Beirut - May 2009 Foreign Commercial Investment in Microfinance – Overview of Market Trends Cedric Lombard Director Sanabel 6 th Annual Conference Symbiotics

Symbiotics - Professional Services for Microfinance Investors and Fund Managers Volume Under Advisory/ Management Investment Portfolio by Region

State of Commercial Financing – Market Patterns Number of MIVs ($ Million)*103 Market Volume ($ Million)*6’500 Average MIV Assets ($ Million)*63 MIV Juridiction (%Total Assets) Western Europe81.4% North America11.5% Geographical Distribution (% MP)Market Data Source: 2008 CGAP MIV Survey * Symbiotics estimates for 2008; all other data are for 2007 » Very few commercial investment to MEDA countries » 0.2% of MIV portfolio & 0.8% of Symbiotics portfolio » Share of MENA’s MFIs in MIX Market database: 2.7% (USD 1.12 bln market)

Recent Trends – Slower but Positive Growth of MIVs YearMIVs (Nb) Total Volume ($ bl.) Growth Rate % % % % » Slow but positive growth in 2008, fueled by socially oriented investors: » Large pension funds maintain their allocation as part of their SRI strategy » Public investors invest more in response to the global credit squeeze » Retail investors continue to make new allocations to support microentrepreneurs in emerging markets » Leading MIVs constitute the main potential source of growth: » Positive track record (risk-return profile) » Critical size attracting institutional investors Lux MIV Market Growth

Recent Trends – Stable Interest Rates but Higher Spreads Spread Analysis SMX Index USD » Stable interest rates » Lower reference rates » Higher credit premiums » Increasing cost of hedging » Increasing cash level for redemptions » Lower but still positive net returns

Recent Trends – Slow deterioration of the MFIs Risk SYM 50 Key IndicatorsMar. 2009Δ 3mΔ 12 m Assets ($ ml.) %17.70% Loan Portfolio ($ ml.) %12.65% Active borrowers 45’ %18.33% Average loan1’ %-3.95% Debt/equity ratio %0.23% Portfolio yield 29.48%-3.22% -2.06% Cost of funding8.75%-5.34%1.21% OER 14.73%-3.12% 2.22% OSS %-8.48% % ROE 4.12%-72.89% % PAR> 30 days 4.46%36.68% 57.04% Risk coverage ratio127%-29.60%-76.78%

Investors’ Expectations – Towards increased partnerships » The struggle to maintain high quality MFIs and progessively » Need for transparency » Compare to the benchmarks » Find a growingly better equilibrium between subsidized and commercial funding sources » Work on solutions jointly with the lenders in order for them to lend loans in local currencies with affordable hedging instruments