Last Friday FINCA inked a $79 million dollar investment deal in our new equity vehicle, FINCA Microfinance Holdings (FMH), which is going to allow us to greatly expand our programs in our existing 21 countries of Latin America, Africa, Eurasia and the Middle East, and hopefully expand into some new countries.
We have been working on this investment, in one form or another, for the past decade. Initially it took the form of a fund, but eventually I was persuaded that it made more sense to put all out programs into a Holding Company structure, which essentially creates a platform connecting us to the nearly limitless resources of the global capital markets. We came close to closing it in 2009, but were derailed by the Global Financial Crisis.
The best news is that we have managed to do this in a manner which protects our mission, and ensures that FINCA will continue to be FINCA, focused on helping the poorest microentrepreneurs climb out of poverty.
Oh, and unlike some other investments of this type which had made (negative) headlines recently, we have ensured that no FINCA employees or board members will benefit financially from this transaction, since all the shares in FINCA’s name will be held by the non-profit. Our other partners, besides the World Bank, are well known European Development Banks, KFW (Germany), FMO (Holland), and two social equity funds, ResponsAbility (Switzerland) and Triple Jump (Holland).
This transaction has taken up significant real estate in my brain for quite a while. I almost don’t know what to do with myself these days.
Uh, oh. I feel another book coming on.