Infrastructure for DevelopmentInvesting in Financial Institutions

Rationale for Financial Institutions Investments

• Private sector development is dependent on access to capital.

• Borrowing and saving money reduces vulnerability of households.

• Large number of enterprises and individuals lack access to basic financial services, such as banks accounts, insurance and credit.

Development

Rationale• Financial institutions need capital to develop products

and increase market outreach.• Banks are dependent on debt in order to extend loans

to their customers, especially longer tenure local currency debt.

• Capital investments are also necessary to build infrastructure to expand service offering to unbanked.

Investment Needs

Financial Institutions Strategy

• High financial returns and strong development effects.

• Focus on SME’s and unbanked.• Mainly local owned with promising growth

potential.

Profile

• Banks.• Micro finance companies.• Non- deposit taking and other financial

institutions.

Institutions

• Equity• Debt (USD and local currency)• Mezzanine

Instruments

Existing Financial Institutions Portfolio

NOK 2,4 billion committed

44%

22%

19%

15%

FI Portfolio per Region

Africa

Asia

Central America

Global

42%

49%

9%

FI Portfolio per Instrument

Debt

Equity

Mezzanine debt

Development Effects of Financial Institutions Portfolio

Jobs (Direct): 130 183Female Jobs: 38%

Taxes: NOK 1,942,219,630

Customers:52.9 millions

11%

26%62%

FI Jobs per Region

Africa

Central Amer-ica

Asia & Pacific

Africa Asia Central America

Taxes NOK '000

946405.431 583159.044 410221.675

100,000 500,000 900,000

Taxes NOK '000

Highlights 2013 - 2014

SUMMARY Committed NOK 627 million to 12 investments

HIGHLIGHTS

• Investment company targeting African financial institutions with equity investments.

• Main rationale to mobilize private Norwegian capital for investment in the Financial institution sector in Africa.

• Investors:Norfund,KLP, Perestroika AS; Skagen Kon-Tiki Verdipapirfond ; Solbakken AS.

• First close USD 136.5 million.

• First investment in Myanmar.• PD provides crop loans to small

and rural farmers.• The organization boasts the most

extensive rural network, covering 80% of rural population.

• Loan will provide more access to finance to rural farmers.

• Convert from a NGO to a commercial company.

NORFINANCE (“NF”) PROXIMITY DESIGNS

Key Next Steps

Fully Invest NorFinance• Invest available capital and possibly raise

additional capital.

Scale up NMI• Scale up Norwegian Micro Finance Initiative

(”NMI”) and possibly obtain more Nordic investors.

Scalable banking models

• Invest in scalable banking models with innovative distribution channels like agency business models and mobile money transfers.

• Examples of Brac Bank, Bangladesh and Equity Bank, East Africa.

Innovative business models• Invest in innovative business models

outside traditional banking sector addressing needs of SME’s and unbanked

Was founded in May 1964 as a Development Finance

Bank and converted to a commercial bank in 2000 and

listed on the Uganda Security Exchange on 2004.

Is Uganda’s 5th largest bank, with 34 branches

countrywide.

We are an investor since 2004 and have increased our

shareholding in 2012 from 10% to 27.5% . This

investment has now been transferred to NorFinance.

We have also provided debt capital

The bank has transformed several private enterprises in

Uganda through provision of funding for projects using

products like Term Loans, Home Loans, Commercial

Mortgages and Leasing.

In 2013 we initiated a strategic alignment of

shareholders with the introduction of Rabobank as a

new shareholder.

Company Background Shareholding Structure

Performance – Total Assets

27.5%27.5% 15%

Bank: DFCU Limited Uganda

Unit: Shs million

30%Other

Started as an NGO food project in 1994 and a

Microfinance operator in 2001.

Norfund has been invested since 2007.

Is among one of the top 4 MFIs in Cambodia and is

moving towards being the leading, sustainable

microfinance provider, helping clients to succeed in

their businesses.

Employs 1872 people, of which 541 are female.

We have provided equity funding, loans in both local

currency and in US dollar and an emergency liquidity

credit line, when there was political turmoil.

Strategic plan initiated to transform to a fully fledged

SME/ Micro finance banking group.

Company Background Shareholding Structure

Performance - Loan portfolio

Strong shareholder group who have been consistently supportive to HKL’s growth.

Local SH

17.49%19.73% 19.75%

19.87% 23.16%

2007 2008 2009 2010 2011 2012 2013 1H 2014

0

50

100

150

200

250

Unit: USD million

As of June 2014, loan portfolio stood at USD 194 million with PAR>30 of only 0,04%.

Microfinance : Hattha Kaksekar Limited, Cambodia (HKL)