Download - GP Investors Report | Q3 | 2013
Social Investment Funds
INVESTORS REPORTThird Quarter 2013 | July 1 - Sept. 30, 2013
www.globalpartnerships.org
1932 First Avenue, Suite 400 | Seattle, WA 98101, USA | 206.652.8773 // De Enitel Villa Fontana 2c. Este, 30v. Norte | Edificio Opus Of. 205 | Managua, Nicaragua
Photo: A MiCrédito client peels beans by the light of a solar-
powered lamp. © Global Partnerships 2013.
For more information, contact:
Jason Henning, Director of Investor Relations
[email protected] | 206.456.7832
Featuring: New partner MiCrédito on p.8
Online: See all partner profiles here
| Letter from the CIOO |
11 COUNTRIESwhere Global Partnerships works
39 PARTNERSwith whom Global Partnerships works
122,608 PEOPLEserved by Global Partnerships through our partners
$52.3 MILLIONfund capital at work
Global Partnerships | Q3 2013 | As of Sept. 30, 2013 | Page 2
BY THE NUMBERS
November 15, 2013
Dear Investor,
Since the launch of Global Partnerships’ (GP) first social investment fund in 2005, we have provided debt financing to social enterprises with the objective of expanding already-proven solutions that help people living in poverty increase their incomes and improve their lives. Two examples of this approach are scaling access to microcredit for underserved entrepreneurs and pre-harvest finance for smallholder farmers.
Yet, our team is increasingly discovering business models that have potential to create significant impact in the lives of the poor, but have not reached sustainability, or represent levels of risk our investment funds aren’t designed to absorb.
However, as a mission-led nonprofit impact investor, we are working hard to be catalytic with all of our capital. This means becoming creative with credit enhancement as well as building our capacity to deploy all types of capital to meet our partners’ needs.
For example, during due diligence for an investment to Fonkoze, a Haitian microfinance institution, it became clear that the organization would not meet our credit criteria for our investment fund. Yet, since we believed strongly in Fonkoze’s approach to integrating credit with business education and health services, we secured guarantors to cover payment defaults for the full loan amount. While we fully expect to recoup the loan, the guarantees allowed us to extend growth capital to a partner with exceptional social performance working in a very difficult geography.
In addition to loan capital, GP is also providing knowledge and grant capital to Fonkoze, in order to help them develop a model of health education and services that could operate sustainably. We hope this will benefit Fonkoze’s clients and strengthen the institution, which would help improve the repayment outlook on our loan.
Furthermore, we worked with Fonkoze and SAFICO, a solar distributor, to develop a unique distribution model to deliver solar lights to non-electrified households in rural Haiti. Through this partnership, leaders of Fonkoze’s borrowing groups (center chiefs) serve as resellers of solar products to remote (last mile) communities. The initiative is still in the early stages, but we have delivered a targeted grant to support their marketing efforts, addressing the issue of lack of awareness about solar technologies.
Loan capital for more mature businesses, and loans combined with knowledge and grant capital for new or struggling—yet promising— initiatives provide a “capital package” that enables good management teams to overcome the common obstacles to development. This type of targeted approach to capital positions us to have a greater social impact in the future.
Thank you for your ongoing interest in and support of our work.
Mark Coffey Chief Investment and Operating Officer
| Microfinance Fund 2008 |
Global Partnerships | Q3 2013 | As of Sept. 30, 2013 | Page 3
Fund Manager’s Comments
Partner performance remains strong and all entities in the Fund continue to make principal and interest payments in a timely manner. Generally speaking, partners continue to show responsible growth, expected earnings, and consistent balance sheet strength. With only a year until it matures, GP conducted one partner loan renewal and one loan extension during the third quarter and deployed additional short-term capital to two existing partners. Through prudent fiscal management, GP has been able to transform the Fund’s original capital commitments of $20 million into over $21 million in investments, thus improving both the financial and social performance of the fund.
