectrum of similar organizations” [1].

The report says that MFIs in Latin America and the Caribbean had an aggregate gross loan portfolio of USD 19.6 billion, an increase of 25.4 percent from 2008, and had a total of 14.6 million borrowers, an increase of 10.9 percent from 2008 [1].

The report can be found in English here: http://www.themix.org/sites/default/files/LAC%20Benchmarks%20Tables%202009%20EN%20%28Final%29.pdf and in Spanish here: http://www.themix.org/sites/default/files/LAC%20Benchmarks%20Tables%202009%20ES%20%28Final%29.pdf.

By Julia Korn, Research Associate

About The Microfinance Information Exchange (MIX):

Established in 2002, Microfinance Information Exchange (MIX) is a nonprofit organization with headquarters in Washington, DC, and regional offices in Peru, Senegal, India and Indonesia. It operates a global, web-based, microfinance information platform. MIX provides detailed financial and social performance information from microfinance institutions (MFIs), as well as business information from market facilitators, donor organizations and investors in microfinance. MIX Market, one of MIX’s products, provides online data on 1800 MFIs and 100 investors as of 2010. MIX was founded by CGAP (Consultative Group to Assist the Poor) and is sponsored by Citi Foundation, Deutsche Bank Americas Foundation, International Fund for Agricultural Development (IFAD) and the Bill & Melinda Gates Foundation.

Sources and Additional Resources:

[1] MIX Market. “Just Released: MIX 2009 Latin America and the Caribbean Benchmark Tables” by Syeda Younus on August 17, 2010. http://www.themix.org/press-release/mix-publishes-2009-latin-america-and-caribbean-benchmark-tables

MicroCapital Universe. Microfinance Information Exchange. http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+Information+Exchange+%28MIX%29

Browse the MicroCapital Universe and add your entry to the wiki at http://www.microcapital.org/microfinanceuniverse/

The funds were loaned to three microfinance institutions: Consejo de Asistencia al Microemprendedor (CAME) of Mexico, Fondo de Desarrollo Comunal (Fondeco) of Bolivia, and Fundación para el Desarrollo Microempresarial (D-Miro) of Ecuador [1]. The details of these transactions are as follows.

responsAbility Microfinanz-Fonds, which invests in microfinance institutions (MFIs) mainly through debt securities and equity investments, loaned USD 500,000 at a fixed interest rate of 8.5 percent per year over two years to Fondo de Desarrollo Comunal (Fondeco) of Bolivia, a non-bank microfinance institution. As of mid-2010, Fondeco reports to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, USD 15.1 million in assets, a gross loan portfolio of USD 9.8 million, 12,465 active borrowers, a return on assets of 1.45 percent and a return on equity of 6.73 percent.

The rAGMF, which invests in MFIs and microfinance investment vehicles (MIVs) mostly through short- to medium-term debt securities, loaned USD 1.25 million at an annual interest rate of 8 percent per year over two years to the Fundación para el Desarrollo Microempresarial (D-Miro), an independent microfinance institution serving approximately 167,000 clients in Ecuador. responsAbility Microfinanz-Fonds loaned USD 750,000 to D-Miro of Ecuador under the same terms. In 2009, D-Miro reported to the MIX assets of USD 23.6 million, 29,359 active borrowers, a gross loan portfolio of USD 19.8 million, a return on assets of -2.88 percent and a return on equity of -11.8 percent.

responsAbility Microfinanz-Fonds loaned MXN 5.5 million (the equivalent of USD 429,855) to CAME of Mexico at a fixed rate of 12 percent per year over two years. The rAGMF invested MXN 10.5 million (USD 830,085) in CAME, also at a fixed rate of 12 percent per year over two years. CAME reported to the MIX in 2009 assets of USD 49.4 million, a gross loan portfolio of USD 35.8 million, 186,620 active borrowers at an average loan balance of USD 192 per borrower, a return on assets of 1.02 percent and a return on equity of 4.6 percent.

According to the MIX, the rAGMF reports assets of USD 475 million as of mid-2010 and holds 202 active microfinance investments. responsAbility Microfinanz-Fonds reports to the MIX Market assets of USD 103 million and holds 130 active microfinance investments. In May, rAGMF announced that it would temporarily suspend accepting investment, in order to reduce liquidity [2].

