CHF International, a US-based international development and humanitarian assistance non-profit organization, has set up a private holding company, CHF Finance Group, to house its commercial microfinance institution (MFI) subsidiaries.

CHF Finance Group will initially consist of four CHF International subsidiary MFIs: Express Finance S.A. in Romania, Ameen S.A.L. in Lebanon, Middle East Micro Credit Company (MEMCC) in Jordan and Lider MicroCredit Company in Bosnia pending their registration that will enable them to qualify for membership. From a CHF International press release, “over the next five years, CHF Finance Group aims to raise over USD 100 million in a combination of debt, equity and technical assistance grants to grow its existing operations, build capacity of local staff, and provide sufficient seed capital to start up operations in new areas.”

A 19.9 percent stake was purchased in the new CHF Finance Group by the International Finance Corporation (IFC), a member of the World Bank Group that provides investments and advisory services to build the private sector in developing countries. In addition to the monetary investment made by the IFC, it has offered a performance-based technical assistance grant.

Elissa McCarter, Director of Development Finance at CHF International said, “for CHF International this is a strategic shift in our approach to microfinance. It is evidence that what began as purely grant-funded projects in difficult environments have proven to be so successful that they are now attractive investments.”

By: Christine Chang, Research Associate

About CHF International:

CHF International (CHF) is an international development organization founded in 1952 that works in post-conflict, unstable and developing countries. CHF partners with communities around the world to help them to improve and direct their lives and livelihoods. The organization believes that those best suited to decide what a community needs are the community itself. CHF is a politically neutral, non-profit organization. CHF Development Finance International LLC is a limited liability company registered in Maryland in the US and majority owned by CHF International. CHP Development Finance International LLC was created to house the commercial ownership of financial institutions in which CHF has an equity position.

About International Finance Corporation (IFC):

The International Finance Corporation (IFC) is a member of the World Bank Group, created to support financial private sector development, mobilize private capital and provide advisory and risk mitigation services to businesses and services. It uses loan and debt securities, equity investments and guarantees as instruments of poverty alleviation. It invests in financial institutions in emerging markets as well as provides technical assistance. IFC has 182 member countries that collectively determine its policies and approve investments. In 2009, IFC made new investments in developing countries that reached a total of USD 14.5 billion.

Additional Resources:

PR Newswire: CHF International Expands Reach of Global Microfinance Initiatives by Selling First Minority Stake in New Holding Company CHF Finance Group, April 21, 2010: http://www.prnewswire.com/news-releases/chf-international-expands-reach-of-global-microfinance-initiatives-by-selling-first-minority-stake-in-new-holding-company-chf-finance-group-91712499.html

IFC website: CHF Holding Summary of Proposed Investment: http://www.ifc.org/ifcext/spiwebsite1.nsf/f451ebbe34a9a8ca85256a550073ff10/86a66f6599a44d4e852576ba000e2b7b?OpenDocument

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

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

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