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Summary of Proposed Investment
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. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.
Access Microfinance Holding AG
Microfinance and Small Business - Non Commercial Banking
Date SPI disclosed
August 7, 2006
Projected board date
September 7, 2006
Invested: October 31, 2006
Signed: October 20, 2006
Approved: October 13, 2006
The proposed project involves the creation of Access Microfinance Holding AG (AccessHolding), a commercial microfinance holding company that will make equity investments in microfinance institutions (MFIs) worldwide. AccessHolding will be established by LFS Financial Systems (LFS or the sponsor) with the participation of IFC and a group of other public and private investors. AccessHolding will be founded with an initial capital endowment of EUR18 million.
AccessHolding will focus on setting up new MFIs together with other like-minded investors, but will also invest in early-stage MFIs or non-bank financial institutions (NBFIs) with the aim of transforming them into full-service microfinance banks. Over time, AccessHolding aims to transform into a controlling parent company of a global network of microfinance banks with a common brand identity.
Investee MFIs will receive management, consulting and training services from LFS, as well as centralized holding services in areas such as internal audit, marketing, human resources, product development and rollout, risk management, and information management.
Project sponsor and major shareholders of project company
LFS was founded in 1997 as a consultancy firm with a focus on commercialization of micro and small business finance in developing and transition economies. The majority of its assignments are on behalf of IFIs such as IFC, KfW, or EBRD, as well as technical co-operation agencies such as the Department for International Development (DFID). Since its inception, LFS implemented more than 50 projects in 30 countries, and built-up lending portfolios of more than EUR150 million. The company’s current long-term project portfolio includes bank management projects in Azerbaijan and Mozambique, the establishment of a start-up microfinance bank in Madagascar, as well as bank downscaling projects in Tajikistan and Uzbekistan.
Total project cost and amount and nature of IFC's investment
AccessHolding will be founded through a private-public partnership with an initial capital endowment of EUR18 million. It is proposed that IFC invest EUR3.46 million in the company.
IFC investment as approved by Board
4.26 million (USD)
IFC Investment (million USD)
* These investment figures are indicative
Location of project and description of site
AccessHolding will be incorporated in Germany. Investment activity will initially be concentrated in Sub-Saharan Africa and Central Asia, and then expanded into other regions.
Anticipated development impact of the project
The proposed project is expected to have a high developmental impact in the following areas:
- financial sector development;
- improved financial infrastructure;
- MFI capacity building; and
- significant contribution to poverty reduction.
IFC's expected development contribution
IFC’s main role lies in facilitating the process of commercialization of the microfinance industry. IFC's growing experience in structuring microfinance investment vehicles will ensure that AccessHolding incorporates best practices. The project will allow IFC to further develop and nurture a diversified network of investment partnerships and promote commercial microfinance by creating a demonstration and replication effect through the introduction of a new asset class to commercial institutional investors.
Environmental and social issues - Category FI
This is an FI project according to IFC’s environmental and social review procedure. AccessHolding will commit to appoint a management person to act as its environmental advisor. It will also commit to ensure that each of its investee institutions will maintain an Environmental and Social Management system to ensure that relevant operations comply with applicable host country standards and IFC’s Microfinance Exclusion List. It will also submit to IFC annual environmental performance reports providing a summary of annual environmental performance reports from its investee institutions.
For inquiries about the project, contact:
LFS Financial Systems
Linienstr, 126 D-10115 Berlin, Germany
Telephone: +49 30 30 87 47 – 0
Fax: +49 30 30 87 50
For inquiries and comments about IFC, contact:
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
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