Download - GP Investors Report | Q1 | 2014
CELEBRATING
1994 - 2014
Social Investment Funds
INVESTORS REPORTFirst Quarter 2014 | Jan. 1 - Mar. 31, 2014
www.globalpartnerships.org
1932 First Avenue, Suite 400 | Seattle, WA 98101, USA | 206.652.8773 // De Enitel Villa Fontana 2c. Este, 30v. Norte | Edificio Opus Of. 205 | Managua, Nicaragua
Photo: Clients meet in the town plaza where they have
conducted their village banking with CRECER for over 20
years. © Global Partnerships.
For more information, contact:
Jason Henning, VP, Investor and Donor Relations
[email protected] | 206.456.7832
Featuring: CRECER on p.3
Now Online: Your financial statements
| Letter from the CIOO |
11 COUNTRIESwhere Global Partnerships works
43 PARTNERSwith whom Global Partnerships works
132,763 PEOPLEserved by Global Partnerships through our partners
$63.2 MILLIONfund capital at work
Global Partnerships | Q1 2014 | As of Mar. 31, 2014 | Page 2
BY THE NUMBERS
May 15, 2014
Dear Investor,
Global Partnerships (GP) is celebrating its 20th anniversary this year as well as its 10th year as a fund manager. We have successfully managed and returned capital to investors in two funds, and we will be returning capital on the third fund with the maturity of Microfinance Fund 2008 (MFF 2008) in October of this year. We have made a number of enhancements over the years to our processes and capacity to manage these funds. As I begin my fifth year at GP, I would like to update you on a few important developments.
At the end of the first quarter, GP’s Social Investment Team was managing a record $63+ million in the current funds: MFF 2008, Social Investment Fund (SIF) 2010, and SIF 5.0. This includes managing lending relationships with 43 different organizations as well as relationships with many prospective partners.
To manage these relationships and develop new ones, we have recently expanded the Social Investment Team’s portfolio staff based in Managua, Nicaragua. The team is led by Vice President of Portfolio Management, Ricardo Visbal, and now includes three Portfolio Directors, Sixta Garcia, Gerardo Talavera, and Vanesa Sandoval, who collectively have dozens of years of experience in various environments working with Latin American and Caribbean cooperatives, microfinance institutions (MFI’s) and other social enterprises. Each of these professionals has experience and expertise in certain countries in which we work, understanding the regulatory, market, and competitive environments. Separately, in Managua we also have a monitoring team that enhances our credit analysis through ongoing evaluation of each partner.
The work being done in Managua and in the field is complemented by the remainder of our Social Investment Team in Seattle. This team provides economic and financial analysis, legal and compliance administration, operational support, and fund management.
Recently, GP has expanded its Program and Impact Team as well. This team works closely with the Social Investment Team to identify excellent programmatic opportunities in our four impact areas, and to provide grant funding and assistance to our partners in their efforts to build sustainable business models for their program services. The collaboration between these two teams helps us to understand the impact of partner program initiatives, as well as provide the types of capital and support our partners need.
As we look to increase our impact, we continue to maintain a robust pipeline of social enterprises that work in our impact areas. Over the past several months, for example, we have been building relationships with several important social enterprises in the solar light value chain. We are confident that the combination of these types of social enterprises, along with our traditional investees (microfinance institutions and cooperatives), will provide very solid financial characteristics for our fund, and a broader and stronger impact in the lives of people living at or near the bottom of the economic pyramid.
As always, thank you for your ongoing support of our work,
Mark Coffey Chief Investment and Operating Officer
In Bolivia 90% of the rural population lives in poverty. Welfare indicators indentify women as especially vulnerable.
For example, 1 in 3 female Bolivians is illiterate.
| Featured Partner: CRECER |
Global Partnerships | Q1 2014 | As of Mar. 31, 2014 | Page 3
WHO CRECER is a Bolivian microfinance institution (MFI) that uses a group lending methodology to provide women in need with critical access to credit, education and health services. The organization was founded in 1985 by Freedom from Hunger and has since grown to serve nearly 150,000 clients in rural and semi-urban areas.
