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Bringing Microfinance to Scale Lessons from the Compartamos IPO

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Bringing Microfinance to Scale Lessons from the Compartamos IPO

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    1. Bringing Microfinance to Scale Lessons from the Compartamos IPO An ACCION International Web Conference June 27, 2007

    2. Host and panelists

    3. Agenda Compartamos Background Why an IPO? A closer look at the IPO process ACCION’s investment - Investing through Gateway Results of the IPO Use of proceeds Implications for the industry Q&A

    4. Evolution of Compartamos

    5. Compartamos at a glance December 31, 2006

    6. Why issue an IPO? Investors seeking liquidity for own missions - ACCION, IFC freeing capital for riskier-edge programs Local and international investors signaling keen interest Demonstrated ready market potential of sale Maintaining continuity of governance Avoiding disruptions in governance, management, direction IPO promised diversified holdings Integrating Compartamos more fully into mainstream Integrating microfinance into traditional financial sector Attracting private investment - Proving viability of microfinance as asset class

    7. The offer: A closer look

    8. A closer look…cont.

    9. The offer: Why so successful?

    10. Why so successful? cont.

    11. How ACCION invested in Compartamos Gateway Fund: Mission-driven equity fund created as LLC in ‘96 - $5.2m funding from bilateral and multilateral organizations Early entrant in MF equity investments - To expand equity in MF, test best practices in equity investing Characteristics Actively seeks to reduce participation as MFIs mature; avg. hold of 4.85 years Investment made to demonstrate commitment to Compartamos - $1m investment through Gateway in 1999 Needed to guarantee voice in governance through investment Motivation: Support strength, efficiency of T.A. with board-level strategic advice Not every investment a success… Lessons learned Enter early, when markets are under-served Good management, governance key to MFI success/fund performance

    12. ACCION’s participation in the IPO

    13. What it means for ACCION as an NGO Goals and initiatives

    14. A major milestone for microfinance

    15. Q&A

    16. Further information… New InSight: ‘The Banco Compartamos Initial Public Offering’ – available for download at http://www.accion.org/insight Email us at: webinar@accion.org Webinar to be archived and posted on www.accion.org

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