6. | 6 Standard ‘wedding cake’ structure shields retail investor from risk – Establishes framework for MFI targeting Community Development, Microfinance and Social Enterprises Senior Capital Subordinate Debt Guarantees Net Assets Loss Reserves Governance Professional Management Analysis, Packaging and Admin Corps Faith Based Institutions Investment Funds Foundations Individuals
12. Minimum Investment Criteria According to the MicroBanking Bulletin, operational self-sufficiency is defined as Financial Revenue / (Financial Expense + Net Loan Loss Provision Expense + Operating Expense) * Leverage: Equity / Total Assets greater than or equal to 12% 11 Charge-offs less than or equal to 5.00% 10 Portfolio at Risk over 30 days less than or equal to 6.00% 9 Demonstrated community support (and support from other funders) 8 Sound financial condition, including ability to repay investment 7 Portfolio diversification 6 Minimum loan portfolio of $3 million 5 Minimum total assets of $5 million 4 Strong and seasoned management where CEO has been with the institution more than 12 months 3 Minimum two-year track record where Operating Self Sufficiency* is greater than or equal to 100% 2 Minimum three-year track record with audited financial statements 1 Organizations that meet the initial criteria identified in A, must also meet most of the following criteria: Financial and Other Criteria: B. Supports diverse communities in urban and/or rural areas in developing countries 3 Contributes to growing the local economy, expanding opportunity or promoting work-related activities, homeownership and non-traditional business owners 2 Focuses on low-income communities and individuals, as well as organizatons without access to traditional sources of capital 1 Desirable MFIs are those with an explicit development mission that: Development Criteria: A.
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15. The Loan Process Calvert Foundation sub-advisor evaluates and recommends MFI for loan Calvert Foundation approves MFI for due diligence, signs term sheet with MFI and sub-advisor Sub-advisor conducts due diligence on MFI (on-site visit, review of reports) Calvert Foundation Credit Committee reviews / approves maximum loan amount to MFI Formal loan agreement negotiated and signed. Calvert Foundation disburses minimum loan amount to MFI. Listing for Calvert Community Investment Note targeted at MFI appears on MicroPlace for 90 days MicroPlace investors purchase Calvert Community Investment Note targeted at MFI After 90 days, Calvert Foundation disburses incremental funds invested above minimum loan amount, up to max approved 1 2 3 4 5 6 7 8 90-day listing cycles continue until maximum approved funding is raised, or otherwise agreed by Calvert Foundation & MFI Estimated Timing: 30 days Estimated Timing: 30 days Estimated Timing: 90 days per listing cycle
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18. MFIs At Launch 1 5 10 5 11 16 Total 0 0 4 3 1 4 Africa 0 3 1 0 4 4 Eurasia 0 2 0 0 2 2 Asia 1 0 5 2 4 6 Latin America Bank NBFI NGO Tier I Tier II Total Region Kenya Women’s Finance Trust, PRIDE Tanzania, Lapo (Nigeria), Sinai Aba Trust (Ghana) Africa Imon(Tajikstan), Findev (Azerbijan), Azercredit (Azerbijan), Credo (Georgia) Eurasia TPC (Cambodia), Credit (Cambodia) Asia Fundeser (Nicaragua), D-Miro (Ecuador), Banco Solidario (Ecuador), Prestanic (Nicaragua), ProMujer Bolivia Latin America
19. Looking Ahead Partial Pipeline List Big Challenge Ahead – Addressing Local Currency Concerns! Kenya: Faulu Kenya; Uganda: Uganda Finance Trust, UML, Finca Uganda Africa Kazakstan: Bereke; Kyrgyzstan: Inexmibank Eurasia India: IIRM, BSS, SKS, Grameen Koota, FWWB India Mongolia: Xac Bank: Pakistan: Kashf Asia Peru: Alternativa, ProEmpresa, Crear Tacna, ProMujer Bolivia: FIE, Crecer; Honduras: Finca; Nicaragua: FINDES Latin America