WHAT CRECER’s education program focuses on issues women face in trying to provide for their families: economic activity, health, food security, schooling, housing, and social security.
The organization capitalizes on monthly village bank meetings to deliver educational content and then looks to provide clients with opportunities to put their learning into action.
For example CRECER’s preventive health education program is complemented by a network of third party providers that offer clients access to discounted screening and primary care.
WHY CRECER has been a pioneer in demonstrating that the microfinance channel can be effectively leveraged to provide education and health services.
By recruiting, training, and incentivizing loan officers to deliver education, while referring to a network of third party providers to offer health services, CRECER’s model provides valuable insight into how quality services can be provided sustainably at scale.Country: Bolivia
Year Founded: 1985Number of Employees: 1,132 Number of Borrowers: 149,487
Outstanding Loan Portfolio: $165,816,481 Average Loan Size Per Borrower: $1,109 Percent Rural: 56%
CRECER’s loan officer provides education about cervical cancer while promoting the importance of annual screening. © Global Partnerships.
Click to see all partner profiles online
| Microfinance Fund 2008 |
Global Partnerships | Q1 2014 | As of Mar. 31, 2014 | Page 4
Fund Manager’s Comments
There was no new activity or maturities in MFF 2008 during the first quarter, as the fund’s capital remains fully invested. In June there will be a small amount of partner loans maturing, so the fund expects to make a small prepayment to investors, with the larger and final payments to be made at maturity in October. Meanwhile, all investees once again made their quarterly payments on time. The fund has built up a solid retained earnings cushion, and the fund manager expects no issues in making all remaining payments to investors on time.
October 31, 2008Inception Date
$21,349,250Capital Invested
$20,000,000Total Fund Capital
18 $827 81% 43%
Fund Manager Global Partnerships
Investment CurrencyUS$ and fully hedged local currency
Type of FundDebt
Fund Facts
Social Impact
Current number of partners
Average loan size
Percentage of borrowers served who are women
Percentage of borrowers served living in rural areas
In thousandsTOTAL BORROWERS SERVED
300400500600
800
700
FY09 FY10 FY11 FY12 FY13 FY14
2008
90
120
150
Total revenues/total expenses as a %
AVERAGE OPERATIONALSELF SUFFICIENCY
FY09 FY10 FY11 FY12 FY13 FY14
Loans past due greater than 30 days as a %AVERAGE PAR >30
02468
10
FY09 FY10 FY11 FY12 FY13 FY14
Asset amount charged to loss as a %AVERAGE WRITEOFFS
0
1
2
3
4
FY09 FY10 FY11 FY12 FY13 FY14
US dollars in millionsTOTAL PARTNER LOAN PORTFOLIO
200
400
600
800
FY09 FY10 FY11 FY12 FY14FY13
GROWTH
PARTNER PORTFOLIO QUALITY
TOTAL PARTNER LOAN PORTFOLIOUS dollars in millions
TOTAL BORROWERS SERVEDIn thousands
AVERAGE OPERATIONAL SELF SUFFICIENCYTotal revenues/total expenses as a %
AVERAGE PAR > 30Loans past due greater than 30 days as a %
AVERAGE WRITEOFFSAsset amount charged to loss as a %
| Social Investment Fund 2010 |
Global Partnerships | Q1 2014 | As of Mar. 31, 2014 | Page 5
Fund Manager’s Comments
There was a large amount of investment activity during the quarter, with new loans of $2.5 million being disbursed to six partners, including four agricultural cooperatives and two microfinance organizations. One of the cooperatives (RAOS, in Honduras) and one of the microfinance organizations (Alternativa Peru) were new relationships for Global Partnerships. The fund also experienced seasonal paydowns on agricultural cooperative loans as well as planned amortization of principal for other loans, but overall loan balances increased by $1.2 million to $23.5 million. All principal and interest payments continued to be made on time.
