Grameen Foundation helps mobilize $10 million for CARD Microfinance

Microfinance Focus August 31, 2009: Grameen Foundation on Monday announced it has facilitated the first privately placed corporate note issued by the Center for Agricultural and Rural Development, Inc. (CARD) of the Philippines.
The $10.4 million transaction, which was supported by a $5 million guarantee from Grameen Foundation’s Growth Guarantee program and related advisory support, was oversubscribed by six local Filipino institutional investors: Security Bank Corporation, Allied Banking Corporation, Banco de Oro Unibank, Inc., BDO Leasing and Finance, Inc., BDO Private Bank, Inc., and Rizal Commercial Banking Corporation. SB Capital Inc, the investment banking subsidiary of Security Bank Corporation, served as the lead arranger for the notes issuance.

The five-year note is the first ever to be issued by a microfinance institution (MFI) in Southeast and East Asia, and marks an important milestone in opening up broader capital markets to MFIs in the Philippines.

This is Grameen Foundation’s third and largest Growth Guarantee transaction with CARD and will provide it with long-term financing to expand its outreach by an additional 100,000 poor families. The first two transactions, totaling $5.3 million in bank financing, were partially secured by guarantees of $1 million each through the program.

“In the current economic climate, when banks and investors are generally more risk averse than they were previously, this transaction sends a strong message about investor confidence in quality MFIs such as CARD, as well as in the broader microfinance industry,” said Alex Counts, president of Grameen Foundation.

CARD is one of the first Grameen replication programs in the world and is the largest MFI in the Philippines. Formed in 1986, it targets primarily low-income landless rural women and serves over 435,740 clients throughout the Philippines. It is part of CARD Mutually Reinforcing Institutions, a family of organizations which focus on providing financial and non-financial services to poor Filipino women.

“This transaction is a watershed moment for CARD, as well as for the microfinance sectors in Southeast and East Asia,” said Dr. Jaime Aristotle B. Alip, founder and managing director of CARD.

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