Established in 1989, China Foundation for Poverty Alleviation (“CFPA”) is the first Non-Profit Non-Government Organization (“NGO”) in China that is specialized in microfinance. Its microfinance activities started in 1996 under a World Bank poverty alleviation project. To date it has cumulatively disbursed RMB600 million of micro loans to 150,000 households, directly benefiting more than 600,000 people. To expand its out-reach and to achieve commercial sustainability, CFPA endeavors to spin-off and transform microfinance operations into a commercially operated entity. CFPA has incorporated a subsidiary, CFPA Microfinance Management Co., (the “Company”), to serve as the vehicle for this transformation. CFPA has invited IFC and other investors to join an upcoming capital increase of the Company and to provide both capital and technical assistance. The project presents an opportunity for IFC to assist in an NGO transformation and to support developing a nationwide commercially operated microfinance franchise.