Originally published: December 12, 2007
Source: Grameen Foundation
With the recent closing of two innovative transactions for Kashf Foundation of Pakistan, the Grameen Foundation's Growth Guarantee program has generated US$112.6Mln in financing for MFIs in ten countries through the placement of US$20.5Mln in guarantees. This funding will generate an estimated 500,000 loans to microentrepreneurs in Bolivia, Egypt, India, Morocco, Nicaragua, Nigeria, Pakistan, Peru, the Philippines, and Tunisia.
The two transactions for Kashf Foundation are among the largest financings backed by Grameen Foundation. The first is a US$3Mln guarantee that supported a US$12Mln private debt placement subscribed by Pakistani institutional investors and banks, many of which were new to microfinance, and was arranged by Habib Bank. The second is a US$2Mln partial guarantee that helped to support a US$8Mln syndicated loan facility that was arranged by Citibank Pakistan with ABN AMRO, Habib Bank Ltd. and MCB Bank as the syndicate banks.
Launched in late 2005, the Grameen Foundation Growth Guarantee program is one of the one of the largest financing efforts dedicated to ensuring adequate liquidity for fast-growing MFIs exclusively in their local currencies. By focusing solely on local currency loans, the program is building important linkages between local commercial banks and MFIs and also helps the MFIs to avoid the foreign exchange risk inherent with hard currency loans.
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