CHF International Expands Reach of Global Microfinance Initiatives by Selling First Minority Stake in New Holding Company CHF Finance Group
SILVER SPRING, Md. April 21 /PRNewswire/ -- CHF International, the Silver Spring-MD based international development and humanitarian assistance organization, continues to break new ground with the creation of a private holding company, CHF Finance Group, for its most commercially oriented global microfinance subsidiaries.
The deal is a landmark decision by a network non-profit organization to commercialize and consolidate its operations to grow through socially responsible investment, rather than depend on donor funding. CHF Finance Group will be seeded initially with four of CHF International's microfinance subsidiaries, including Express Finance S.A. in Romania and Ameen S.A.L. in Lebanon at the outset, followed by the Middle East Micro Credit Company (MEMCC) in Jordan and Lider MicroCredit Company in Bosnia pending their registration under new local laws that will enable them to qualify for membership.
On Monday, April 12. CHF International and the International Finance Corporation (IFC), a member of the World Bank Group, signed a subscription agreement for IFC to invest in a 19.9% stake, making the IFC the first minority investor in the CHF holding company.
Over the next five years, CHF Finance Group aims to raise over $100 million in a combination of debt, equity and technical assistance grants to grow its existing operations, build capacity of local staff, and provide sufficient seed capital to start up operations in new areas. The proceeds from the sale of shares to IFC, and to other minority investors in the future, will help the Group accelerate the growth of its subsidiaries' lending operations, increase outreach, expand product lines and generate innovative solutions to capital access challenges in the developing world.
Elissa McCarter. Director of Development Finance at CHF International says: "For CHF International this is a strategic shift in our approach to microfinance. It is evidence that what began as purely grant-funded projects in difficult environments have proven to be so successful that they are now attractive
investments. With private investment from those who agree to a balance of financial and social return, we are now in a position to grow these operations to scale for the benefit of many more households and small businesses in need."
The IFC investment is provided in tandem with a performance-based technical assistance grant to strengthen the institutional capacity of the holding company and the four initial subsidiaries.
It is anticipated by both shareholders CHF and IFC that this first transaction will pave the way for other like-minded investors who share the vision of drastically expanding CHF's reach to growing businesses and providing a better, broader range of financial products that meet the needs of low-income customers.
ABOUT CHF INTERNATIONAL: CHF International (CHF) is an international development organization founded in 1952 that works in post-conflict, unstable and developing countries. CHF partners with communities around the world to help them to improve and direct their lives and livelihoods. The organization believes that those best suited to decide what a community needs are the community itself. CHF is a politically neutral, non-profit 501(c)(3) organization. CHF Development Finance International LLC ("The CHF Finance Group") is a limited liability company registered in the State of Maryland and majority owned by CHF International. The Group was created to house the commercial ownership of financial institutions in which CHF has an equity position. For more information, visit www.chfinternational.org .
About IFC: IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. It fosters sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. IFC's new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit www.ifc.org .
SOURCE CHF International
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