Microfinance Bonds from EBRD and Daiwa Securities

Microfinance Focus, May 21, 2010: For supporting the development of micro and small enterprises, The European Bank for Reconstruction and Development (“EBRD”) and Daiwa Securities Group are planning an issue of EBRD microfinance bonds in the EBRD’s countries of operations. The funding will be raised under the EBRD’s Global Medium Term Note Program. Proceeds will support EBRD operations that fund financial institutions which provide microfinance to small businesses.

The inaugural issuance of EBRD’s Microfinance Bonds will be arranged by Daiwa Securities Capital Markets Co. Ltd., the wholesale securities firm under Daiwa Securities Group, and distributed by Daiwa Securities Co. Ltd. to Japanese retail and institutional investors. Sustainable MSEs are viewed as important for job creation, private sector growth and economic recovery as well as being an important component of a sustainable financial sector. The proceeds from the issuance of Microfinance Bonds in Japan are expected primarily to support these activities and, ultimately, are intended to help smaller businesses grow into major enterprises, with positive implications for jobs, poverty alleviation and economic growth. Japanese investors will thereby contribute indirectly to reducing poverty through investments in Microfinance Bonds.

The EBRD provides private micro and small enterprises (MSEs), which are not catered for by the formal financial sector, with sustainable access to financial services, via a range of financial institutions. EBRD’s outstanding microfinance portfolio totalled €767 million at end-2009 compared with the Bank’s total portfolio of €25.6 billion at the same period. The EBRD expects to commit approximately €200 million in microfinance loans each year. Altogether the EBRD works with 110 different partner institutions active in the small business finance sector.

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