CHF International Expands Reach of Global Microfinance Initiatives by Selling First Minority Stake in New Holding Company CHF Finance GroupBy Chf International, PRNE
Tuesday, April 20, 2010
SILVER SPRING, Maryland, April 21, 2010 - 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
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 US$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 US$14.5 billion in fiscal 2009, helping channel capital into
developing countries during the financial crisis. For more information, visit
David Humphries of CHF International, +1-301-563-1891, dhumphries at chfinternational.org; or Carrie Fox, +1-301-585-5034 x111, carrie at cfoxcommunications.com, for CHF International
Tags: April 21, Chf International, maryland, Silver spring, United Kingdom