MICROCAPITAL BRIEF: Asian Development Bank Bond Sale Raises $30m to Boost Local Microenterprises Served by Credo Microfinance, FINCA Georgia

The Asian Development Bank (ADB), a multilateral development banking institution based in the Philippines, recently announced it has raised GEL 64 million (approximately USD 30 million) through a sale of bonds denominated in Georgian lari.The proceeds of the sale will be lent to two Georgian microfinance lenders, Credo Microfinance Organization and FINCA Georgia, which will use the funds to on-lend to local microenterprises. FINCA Georgia is a subsidiary of the US-based Foundation for
International Community Assistance (FINCA) International.

Pierre Van Peteghem, the treasurer of ADB, stated that “microenterprises play a critical role in employment creation in Georgia, and getting better access to bank financing will help them to grow.”[1]

The bonds will mature on July 6, 2019, and pay a floating interest rate indexed to the National Bank of Georgia’s 3-month certificate of deposit (CD) reference rate plus 20 basis points. The bond issue was privately placed.

As of 2015, ADB reported total assets of USD 117 billion. As of December 31, 2015, Credo reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 247 million, a gross loan portfolio of USD 177 million and approximately 197,000 active borrowers. For the same period, FINCA Georgia reported to MIX total assets of USD 91 million, a gross loan portfolio of approximately USD 73 million and 55,000 borrowers. Neither institution accepts deposits. As of December 2015, FINCA
International had total assets of USD 1.1 billion and served 1.8 million
clients through subsidiaries in 23 countries.

By Imke Herholdt, Research Associate

About Asian Development Bank (ADB)
Established in 1966 and headquartered in Manila, the Philippines, the Asian Development Bank (ADB) is a development finance institution that consists of 67 member countries, of which 48 are from the Asia-Pacific region. ADB has three strategic priorities: to foster inclusive growth, to facilitate regional integration and to ensure environmentally sustainable growth. To accomplish these objectives, ADB uses loans, technical assistance programs, grants, equity investments and guarantees in member countries in the region. As of 2015, ADB reported total assets of USD 117 billion.

About Credo Microfinance Organization
Credo Microfinance Organization is a microfinance institution (MFI) that was established in 1997 in Tbilisi, Georgia. As of December 31, 2015, Credo reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 247 million, a gross loan portfolio of USD 177 million and approximately 197,000 active borrowers. The institution does not accept deposits.

About FINCA Georgia
FINCA Georgia is a microfinance institution (MFI) subsidiary of the Foundation for International Community Assistance (FINCA) International, a US-based nonprofit microfinance network. As of December 31, 2015, FINCA Georgia reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 91 million, a gross loan portfolio of approximately USD 73 million and 55,000 borrowers. The institution does not accept deposits.

About FINCA International
The Foundation for International Community Assistance (FINCA International), a nonprofit microfinance network based in the United States city of Washington, DC, 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. The organization was founded in 1984 by Dr. John Hatch, who is known for helping develop “village banks” in which each member guarantees the loans of other members. As of December 2015, FINCA International had total assets of USD 1.1 billion and served 1.8 million clients through subsidiaries in 23 countries.

Sources and Additional Resources
[1] ADB: ADB Sells 64 Million Georgian Lari Bond to Lift Microenterprises
[2] MicroCapital Universe Profile: ADB
[3] MicroCapital Universe Profile: LLC MFO Credo
[4] MicroCapital Universe Profile: FINCA Georgia
[5] MicroCapital Universe Profile: FINCA International
[6] MIX: FINCA-GEO
[7] MIX: CREDO

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/