BlueOrchard Finance SA European Microfinance Network Milan, 4-5 June 2009

Car repair workshop in Bosnia and Herzegovina. Photo Johan Sauty © BlueOrchard

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Debt Funds:

➘ Dexia Micro-Credit Fund: Senior debt, fully hedged (NAV USD 487Mil as of 3 June 2009)

➘ Saint-Honoré Microfinance fund: Senior debt, fund of funds and MFIs in Tier 1 and 2, hard currency.

➘ BBVA Codespa Microfinanzas : Senior debt, Latin America and Caribbean only, partially unhedged

➘ Microfinance Enhancement Facility (MEF): IFC/KfW fund for microfinance, co-managed by BlueOrchard (new)

Private Equity Fund:

➘ The BlueOrchard Private Equity Fund: Direct stakes + investments in third party equity funds

CDOs/CLOs:

➘ BOMSI (USD 87 million)

➘ BOLD 2006 (USD 100 million)

➘ BOLD 2007 (USD 111 million) rated by S&P

Microfinance vehicles managed or advised by BlueOrchard

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BlueOrchard Finance S.A. – the world leader in private commercial microfinance debt at a glance

Swiss company specialized in microfinance investment products and services.

Qualified, motivated staff of more than 30 with presence in Geneva, New York, Lima.

Stable, committed shareholders' base and board.

Wide product range tailored to different financial needs and maturity of microfinance institutions, from solid, well managed, profitable, fast growing microfinance institutions to small-scale, niche players or start-ups; composed of four debt funds, including the Dexia Micro-Credit Fund, with different structures, domiciles, registrations, track-records; three collateralized debt obligations (CDOs); and a private equity fund.

Total portfolio: as of June 09 Over 1 Billion AUM.

Robust track record: 762 loans made to microfinance institutions since inception in 2001, without any defaults to date.

Targets: the top 300 microfinance institutions world-wide.

Investors: private banking clients, institutional investors.

Main partners: Dexia, Banque Privée Edmond de Rothschild Europe, Banco Bilbao Vizcaya (BBVA), ResponsAbility.

Total Assets under Management in Mio USD(as of 31 March 2009)

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2001 2002 2003 2004 2005 2006 2007 2008 20091Q

2009Fcst

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Structured Products

The Dexia Micro-Credit Fund at a glance – key facts and figures

Over 10 years of successful experience - the DMCF was launched in September 1998 as the first worldwide private and fully commercial microfinance investment fund.

Managed by professionals of the microfinance and banking industries - the DMCF portfolio of microfinance institutions is managed by BlueOrchard Finance S.A., while Dexia Asset Management is responsible for the liquidity management and the operations around the fund. RBC Dexia acts as custodian bank.

Invested in a diversified portfolio of short term loans to leading microfinance institutions globally – the DMCF finances 94 microfinance institutions in 30 countries with 189 loans. The loans’ maturity averages at 2 1/3 years (max. 3 years); most loans are renewed at expiration. Since inception, the DMCF has invested in 592 loans to over 150 microfinance institutions in over 40 countries. The average loan size to MFIs from the DMCF is presently of USD 1,9 million. There have been no defaults to date on any loans made by the fund.*

Meeting the needs of microfinance institutions and providing reliable returns to investors – As of beginning of January 2009, 15% of the outstanding loans were in local currencies (other than USD or EUR); all loans are hedged into USD. The investment objective is to achieve returns in excess of 6-month USD Libor +100-200 basis points, net.

* Figures as of 5 May 2009

More figures

Currently USD 466 million in net assets.*Annualized return last 3 years of 6.06% in USD,net.*

Total Expense Ratio: ~ 2.2%Issuing fees: 0-4%

More facts

Organized as a Luxemburg SICAV, part II (mutual fund), with monthly liquidity.

Distribution rules: Min. investment USD 10,000 / EUR 10,000 / CHF 15,000.

Currently pursuing registration for investors in additional jurisdictions.

Obtained the Luxembourg Fund Labelling Agency award in 2007, 2008 and 2009.

