Summary of Proposed Investment
Project Number
11576
Company Name
Accion Investments In Microfinance SPC
Date SPI Disclosed
Feb 4, 2003
Country
World Region
Industry
Financial Markets
Projected Board Date
Dec 13, 2002
Status
Active
Sector
Microfinance and Small Business - Non Commercial Banking
Department
Global Industry, Financial Markets
Environmental Category
FI
Previous Events
Approved : Feb 24, 2003
Signed : Feb 27, 2003
Invested : May 6, 2003
Project Description
The project is to establish an investment company, ACCION Investments in Microfinance. The primary objective of the company is to capitalize profitable MFIs so that they can scale up, reaching more people who currently do not have access to traditional formal financial services. Through its role on investee boards, AIM will provide governance support. ACCION''s parallel technical assistance facility will provide a range of strategic and operational assistance in areas such as new product development and MIS development.
Development Impact
Demonstration Effect. The entry of MFIs into the formal financial system, or the provision of microfinance services by traditional financial institutions, represents a significant step in integrating the formal and informal sectors. This demonstration impact, particularly in Africa''s young commercial microfinance industry, will be achieved as investee companies develop into sustainable formal financial intermediaries.
Private Sector Development , Economic and Living Standards Contribution. Micro enterprises and small businesses account for the major share of the private sector and employment in many developing countries. Yet, despite their size and importance, these businesses rarely have access to the savings, credit, and payment services provided by formal institutions. By expanding the scale and outreach of financial services to these businesses, the project will make a significant contribution to economic and living standards of low-income populations in developing countries.
IFC Role
IFC’s solid track record as a risk-taking investor, strategic advisor, and technical assistance provider to the financial services industry places it in a unique position to provide comfort to other investors, acting as anchor investor and participating in the growth and development of the industry at this critical stage of its evolution.
IFC also has an important role in the structuring of the company, drawing on lessons learned in its other wholesale microfinance investment vehicles. The sponsor has incorporated such ''best practices'' in the structuring of this project, to align its interest with those of other investors. IFC will also play an important governance role through its participation in the company''s board of directors.
Development Impact
Demonstration Effect. The entry of MFIs into the formal financial system, or the provision of microfinance services by traditional financial institutions, represents a significant step in integrating the formal and informal sectors. This demonstration impact, particularly in Africa''s young commercial microfinance industry, will be achieved as investee companies develop into sustainable formal financial intermediaries.
Private Sector Development , Economic and Living Standards Contribution. Micro enterprises and small businesses account for the major share of the private sector and employment in many developing countries. Yet, despite their size and importance, these businesses rarely have access to the savings, credit, and payment services provided by formal institutions. By expanding the scale and outreach of financial services to these businesses, the project will make a significant contribution to economic and living standards of low-income populations in developing countries.
IFC Role
IFC’s solid track record as a risk-taking investor, strategic advisor, and technical assistance provider to the financial services industry places it in a unique position to provide comfort to other investors, acting as anchor investor and participating in the growth and development of the industry at this critical stage of its evolution.
IFC also has an important role in the structuring of the company, drawing on lessons learned in its other wholesale microfinance investment vehicles. The sponsor has incorporated such ''best practices'' in the structuring of this project, to align its interest with those of other investors. IFC will also play an important governance role through its participation in the company''s board of directors.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
James C. Kaddaras, Vice President, Special Projects
Accion International
56 Roland Street, Suite 300
Boston, MA 02129
Phone: 617-625-7080, x 1025
Fax:617-625-7020
Accion International
56 Roland Street, Suite 300
Boston, MA 02129
Phone: 617-625-7080, x 1025
Fax:617-625-7020