By Lindsey Shaughnessy, Research Associate

About responsAbility Global Microfinance Fund (rAGMF): The responsAbility Global Microfinance Fund (rAGMF) invests in microfinance institutions (MFIs) and microfinance investment vehicles (MIVs), mostly through short- to medium-term debt securities. rAGMF also invests up to 10 percent of its assets in the equity of MFIs. LuxFLAG, an independent organization that certifies that microfinance vehicles actually invest in the microfinance sector, renewed the rAGMF’s label as of April 2010. According to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, the rAGMF reports assets of USD 475 million in mid-2010 and holds 202 active microfinance investments.

About responsAbility Mikrofinanz-Fonds: The responsAbility Mikrofinanz-Fonds is a microfinance investment vehicle managed by responsAbility Social Investments AG, a social investment company based in Switzerland. responsAbility Microfinanz-Fonds invests in microfinance institutions (MFIs) through debt securities and equity investments. The fund was created in 2007 by responsAbility, and is financed by Bank im Bistum Essen, a German cooperative financial institution, and Stadtsparkasse Düsseldorf, a German bank. LuxFLAG, an independent organization that certifies that microfinance vehicles actually invest in the microfinance sector, renewed the rAGMF’s label as of April 2010. responsAbility Microfinanz-Fonds reports to the MIX Market assets of USD 103 million and holds 130 active microfinance investments.

About Consejo de Asistencia al Microemprendedor, S.A. de C.V., SOFIPO (CAME): CAME is a Mexican microfinance institution (MFI), serving approximately 167,000 borrowers and savers in and around Mexico City. CAME reported to the MIX in 2009 assets of USD 49.4 million, a gross loan portfolio of USD 35.8 million, and 186,620 active borrowers at an average loan balance of USD 192 per borrower, a return on assets of 1.02 percent, and a return on equity of 4.6 percent.

About Fondo de Desarrollo Comunal (FONDECO): Fondeco was established as a non-bank microfinance institution in Bolivia in 1995, and is today part of the Grameen Foundation’s partner network. Fondeco targets those without access to financial services in rural Bolivia, especially small-scale farmers, entrepreneurs and traders. As of mid-2010, Fondeco reports to the MIX USD 15.1 million in assets, a gross loan portfolio of USD 9.8 million, 12,465 active borrowers, a return on assets of 1.45 percent and a return on equity of 6.73 percent. 60 percent of Fondeco’s borrowers are women.

About Fundación para el Desarrollo Microempresarial (D-Miro): D-Miro was started by Norway-based Mision Alianza in 1997 in Ecuador, but has operated as an independent microfinance organization since 2006. In 2009, D-Miro reported to the MIX assets of USD 23.6 million, 29,359 active borrowers, a gross loan portfolio of USD 19.8 million, a return on assets of -2.88 percent, and a return on equity of -11.8 percent.

Sources and Additional Resources:

[1] Per data submitted by responsAbility Social Investments AG to MicroCapital August 4, 2010

[2] MICROCAPITAL BRIEF: “responsAbility to Stop Issuing Shares for Global Microfinance Fund”, May 10, 2010. http://www.microcapital.org/microcapital-brief-responsability-to-stop-issuing-shares-for-global-microfinance-fund/

MicroCapital’s Microfinance Universe profile: responsAbility Global Microfinance Fund

MicroCapital’s Microfinance Universe profile: responsAbility Mikrofinanz-Fonds

MicroCapital’s Microfinance Universe profile: Consejo de Asistencia al Microemprendedor, S.A. de C.V., SOFIPO (CAME)

MicroCapital’s Microfinance Universe profile: Fondo de Desarrollo Comunal (FONDECO)

MicroCapital’s Microfinance Universe profile: Fundación para el Desarrollo Microempresarial (D-Miro)

Browse the MicroCapital Universe and add your entry to the wiki at http://www.microcapital.org/microfinanceuniverse/.

According to Christina Leijonhufvud, leader of JP Morgan’s Social Finance unit, “By helping microfinance organizations improve their operations, develop new products, and reach more clients, volunteers can ensure more of the world’s poor have the opportunity to progress out of poverty.”