The Dexia Micro-Credit Fund at a glance – investing globally in emerging economies

Figures as of 5 May 2009

Exposure by country in % of NAV

Geographical distribution of the portfolio as % of total assets

Liquidities and Other Assets

23.9%

Middle East and North Africa

0.1%Africa2.2%

East Europe17.5%

Russia, Central Asia and Caucasus

16.8%

Central America and The Caribbean

7.4%

South America21.1%

East Asia and the Pacific

6.9%

South Asia4.0%

- 1 2 3 4 5 6 7 8 9

East Timor

Armenia

Bulgaria

Cameroon

Egypt

Mozambique

Indonesia

Philippines

Moldova

Paraguay

Mongolia

Russia

El Salvador

Montenegro

Kosovo

Kenya

Mexico

Tajikistan

Kyrgyzstan

Peru

India

Nicaragua

Azerbaijan

Bolivia

Colombia

Cambodia

Ukraine

Georgia

Ecuador

Bosnia Herzegovina

The Dexia Micro-Credit Fund at a glance – performing well, steadily

Figures as of 5 May 2009

Performance chart - USD share class

The DMCF aims at a return of US 6 months Libor plus 100 to 200 basis points. Since 2001, Investment returns have been constant, showing low volatility and remaining fairly uncorrelated from the mainstream market.

2001 2002 2003 2004 2005 2006 2007 2008 2009

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- Performance per year (right-hand scale)

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Indexed performance (left-hand scale)Libor USD 6 months (daily average)

Indexed in %

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Year to Date annualized*

2004 2005 2006 2007 2008 2009

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- Indexed performance (left-hand scale)

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Microfinance Investing - Current and Post-Crisis…

• Microfinance Investing – Recent and Current:– 10/2008: Investments stopped, few redemptions…

– 12/2008: MIVs Year End Performance noticed…

– Q1 2009: Interest from many sides (Asset Managers, Banks, Investors, etc.)

• Current broader “Trends”:– Sustainable Investing

– Socially Responsible Investing (SRI)

– Mission Investing

• Microfinance Investing - Next:– Real Economy

– Product Transparency

– Social / Solidarity aspects

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• Profitability (Return on Assets) and Margins (Gross Loan Portfolio Yield) remain strong and generally stable.

DMCF Portfolio: Impacts of the Crisis on MFI Profitability

Return on Assets(LTM, exposure-weighted, based on local currencies)

1%

2%

3%

4%

5%

6%

7%

8%

Mar 09Feb 09Jan 09Mar 08

South America Russia & Caucasus Eastern Europe

Southeast Asia Africa Central America

South Asia Central Asia & Mongolia Total

Gross Portfolio Yield(LTM, exposure-weighted, based on local currencies)

20%

25%

30%

35%

40%

Mar 09Feb 09Jan 09Mar 08

South America Russia & Caucasus Eastern Europe

Southeast Asia Africa Central America

South Asia Central Asia & Mongolia Total

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• Gross Loan Portfolio Growth: slowed down mostly in Q4 2008 due to funding constraints, but still at 31% year-on-year in March 2009 (versus negative growth rates in the formal financial sector).

• Portfolio at Risk > 30 days: has increased by 140bps to 3.2% which is still a low figure in comparison to the formal financial sector in the same markets (> 15% NPLs).

DMCF Portfolio: Impacts of the Crisis on Portfolio Growth and Quality

Gross Loan Portfolio Growth(year-on-year, exposure-weighted, based on local currencies)

0%

20%

40%

60%

80%

100%

120%

Mar 09Feb 09Jan 09Mar 08

South America Russia & Caucasus Eastern Europe

Southeast Asia Africa Central America

South Asia Central Asia & Mongolia Total

Portfolio at Risk > 30 Days (PAR 30)(month ends, exposure-weighted, based on local currencies)

0%

1%

2%

3%

4%

5%

6%

Mar 09Feb 09Jan 09Mar 08

South America Russia & Caucasus Eastern Europe

Southeast Asia Africa Central America

South Asia Central Asia & Mongolia Total

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Microfinance Investing In Eastern Europe

• Very important region: represents approx. 35% of BlueOrchard portfolio • Challenges and Opportunities:

– Provide Local Currency (through hedging mechanisms) to avoid Forex Risk– Liquidity and Investment Opportunities in the Current Environment– Balancing Risk Aversion with Seeking New investment Opportunities and Portfolio

Diversification… Risk Mgmt & Business Development: not always hand in hand!– Intense Portfolio Monitoring & Tightening the Belt: Financial Covenants and more! – Microfinance a Champion in the fight of Over-indebtedness associated with Consumer

Lending– Ensuring a balance of Sound Credit Risk and Sound Financial Performance in a very volatile

interest rate and financing market

• Microfinance Investing - Next:– Poland, Romania and more in Western Europe?– Strong Pipeline with Higher Margins– But potential Turbulence ahead of us (restructurings and defaults)– Educating Investors on this Asset Class and on the Risks of this Industry– Social/Solidarity aspects