Catalyst Microfinance Investors achieves second close for equity

Print
 
Oct 2007
Nijmegen, the Netherlands, October, 09 2007 - Catalyst Microfinance Investors (“CMI”) today announced that it has achieved its second private closing with total initial commitments of US$ 50 million (€35 million) from leading institutional and private investors based in the United States of America and Europe. CMI is a private equity fund dedicated to investing in emerging, fast-growing microfinance institutions (“MFI’s”) throughout Asia and Africa and is planning total commitments from investors to reach between US$ 75 million (€53 million) and US$ 100 million (€71 million) before the end of the year.

CMI is managed by ASA of Bangladesh, widely recognized as one of the world’s largest and most successful microfinance institutions, which serves over 6 million micro-entrepreneurs from more than 3,000 branches spread all over Bangladesh, and Sequoia, an independent European financial advisory and investment firm. The global microfinance market is substantial with an estimated 1 billion potential microfinance clients worldwide of which at this time less than 120 million are being served. Microfinance has proven itself as a sustainable and attractive business with most MFI’s consistently achieving repayment rates of 99% or more on outstanding loans. Simultaneously, many independent surveys provide evidence of microfinance’s positive social impact on low-income families with substantial increases in income, savings and capital, as well as improved access to healthcare and education.

Concurrent with achieving its second closing, CMI plans to make a US$ 10 million (€7 million)equity investment in ASA International, one of the largest equity investments of its kind in a single MFI. ASA International is a wholly-owned subsidiary of CMI and is establishing new microfinance institutions in some of Asia’s and Africa’s largest microfinance markets. Each of ASA International’s microfinance operations will adopt ASA’s successful model of microfinance, which distinguishes itself for its rapid scalability and low operating costs. ASA International already commenced microfinance operations in the Philippines, Nigeria and Ghana, and expects to become operational in India, China and Pakistan over the next few months. CMI also has investments in existing MFIs in Sri Lanka and Cambodia.

CMI aims to deliver long-term capital growth from equity investments in rapidly growing, highly efficient microfinance institutions in some of the world’s largest microfinance markets, including India and China. Mr. Shafiqual Haque Choudhury, Executive Chairman of CMI and Founder and President of ASA of Bangladesh, said: “This important milestone in the development of CMI will enable us to invest in, build and develop large scale and highly efficient microfinance institutions in developing markets around the world and provide the non-bankable poor in these regions with first-time access to credit and other basic financial services, which will help free them from exploitation, unleash their entrepreneurial drive, and improve their family’s livelihoods.”

Mr. Dirk Brouwer, Executive Director of CMI and Managing Director of Sequoia, commented: “CMI now manages the largest pool of equity capital dedicated to investing in the microfinance sector and combines mainstream private equity skills with ASA’s tremendous operational microfinance expertise and experience throughout Asia and Africa.” “CMI provides pension funds and other institutional investors as well as major private investors with exposure to the rapidly-expanding microfinance sector which has the potential to provide investors with a combination of strong growth and attractive returns in high growth economies through an investment that is relatively non-correlated with most other asset classes.”

Mr. Willem Nolens, General Manager of CMI, mentioned: “ASA’s powerful, highly efficient model of microfinance, which successfully services many millions of micro-entrepreneurs in Bangladesh and, through a number of existing ASA replicas, various other countries in Asia and Africa, gives us a true competitive edge as an investor and, through our proprietary investment in ASA International, as an owner/operator of MFI’s. Since 2005, CMI has built a solid team of microfinance investment professionals which leverages off the best of ASA’s and Sequoia’s respective know-how and expertise.”

Mr. Robert Pattillo, Founder of Gray Ghost Microfinance Fund, a major investor in CMI, mentioned: “We are honored to have been associated with CMI from its very start several years ago. What makes CMI so attractive is that, through CMI, Gray Ghost essentially  provides the capital for the world’s largest, most efficient and most profitable MFI to roll out its distinctive, highly successful model of microfinance around the world.”

CMI started its operations with a pilot program in August 2005. This program allowed for extensive due diligence on a large number of MFI’s in many attractive microfinance markets.  It enabled CMI to establish an initial portfolio of emerging MFI’s and provided the basis for the start-up of new MFI’s and the establishment of ASA International.



 

Research Analysis Tools

The fund indexes, institution benchmarks and other market information displayed here are all Symbiotics designed analysis tools, created in-house by our analysts and experts. Symbiotics has one of the oldest track records in microfinance investment analysis dating back to the late 1990s; its indexes and benchmarks have been regularly used as markers by investors, asset managers, financial institutions and practitioners. These, as well as several other research products, are available through the Research Account. Click on the link below to find out more.

Learn More