Microfinance Institution ASA International Secures Largest Equity
Capital Commitment Ever to Microfinance
Wednesday February 13 2:28 AM
Catalyst Microfinance Investors ("CMI") announced today that it has
achieved its final private closing with total capital commitments of US
$ 125 million (EUR 86 million) from leading international
institutional and private investors such as, amongst others, the Dutch
pension fund, ABP, and US investor financial services organization,
TIAA-CREF. This is the largest collective equity capital commitment to
microfinance ever. CMI intends to use most of the funds for the rapid
establishment and growth of ASA International in many of the largest
microfinance markets in Asia and Africa. CMI is one of the first
private equity funds dedicated to investing in micro finance
institutions on a commercial basis.
ASA International is one of CMI's major investments vehicles, managed
in partner****p with ASA of Bangladesh, one of the world's largest and
most successful microfinance institutions, which serves over 6 million
micro-entrepreneurs from more than 3,000 branches spread all over
Bangladesh. Each of ASA International's microfinance operations has
adopted ASA's successful model of microfinance, which distinguishes
itself for its rapid scalability and low operating costs. CMI and ASA
International already commenced operations in Cambodia, Ghana, India,
Nigeria, Pakistan, the Philippines, and Sri Lanka, and they expect to
become operational in China and Indonesia later this year.
CMI is a private equity investment fund, managed in partner****p by ASA
of Bangladesh and Sequoia, an independent, international cor****ate
finance advisory and investment firm, dedicated to investing in
emerging, fast-growing microfinance institutions ("MFI's") throughout
Asia and Africa. CMI aims to deliver long-term capital growth to its
investors, including some of the world's largest and most established
institutional investors.
There are an estimated 1 billion potential microfinance clients around
the world of which at this time less than 120 million are being
served. Microfinance has proven itself as a sustainable and attractive
business with many MFI's consistently achieving repayment rates of 99%
or more on outstanding loans. Simultaneously, many independent surveys
provide evidence of microfinance's positive social impact on low-
income families with substantial increases in income, savings and
capital, as well as improved access to healthcare and education.
Powered by CMI's equity capital, ASA International has the potential
to provide basic financial services to millions of low-income micro-
entrepreneurs.
Mr. Shafiqual Haque Choudhury, Chief Executive Officer of ASA
International and Founder and President of ASA of Bangladesh, said:
"This large pool of equity capital will enable us to build and develop
large scale and highly efficient microfinance institutions in
developing markets around the world and provide the non-bankable poor
in these regions with first-time access to credit and other basic
financial services, which will help free them from exploitation,
unleash their entrepreneurial drive, and improve family's
livelihoods."
Mr. Dirk Brouwer, Executive Director of CMI and Managing Director of
Sequoia, commented: "ASA's powerful, highly efficient model of
microfinance gives us a true competitive edge as an owner and operator
of MFI's".
Mr. Paul Spijkers, CIO Alternative Investments of Stichting
Pensioenfonds ABP, one of the world's largest pension funds with more
than US$ 320 billion under management, remarked: "Our financial
commitment to CMI and ASA International will give some of the world's
economically most disadvantaged people the op****tunity to improve
their livelihoods, while, simultaneously, the investment has the
potential to provide us with a combination of strong growth and
attractive returns in high growth economies. These investments are
particularly fit for a pension fund as a risk diversifier. They are
relatively non-correlated with most other asset cl*****."
"CMI and ASA International provide TIAA-CREF an im****tant op****tunity
for a second investment in our Global Microfinance Investment
Program", said Mr. Scott Budde, Managing Director, Social and
Community Investing, TIAA-CREF, a major U.S. financial services
organization and the leading provider of retirement services in the
academic, research, medical and cultural fields with more than US$435
billion in combined assets under management.(1) "We believe ASA is an
efficient vehicle for expanding Microfinance around the world with a
consistent focus on both the betterment of low income borrowers and a
competitive investment structure. We are also pleased by how the
structure of this investment is enabling Bangladesh to strengthen and
ex****t some of the significant Microfinance management expertise it
has developed over the years."(2)
Editors Note:
ASA
ASA of Bangladesh was founded in 1979 as an NGO in Bangladesh by Mr.
Shafiqual Haque Choudhury, its current president, and has provided
microfinance services since 1991. ASA is known globally as one of the
most cost-effective and fastest growing organizations of its kind,
with over fifteen years of experience in successfully providing high-
quality microfinance services to more than five million borrowers in
Bangladesh. The Asian Development Bank termed the ASA's "cost-
effective sustainable microfinance model" as the "Henry Ford Motor
Model of Microfinance". Recently, ASA was recognized by Forbes
Magazine as the world's most successful microfinance institution.
As of December 31, 2006, ASA had a total loan ****tfolio of US$ 294
million, of which less than one percent (1%) was overdue, and retained
earnings of US$ 196 million. Its 6.5 million clients, of which 5.2
million are borrowers, were served through 2,931 branches by 18,400
staff members. In 2006, ASA realized a return on equity of eighteen
percent (18%) and a return on assets of ten percent (10%). ASA's rapid
expansion over the past years has been fuelled by its strong financial
performance. ASA owes its success largely to its innovative products
that uniquely suit the needs of its clients. Additionally, ASA has
sup****ted a large number of MFIs throughout Asia (India, the
Philippines, Sri Lanka, Yemen, and Bangladesh) and Africa (Nigeria and
Ethiopia) by helping them to establish best practice credit
methodologies and standard operating procedures to accelerate growth.
Sequoia
Sequoia, founded by Mr. Dirk Brouwer in 2002, is an independent,
international cor****ate finance advisory and private equity firm with
offices in the Netherlands and the United Kingdom, specializing in
strategic mergers and acquisitions and capital markets advisory
services and private equity investments.
What is microfinance?
Microfinance is the practice of providing banking services to the
economically active poor. Microfinance is not charity; rather, it
seeks to provide equal access to financial services so that the poor
can grow their businesses, insure their families, and begin savings
deposit programs. Accordingly, microfinance services can include
anything from credit to insurance, which are provided to people on low
incomes who run and operate micro-enterprises in developing nations.
MFI's are dedicated to serving a high potential and underserved market
of over 1 billion potential customers worldwide that lack access to
formal financial services. An increasing number of MFI's, like ASA,
have demonstrated that they are successful in meeting the needs of
their low-income clients in a commercially and financially sustainable
way and thereby generating an attractive risk-adjusted return on
investment.
(1) TIAA-CREF Individual & Institutional Services, LLC and Teachers
Personal Investors Services, Inc., members FINRA, distribute
securities products.
(2) The Global Microfinance Investment Program is funded by the
General Account of TIAA, a member of the TIAA-CREF family of
companies.
Contact:
Catalyst Microfinance Investment Company
Martijn Bollen, Investor Relations Officer
Tel: +31 24 322 8223
Mob: +31 6 40542551
mbollen@[EMAIL PROTECTED]
First Financial B.V.
Edi Cohen, Director
Tel: +31 20 575 40 17
Mob: +31 6 215 17 820
edi.cohen@[EMAIL PROTECTED]
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