Procredit Holding AG, the parent company of the largest microfinance group in the world, announced a significant capital increase of EUR 74mn to make their paid-in capital a total of EUR 216mn. The new private sector investors are 1)TIAA-CREF, a US based asset management company with more than $380bn in assets under management and the leading provider of retirement saving products in the academic, research, medical and cultural fields and 2) the Omidyar-Tufts Microfinance Fund. These two American investors purchased non-voting preference shares amounting to EUR 40.5mn and the company’s existing shareholders Kfw, FMO , IFC and responsAbility Global Microfinance Fund also participated in the capital increase.
This seems so far the largest private equity investment in microfinance by a single private sector investor. TIAA-CREF invested $43mn in Procredit Holding AG. Development World Markets advised Procredit Holding AG on this transaction.
According to the press release of Procredit the additional capital will be used to expand Procredit activities in Sierra Leone, Honduras and Mexico. Procredit currently operates in 18 countries in Africa, Latin America and Eastern Europe. As of the end of July 2006, the Procredit group had a loan portfolio of EUR 1.8bn and deposits of EUR 1.5bn outstanding to more than half a million of micro and small entrepreneurs in developing countries and transition economies. News releases. Procredit, TIAA-CREF, DWM.