MICROCAPITAL BRIEF: International Finance Corporation (IFC) Sells Dai-ichi Life Insurance Company of Japan $100m in “Inclusive Business Bonds”

The International Finance Corporation (IFC), a member of the US-based World Bank Group that offers financial services to businesses and governments in developing countries with the aim of increasing economic growth, recently announced that it has sold five-year “inclusive business bonds” valued at MXN 1.5 billion (USD 100 million) to Japan’s Dai-ichi Life Insurance Company (Dai-ichi Life), a firm that offers life, property and casualty insurance as well as investment trust and related services. Investments under the IFC inclusive business bonds program support companies that offer job opportunities, goods and services for people who live on less than USD 8 per day. The sole arranger of the transaction was J.P. Morgan Chase & Company (J.P. Morgan Chase).

Mr Jingdong Hua, IFC’s vice president and treasurer, said that “IFC inclusive business bonds support companies in emerging markets that actively integrate low-income communities into their value chain so they can participate in economic growth”[1]. He added that “the endorsement of the bonds by institutional investors such as Dai-ichi [Life] is a strong indication for the opportunity to scale up the program, particularly as IFC looks to boost our investment in inclusive business models”[1]. Mr Kazuyuki Shigemoto, the general manager of the global fixed income investment department of Dai-ichi Life, said that “Dai-ichi Life follows investment principles that combine attractive investment opportunities with social, environmental, and governance considerations. We strongly support IFC’s vision that people should have the opportunity to escape poverty and improve their lives”[1]. Mr Shigemoto also said that “we see great impact in being the first institutional investor to invest in IFC’s inclusive business bonds. We also believe the Mexican peso denominated bonds offer a solid and attractive investment opportunity”[1].

IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013. IFC has committed USD 11 billion in inclusive investments since 2005 with the aim of encouraging the financial inclusion of low-income communities. As of 2013, Dai-ichi Life reported total assets of JPY 33 trillion (USD 274 billion). As of December 2013, J.P. Morgan Chase reported total assets of USD 2.4 trillion, return on equity (ROE) of 9 percent and return on assets (ROA) of 0.75 percent.

By Alíz Crowley, Research Associate

About International Finance Corporation

The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments, advisory and risk mitigation services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013.

About Dai-ichi Life Insurance Company

Dai-ichi Life Insurance Company (Dai-ichi Life) is a Japanese insurance company that was established in 1902 and is based in Tokyo. The organization offers life, property and casualty insurance as well as investment trust and related services. In addition to its presence in Japan, Dai-ichi Life has affiliates in Australia, mainland China, Hong Kong, India, Indonesia, Thailand, United States, United Kingdom and Vietnam. As of 2013, Dai-ichi Life reported total assets of JPY 33 trillion (USD 274 billion).

About J.P. Morgan Chase & Company

J.P. Morgan Chase & Company (J.P. Morgan Chase) is a US-based financial services firm involved in investment banking, consumer financial services, small-business and commercial banking, financial transaction processing, asset management and private equity. A component of the Dow Jones Industrial Average, J.P. Morgan Chase serves corporate, institutional and government clients in approximately 100 countries. In 2000, Chase Manhattan Bank acquired J.P. Morgan, making the company the investment arm of J.P. Morgan Chase. As of December 2013, the company reported total assets of USD 2.4 trillion, return on equity (ROE) of 9 percent and return on assets (ROA) of 0.75 percent.

Sources and Additional Resources

[1] International Finance Corporation, News, IFC Issues First Inclusive Business Bonds for Institutional Investors

MicroCapital, December 10, 2014, International Finance Corporation (IFC) to Provide $18m to Peru-based La Positiva Seguros Generales through Convertible Subordinated Loan to Expand Insurance to Poor People

MicroCapital, December 7, 2014, International Finance Corporation (IFC) to Invest $67m in Equity in Bank Alfalah of Pakistan to Promote Financial Access for Small, Medium-sized Enterprises (SMEs); Economic Growth; Job Creation

MicroCapital, November 25, 2014, International Finance Corporation (IFC) to Loan $30m to Rizal Commercial Banking Corporation (RCBC) of Philippines to Fund Small, Medium-sized Enterprises; Women-led Businesses

MicroCapital Universe Profile: International Finance Corporation

MicroCapital Universe Profile: Dai-ichi Life Insurance Company

MicroCapital Universe Profile: J.P. Morgan Chase & Company

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