GrameenJameel Guarantees for the Arab World

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Grameen-Jameel Guarantees for the Arab
World Heather HenyonGeneral ManagerGrameen-Jam
eel Pan-Arab Microfinance Limited
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Grameen-Jameel Pan-Arab Microfinance Limited

• A for-profit limited liability company jointly
  owned by Grameen Foundation and Abdul Latif
  Jameel Group registered in Cyprus with head
  office in Beirut, Lebanon
• Our Objective Poverty alleviation in the Arab
  world through microfinance
• Our Vision To reach 1 million new active
  clients by 2011
• Our Strategy Partner with MFIs who share our
  Values
• Our Values
• Commitment to reaching women and the poorest
• Aggressive outreach growth plans
• Financially sustainable or plans to achieve
  financial sustainability

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Grameen-Jameel Partners
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Grameen-Jameel Guarantees

• The basics
• 50 million guarantee pool available only for the
  Arab World
• Banque Saudi Fransi issues a USD Letter of
  Guarantee to local banks in the MFIs country
• Local banks then provide local currency financing
  to MFI
• Opportunity to utilize Grameen Foundations
  Growth Guarantees Program (SBLCs issued by
  Citibank)
• Program aims to catalyze local currency financing
• Guarantee structure
• Irrevocable and available on first demand
• Partial guarantee covering principal only
• Structures include pari passu (proportional
  sharing) or first loss guarantees

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Guarantee Mechanism
Banque Saudi Fransi (Calyon) or Citibank (US)
In-Country Bank
Mohammed Jameel Guarantee Fund
Guarantor SBLC
SBLC and L/G
US50 million
US50 million
Leveraged Local Currency Financing
Target Average 2x Leverage
Non-recourse Line of Credit
Regular reporting
US50 million
Grameen- Jameel Selected MFIs
Selection, Evaluation, Quarterly Monitoring
SBLC
Line of Credit
Cash Financing
Borrowers
GF Responsibilities
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Guarantee Terms Conditions
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Guarantee Execution An Example
Origination
Local Bank reviews and approves transaction
MFI and local Bank sign loan agreement (following
G-J review)
Bank submits Term Sheet / proposal
Projected execution 3 months, yet may vary
depending on bank negotiations
G-J conducts Due Diligence
Issue Guarantee to local Bank
MFI G-J sign Service Agreement
G-J offers Letter of Interest to MFI, if needed
G-J conducts preliminary assessment
Investment Committee approves transaction
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Closed Grameen-JameelGuarantee Transactions

• Total Guarantees Deployed 8.6 million
• Total Commercial Financing Raised 17.3 million
• Average Leverage 2x

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Summary of Closed Transactions
FONDEP Term Loan Country Morocco The Deal
US888,000 guarantee leveraged 3x for
2,700,000 in Moroccan Dirhams Lender
Attijariwafa Bank
ENDA Term Loan Country Tunisia The Deal
US375,000 guarantee leveraged 2x for 750,000
in Tunisian Dinars Lender UIB
DBACD Term Loan Country Egypt The Deal
US2,000,000 guarantee leveraged
1.25x for 2,500,000 in Egyptian
Pounds Lender BNP Paribas
Zakoura Term Loan Country Morocco The Deal
US5,000,000 guarantee leveraged 2.1x
for 10,600,000 in Moroccan
Dirhams Lender Societe Generale Marocaine de
Banques
ENDA Term Loan Country Tunisia The Deal
US375,000 guarantee leveraged 2x
for 750,000 in Tunisian Dinars Lender Arab
Tunisian Bank (Arab Bank local
affiliate)
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Closing

• Bank linkages and local currency financing are
  critical for growth in the sector
• Guarantees are flexible and can support a variety
  of financing instruments, including
• Term loans, credit lines
• Private placements
• Bond issues
• Securitizations
• Syndicated credit facilities
• Leading poverty-focused MFIs meeting
  Grameen-Jameels Values and due diligence
  standards are eligible

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Thank You!

• Contact Information
• Heather Henyon
• General Manager
• Grameen-Jameel Pan-Arab Microfinance Limited
• hhenyon_at_grameenfoundation.org
• 961 (1) 975 522 (Tel)
• 961 (3) 828 154 (Mobile)
• www.grameen-jameel.com