Legatum’s microfinance initiatives are currently focused on India, where over 600 million people lack access to basic financial services. Legatum has chosen India because it has a number of inherent advantages:

• A vibrant entrepreneurial culture
• An abundance of willing entrepreneurs and productive borrowers
• A developed and progressive private banking sector
• A supportive regulatory environment

India is well positioned to lead the global development of microfinance, establishing best practices and a robust infrastructure that will provide useful models for other markets to follow.

Unitus Equity Fund II

Legatum and Omidyar Network have co-anchored Unitus Equity Fund II (http://www.unitusequityfund.com), a private equity fund focused on the poor, with each firm investing USD 20 million. Like its predecessor, UEF II will provide capital to growth-oriented MFIs that are run by visionary, entrepreneurial leaders. In addition, UEF II will expand the focus of UEF I by investing in companies offering products and services that enable the world’s poor to create opportunities for themselves and their communities.

This joint investment with Omidyar Network reflects both organisations’ shared belief that enterprise offers one of the best long term solutions to poverty. Legatum’s co-investment in the Unitus Equity Fund II reflects its confidence in the Unitus management team, which has a proven track record of success investing in MFIs around the globe.

Intellecap

Intellecap is a pioneer and leader in providing business advisory services for investors and companies that seek both a financial and social return. Intellecap (http://www.intellecap.net) provides a range of strategy and corporate finance advisory services to facilitate and enable innovations that create economic activity in India’s poorest communities. Intellecap also directly incubates sustainable development solutions to address the broader challenges of businesses in development.

Legatum’s $8.4 million investment will ensure that Intellecap is well positioned to address issues in the microfinance sector, as well as other areas that benefit social and economic development such as health, education, and technology. Intellecap also plans to expand its services in India and beyond, providing clients with the necessary support and expertise to identify and realise a wide range of opportunities.

SHARE Microfin

Legatum has made a significant commitment to one of India's largest microfinance institutions, investing US$25 million for a majority interest in SHARE Microfin Ltd (www.sharemicrofin.com). This is the largest single equity investment to-date in the global microfinance industry.

Over its 17 year history, SHARE has developed a business model that incorporates not only microloans but also training programs in health, nutrition, education, literacy, and sanitation. SHARE’s model is scalable and efficient in reaching poorer communities and providing higher quality services at lower costs.

Legatum's investment will allow SHARE (currently serving over 1 million clients) to extend access to basic financial services to over 10 million people by 2012, with the majority being households without prior access to financial services.

Additional investments in infrastructure

The microfinance industry faces many challenges during this period of transition - lowering costs within the value chain, developing the back-office and technological infrastructure required for growth, and establishing common standards for increased transparency.

To address these challenges, Legatum has invested in two additional companies that we believe support the growth of the microfinance industry: FINO and A.Little.World.

FINO

Financial Information Network & Operations (“FINO”), is dedicated to providing an integrated back-end and front-end service platform to microfinance institutions (“MFIs”) Legatum’s investment in FINO (http://www.fino.co.in/) will allow it to offer standardised and shared infrastructure that will link clients and financial service providers across the financial spectrum, reducing the cost of capital for all participants in the value chain and dramatically increasing the ability of MFIs to achieve scale.

A.Little.World

Legatum has also invested $2 million in A.Little.World (http://www.alittleworld.com), a company seeking to provide a scalable and sustainable branchless banking platform ("ZERO") in partnership with major banks, strong local NGOs and village organisations. ZERO's platform includes integrated use of biometrics and mobile phones to enable financial transactions.