*EPF413 05/20/2004
Text: U.S. Agency to Support Microenterprise Overseas
(Entrepreneurs in Latin America, Europe, Asia targeted, OPIC says) (540)

The Overseas Private Investment Corporation (OPIC) has announced it will start supporting loans to microenterprises in seven countries.

In a May 18 news release, the agency said it approved a $54 million loan that will help fund microfinance institutions working in Latin America, Eastern Europe and Southeast Asia.

OPIC said that project sponsors expect 63,000 entrepreneurs in Bolivia, Cambodia, Colombia, Ecuador, Nicaragua, Peru and Russia to benefit from microloans.

OPIC provides political insurance and financing to U.S. firms doing business in developing and transition economies.

Following is the text of the release:

(begin text)

Overseas Private Investment Corporation

May 18, 2004

OPIC BOARD APPROVES $54 MILLION LOAN FOR MICROFINANCING FACILITY

WASHINGTON, D.C. -- The board of directors of the Overseas Private Investment Corporation (OPIC) approved a $54 million loan for a lending facility that will use money raised from U.S. capital markets to lend to microfinance institutions (MFIs) in seven developing countries worldwide. The facility will be the first global MFI fund to access U.S. capital markets for such a purpose.

OPIC will provide the loan to BlueOrchard Microfinance Securities I; Developing World Markets, Inc., of Darien, CT, and BlueOrchard Finance s.a. will be the structuring partners. The OPIC loan, plus the proceeds from the issuance of subordinated notes on the U.S. capital markets and sponsor equity will be used to lend to MFIs in Latin America, Eastern Europe and Southeast Asia. The MFIs will use the funds to expand their microfinance business, and make investments in staff, branches and other infrastructure. Project sponsors predict that 63,000 new microenterpreneurs will receive financing due to the facility.

The Grameen Foundation USA is also a sponsor of the project.

OPIC President and CEO Dr. Peter Watson said establishment of the facility reflected MFIs' recent efforts to diversify their funding bases by turning increasingly to commercial funding, in particular to enhance balance sheet sustainability and long-term stability. "Microfinance institutions are becoming increasingly savvy financially, and as such have matured into a transparent and regulated industry with a solid legal, financial and political framework," Dr. Watson said. "This facility will support that process, and at the same time provide much-needed capital to small entrepreneurs who have demonstrated their ability to spur local economic growth. OPIC is pleased to support such an innovative project."

OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.

OPIC's political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency's 32-year history, OPIC has supported $150 billion worth of investments that have helped developing countries to generate over 690,000 host-country jobs. OPIC projects have also generated $66 billion in U.S. exports and created more than 257,000 American jobs.

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(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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