microfinance forum 2009 (5.grameen pioneer fund)

Creating a World

Living in Peace ForumNovember 15, 2009

WITHOUTPOVERTY

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Overview

• Grameen Foundation Programs– SPM– Technology– Forgotten Bottom– CMAC

• CMAC Products– Growth Guarantee– Pioneer Fund

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Headquarters: Washington, DCGrameen Technology Center: Seattle, WA

Regional offices planned for Asia and sub- Saharan Africa

Our Global Reach

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GF Programs

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Social Performance Management

•Developed Progress out of Poverty Index™

•Objective client poverty assessment tool

•Already PPIs for 21 countries

•Establishing industry standard

THE CHALLENGEHelping microfinance institutions create systems of accountability around their social goals

OUR STRATEGY

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Serving the World’s Poorest People

•Identify, test, scale and replicate solutions that

•Provide financial tools

•Give access to business opportunities

THE CHALLENGEBreaking down barriers to reaching the poorest people with microfinance and technology

OUR STRATEGY

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Technology for Microfinance

•Mifos: open source microfinance technology platform

•Successfully deployed in five organizations

•Technology readiness: helping organizations adopt and manage new technology

THE CHALLENGEIncreasing efficiency of microfinance organizations

OUR STRATEGY

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Technology For Development

•Establishing cell phone business opportunities

•Providing vital information and services such as health and agriculture via cell phones

THE CHALLENGEGiving poor people access to relevant information and business opportunities

OUR STRATEGY

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Access to Commercial Capital

Microfinance institutions need financial tools and resources to help them grow and expand efficiently

•Growth Guarantees: $60 million program guarantees loans in local currency from local banks

•Pioneer Fund: direct investment in smaller institutions working in poorest communities

•Advisory Services/Investment Readiness Trainings

THE CHALLENGE

OUR STRATEGY

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Growth Guarantee Program• The basics

First US$31 million round launched in November 2005 with 9 Donor Guarantors. GF is currently inviting new Donor Guarantors to join the program, bringing total program size to $60 million. Current commitment is $54.5 million.

• How does it work?

Donor Guarantors use their credit, not their money: Program supporters do not make a direct financial contribution. They participate by providing their names and credit while continuing to earn returns on their individual investment portfolios.

By working through local banks, GF generates over $4 in micro-loans for each $1 of guarantee commitment. 100% of a Guarantor’s commitment goes to leveraging micro-loans for the poor.

• Who does the program support?

Poverty-focused microfinance institutions (MFIs) aspiring to expand rapidly and capable of managing large amounts of commercial financing. GF works with a select group of leading MFIs around the world with excellent track records in financial and operational performance, strong management teams, and poverty focus.

Pioneer Fund

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Investment ObjectiveThe Pioneer Fund (initial capitalization of $10 million) endeavors to catalyze the microfinance industry towards the large-scale provision of financial services tailored to the poor in underserved markets.

Investment FocusThe Pioneer Fund will provide senior loans, subordinated loans and standby letters of credit to institutions that have a strong potential to achieve the its investment objective but lack the required funding. Investments will be targeted to the following chronically capital-constrained entities:

• High Potential Tier III Microfinance Institutions (MFIs) – Primary FocusHigh potential early-stage MFIs who can become tomorrow’s industry leaders and achieve the Pioneer Fund objectives on a large scale.

• “Industry Pioneers” – Secondary FocusInnovators with the potential to catalyze the microfinance industry towards achieving Pioneer Fund objectives, particularly through a demonstration effect. Limited to 25% of total capital deployedMFIs which are young, small, at or near profitability and not commercially funded are considered “Tier III”.

Contact Information

Jennifer Meehan, CEO, Asia+ 852.2529.6300jmeehan@grameenfoundation.org

Mike Gabriel, Asia Product Manager, CMAC+ 63.917.568.0894mgabriel@grameenfoundation.org

Christopher Tan, Country Director, Philippines+ 63.917.507.8030ctan@grameenfoundation.org

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