October 31, 2008Inception Date
$21,069,250Capital Invested
$20,000,000Total Fund Capital
17 $730 80% 48%
Fund Manager Global Partnerships
Investment CurrencyUS$ and fully hedged local currency
Type of FundDebt
Fund Facts
Social Impact
Current number of partners
Average loan size
Percentage of borrowers served who are women
Percentage of borrowers served living in rural areas
In thousandsTOTAL BORROWERS SERVED
300400500600
800
700
FY09 FY10 FY11 FY12 FY13
2008
90
120
150
Total revenues/total expenses as a %
AVERAGE OPERATIONALSELF SUFFICIENCY
FY09 FY10 FY11 FY12 FY13
Loans past due greater than 30 days as a %AVERAGE PAR >30
02468
10
FY09 FY10 FY11 FY12 FY13
Asset amount charged to loss as a %AVERAGE WRITEOFFS
0
1
2
3
4
FY09 FY10 FY11 FY12 FY13
US dollars in millionsTOTAL PARTNER LOAN PORTFOLIO
100
200
300
400
500
600
FY09 FY10 FY11 FY12 FY13
GROWTH
PARTNER PORTFOLIO QUALITY
TOTAL PARTNER LOAN PORTFOLIOUS dollars in millions
TOTAL BORROWERS SERVEDIn thousands
AVERAGE OPERATIONAL SELF SUFFICIENCYTotal revenues/total expenses as a %
AVERAGE PAR > 30Loans past due greater than 30 days as a %
AVERAGE WRITEOFFSAsset amount charged to loss as a %
| Social Investment Fund 2010 |
Global Partnerships | Q3 2013 | As of Sept. 30, 2013 | Page 4
Fund Manager’s Comments
Social Investment Fund 2010’s (SIF 2010) performance remains strong with all partners continuing to make principal and interest payments in a timely manner. SIF 2010 continues to have investment opportunities as a result of regularly scheduled amortizations and repayments. During the third quarter the fund renewed or disbursed roughly $2.4 million in fund loans to existing partners, and disbursed an additional $450,000 to two new partners, MiCrédito and Fonkoze. MiCrédito is a Nicaraguan microfinance institution (MFI) that is committed to using the microfinance channel to unlock rural access to green technologies (see profile on page 8), while Fonkoze is a Haitian organization that provides a range of financial, educational and health services to marginalized and underserved members of society (see CIOO letter on page 2).
October 21, 2010Inception Date
$21,329,090Capital Invested
$25,000,000Total Fund Capital
31 $877
77%
51%
Fund Manager Global Partnerships
Investment CurrencyUS$ and fully hedged local currency
Type of FundDebt
Fund Facts
Current number of partners
Average loan size
Percentage of borrowers served who are women
Percentage of borrowers served living in rural areas
Social Impact
In thousandsTOTAL BORROWERS SERVED
0200400600800
1000
FY11 FY12 FY13
Total revenues/total expenses as a %
AVERAGE OPERATIONALSELF SUFFICIENCY
90
120
150
FY11 FY12 FY13
Loans past due greater than 30 days as a %AVERAGE PAR >30
0
1
2
3
4
FY11 FY12 FY13
Asset amount charged to loss as a %AVERAGE WRITEOFFS
0
1
2
3
4
FY11 FY12 FY13
US dollars in millionsTOTAL PARTNER LOAN PORTFOLIO
FY11 FY12 FY130
200
400
600
800
GROWTH
PARTNER PORTFOLIO QUALITY
TOTAL PARTNER LOAN PORTFOLIOUS dollars in millions
TOTAL BORROWERS SERVEDIn thousands
AVERAGE OPERATIONAL SELF SUFFICIENCYTotal revenues/total expenses as a %
AVERAGE PAR > 30Loans past due greater than 30 days as a %
AVERAGE WRITEOFFSAsset amount charged to loss as a %
| Social Investment Fund 5.0 |
Global Partnerships | Q3 2013 | As of Sept. 30, 2013 | Page 5
Fund Manager’s Comments
The third quarter of 2013 was busy with due diligence and new disbursements as the deployment of Social Investment Fund 5.0 (SIF 5.0) picks up speed. At quarter end, the fund had deployed $9.7 million to eight mission-aligned partners in five countries. Five additional loans have been approved and are in the documentation stage, while GP’s team remains busy at work building a robust pipeline of high performance partners. The next capital call for approximately $1.8 million is scheduled to occur in late November. SIF 5.0 currently has $33.45 million in commitments from 34 impact investors and will continue to accept new commitments as it scales to meet its target fund size of $50 million.
