Microfinance Institution ASA International Secures Largest Equity Capital Commit...

Feb 2008
New York, United States, February, 12 2008 - Catalyst Microfinance Investors ("CMI") announced today that it has achieved its final private closing with total capital commitments of US$ 125 million (EUR 86 million) from leading international institutional and private investors such as, amongst others, the Dutch pension fund, ABP, and US investor financial services organization, TIAA-CREF. This is the largest collective equity capital commitment to microfinance ever.

CMI intends to use most of the funds for the rapid establishment and growth of ASA International in many of the largest microfinance markets in Asia and Africa. CMI is one of the first private equity funds dedicated to investing in micro finance institutions on a commercial basis.

ASA International is one of CMI's major investments vehicles, managed in partnership with ASA of Bangladesh, 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. Each of ASA International's microfinance operations has adopted ASA's successful model of microfinance, which distinguishes itself for its rapid scalability and low operating costs. CMI and ASA International already commenced operations in Cambodia, Ghana, India, Nigeria, Pakistan, the Philippines, and Sri Lanka, and they expect to become operational in China and Indonesia later this year.

CMI is a private equity investment fund, managed in partnership by ASA of Bangladesh and Sequoia, an independent, international corporate finance advisory and investment firm, dedicated to investing in emerging, fast-growing microfinance institutions ("MFI's") throughout Asia and Africa. CMI aims to deliver long-term capital growth to its investors, including some of the world's largest and most established institutional investors.

There are an estimated 1 billion potential microfinance clients around the world of which at this time less than 120 million are being served. Microfinance has proven itself as a sustainable and attractive business with many 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. Powered by CMI's equity capital, ASA International has the potential to provide basic financial services to millions of low-income micro-entrepreneurs.

Mr. Shafiqual Haque Choudhury, Chief Executive Officer of ASA International and Founder and President of ASA of Bangladesh, said: "This large pool of equity capital will enable us to 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 family's livelihoods."

Mr. Dirk Brouwer, Executive Director of CMI and Managing Director of Sequoia, commented: "ASA's powerful, highly efficient model of microfinance gives us a true competitive edge as an owner and operator of MFI's".

Mr. Paul Spijkers, CIO Alternative Investments of Stichting Pensioenfonds ABP, one of the world's largest pension funds with more than US$ 320 billion under management, remarked: "Our financial commitment to CMI and ASA International will give some of the world's economically most disadvantaged people the opportunity to improve their livelihoods, while, simultaneously, the investment has the potential to provide us with a combination of strong growth and attractive returns in high growth economies. These investments are particularly fit for a pension fund as a risk diversifier. They are relatively non-correlated with most other asset classes."

"CMI and ASA International provide TIAA-CREF an important opportunity for a second investment in our Global Microfinance Investment Program", said Mr. Scott Budde, Managing Director, Social and Community Investing, TIAA-CREF, a major U.S. financial services organization and the leading provider of retirement services in the academic, research, medical and cultural fields with more than US$435 billion in combined assets under management."We believe ASA is an efficient vehicle for expanding Microfinance around the world with a consistent focus on both the betterment of low income borrowers and a competitive investment structure. We are also pleased by how the structure of this investment is enabling Bangladesh to strengthen and export some of the significant Microfinance management expertise it has developed over the years."

Source : Fox Business

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