Microfinance and Capital Markets - Council of Microfinance Equity ...

More documents

Recommendations

Info

Table 1: IPO/Listing DetailsName of Institution PT Bank Rakyat Indonesia (BRI) BRAC Bank Banco Compartamos, S.A. Equity Bank LimitedDate of Offering 10/31/2003 12/11/2006 4/20/2007 8/7/2006Total Shares Outstanding 11,764,703,700 10,000,000 c 427,836,876 90,564,550Offering Number of Shares(% of total)4,764,705,000 a (41%) 5,000,000 (50%) 128,308,412 (30%) 90,564,550 (100%)Total Value of Offering $476,470,500 $12,588,500 $473,899,952 $86,941,968Price Per Share at Offering $0.10 $2.52 $3.65 $0.96Implied Market Value ofCompany at Offering$1,176,470,370 $25,200,000 $1,561,604,597 $86,941,968Price Per Share as of 9/2007 $0.66 $18.12 $5.25 $1.8852 Week High $0.72 $20.06 $6.45 $2.2452 Week Low $0.47 $7.05 $3.65 $0.62Earnings Per Share $0.04 $0.95 $1.50 (as of 9/30/07) $0.12Price Earnings Ratio 16.5 19.1 11.85x (as of 9/30/07) 15.67Book Value Per Share $0.15 b $2.64 d $0.29 (at offering) -Percentage Increase on InitialPriceSellers’ ProceedsDistribution of Shares byType of BuyerGovernment of Indonesia: $291 millionBRI: $186 millionDomestic and international investors561% 619% 47.75 % (as of 9/30/07) 95.8%BRAC Bank received nearly 100% of theproceeds ($13 million), less underwritingfees.General public: 80%Nonresident Bangladeshi: 10%Mutual funds: 10%Compartamos A.C. (NGO): $116 millionACCION Gateway Fund LLC: $143 millionIFC: $42 millionIndividual shareholders: $172 millionMexico general public: 18%International Qualified Institutional Buyers:82%Currency is not in constant dollars or adjusted for inflationPrimary information sources are as follows: BRI – Offering Circular (10/31/03), BRAC Bank – Prospectus of BRAC Bank Limited (9/20/06), Banco Compartamos – Offering Circular (4/19/07) and Equity Bank –Information Memorandum (3/7/06).a. Source: Indonesia Stock Exchange, BRI first issue information, November 10, 2003. http://www.idx.co.id.b. This number is calculated using December 31, 2006 book value and the share price in this chart (September 10, 2007)c. Source: Dhaka Stock Exchange Ltd., http://www.dsebd.org/forthcoming//bracbank.pdf.d. This number is calculated using July 6, 2007 book value and the share price in this chart (September 10, 2007)No funds were raised.Kenya existing investorsLock-up 12 months 3 years 180 days 2 yearsType of Offering Primary and Secondary Primary Secondary Listing
THE INSTITUTIONSAs we noted in the introduction, each of the institutions has approached the capitalmarkets somewhat uniquely, partly a result of different political and economic conditionswithin each institution’s respective country. In this section, we will briefly discuss thenature of these four MFIs, their histories as financial institutions, their growth andfinancial performance and their ability to reach scale and impact those without access toformal financial services.I. BANK RAKYAT INDONESIA (BRI)Established in 1895, BRI is among the oldest banks in Indonesia. Its unit desa systemwas established in 1984 and is currently one of the largest microfinance institutions in theworld. 2 The unit desa system is essentially a network of village banks that providemicrofinance and savings to poor rural farmers in Indonesia. The system emerged fromefforts by the Indonesian government in the early 1970s to substantially increase the sizeof the rice crop by subsidizing the financing of inputs such as fertilizer and seeds. BRIadministered the financing by establishing some 3,600 unit desas at its peak under theBIMAS (Mass Guidance) credit program. The unit desas were also responsible forproviding rural, non-agricultural loans. Employment levels at the unit desas grew rapidlyto some 14,000 employees. While the effort succeeded in terms of increasing the ricecrop, it was clear by the early 1980s that the program of subsidized financing was verycostly to the government. A non-payment culture developed rapidly, and the programbecame clearly unsustainable in the long run. 3In 1984, utilizing the infrastructure of the BIMAS program along with the technicalassistance and advice of a Harvard Institute of Development team, the government andBRI developed the unit desa system. The key was the development of the KUPEDESloan product as well as a number of savings-deposit products introduced afterKUPEDES. 4 Though the products have been somewhat modified over the last severalyears, the unit desa system remains much as it was designed in 1984. By 1986 theprogram reached its break-even point and took off on a remarkable period of growth.From 1984 to 1996, BRI generated 18.5 million KUPEDES loans, and during 1996the unit desas were extending some 160,000 loans per month, averaging $1,0072 For a comprehensive discussion of microfinance in Indonesia, in particular BRI’s unit desa system, seeMarguerite S. Robinson, Microfinance Revolution Volume 2: Lessons from Indonesia (Washington: WorldBank Publications, 2002).3 See S. Charitonenko, Richard H. Patten and Jacob Yaron, “Indonesia: Bank Rakyat Indonesia—UnitDesa, 1970-1996, Sustainable Banking with the Poor” (the World Bank, May 1998), ix-x.4 Ibid., x-xiii.7
Page 1: MICROFINANCE AND CAPITAL MARKETS:TH
Page 5: ACKNOWLEDGEMENTSWe appreciate the g
Page 8 and 9: a larger process in which the Indon
Page 12 and 13: (approximately at GNP per capita),
Page 14 and 15: compared to per capita GNP. Average
Page 16 and 17: that prepare their clients economic
Page 18 and 19: director and Ivan Mancillas serving
Page 20 and 21: • Cash mobilization and handling
Page 22 and 23: would be appropriate for the microf
Page 24 and 25: expenses increased rapidly as well
Page 26 and 27: Ownership incentivesIn two of the i
Page 28 and 29: its NGO offering microfinance and i
Page 30 and 31: Table 3: Bank Rakyat Indonesia (BRI
Page 32 and 33: Table 5: BRAC Bank—SME bank2004 -
Page 34 and 35: Table 7: Equity BankYear of Establi
Page 36 and 37: BRI’s stock has performed excepti
Page 38 and 39: improving health and nutrition for
Page 40 and 41: IV. EQUITY BANK LISTINGAs previousl
Page 42 and 43: limits for MFIs and “truth in len
Page 44 and 45: OVERALL CONCLUSIONSOur conclusions
Page 46 and 47: Annex 1: Poverty Data for Locations
Page 48 and 49: Profit Margin 2006 16.09% 22.35% 31
Page 50 and 51: Portfolio at Risk >30 days 2006 3.7
Page 52 and 53: Holloh, D., Microfinance Institutio
Page 54: ABOUT THE STUDYThis paper discusses

Microfinance and Capital Markets - Council of Microfinance Equity ...

Create successful ePaper yourself

Delete template?

Save as template?