| Focus Area: |
The Escape From Poverty |
| Project: |
Supporting Grameen Foundation USA’s “Growth Guarantees” Program |
| Commitment By: |
Basler Associates |
| Partner: |
Grameen Foundation USA (GFUSA) |
| Value: |
$10 Million in guaranteed letters of credit, which will generate up to $60 Million in microfinance loans in local currencies |
Objective: To support the efforts of the Grameen Foundation USA (GFUSA), to achieve the target amount of $50 Million for its “Growth Guarantees” Program.
Commitment: To identify 3-4 individuals during 2006 who will agree to provide GFUSA with a total of $10 Million in five-year standby letters of credit by early to mid 2007.
Background: The GFUSA Growth Guarantees program is one of the largest financing efforts dedicated to advancing poverty-focused microfinance institutions. This anticipated $50 million guarantees program is an innovation for the microfinance industry. Developed in cooperation with Citigroup, the GFUSA Growth Guarantees program will enable Micro-Finance Institutions (MFIs) around the world to raise much-needed financing by accessing local capital markets, thereby helping more poor people lift themselves from poverty. GFUSA’s first round of $31 Million just closed. This commitment is to help GFUSA find at least $10 Million of the remaining $19 Million.
This project was inspired by meeting GFUSA’s Board Chair, Ms. Susan Davis, during the Clinton Global Initiative inaugural meeting. Mr. Basler has good contacts with high net worth individuals in his college class (’64) and elsewhere.
| Point of Contact: |
Frank Basler, President
Basler Associates
Bridgeport, CT |
| Geographic Scope: |
Global |
| Anticipated Launch Date: |
Fall 2005 |
| Anticipated Duration: |
1 year |
Update:
December 2005:
A letter has been written and sent to GFUSA for feedback; names have been collected, and a “pilot” mailing to six individuals has gone out. Approach will be modified based on the early results.
January 2006:
The First GFUSA Growth Guarantees transaction has been closed, supporting a loan of $750,000 from a Tunisian bank to ENDA, a Tunisian MFI serving poor entrepreneurs in rural and peri-urban areas. This transaction will produce 5000 loans to poor women microentrepreneurs to support their businesses, which will enable them to improve the living conditions of their families. Most recently GFUSA’s conducted a road show in the Philippines, meeting with seven local commercial banks and four microfinance institutions to generate interest in and inform about the Growth Guarantees.
Additionally, The second Growth Guarantees Investment Committee meeting was held, during which guarantees totaling $2.3 million were approved for MFIs in India, Nigeria, and Bolivia. This $2.3 million, which will be leveraged more than seven times, will generate approximately 130,000 micro-loans in these countries.
March 2006:
The third Growth Guarantees Investment Committee meeting was held, during which guarantees totaling $5.0 million were approved for MFIs in Nicaragua, Egypt, and Morocco. The $5.0 million in guarantees will be leveraged nearly two times, to generate nearly $10 million and create approximately 50,000 micro-loans.