FINCA International, Deutsche Bank raise $21 million for Microfinance fund

Microfinance Focus, November 12, 2009: FINCA International and Deutsche Bank have raised $21.2 million for the FINCA Microfinance Fund, the first-ever single microfinance network sub-debt deal. The fund, which has only private sector investors, was about 100 percent oversubscribed bringing in a new pool of investors to the microfinance industry, said a statement.
The FINCA Microfinance Fund is the first microfinance subordinated debt deal to be completed since 2007 and managed by Deutsche Bank. The offering will provide FINCA affiliates in the Democratic Republic of Congo, Mexico, Armenia, Azerbaijan, Kyrgyzstan, Georgia and Tajikistan the financial flexibility to on-lend an estimated $100 million in additional loan capital, as well as make the investments in staff, branches and other infrastructure to support its expanding microfinance lending and deposit-taking programs.
With the facility’s average loan size of $503, the seven FINCA affiliates will be positioned to provide an estimated 150,000 additional microloans each year to some of the world’s lowest-income entrepreneurs.
“This new financial facility represents an important breakthrough for both FINCA and the microfinance industry,” said Rupert Scofield, President & CEO of FINCA International. “As we approach the year of our 25th anniversary, it opens an exciting new chapter for FINCA, allowing us to further expand our outreach to lower-income entrepreneurs, while at the same time broadening the universe of investors for the microfinance community as a whole. As a double bottom line event, it’s definitely a win-win situation all round.”
“FINCA International’s long term performance and commitment to a sustainable and socially-responsible microfinance sector aligns closely with Deutsche Bank’s own strategy and commitment to the sector,” said Gary Hattem, Managing Director of Deutsche Bank’sCommunity Development Finance Group.
“This fund demonstrates the attractiveness of that model to investors who have confidence in providing capital to the poor for self employment where strong management models have delivered continuing social impact and sound financial performance.” Investors in the fund include mainstream pension funds and socially-responsible private investors.
“MetLife has a long history of investing in local communities, and we are excited by the potential to reach the very poorest through our investment in FINCA. By investing in microfinance, we are supporting a sector that we believe has both commercial sustainability as well as the potential to make a significant social impact,” said Dennis White, Vice President of MetLife’s Social Investment Program.
“I view FINCA and Deutsche Bank as two of the strongest and most socially committed actors in the microfinance sector. The FINCA Fund puts our foundation’s capital to work in a highly leveraged manner that will truly benefit the poor with new opportunities for economic empowerment,” said Matt McConnell, President of the Left Hand Foundation.
FINCA is an international microfinance organization that provides financial services to the world’s lowest-income entrepreneurs. Based in Wahington D.C., it operates across 21 countries, serving more than 730,000 clients.

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