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Norfund sells share in Latin American fund |
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The Norwegian Investment Fund for Developing
Countries (Norfund) has sold its 23 per cent holding in the Latin
American Challenge Fund (LA-CIF) to Gray Ghost Fund, a private US
microfinance fund.
This holding, the largest in the
LA-CIF, was acquired by Norfund when it helped to establish the fund in
1998 with an equity capital injection of USD 800 000.
The
parties have agreed not to disclose the sales price, but Norfund has
achieved a satisfactory return on its investment. It still has an
outstanding loan of USD 1 million to the LA-CIF.
The LA-CIF
lends to microfinance institutions in Latin American which function as
banks for small entrepreneurs. Its portfolio of loans currently totals
about USD 21 million to 15 banks in South and Central America.
The
second-largest LA-CIF shareholder, the Inter-American Development Bank,
has also sold its 18 per cent stake to Gray Ghost Fund, which thereby
owns 41 per cent of the shares.
These transactions make the
LA-CIF one of first microfinance funds established by development
investors to be sold on to a private investor.
"We've helped to
develop this fund into a profitable and attractive enterprise,"
observes Aage Hagen, Norfund's regional director for Latin America.
"That's also confirmed by our sale to Gray Ghost Fund at a price substantially above our original investment."
A new LA-CIF II fund aimed at larger microfinance institutions is currently under preparation.
"Gray
Ghost Fund has allocated some USD 75 million to microfinance, and we've
given great weight to its opportunities for playing a leading role in
the further development of the LA-CIF," Hagen emphasises.
Links: LA-CIF
Gray Ghost Fund
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