March 25, 2013Inception Date
$9,700,000Capital Invested
$15,950,000Total Fund Capital
8 $1,386
69%
51%
Fund Manager Global Partnerships
Investment CurrencyUS$
Type of FundDebt
Fund Facts
Current number of partners
Average loan size
Percentage of borrowers served who are women
Percentage of borrowers served living in rural areas
Social Impact
In thousandsTOTAL BORROWERS SERVED
04080
120160200
FY13
2008
90
120
150
Total revenues/total expenses as a %
AVERAGE OPERATIONALSELF SUFFICIENCY
FY13
2008AVERAGE PAR >30Loans past due greater than 30 days as a %
0
2
4
6
8
10
FY13
Asset amount charged to loss as a %AVERAGE WRITEOFFS
0
1
2
3
4
FY13
US dollars in millionsTOTAL PARTNER LOAN PORTFOLIO
0
60
120
180
240
300
FY13
GROWTH
PARTNER PORTFOLIO QUALITY
TOTAL PARTNER LOAN PORTFOLIOUS dollars in millions
TOTAL BORROWERS SERVEDIn thousands
AVERAGE OPERATIONAL SELF SUFFICIENCYTotal revenues/total expenses as a %
AVERAGE PAR > 30Loans past due greater than 30 days as a %
AVERAGE WRITEOFFSAsset amount charged to loss as a %
Outstanding PositionsDistribution by Institution and Country
Global Partnerships | Q3 2013 | As of Sept. 30, 2013 | Page 6
| |
Microfinance Fund 2008Percent of investable assets
Social Investment Fund 2010Percent of investable assets
Note: All percentages have been rounded to the nearest whole number.
BOLIVIA (23%)CRECER (9%)Pro Mujer in Bolivia (9%)FONDECO (5%)
ECUADOR (28%)FINCA Ecuador (9%)FODEMI (9%)Banco D-MIRO (5%)Fundación Alternativa (3%)Fundación Faces (2%)
EL SALVADOR (5%)ENLACE (5%)
GUATEMALA (3%)Friendship Bridge (3%)
MEXICO (10%)Vision Fund Mexico (3%)Pro Mujer in Mexico (7%)
NICARAGUA (14%)FDL (9%)Pro Mujer in Nicaragua (5%)
PERU (14%)Credivisión (6%)Pro Mujer in Peru (6%)Arariwa (2%)
CASH (1%)
BOLIVIA (17%)Sembrar Sartawi (5%)IDEPRO (6%)CRECER (1%)FONDECO (2%)EMPRENDER (3%)
COLOMBIA (10%)Fundación Amanecer (4%)Contactar (6%)
DOMINICAN REPUBLIC (1%)Esperanza (1%)
ECUADOR (10%)ESPOIR (4%)Banco D-MIRO (3%)Fundación Faces (3%)
EL SALVADOR (6%)Fundación Campo (4%)ENLACE (2%)
HAITI (1%)Fonkoze (1%) NEW
HONDURAS (1%)COMIXMUL (1%)
MEXICO (8%)CONSERVA (4%)Vision Fund Mexico (3%)Pro Mujer in Mexico (1%)CESMACH (<1%) Triunfo Verde (0%)
NICARAGUA (5%)Aldea Global (0%) FDL (2%)MiCrédito (1%) NEW Pro Mujer in Nicaragua (2%)
PERU (27%)ADRA (4%) Pro Mujer in Peru (5%)Crediflorida (5%)Los Andes (3%)NORANDINO (6%)Arariwa (2%)APROCASSI (2%)
CASH (14%)
1% Cash
5% El Salvador3% Guatemala
23% Bolivia
28% Ecuador
10% Mexico
14% Nicaragua
14% Peru
1% Dominican
Republic
5% Nicaragua
1% Honduras
17% Bolivia
10% Colombia
10% Ecuador
6% El Salvador
1% Haiti
8% Mexico
27% Peru
14% Cash
Outstanding PositionsDistribution by Institution and Country
Global Partnerships | Q3 2013 | As of Sept. 30, 2013 | Page 7
| |
BOLIVIA (10%)FONDECO (7%)PRO RURAL (3%) NEW
COLOMBIA (10%)Fundación Amanecer (10%)
ECUADOR (30%)Banco D-MIRO (13%)ESPOIR (10%)Fundación Alternativa (7%)