As of February 2010, BwB had approximately 50 projects operating in nine countries.

Development organizations that wish to apply to receive an investment from BwB may visit http://www.bankerswithoutborders.com/mfis-networks by September 30, 2010.

By Julia Korn, Research Associate

About Bankers Without Borders (BwB):

Bankers Without Borders is a volunteer program started by the US-based nonprofit Grameen Foundation that supports microfinance and technology initiatives related to finance in poor countries. It was founded in 2008 and, as of February 5, 2010, had approximately 50 projects operating in nine countries. It has received funding from JP Morgan Chase and the Bill and Melinda Gates Foundation.

About JP Morgan’s Social Finance Unit:

JP Morgan’s Social Finance Unit provides investment and capital markets services to social enterprises, funds, foundations, non-governmental organizations, development financial institutions and other investors serving the base of the economic pyramid. The unit was launched in November 2007, as part of JP Morgan’s investment banking division. The group serves as the client contact for social impact investment opportunities.

Sources and Additional Resources:

[1] The Grameen Foundation. “Bankers Without Borders Announces Funding Available to Expand in Asia and the Americas” http://www.grameenfoundation.org/press-releases/bankers-without-borders%C2%AE-announces-funding-available-expand-asia-and-americas.

MicroCapital. “MEET THE BOSS: Discussions on Successful Due Diligence When Evaluating Microfinance Investment Vehicles’ (MIV’s) Financial Viability: Interview with Christina Leijonhufvud, Managing Director, Social Sector Finance Group (SSF)/Investment Bank (IB) at JP Morgan (Part I of a Three Part Series)” by Zoran Stanisljevic on October 16, 2009. http://www.microcapital.org/meet-the-boss-discussions-on-successful-due-diligence-when-evaluating-microfinance-investment-vehicles’-miv’s-financial-viability-interview-with-christina-leijonhufvud-managing-di/

MicroCapital Universe. Bankers Without Borders. http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Ban…

MicroCapital Universe. JP Morgan Social Finance. http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=JP+…

Browse the MicroCapital Universe and add your entry to the wiki at http://www.microcapital.org/microfinanceuniverse/

Event Date: September 1 and September 2, 2010

Event Location: September 1 in Bogota and September 2 in Medellin

See Our Comprehensive Event Calendar Here: http://microfinanceassociation.ning.com/events

Cost: Free

Summary of Event: Training will be provided on pricing transparency as it relates to microfinance institutions (MFIs), regulators, funders and other support organizations. The event is being held as part of an effort by MFTransparency to collect and publish pricing data for microfinance products offered in Bogota and Medellin.

Background on Organizer:

MFTransparency is a nongovernmental organization that aims to provide “information on credit products and their prices in a clear and consistent fashion” for the microfinance industry. MFTransparency collects data on the interest and fees charged on microfinance loan products in order to calculate the effective interest rates on those loans. Its intention is to establish the industry standard for pricing disclosure and to facilitate a fair exchange between suppliers and consumers of microfinance products. MFTransparency was launched in July of 2008 and is based in the US. According to its website, as of December 6, 2009, it has been endorsed by 264 “industry leaders” that serve 80 million clients globally.

Event Themes and Discussion Topics: The event will teach new industry standards for calculating interest rates for microcredit products and will explain how institutions can actively participate in the MFTransparency project.

Who Is Invited to Attend: Limit of 2 members per organization.

About the Presenters:

Representatives from microfinance institutions, donor agencies, investors, raters, technical assistance providers and government officials will participate in the event.

Event Website: While no specific website is available, the website of the event organizer can be found at: www.MFTransparency.org

Online Registration Address: Currently unavailable.

For additional information, you may contact: Jordan Filko, Development and Communications Associate of MFTransparency at jordan@mftransparency.org or call (973)868-8375.

Submit Your Event: http://microfinanceassociation.ning.com/events

By Julia Korn, Research Associate

Sources and Additional Resouces:

[1] Submitted to MicroCapital by MFTransparency on August 13, 2010.

