Originally published: May 15, 2008
Source: International Finance Corporation (IFC)
International Finance Corporation (IFC) and Standard Chartered Bank have announced that they have collaborated on the launch of the first-ever issuance of notes backed by loans to MFIs in Africa and Asia. The transaction will establish a new product to provide investors with access to microfinance as an asset class, and will enable Standard Chartered to expand its lending to the microfinance sector. The deal is a part of commitment made by Standard Chartered, at the 2006 Clinton Global Initiative, to establish a US$500 million microfinance facility over a five-year period.
IFC will invest US$45 million in credit-linked notes to be issued by Microfinance Institutional Loans for Asia and Africa (MILAA), a special purpose vehicle set up by Standard Chartered to facilitate microfinance lending. The notes will be linked to a portfolio of loans that the bank has made to MFIs in Sub-Saharan Africa and South Asia. They will also enable the bank to extend additional credit to MFIs that will in turn reach more unbanked people.
Peter Sands, Standard Chartered Group Chief Executive, said, "This transaction will unlock more funding for microfinance. We believe improving access to finance is a key lever in reducing poverty and catalyzing broader social and economic development. We hope other investors will be inspired by the IFC's support of this transaction."
- Read the complete article: IFC and Standard Chartered Bank Collaborate on the Launch of Innovative Credit-Linked Notes to Improve Financing for Microfinance Sector (International Finance Corporation)
- Related news: Standard Chartered Bank Commits US$500Mln Towards Microfinance in Asia & Africa (25 Sep 2006)