October 21, 2010Inception Date
$23,665,838Capital Invested
$25,000,000Total Fund Capital
32 $900
77%
51%
Fund Manager Global Partnerships
Investment CurrencyUS$ and fully hedged local currency
Type of FundDebt
Fund Facts
Current number of partners
Average loan size
Percentage of borrowers served who are women
Percentage of borrowers served living in rural areas
Social Impact
In thousandsTOTAL BORROWERS SERVED
0200400600800
1000
FY11 FY12 FY13 FY14
Total revenues/total expenses as a %
AVERAGE OPERATIONALSELF SUFFICIENCY
90
120
150
FY11 FY12 FY13 FY14
Loans past due greater than 30 days as a %AVERAGE PAR >30
0
2
4
6
FY11 FY12 FY13 FY14
Asset amount charged to loss as a %AVERAGE WRITEOFFS
0
1
2
3
4
FY11 FY12 FY13 FY14
US dollars in millionsTOTAL PARTNER LOAN PORTFOLIO
FY11 FY12 FY13 FY140
200
400
600
800
GROWTH
PARTNER PORTFOLIO QUALITY
TOTAL PARTNER LOAN PORTFOLIOUS dollars in millions
TOTAL BORROWERS SERVEDIn thousands
AVERAGE OPERATIONAL SELF SUFFICIENCYTotal revenues/total expenses as a %
AVERAGE PAR > 30Loans past due greater than 30 days as a %
AVERAGE WRITEOFFSAsset amount charged to loss as a %
| Social Investment Fund 5.0 |
Global Partnerships | Q1 2014 | As of Mar. 31, 2014 | Page 6
Fund Manager’s Comments
At the end of March, the fund concluded its first year of operation, with called capital of $19.25 million and loans outstanding of $18.0 million, close to the $20 million originally projected. Four additional loans with combined balances of $4.3 million were closed, including one to a new GP partner, Fundea, a microfinance organization providing working capital and training to farmers in some of Guatemala’s most remote regions. As expected, the fund’s fourth capital call occurred in March, and two additional capital calls have been issued since the end of the quarter. The fund is continuing to accept new commitments from investors. Meanwhile, all partners have made payments according to schedule and all partners are aligned with one or more of GP’s impact areas.
March 25, 2013Inception Date
$17,977,186Capital Invested
$19,250,000Total Fund Capital
13 $1,256
68%
43%
Fund Manager Global Partnerships
Investment CurrencyUS$ and fully hedged local currency
Type of FundDebt
Fund Facts
Current number of partners
Average loan size
Percentage of borrowers served who are women
Percentage of borrowers served living in rural areas
Social Impact
In thousandsTOTAL BORROWERS SERVED
0100200300400500
FY13 FY14
US dollars in millionsTOTAL PARTNER LOAN PORTFOLIO
0
80
160
240
320
400
FY13 FY14
90
120
150
Total revenues/total expenses as a %
AVERAGE OPERATIONALSELF SUFFICIENCY
FY13 FY14
AVERAGE PAR >30Loans past due greater than 30 days as a %
0
2
4
6
8
10
FY13 FY14
Asset amount charged to loss as a %AVERAGE WRITEOFFS
0
1
2
3
4
FY13 FY14
GROWTH
PARTNER PORTFOLIO QUALITY
TOTAL PARTNER LOAN PORTFOLIOUS dollars in millions
TOTAL BORROWERS SERVEDIn thousands
AVERAGE OPERATIONAL SELF SUFFICIENCYTotal revenues/total expenses as a %
AVERAGE PAR > 30Loans past due greater than 30 days as a %
AVERAGE WRITEOFFSAsset amount charged to loss as a %
Outstanding PositionsDistribution by Institution and Country
Global Partnerships | Q1 2014 | As of Mar. 31, 2014 | Page 7
| |
Microfinance Fund 2008Percent of investable assets
Social Investment Fund 2010Percent of investable assets
Note: All percentages have been rounded to the nearest whole number.