[2] MicroCapital Universe. MFTransparency. http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MFTransparency

MicroCapital. “MICROCAPITAL EVENT: Transparent Pricing Initiative in Malawi on August 31, 2010, in Blantyre, Malawi, Hosted by Microfinance Transparency” by Julia Korn on July 23, 2010. http://www.microcapital.org/microcapital-event-transparent-pricing-initiative-in-malawi-on-august-31-2010-comma-in-blantyre-malawi-hosted-by-microfinance-transparency/

MicroCapital. “MICROCAPITAL BRIEF: MFTransparency to Launch Transparent Pricing Initiative in India With Participation of 82 Microfinance Institutions to Date” by Jennifer Shevock on August 10, 2010. http://www.microcapital.org/microcapital-brief-mftransparency-to-launch-transparent-pricing-initiative-in-india-with-participation-of-82-microfinance-institutions-to-date/

Browse the MicroCapital Universe and add your entry to the wiki at http://www.microcapital.org/microfinanceuniverse/

Acting as lead arranger, IDB integrated funds from the Dexia-Microcredit Fund, which is managed by BlueOrchard of Switzerland; the development financial institution Societe de Promotion et de Participation pour la Cooperation Economique (PROPARCO), which is jointly held by the Agence Francaise de Developpement (AFD) and private shareholders, as well as microfinance investors Oikocredit and the Calvert Foundation.

The syndicated loan consists of an A loan for the equivalent of USD 10 million from the IDB’s own resources and a B loan for the equivalent of USD 26 million provided by a syndicate of private investors. The B loan consists of USD 17.5 million from BlueOrchard, USD 6.5 million from Oikocredit and USD 2 million from the Calvert Foundation. Although the loan amounts were announced in US dollars, both A and B loans are denominated in Peruvian nuevos soles.

An additional loan for the equivalent of USD 9 million, also in denominated in nuevos soles, from the French development finance institution, Societe de Promotion et de Participation pour la Cooperation Economique (PROPARCO), brings the financing package to the equivalent of USD 45 million.

Mibanco’s Chief Financial Officer (CFO), Ramiro Postigo Castro stated, “We are sure that this transaction, the first local currency-denominated syndicated loan approved by a multilateral institution for Peru, will strengthen and promote entrepreneurship among women in our country and have a positive impact on the local economy.”

About Mibanco:

Mibanco (Banco de la Microempresa), created in 1998, is a private Peruvian bank that aims to assist the development of micro- and small enterprises (MSEs). Its strategy is to target markets where demand for micro-credit is highest and supply weakest: it focuses on the Lima and Callao area where an estimated 70 percent of unsatisfied microcredit demand can be found. Mibanco offers both lending and savings products, and it employs both individual and solidarity group lending methodologies. Loans are offered for working capital and fixed investment needs. Loan size ranges from the equivalent of USD 100 to USD 100,000, with loan terms of 3 to 60 months, with interest rates from 25 percent up to 50 percent per year.

About Inter-American Development Bank (IDB):

The Inter-American Development Bank (IDB) was established in 1959 and provides multilateral financing in Latin America and the Caribbean. The bank works with governments, companies and non-governmental organizations (NGOs) to provide both loans and grants to support small and medium-sized enterprises (SMEs), health and education, among other sectors. It also provides technical assistance and research in these areas. Its Board of Executives are elected by 48 member countries, 26 of which are from Latin America and the Caribbean.

About BlueOrchard:

BlueOrchard is a Swiss commercial microfinance intermediary that provides loans to microfinance institutions through its subsidiary BlueOrchard Finance S.A. and invests in the equity of microfinance institutions and microfinance network funds through its subsidiary BlueOrchard Investments S.A. BlueOrcahrd had approximately USD 980 million under management as of June 2009.

About Oikocredit:

Oikocredit is a Dutch cooperative investment fund comprised of church groups, social support groups and individual investors. Established in 1975, it works in 70 countries worldwide, investing mainly in microfinance institutions (MFIs), as well as trade cooperatives, fair trade organizations and small and medium-sized enterprises (SMEs) in the developing world. As of year-end 2009 it had EUR 537 million (USD 715 million) in total assets with 790 active investments, of which 543 investments were in MFIs.
About Calvert Foundation:

The Calvert Foundation provides loans to organizations that provide affordable housing, microfinance, small business loans, and community facilities. The fund is offered by the Calvert Social Investment Foundation, a private US foundation founded in 1995 with the support of the Ford, MacArthur and Mott Foundations. Investment in the Fund comes in the form of donations and notes held by individuals and organizations, including Washington Mutual Bank, Ameritas Life Insurance Corp. and Gray Ghost Microfinance Fund, LLC.

