OPIC Loan Enables Microfinance Fund to Expand Lending
October 7, 2009
WASHINGTON, D.C. – A loan from the Overseas Private Investment Corporation (OPIC) will enable a microfinance fund to expand its lending to microfinance institutions (MFIs) throughout the world, generating nearly 100,000 estimated new loans for micro borrowers and impacting up to a half-million individuals in developing countries.
OPIC will provide a $10 million loan to MicroVest I, LLP (MVI), the first North American microfinance investment fund to raise capital entirely from socially-motivated individuals and institutional investors; its principal U.S. sponsors are CARE USA, MEDA Investments Inc, Perls Foundation, and Omidyar Network. Proceeds of the OPIC loan will be used by MVI to expand its MFI lending in OPIC-eligible countries worldwide.
“MicroVest is a successful microfinance fund manager, with a track record of sound investing and a demonstrated commitment to maximizing developmental impacts,” said OPIC Acting President Dr. Lawrence Spinelli. “Through this OPIC loan, MVI will expand its lending significantly, enabling thousands of microbusinesses to grow, serve their local economies and improve living standards in developing countries across the world.”
MVI was established in 2003 to build capital markets by serving as an intermediary linking qualified MFIs with the global capital markets. The MFIs in which MVI invests are banks, non-bank financial intermediaries and non-governmental organizations which specialize in extending credit to micro enterprises. Since its inception, MVI has made investments in 39 MFIs and three regional microfinance funds in 14 countries, and today has assets of approximately $38 million. The fund has not experienced any defaults or investment write offs in its portfolio since it was launched.
“We are very pleased to be initiating a substantial, long-term relationship with OPIC in this exciting phase of our growth”, said MicroVest Vice-Chairman Gerhard Pries. “Globally, OPIC is well-respected and plays a critical role in the development finance arena, and this partnership offers significant strategic opportunities to address the vast unmet needs of the world’s working poor.”
CARE is a leading humanitarian organization managing poverty-fighting programs in some 70 developing countries. As a nonprofit 501(c)(3) tax exempt organization CARE seeks to empower families and communities through programs in agriculture and natural resource management, education, emergency relief, health, nutritional support, small enterprise development, and water and sanitation.
MEDA Investments Inc is the investment arm of Mennonite Economic Development Associates, an association of North American businesspeople that works to create business solutions to poverty in developing countries. Through early stage capital investments, MEDA Investments Inc seeks to establish private investment as an effective solution to global poverty.
Omidyar Network is a philanthropic investment firm dedicated to harnessing the power of markets to create opportunity for people to improve their lives. Through its access to capital initiative, Omidyar Network aims to create economic opportunity by increasing access to financial services, business opportunities, and property rights that are available to most citizens of developed countries.
The Perls Foundation is a small family foundation active in social enterprise and social justice.
Seed Capital Development Fund is a U.S. non-profit organization dedicated to economic development through the creation of mechanisms that link microfinance institutions to capital markets.