1. Emergency Liquidity Facility ELF

2. Emergency Liquidity Facility
Stakeholders
• “Lender of Last Resort” for
MFIs in Latin America & the
Caribbean (Launched in Late
2004)
• Designed after MIF/IADB
experiences with Hurricane
Mitch.
• Triggered by natural disasters &
man-made crises.
• Operates Parallel Technical
Services Facilities.

3. Emergency Liquidity Facility
• Bridge facility in the wake of external shocks.
• Up to $40 million available.
• Staggered capital structure: small first-loss equity base
complemented by callable loans.
• Low cost structure.
• Omtrix, a private fund manager located in Costa Rica
operates the Facility. Economies of Scale. Regional
Consultants.
• Rapid response (2 to 4 weeks).
• Market interest rates aiming for low, yet positive, returns.
• MFIs prequalified(includes on-site visits & continuous
monitoring).
• 50+ MFIs affiliated. Initial database included over 300 MFIs in
Latin America & Caribbean.

4. ELF’s Record
Throughout 6+ years of operation, has provided emergency short term
“bridge” loans totaling close to US$ 30 million to 29 MFIs. Average
loan: US 1 million. So far, all loans repaid/ performing.
Examples of Interventions:
• May/June 2005, Bolivia (Socio-political Crisis)
• October 2005, Central America (Hurricane)
• December 2005, Bolivia (Socio-political Crisis)
• August 2006, Ecuador (Volcanic Eruption)
• August 2007, Peru (Earthquake)
• Early 2008, Ecuador (Floods)
• Late 2008 - Early 2009 (International Financial Crisis)
• January 2010, Haiti (Earthquake)
• Early 2011, Peru (Socio-political Crisis)

5. Technical Support Facility
• Parallel Technical Assistance:
 Two complementary levels:
• Pre-Crisis Level (Ex-ante/Preventive)
– Oriented to taking steps to decrease vulnerability of the MFI and its
clients.
• Post-Crisis Level (Ex-post/Recovery)
– Oriented to an efficient operational response to a natural disaster;
provides a manual that guides the MFI through recovery and
reconstruction.

6. Haitian Emergency Liquidity Program

7. Haiti – Balance Strengthening
• The early 2010 Haitian earthquake affected about one
quarter of the clients of microfinance organizations in the
country.
• More than liquidity needed to ensure continuity of services
• Haitian Emergency Liquidity Program (HELP): a special
purpose vehicle created as a complement to ELF to
strengthen the balance sheets of affected MFIs while
minimizing the potential moral hazard of outright grants.

8. HELP
• US$ 2.2 millions committed as a combination of grants and
loans (50/50) from MIF/IADB, Clinton-Busch, Calvert,
Deutsche Bank, Taiwan Cooperation, and Calmeadow.
• HELP has used these resources to buy earthquake-affected
loans from microfinance institutions (up to 1/3 of an MFIs
portfolio).
• Fresh funds allow MFIs to maintain their lending operations,
preserve their capital base and thus continue
operating/lending.

9. HELP
• After three years MFIs have the obligation to acquire at
least 50% of the portfolio sold. Interest income from
acquired portfolio utilized to cover operating expenses.
• 3 MFIs served.
• After close to a year of operation, participating MFIs,
using a combination of bad portfolio restructuring and
new loans, have been able to jumpstart back into
operation several thousand of their clients.

10. Thanks!!