The Deutsche Bank Microcredit Development Fund Insuring the Uninsurable Climate Change and Insurance Munich Re GERMANWATCH

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1 Insuring the Uninsurable Climate Change and Insurance Munich Re GERMANWATCH Samuel Shiroff, Deutsche Bank Corporate Cultural Affairs

2 The Need for Microfinance! More than half the world s population lives on less than $2 dollars a day. Population served by Microfinance!More than 500 million of the selfemployed poor run micro-businesses but less than 6% have access to credit or savings.!the microfinance sector works against this trend, and its success has lead international development policies to embrace bottom-up strategies to effect economic change. MENA 0.1mm Africa 4 mm E. Euro & CA 0.4 mm Latin Am. 1.3 mm Asia 25 mm Samuel Shiroff, Deutsche Bank Corporate Cultural Affairs 2

3 The Success of Microfinance Institutions Ten of the MicroRate 29 had PAR of 5% or less in % Unadjusted Portfolio at Risk: 2001 MicroRate 29 Top 10 MFI's 5% 4.6% 4.7% Portfolio at Risk 4% 3% 2% 1.7% 1.7% 2.2% 2.9% 2.9% 3.4% 1% 1.0% 1.1% 0% WWB Bucaramanga Compartamos WWB Cali Finde WWB Medellin Samuel Shiroff, Deutsche Bank Corporate Cultural Affairs 3 WWB Bogota MFI WWB Popayan ADOPEM Fund. Jose Nieberowski CMAC Cusco Source: The Finance of Microfinance by MicroRate

4 MicroRate29MFIs The Success of Microfinance Institutions The best MicroRate 29 MFIs are more profitable than Citigroup. CMAC Arequipa Compartamos CMAC Cusco CMAC Sullana CMAC Tacna WWB Popayan Fondesa WWB Cali Adopem WWB Bucaramanga CMAC Trujillo WWB Bogota Citigroup Twelve most profitable MicroRate 29 MFI's compared to Citigroup: 2001 ROE 42.9% 37.8% 34.5% 34.1% 29.7% 26.4% 24.7% 23.6% 22.2% 21.4% 21.3% 20.2% 19.7% 15% 20% 25% 30% 35% 40% 45% ROE Samuel Shiroff, Deutsche Bank Corporate Cultural Affairs 4 Source: The Finance of Microfinance by MicroRate. Data from MicroRate and Citigroup 2001 Annual Report and Form 10-K

5 Corporate Citizenship at Deutsche Bank Focus on Target Markets Global Reach...! employees, 50 percent outside Germany! Present in over 70 countries! Bulge-bracket universal bank with a dual-focus approach in a Global World! New global standards, expectations and challenges! Rights and responsibilities of a corporation in a multi-national world! Governance: corporations, governments, and non-governmental organizations Three C Concept with Global Responsibility!! Long-standing philanthropic tradition beginning with founding in 1870! World-wide commitment through border-less initiatives and partners! Co-operation with NGOs and governments! Communicate! Cooperate! Consolidate Samuel Shiroff, Deutsche Bank Corporate Cultural Affairs 5

6 The Deutsche Bank Microcredit Development Fund (DBMDF)! Founded: 1998 by Bankers Trust! Deutsche Bank pledged to support DBMDF after acquisition of BT in 1999 Goal: An innovative loan fund serving as a catalyst to foster market based relationships between Microfinance Institutions (MFIs) and local commercial banks - a sustainable source of capital enabling them to grow to scale and achieve self-sufficiency. Combination of Bank and Private Client Funds! DBMDF grants loans to micro-finance organizations around the world 1-2% rate of interest Actively making low-interest loans to MFIs for the last three years. Managed by Deutsche Bank Community Development Group/ Deutsche Bank Americas Foundation! To date: $1.9 million in loans to 21 Microfinance Institutions in Asia, Eastern Europe, Africa, North and Latin America Leveraging of an additional US$33 million in private financing from local commercial banks. Samuel Shiroff, Deutsche Bank Corporate Cultural Affairs 6

7 How it works A typical DBMDF loan structure Samuel Shiroff, Deutsche Bank Corporate Cultural Affairs 7

8 Where it happens Partnerships around the world Accion International Asian Development Bank Grameen Bank and Grameen Foundation USA International Finance Corporation SHARE Group Women s World Banking World Bank Samuel Shiroff, Deutsche Bank Corporate Cultural Affairs 8

9 Microcredit and Sustainable Development The Commitment Global: Microfinance support provided irrespective of Deutsche Bank business presence. We believe that supporting entrepreneurs is the key to developing future markets. Sustainable: Triple-bottom line effect - an allencompassing part of Deutsche Bank s business policy: Microfinance has the power to positively affect economy, ecology and society without an on-going reliance on charity Inclusive: Deutsche Bank employees around the world are becoming increasingly involved through working groups and in-country relationships Samuel Shiroff, Deutsche Bank Corporate Cultural Affairs 9

10 Contact Infomation DBMDF Deutsche Bank, Frankfurt Deutsche Bank Deutsche Bank Asad Mahmood Samuel Shiroff 31 West 52nd Taunusanlage 12 New York, NY Frankfurt am Main Tel: +1(646) Tel: +49 (0) DBMDF Homepage: United Kingdom: Germany: Samuel Shiroff, Deutsche Bank Corporate Cultural Affairs 10