presentation of the business concept workshop on sme finance – reaching scale: a dialogue between...
TRANSCRIPT
Presentation of the Presentation of the Business ConceptBusiness Concept
Workshop on SME Finance – Reaching Scale: A dialogue between global practitioners and East African BankersWorkshop on SME Finance – Reaching Scale: A dialogue between global practitioners and East African Bankers
26 – 27 June 2007, Dar es Salaam, Tanzania26 – 27 June 2007, Dar es Salaam, Tanzania
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LFS Market position
Holding Services
InvestmentsKey Features
LFS Company Overview
Foundation: 1997
Specialisation: Consulting and management services to
financial institutions in developing and
transition economies
Clients: IFIs: EBRD, KfW, IFC, IDB, AfDB, others
TC-Agencies: DFID, BIO, others
Commercial banks
Ownership & management: 3 managing partners
Permanent staff: 41 Bank Advisors
Almost all economists
Turnover: € 4.9 million in 2006
LFS
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LFS Market position
Holding Services
InvestmentsKey Features
LFS Range of Services
Management: Greenfield microfinance banks
Transformation of microfinance institutions
Downscaling: Micro and small business lending units in
commercial banks
Complementary: Sector & feasibility studies
Project evaluation
Specialised advice (mostly in credit)
Systems & Tools: Bank management kits (policies, procedures,
job descriptions, training material, …)
LFS MicroBank System® software package
LFS P-CAMELS – rating and evaluation tool
LFS
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LFS Market position
Holding Services
InvestmentsKey Features
LFS Lending Technology
Methodology Individual lending
Cash-flow based
Collateral: More hostage than pawn
Risk Assessment: Take reality serious!
First-hand gathering of information
Organisation: Responsible loan officers & managers
Incentive salaries
Long-term relationship: Strictness and reliability
Graduation principle
House-bank principle
LFS
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LFS Market position
Holding Services
InvestmentsKey FeaturesMarket
position
State of the Microfinance IndustryState of the Microfinance Industry
Dynamic development over the last 5 years Rapid professionalisation of top institutions Increasing access to international capital markets for
top institutions (although still requiring support by public institutions)
Mushrooming of wholesale investors in debt and (increasingly) equity
BUT: Concentration in ~100 institutions, usually not more than 1-3 per country
>> Industry is far from mainstreaming on supply side
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LFS Market position
Holding Services
InvestmentsKey FeaturesMarket
position
ConclusionsConclusions
Management capacity is the key bottleneck Size matters: MFIs with access to international
networks will be the winners From an investor‘s point of view, there will be
increasing competition for the top MFIs>> A strategic link between management capacity
and solvent investors will be the key advantage for both the MFI and the investors
>> This is why AccessHolding was established
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LFS Market position
Holding Services
InvestmentsKey Features
Registered Seat
Legal type
Established in
Access Microfinance Holding AG
Berlin, Germany
Joint Stock Company
August 2006
Full name
Key Features
AccessHolding: Key FactsAccessHolding: Key Facts
CapitalCommitted capital EUR 21.46 million;
Expected to increase to EUR 50 million over five years
Business targetsGroup of 12-15 banks by 2012
Total assets increase to € 1bn by 2012; € 3bn by 2018
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LFS Market position
Holding Services
InvestmentsKey Features
OwnershipOwnership Structure StructureEUR
Shareholder Place of Incorporation Share Capital Commitment Total ShareLFS Financial Systems GmbH Berlin, Germany 778,500 2,681,500 3,460,000 16.12%CDC Group Ltd London, UK 778,500 2,681,500 3,460,000 16.12%European Investment Bank Luxembourg 778,500 2,681,500 3,460,000 16.12%International Finance Corporation Washington, D.C., USA 778,500 2,681,500 3,460,000 16.12%KfW Development Bank Frankfurt, Germany 778,500 2,681,500 3,460,000 16.12%MicroAssets GbR Berlin, Germany 157,500 542,500 700,000 3.26%Omidyar Tufts Microfinance Fund Boston, USA 778,500 2,681,500 3,460,000 16.12%Total 4,828,500 16,631,500 21,460,000 100%
Capital Structure
Capital Structure
LFS; 16.12%
CDC; 16.12%
EIB; 16.12%IFC; 16.12%
MA; 3.26%
OTMF; 16.12%
KfW; 16.12%
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LFS Market position
Holding Services
InvestmentsKey FeaturesKey Features
Investment PrinciplesInvestment Principles
Strategic Investor / Technical Partner Concept:
- AccessHolding will acquire majority stake over time
- Network banks managed by LFS under MSC Majority of AccessHolding and likeminded investors Sale of shares to AccessHolding without pre-emptive
rights of third parties Country selection based on market, legal environment,
synergies and TA availability
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LFS Market position
Holding Services
InvestmentsKey Features
Holding ServicesHolding Services
Holding Services
AccessHolding
Centralised ServicesCapital
Equity If functional
for equity investment:
- Quasi-equity- Loans, purchase of
bonds, certificates of deposits, etc.
- Guarantees
Internal audit IT Information mgmt. Human resources Training Product development Marketing Refinancing Treasury other
Know How
TA from Partners / Direct payments by network banks
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LFS Market position
Holding Services
InvestmentsKey Features
Current InvestmentsCurrent Investments
Investments
Institution Country Investment Share Co-investors
MFBA Azerbaijan 1,600,000 16.5%BSTDB, EBRD, IFC, KfW, LFS
Socremo Mozambique 306,000 13%KfW, LFS, Seco, others, soon IFC
ABM Madagascar 560,000 22%Africap, Triodos, SG, IFC and KfW
ABT Tanzania 1,400,000 37%AfDB, BIO, IFC, KfW
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LFS Market position
Holding Services
InvestmentsKey Features
Portfolio OverviewPortfolio Overview
Investments
US$ 1,000
Bank MFBA Socremo ABM Total
Item Dec-06 May-07 Dec-06 May-07 Dec-06 May-07 Dec-06 May-07
Assets 55,615 91,159 14,112 15,501 2,376 69,727 109,036
Loan Portfolio 47,641 71,092 10,352 12,201 742 57,993 84,035
Number of loans 16,719 29,093 10,209 11,925 771 26,928 41,789
Average loan ($) 2,850 2,444 1,014 1,023 962 2,154 2,011
PAR (30 days) 0.46% 0.30% 0.44% 1.56% 0 0.46% 0.48%
Deposits 3,666 7,694 1,574 2,339 372 5,240 10,405
Number of accounts 5,446 7,666 9,284 16,670 2,012 14,730 26,348
Average balance ($) 673 1,004 170 140 185 356 395
RoaE 1.8% 26.9% 13.1% 36.0% -3.9%
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LFS Market position
Holding Services
InvestmentsKey Features
Investment PipelineInvestment Pipeline
Investments
Nigeria Q3-4 / 2007
Zambia Q3-4 / 2007
Belarus Q3-4 / 2007
2-3 banks 2008
Thank you for your attention!
Christoph DiehlChristoph DiehlAccess Microfinance Holding AGAccess Microfinance Holding AG
Linienstraße 126Linienstraße 12610115 Berlin10115 Berlin
GermanyGermanyTel.: +49-(0)30-30 87 47 34Tel.: +49-(0)30-30 87 47 34Fax: +49-(0)30-30 87 47 50Fax: +49-(0)30-30 87 47 50