FINCA International and Deutsche Bank announce first-ever single microfinance network sub-debt deal
Fund enjoys strong interest from both mainstream and socially-responsible investors
FINCA International, along with Deutsche Bank, today announced that they have secured total capital commitments of $21.2 million for the FINCA Microfinance Fund B.V., the first-ever single microfinance network sub-debt deal. The fund, which has only private sector investors was about 100 percent oversubscribed and brings a new pool of investors to the microfinance industry.
The FINCA Microfinance Fund is the first microfinance subordinated debt deal to be completed since 2007 and was structured, placed 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. Through the facility, and based on its average network-wide 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's Community 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.
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About Deutsche Bank
Deutsche Bank <NYSE: DB> is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With 78,530 employees in 72 countries, Deutsche Bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people.
About FINCA International
FINCA is a leading international microfinance organization that provides financial services to the world's lowest-income entrepreneurs so they can create jobs, build assets and improve their standard of living. For nearly 25 years, FINCA has been committed to breaking the cycle of poverty by providing community-based credit and savings opportunities. Currently, FINCA operates with a distinctive, integrated business model that accepts donations and investment dollars, an approach that leverages available capital and promotes greater transparency, sustainability and higher standards of business practice. This approach has allowed FINCA to achieve balanced financial and social performance unmatched in the Microfinance Industry, while opening the path to socio-economic development for some of the lowest-income citizens of the world. Based in Washington, DC and with local operations across 21 countries, serving more than 730,000 clients, FINCA's outreach is among the broadest and most comprehensive of today's microfinance networks.