28285 - Project Name Pending

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Summary of Proposed Investment

Project Number

28285

Company Name

Company Name Pending

Date SPI Disclosed

Jul 22, 2009

Country

World Region

Industry

Financial Markets

Projected Board Date

Oct 15, 2009

Status

Active

Sector

Private Equity/Venture Cap Fund - Sector

Department

Equity Portfolio Management

Environmental Category

Previous Events

Approved : Dec 3, 2009
Signed : Dec 17, 2009
Invested : Feb 18, 2010

Project Description

Note on Disclosure: pursuant to paragraph 9 (d) of IFC’s Disclosure Policy, the disclosure of the Project Name and Company Name of IFC’s investment is being delayed because of risk of impacting market conditions. In due course, a revised SPI will be published containing all standard SPI information.

IFC proposes to invest in Private Investment Fund (the “Fund”), a $100 million equity fund sponsored by U.S, Bank Holding Company. The Fund is a follow-on fund to a prior investment fund that is an IFC investee company. The Fund will invest in microfinance institutions (MFIs) and small business banks (SBBs) in Africa and Asia. The Fund will follow the same model of combining investment capital, governance and capacity-building services as the first fund, which entails value addition through the acquisition of minority equity stakes in financial institutions complemented by advisory services (“AS”) aimed at strengthening the Fund’s investees. The AS will be provided by an independent U.S.-based nonprofit organization.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	10.0

Development Impact

Scaling up Microfinance: The Project will help scale up financial institutions focusing on MSMEs by providing them commercial funding and AS to expand their operations and enhance their capacity. This model should attract other private and commercial investors to do the same, thereby promoting investments in the microfinance sector.

Facilitate access to funding for MFIs and SBBs: The current demand for credit by underserved microenterprises in emerging markets far exceeds the funding provided by donors and commercial lenders. The creation of the Fund will enable the financial institutions to have access to financing to develop their operations and enable them to meet the local demands from microenterprises.

Access to finance for MSMEs: The Project will benefit the end users, MSMEs, in terms of increased access to finance, which will in turn stimulate business activity and create jobs.

(i) Catalytic Role: IFC will play a catalytic role in encouraging the participation of other investors including both IFIs and private sector investors at a time when fundraising is particularly difficult. (ii) Best Practice: IFC’s expertise and experience in structuring microfinance investment vehicles, which have evolved and improved since the time that the first fund was created, will enable best practices to be incorporated and reflected in the structure of this Fund. (iii) IFC’s microfinance expertise and regional presence: IFC has the most experience among the principal investors in supporting microfinance and SBBs in Africa and Asia and hence can play an important role in the Fund

This project involves IFC support for microfinance institutions and small business banks and has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. Considering the nature of activities supported, the project and/or the fund manager will be required to:

-Develop a social and environmental management system (SEMS) that will ensure its investee companies’ investment operations meet applicable host country social and environmental requirements and be consistent with IFC’s Microfinance Exclusion List,
-Identify qualified persons to manage and implement the SEMS,
-Commit to implement the SEMS, and
-Submit a periodic report to IFC as per a format to be provided by IFC

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Company Name pending

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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