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| Microfund for Women (MFW) |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 24947 |
| Company name | Microfund for Women (MFW) |
| Country | Jordan |
| Sector | Finance & Insurance |
| Environmental category | FI-1 |
| Department | Global Financial Markets Group |
| Status | Pending Disbursement |
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| Date SPI disclosed | May 22, 2006 |
| Projected board date | June 26, 2006 |
| Previous Events | Signed: March 19, 2007
Approved: August 18, 2006 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The project involves an up to $3.0 million loan or JOD 3.0 million with an IFC 50% partial credit guarantee (PCG) and a comprehensive technical assistance (TA) package to Microfund for Women (MFW or the company), the leading microfinance institution in Jordan. The purpose of the loan is to support MFW’s microfinance lending operations through its nine branches covering central and northern Jordan: in the following areas; Raghadan, Nazzal, Wehdat, Baqa’a, Russaifeh, Zarqa, Jerash, Madaba and Irbid. The proposed loan will also allow MFW to introduce new products such as micro-leasing, home improvement loans, education loans and provide comprehensive financial services on a commercially sustainable basis for low income women and reach greater scale.
PEP-MENA is expected to design a TA package for MFW, which may include introducing micro-leasing and Board of Directors (governance) training. In addition, IFC’s Gender Entrepreneurship Markets (GEM) program is expected to assess the financial needs of women clients and based on their findings, develop new financial products for women clients. |
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| Project sponsor and major shareholders of project company |
| MFW began as a pilot lending program initiated by Save the Children in Jordan in 1994. Later, in 1996, it operated as a local NGO known as the Jordanian Women's Development Society (JWDS) which took over the Group Guaranteed Lending Program with the dual purposes of testing the feasibility of group lending in Jordan and providing poor women with access to credit. Finally, in 1999 MFW was registered as a not-for-profit limited liability company licensed with the Ministry of Industry and Trade. The Chairman of the Board, Mr. Ghaith Sukhtian, owns 60%, while Save the Children owns 40%. |
| Total project cost and amount and nature of IFC's investment |
| The project involves an up to $3.0 million loan or JOD 3.0 million with an IFC 50% partial credit guarantee (PCG). |
| Location of project and description of site |
| MFW is based in Amman with branches covering central and northern Jordan namely Raghadan, Nazzal, Wehdat, Baqa’a, Russaifeh, Zarqa, Jerash, Madaba and Irbid |
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| Anticipated development impact of the project |
The developmental impact of MFW is expected to be high and far reaching in terms of its economic support for productive micro and small businesses, stimulus for employment generation in Jordan. Specifically, IFC’s investment is expected to have a high development impact in the following key areas:
- Significant contribution to economic development through IFC’s support of the strengthening of a microfinance company and the more ample range of financial products that were previously not available to microentrepreneurs; and
- Significant direct contribution to poverty reduction: this project is expected to reach an estimated 24,000 new micro and small entrepreneurs and increase employment and income generation for over 40,000 citizens, primarily in rural areas, during the tenor of the loan. |
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| IFC's expected development contribution |
The most recent World Bank Group Country Assistance Strategy (January 15, 2003), outlines the WBG’s strategy which focuses on advisory activities designed to further support Jordan’s macroeconomic stabilization, and pro-market structural reforms to foster growth and reduce poverty. The CAS contemplates support from both the IBRD and the IFC. The CAS has three main pillars, but the most relevant to IFC’s activities is the third, which focuses on understanding the causes of poverty and developing ways to reduce unemployment and alleviate poverty.
IFC’s support will allow MFW to access long-term funding in dollars or local currency to further grow its loan portfolio and establish a sustainable microfinance entity. In addition, IFC’s Private Enterprise Partnership for the Middle East has proposed to support MFW through a comprehensive technical assistance package focused on developing new products, improving corporate governance and strengthening brand positioning. These programs are critical to MFW's sustainability and growth. |
| Environmental and social issues - Category FI-1 |
| This is a Category FI Type 1 project according to IFC's environmental and social review procedure. The project must establish and maintain an Environment and Social Management System (ESMS) to the satisfaction of IFC, to ensure that it does not make investments in items listed on IFC’s Microfinance exclusion list. The project must designate appropriate individuals who will have responsibility for the implementation of the ESMS. The project must submit annual environmental performance reports to IFC, as per an IFC format. |
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