BOLIVIA (23%)CRECER (9%)Pro Mujer in Bolivia (9%)FONDECO (5%)
ECUADOR (28%)FINCA Ecuador (9%)FODEMI (9%)Banco D-MIRO (5%)Fundación Alternativa (3%)Fundación Faces (2%)
EL SALVADOR (5%)ENLACE (5%)
GUATEMALA (3%)Friendship Bridge (3%)
HONDURAS (1%)COMIXMUL (1%)
MEXICO (10%)Vision Fund Mexico (3%)Pro Mujer in Mexico (7%)
NICARAGUA (14%)FDL (9%)Pro Mujer in Nicaragua (5%)
PERU (14%)Credivisión (6%)Pro Mujer in Peru (6%)Arariwa (2%)
CASH (<1%)
BOLIVIA (16%)EMPRENDER (3%) FONDECO (2%)IDEPRO (6%)Sembrar Sartawi (5%)
COLOMBIA (9%)Fundación Amanecer (3%)Contactar (6%)
DOMINICAN REPUBLIC (1%)Esperanza (1%)
ECUADOR (10%)Banco D-MIRO (3%)ESPOIR (4%)Fundación Faces (3%)
EL SALVADOR (4%)CrediCampo (3%)ENLACE (1%)
HAITI (1%)Fonkoze (1%)
HONDURAS (7%)COMIXMUL (6%)RAOS (1%) NEW
MEXICO (13%)CESMACH (3%) CONSERVA (4%)Pro Mujer in Mexico (1%)Triunfo Verde (1%) Vision Fund Mexico (4%)
NICARAGUA (9%)Aldea Global (1%) FDL (2%)MiCrédito (2%) Pro Mujer in Nicaragua (4%)
PERU (26%)ADRA (8%)Alternativa (Peru) (1%) NEW APROCASSI (1%) Arariwa (1%)Crediflorida (3%)FONDESURCO (3%)NORANDINO (6%) Pro Mujer in Peru (3%)
CASH (5%)
14% Peru
5% El Salvador
1% Cash
3% Guatemala
1% Honduras
23% Bolivia
28% Ecuador
10% Mexico
14% Nicaragua
14% Peru
1% Dominican
Republic
7% Honduras
16% Bolivia
9% Colombia
10% Ecuador
4% El Salvador
1% Haiti
13% Mexico
26% Peru
5% Cash
9% Nicaragua
Outstanding PositionsDistribution by Institution and Country
Global Partnerships | Q1 2014 | As of Mar. 1, 2014 | Page 8
| |
BOLIVIA (25%)Emprender (4%)FONDECO (5%)Idepro (11%)PRO RURAL (5%)
COLOMBIA (8%)Fundación Amanecer (8%)
ECUADOR (29%)Banco D-MIRO (11%)ESPOIR (8%)FODEMI (5%)Fundación Alternativa (5%)
EL SALVADOR (5%)Fundación Campo (5%)
GUATEMALA (11%)Fundea (11%) NEW
All FundsPercent of investable assets
HONDURAS (7%)COMIXMUL (7%)
MEXICO (11%)Pro Mujer Mexico (11%)
CASH (1%)
Note: All percentages have been rounded to the nearest whole number.
BOLIVIA (21%)
COLOMBIA (6%)
DOMINICAN REPUBLIC (<1%)
ECUADOR (22%)
EL SALVADOR (4%)
GUATEMALA (4%)
HAITI (<1%)
HONDURAS (5%)
MEXICO (11%)
NICARAGUA (9%)
PERU (15%)
CASH (3%)
Social Investment Fund 5.0Percent of investable assets
6% Colombia
<1% Haiti
<1% Dominican
Republic5% Honduras
4% Guatemala
15% Peru
9% Nicaragua
21% Bolivia
22% Ecuador
11% Mexico
4% El Salvador
8% Cash
25% Bolivia
11% Mexico
1% Cash
7% Honduras
5% El Salvador
11% Guatemala
8% Colombia
29% Ecuador