MICROCAPITAL BRIEF: International Finance Corporation (IFC) and IFC African, Latin American and Caribbean Fund Make $75m Equity Investment in Insurance Sector Activities of Caribbean-based Guardian Holdings Limited

The International Finance Corporation (IFC), a member of the World Bank Group that provides investment and advisory services to the private sector in developing countries, recently announced a USD 75 million equity investment in Guardian Holdings Limited (GHL), a financial services group based in Trinidad & Tobago that operates throughout the Caribbean. The investment, made up of USD 56.2 million in equity from IFC and USD 18.8 million in equity from the IFC African, Latin American and Caribbean (ALAC) Fund, will be used by GHL to improve access to insurance services, especially health and agribusiness insurance, through strategic regional partnerships and increased market penetration. IFC and the ALAC Fund hope this investment will spur growth as well as and create value for shareholders in the Caribbean region’s insurance sector [1].

IFC has launched other projects in the Caribbean with the aim of connecting entrepreneurs with the financial sector. In June 2010, IFC, in collaboration with the Japanese government, the Canadian International Development Agency and the Commonwealth Secretariat, a voluntary association of 54 countries working to promote democracy and development, established a training program for bankers to learn about sustainable small and medium-sized enterprise (SME) banking strategies [2].

By Lindsey Shaughnessy, Research Associate

About Guardian Holdings Limited: Guardian Holdings Limited (GHL) describes itself as “the parent company for an integrated financial services group with a focus on life, health, property and casualty insurance, pensions and asset management. The company has grown steadily and currently operates across the English and Dutch Caribbean with interests in the United Kingdom. It is listed on both the Trinidad and Tobago and Jamaica stock exchanges.” As of June 2010, GHL reports total assets of USD 3.48 billion.

About the 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 The International Finance Corporation Global Small and Medium-Sized (SME) Banking Program: The International Finance Corporation Global Small and Medium-Sized (SME) Banking Program is an office of the World Bank Group’s International Finance Corporation (IFC) that works to increase access of SMEs in developing countries to financial services. It provides funding for equity, loans and mezzanine finance to financial intermediaries. It focuses on SME financing, building the capacity of financial intermediaries and raising awareness on SME Banking practices. At the end of 2009, IFC had a committed portfolio of USD 6.1 billion in 200 financial institutions that primarily target SMEs in developing countries. About half of these institutions also received advisory services from IFC. In total, these institutions had an outstanding portfolio of 1.3 million SME loans amounting to USD 90.6 billion. In the Caribbean, IFC’s committed portfolio in 2009 was USD 1.3 billion in 50 financial institutions with new commitments in these financial intermediaries totaling USD 181.5 million.

Sources and Additional Resources:

[1] Media Newswire, “IFC, IFC ALAC Fund Investment in Guardian Holdings Limited Expands Access to Insurance in the Caribbean”, August 24, 2010. http://media-newswire.com/release_1125776.html

[2] MICROCAPITAL BRIEF: “International Finance Corporation (IFC)’s Global Small and Medium-Sized Enterprise (SME) Banking Program Trains Caribbean Bankers on Building Sustainable Banking Operations”, June 10, 2010. https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc%E2%80%99s-global-small-and-medium-sized-enterprise-sme-banking-program-trains-caribbean-bankers-on-building-sustainable-banking-operations/

MicroCapital’s Microfinance Universe profile: Guardian Holdings Limited

MicroCapital’s Microfinance Universe profile: International Finance Corporation (IFC)

MicroCapital’s Microfinance Universe profile: The International Finance Corporation Global Small and Medium-Sized (SME) Banking Program

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