MICROCAPITAL BRIEF: International Finance Corporation (IFC) Loans $4m to FINCA Georgia to Support Micro- and Small Businesses, Entrepreneurs

The International Finance Corporation (IFC), a member of the US-based World Bank Group, recently announced that it will provide a USD 4 million loan to the Republic of Georgia-based subsidiary of the Foundation for International Community Assistance (FINCA), a US-based microfinance network, for on-lending to micro and small businesses as well as entrepreneurs in rural regions of Georgia. Thomas Lubeck, the IFC Regional Manager for the South Caucasus, expressed that this loan would “encourage other investors to enter this sector” and “create new opportunities for micro and small businesses, supporting their growth.” [1]

As of 2012, FINCA Georgia reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 59.9 million, a gross loan portfolio of USD 49.4 million, return on assets of 7.66 percent, return on equity of 35.3 percent and approximately 42,000 borrowers. The institution does not take deposits. FINCA International has total assets of USD 719 million as of December 2011 and has nearly 1 million clients through its subsidiaries in 22 countries as of June 2012. At fiscal year-end 2012, IFC reported 184 member countries, total assets of USD 76 billion and return on equity of approximately 5 percent.

By Michael Averell, Research Associate

About FINCA Georgia

FINCA Georgia is a microfinance institution (MFI) and a subsidiary of FINCA International, a US-based nonprofit microfinance network. As of 2012, FINCA Georgia reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 59.9 million, a gross loan portfolio of USD 49.4 million, approximately 42,000 borrowers, return on assets of 7.66 percent and return on equity of 35.3 percent. The institution does not take deposits.

About FINCA International

Founded in 1984 by Dr John Hatch, who is known for helping develop village banking in which each member of the village bank ensures the loan of other members, the Foundation for International Community Assistance (FINCA) International is a microfinance network based in Washington, DC, that provides financial services to poor families through a network of locally managed institutions. FINCA targets its services to poor women living in the Americas, sub-Saharan Africa and Eurasia. FINCA International has total assets of USD 719 million as of December 2011 and has nearly 1 million clients through its subsidiaries in 22 countries as of June 2012. In December of 2011, FINCA launched a subsidiary, FINCA Microfinance Holding LLC, with funding from the International Finance Corporation (IFC), KfW Bankengruppe, Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO), responsAbility Social Investments, and Triple Jump.

About International Finance Corporation

A member of the US-based World Bank Group, the International Finance Corporation (IFC) offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. At fiscal year-end 2012, IFC reported 184 member countries, total assets of USD 76 billion and return on equity of approximately 5 percent.

Sources and Additional Resources

[1] International Finance Corporation (IFC): “IFC Supports Microfinance Lending, to Help Entrepreneurs and Create Jobs in Georgia,” http://ifcext.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/E8276DDA78394B0F85257B8D0036ACFC?OpenDocument

Microfinance Information Exchange (MIX): “FINCA Georgia MFI Report,” http://www.mixmarket.org/mfi/finca-geo

“Ratings on International Finance Corporation,” by Standard & Poors Rating Service: December 2012, http://www.ifc.org/wps/wcm/connect/f4c0c6004cb890b58e88cff81ee631cc/S%26P+Dec+2012+Report.pdf?MOD=AJPERES

MicroCapital story, June 12, 2013, “MICROCAPITAL BRIEF: FINCA Become Majority Stakeholder of Kashf Microfinance Bank of Pakistan with $8.4m Investment,” http://www.microcapital.org/microcapital-brief-finca-becomes-majority-shareholder-of-kashf-microfinance-bank-of-pakistan-with-8-4m-investment/

MicroCapital story, April 20, 2011, “MICROCAPITAL BRIEF: responsAbility Social Investments of Switzerland Loans $15m to FINCA International Subsidiaries in Azerbaijan, Georgia, Kyrgyzstan,” http://www.microcapital.org/microcapital-brief-responsability-social-investments-of-switzerland-loans-15m-to-finca-international-subsidiaries-in-azerbaijan-georgia-kyrgyzstan/

MicroCapital story, June 21, 2013, “MICROCAPITAL BRIEF: International Finance Corporation (IFC) Extends $10m Loan, $8m Trade-Finance Credit Line to Banco Financiera Centroamericana (Ficensa) of Honduras for Small and Medium-Sized Businesses,” http://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-extends-10m-loan-8m-trade-finance-credit-line-to-banco-financiera-centroamericana-ficensa-of-honduras-for-small-and-medium-sized-busine/

MicroCapital story, June 9, 2013, “MICROCAPITAL BRIEF: IFC Loans $70m to SB Sberbank of Kazakhstan to Support Small, Medium-Sized Enterprises (SMEs),” http://www.microcapital.org/microcapital-brief-ifc-loans-70m-to-sb-sberbank-of-kazakhstan-to-support-small-medium-sized-enterprises-smes/

MicroCapital Universe Profile: FINCA Georgia                                                                                              http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FINCA+Georgia

MicroCapital Universe Profile: FINCA International                                                                                             http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FINCA+International

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

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