Project detail - Teak Tree Investments

Teak Tree Investments

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Who is our client

Teak Tree Investments (TTI) is a newly established holding and operating company that will take minority equity positions into 4-8 Filipino provincial (SME/agricultural) banks and build them up into ‘Regional Champions’ by providing general services and technical assistance. TTI will provide the banks with the capacity building services tailored to each investee bank through local banking experts, a panel of international expert banking advisors and the full-time input of TTI’s principals.

Funding objective

Investing in TTI will provide quite a unique opportunity to enter the financial sector of the rural Philippines, one of the largest and most attractive rural markets in the region. The fragmented nature of this (micro) finance sector has prevented international investors from directly investing in microfinance institutions (MFIs) in the Philippines. FMO invested US$7 million in TTI, thereby expanding outreach to the unbanked population through high-quality financial services, multiplying impact by working with (initially) three institutions, contributing to the strengthening and consolidation of the sector and benefiting from significant learning opportunities.

Why we fund this project

TTI's approach is closely aligned with FMO’s approach to strengthening (in growth and skills) rural agricultural banks in the Philippines and thereby increasing access to finance for many individuals, small enterprises and farming communities. TTI’s concept is tailored to improve financial inclusion and its activities will have an immensely positive effect on the lives of the low-income population in the Philippines, both in terms of outreach as well as the quality of the services offered. The investment has been made through the MASSIF fund, as TTI is a start-up and the target investees are small, mainly serving rural SMEs and still having a high capacity development need in order to reach a higher standard.

Region
Asia
Country
Philippines
Sector
Financial Institutions
Signing date
2/22/2013
Total FMO financing
USD 7.00 MLN
Fund
MASSIF
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
B