About Societe de Promotion et de Participation pour la Cooperation Economique (PROPARCO):

Established in 1977, Promotion et Participation pour La Cooperation Economique (PROPARCO) ?the Investment and Promotions Company for Economic Cooperation) is a development finance institution based in Paris, France, that is jointly held by the Agence Francaise de Developpement (AFD), a bi-lateral development finance institution working on the behalf of the French government, and private shareholders. PROPARCO’s mission is to be a catalyst for private investment in developing countries which targets growth, sustainable development and reaching the Millennium Development Goals (MDGs). In 2009, PROPARCO disbursed EUR 1.1 billion (USD 1.4 billion) for 80 projects in thirty countries.

By Matthew Fox, Research Assistant

Sources and Additional Resources

Inter-American Development Bank (IDB) Press Release, 6 August 2010: http://www.iadb.org/news-releases/2010-08/english/perus-mibanco-receives-45-million-to-boost-credit-for-women-microentrepreneurs–7613.html

MicroCapital Brief: Inter-American Development Bank (IDB) to Provide $10m Loan to Mibanco of Peru to Help Launch Microfinance Product: http://www.microcapital.org/microcapital-brief-inter-american-development-bank-idb-to-provide-10m-loan-to-mibanco-of-peru-to-help-launch-microfinance-product/

MicroCapital Universe: Mibanco: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Mibanco

MicroCapital Universe: Inter-American Development Bank (IDB): http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Inter-American+Development+Bank+(IDB)

MicroCapital Universe: BlueOrchard: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=BlueOrchard

MicroCapital Universe: Oikocredit: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Oikocredit

MicroCapital Universe: Calvert Foundation: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Calvert+Foundation

MicroCapital Univese: Societe de Promotion et de Participation pour la Cooperation Economique (PROPARCO): http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=PROPARCO

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The assistance under the Latin America and Caribbean Subordinated Debt Facility, a financial intermediary of IDB, will also mobilize additional resources from commercial banks and other institutions in order to increase funding to small and medium-sized enterprises (SMEs), microfinance and housing finance.

A press release from IDB claims that liquidity constraints and worsening portfolio performance due to the financial crisis in 2008 have forced Latin American private financial institutions to reduce lending levels, particularly to SMEs.

IDB states that the Latin America and Caribbean Subordinated Debt Facility will utilize subordinated debt instruments that may consist of subordinated loans, guarantees to regional banks and other investors willing to fund such loans, or partial credit guarantees to support the issuance of subordinated bonds. The subordinated debt instruments will be financed chiefly by the IDB, whereas capital instruments that may be required by these institutions will be financed mostly by the International Finance Corporation (IFC), the private-sector arm of the World Bank.

About Inter-American Development Bank (IDB):

Established in 1959, the Inter-American Development Bank (IDB) provides multilateral financing in Latin America and the Caribbean. The bank works with governments, companies and non-governmental organizations (NGOs) to provide both loans and grants to support small and medium-sized enterprises (SMEs), health and education, among other sectors. It also provides technical assistance and research in these areas. Its Board of Executives are elected by 48 member countries, 26 of which are from Latin America and the Caribbean.

About International Finance Corporation (IFC):

A member of the World Bank Group, the International Finance Corporation (IFC) uses loan and debt securities, equity investments and guarantees with the intent of alleviating poverty. It invests in financial institutions and other companies in emerging markets as well as providing technical assistance. The IFC has 182 member countries that collectively determine its policies, and approve investments. In fiscal year 2009, its new investments totaled USD 14.5 billion.

By Matthew Fox, Research Assistant

Sources and Additional Resources

Inter-American Development Bank (IDB): Press Release, 6 August 2010: http://www.iadb.org/news-releases/2010-08/english/idb-to-help-financial-institutions-boost-lending-to-small-projects-with-high-soc-7607.html

MicroCapital Universe: Inter-American Development Bank (IDB): http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Inter-American+Development+Bank+(IDB)

MicroCapital Universe: International Finance Corporation (IFC): http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+(IFC)

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