Tapping the Capital Market II

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Welcome to Grameen Foundation
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Grameen Foundation empowering people
Reducing global poverty among the poorest of the
poor

• Harnesses innovative financing, cutting-edge
  technology, technical assistance, and
  breakthrough thinking
• Supports and advances microfinance, a proven
  poverty-reduction strategy
• Grameen Foundation and Grameen Bank a strong,
  strategic alliance

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Grameen Foundation

• US-based nonprofit organization established in
  1997
• GF network 52 microfinance institution partners
  (MFIs) in 22 countries
• Has impacted more than 11 million people
• Serving more than 2.2 million clients

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What is microfinance?

• Very small, unsecured loans usually under
  US200
• Start, sustain or expand self-supporting
  businesses
• Savings, insurance and other financial services
• Clients use traditional skills and
  entrepreneurial instincts
• Clients empowered to escape poverty
• Peer support helps ensure success

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Meeting the needs of the poor
Working Capital Loans
Savings
Right Product
Insurance
Right Price
Housing Loans
Right Time
Money Transfer Services
Consumer Loans
Education Technical Assistance
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Microfinancea proven strategy
Amazingly successful

• 95 - 99 repayment
• Repayment better than credit cards and student
  loans

Womenthe best poverty fighters

• Profits used for children, nutrition, education
  
• Improve living conditions of family
• Reinvest in business

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Profitability by region MFIs vs. commercial
banks (RoA basis)
Sources MFIs MBBs 9-11, and ratings from
Rating Fund Commercial Banks BANKSCOPE
Removing Brazil, Ethiopia, Romania Russia from
respective regions
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Profitability by region MFIs vs. commercial
banks (RoE basis)
Sources MFIs MBBs 9 - 11, and ratings from
Rating Fund Commercial Banks BANKSCOPE
(Removing Brazil, Ethiopia, Romania Russia from
respective regions)
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Poverty-focused MFIs outperform
Source The Mix Market 2005 data
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Progress out of Poverty Index (PPI)

• PPI is a new management and measurement tool
  developed by Grameen Foundation, The World Bank
  and others
• What can it do for MFI management?
• Quickly, accurately and cost-effectively assess a
  clients poverty profile based on her scorecard
  test result
• Show the rate at which clients are moving towards
  and above poverty line over time
• Helps rationalize loan portfolio segmentation
• Accurately report poverty focus to third parties
  with social impact agenda
• What can it do for the industry?
• Estimate the trends of microfinance impact on
  poverty
• Balance MFI financial indicator reporting with
  social indicators
• Determine patterns of success across product
  types
• Compare social performance of MFIs by region and
  country

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Capital Management Advisory Center
Harness the vast resources of the financial
markets to support rapid expansion in outreach to
poor families by leading, poverty-focused MFIs

• Develop and manage a range of GF-branded
  financial products
• Establish microfinance as a commercial investment
  opportunity
• Link poverty-focused microfinance institutions
  and the capital markets

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Growth Guarantee Program

• Basics
• First tranche of US 31 million closed in October
  2005
• Formed from a pool of 5-year SBLCs issued to
  Citibank by Donor Guarantors
• Citibank in turn issues SBLCs to commercial banks
  in the MFIs country
• Growth Guarantees strategic advantages
• Flexibility Offers a wide range of financing
  options customized to meet local financial
  regulations MFI needs (direct lending, bonds,
  securitizations)
• Reduced foreign exchange risk for MFIs Program
  innovatively enables MFIs to borrow in their own
  local currency

In 1st year, closed 13 transactions totaling 8
million in guarantees generating 27 million in
local currency financing for MFIs
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Advisory Services

• Standardized Training and Education
• Structuring, Negotiating, and Managing Debt
  Financing
• Investment Readiness
• Strategic Growth Funding
• Transaction related Advisory Work /
  Individualized Consulting
• Debt financing
• Support all types from commercial bank loans to
  more highly structured financings
• Equity and quasi-equity financings
• Capital for transition to regulated entity or for
  growth and balance sheet strengthening
• Individualized Consultation
• Planning for Strategic Growth Funding
• Exploring potential for partnering with financial
  institutions

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For more information

• www.grameenfoundation.org