Innovative Financial Intermediary Program
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INNOVATIVE FINANCIAL INTERMEDIARY PROGRAM

U.S. Overseas Private Investment Corporation
The U.S. Government's Development Finance Institution
Innovative Financial Intermediary Program

Over its 40+ year history, OPIC has demonstrated its ability to respond to market demands that the private sector has been unable to support entirely on its own. Political risk insurance, extended loan maturities, private equity funds, and creative financing structures such as non-bank financial intermediaries and microfinance institutions show OPIC’s leading and adaptive approach to mobilizing private investment in developing markets.

What is IFIP?


In recent years, OPIC has experienced increased demand for financing from fund managers and investors for pooled capital vehicles, which contain elements typical of both the Agency’s traditional direct finance and investment funds products, but do not fit squarely within either process.

To respond to this demand, OPIC launched the Innovative Financial Intermediary Program (IFIP) in November 2013. IFIP is a two-year, $500 million pilot program which aims to facilitate capital flow to developing economies, with a focus on SMEs. The program provides support to financial intermediaries who will invest in enterprises in OPIC-eligible countries, with investment vehicles that are smaller in size than those typically found in a traditional OPIC private equity financing, or where the investment vehicle is deploying capital using debt or a combination of both debt and equity.

The IFIP pilot has enabled OPIC to establish a new process to consider these different structures and respond more effectively to them, while leveraging the expertise and best practices within the Agency’s finance and investment funds departments.

Eligibility


As with all OPIC projects, investments made through this program will be required to comply with OPIC’s U.S. investment eligibility requirements, as well as its environmental, social, worker rights, and U.S. effects standards and criteria.

The chart below provides key information on eligible structures for IFIP; however, OPIC strongly recommends that potential applicants use the IFIP Eligibility Self-Screener to determine if their proposed vehicle meets the minimum requirements for application to IFIP.

IFIP-Eligible Structures Maximum Total Fund Size Maximum OPIC Commitment Description
Small Equity Funds $75M $25M Funds that make equity and equity-like investments, including mezzanine and subordinated debt, into portfolio companies.
Hybrid Funds and Debt Funds $150M $50M Includes, inter alia, funds that make investments into portfolio companies in the form of: both debt and equity; solely senior debt; or both senior and subordinated debt.
Greenfield Non-Bank Financial Institutions No Limit $50M Start-up non-bank financial institutions with characteristics similar to an operating company.
Hybrid Microfinance Investment Vehicles (MIVs) No Limit $50M MIVs investing 25% or more of their total portfolio as equity.

Evaluation Criteria


Application submissions will be evaluated on a range of criteria, including the following:

Fund Strategy Management Team Track Record Fundraising Governance Impact Potential
  • Clarity of Investment Objectives
  • Market Opportunity
  • Pipeline of Opportunities
  • Innovation
  • Years of Relevant Experience
  • Team Composition
  • Years Working Together
  • Relationships & Resources
  • Fund Manager & Investment Team Deal History
  • Value Created
  • Capital Commitments to Date
  • Demonstrable Funding Pipeline
  • Previous Fundraising Track Record
  • Compensation, Carry
  • Conflicts of Interest
  • GP Commitment
  • Impact Intent
  • Target Population
  • Scalability

IFIP Application Process


The application process involves submission of a:

  Response to the application questionnaire
  Pitch book
  Diagram of proposed fund/vehicle structure and of how OPIC’s financing will flow through the structure
  Financial model (optional)

OPIC accepts proposals on an ongoing basis and reviews them quarterly with the assistance of an external investment advisor.

To begin the application process, please create an account and complete and submit the IFIP questionnaire along with the required supporting materials.

The next quarterly deadline is October 31, 2015.

If you have any questions regarding the Innovative Financial Intermediaries Program, please view the FAQs or contact Anu Shetty at IFIP@opic.gov.

OPIC is the U.S. Government’s development finance institution. It mobilizes private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets, catalyzing revenues, jobs and growth opportunities both at home and abroad. OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.

Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers. OPIC services are available for new and expanding business enterprises in more than 150 countries worldwide.