EL SALVADOR (7%)Fundación Campo (7%)
HONDURAS (8%)COMIXMUL (8%)
CASH (36%)
All FundsPercent of invested assets
Note: All percentages have been rounded to the nearest whole number.
BOLIVIA (21%)
COLOMBIA (8%)
DOMINICAN REPUBLIC (<1%)
ECUADOR (25%)
EL SALVADOR (6%)
GUATEMALA (1%)
HAITI (<1%)
HONDURAS (3%)
MEXICO (9%)
NICARAGUA (9%)
PERU (19%)
Social Investment Fund 5.0Percent of investable assets
10% Bolivia
36% Cash
7% El Salvador8% Honduras
10% Colombia
30% Ecuador
8% Colombia
<1% Haiti
<1% Dominican
Republic 3% Honduras
1% Guatemala
19% Peru
9% Nicaragua
21% Bolivia
25% Ecuador
9% Mexico
6% El Salvador
In Nicaragua more than 2.4 million people are living below the poverty line and roughly 56% of rural households lack access to electricity.
| Featured Partner: MiCrédito |
Global Partnerships | Q3 2013 | As of Sept. 30, 2013 | Page 8
WHO MiCrédito is a Nicaraguan microfinance institution (MFI) providing working capital loans to microentrepreneurs, many of whom live in hard-to-reach rural communities. Witnessing first-hand the challenges of living without electricity, MiCrédito is committed to using the microfinance channel to unlock access to green technologies.
WHAT Through a combined investment of knowledge, grant and debt capital, GP is enabling MiCrédito to turn their commitment into a reality. With market intelligence, in-field support, introductions to key distributors and funds to hire dedicated staff, GP has helped MiCrédito design a program that enables families to cover the upfront costs of bringing clean electricity into their homes. The program also innovates to fund “last mile” resellers–clients who create businesses by purchasing solar products in bulk and then reselling them in their communities. With a recent loan from GP’s SIF 2010, MiCrédito is now piloting the program and aims to reach over 1,600 families in the first two years.
WHY GP is invested in MiCrédito because the organization is committed to delivering appropriate and affordable solar lighting products to high-need, underserved communities in a market-sustained way. Once in the home, the products offered by MiCrédito enable cost savings, increased productivity, and improved health across the family. In addition to these benefits, there is the environmental impact of decreased emissions as well as the livelihoods created by the reseller model. If MiCrédito’s pilot is successful, GP believes the model is one that could be replicated by other MFIs working in rural communities that lack access to basic electricity.
Country: NicaraguaYear Founded: 2004
Number of Employees: 57Number of Borrowers: 5,358 Outstanding Loan Portfolio: $4,939,421Average Loan Size Per Borrower: $921Percent Rural: 35%
A MiCrédito client is able to extend her day and continue working after sunset, thanks to her solar-powered light. © Global Partnerships 2013.
Click to see all partner profiles online.