CASE STUDIES
Unitus Case Study: Lifebank (Philippines)
Unitus MFI partner since 2006
Lifebank provides
microcredit loans to poor, entrepreneurial women in the central Philippines
using the flexible ASA-Bangladesh model. A typical client might own and operate
sari-sari stores, sell fish on the highway, or invest in animal husbandry. Lifebank’s
staff and board are focused on actively exploring ways to empower poor
families, especially those excluded by the rural banking system, and help these
families realize economic opportunities by accessing small financial products.
Challenge
Lifebank required
$2.5 million to support its growth plan for 2007 and 2008, and also wanted to
create a more robust, and diversified group of core lending relationships.
Solution
The Unitus Capital Markets team engaged with Lifebank to understand its capital needs and evaluate its lending relationships. Unitus then worked with Lifebank to prepare them for a competitive tender capital raising process. Investor preparedness activities included business plan drafting, revision of financial projections, solicitation of a performance rating, and a listing on the MIX Market (where Lifebank was recently named the top MFI in the Philippines).
After completing the preparation process, Unitus initiated a competitive tender process in May 2007 with seven leading international banks and microfinance funds. From this process, Lifebank received five competitive offers totaling more than three times the required capital.
With the assistance of Unitus, Lifebank
elected to pursue facilities with three parties. Unitus then led the negotiations with each
lender, and in October 2007, Lifebank
closed on $1.3 million in debt, with an additional $1.2 million expected to
close in early 2008.
Impact
Lifebank initially intended to raise $1.2-1.5 million in debt capital for 2007 from existing lenders. By working with Unitus, the organization was able to position itself as an attractive borrower to multiple international lenders. The results were self-evident: Lifebank obtained facilities meeting both 2007 and 2008 capital needs. This success eliminated the need for Lifebank to return to lenders for further capital in 2008. In addition, the competitive tender process lowered Lifebank’s cost of capital on one facility by 125 basis points below the initial offer.
Feedback
"The partnership with Unitus has definitely brought value to Lifebank. It has opened the doors to global sources of capital and our list of reputable funders continues to increase. A major constraint to reaching out to more and more poor families has been addressed."
Senior VP for Microfinance and Finance
"Our partnership
with Unitus hinges on congruence of vision to empower the enterprising poor and
develop human capacity to its fullest. Above and beyond LifeBank's improved
access to the global arena, we value Unitus management's strategic flexibility
and its competent and dedicated staff who brainstorm solutions with us and our
staff for more efficient and effective delivery of our services. They walk the
talk and keep us on our sharpest."
President
