MFX Solutions Launches Service to Reduce Microfinance Currency Risk

New Company Created by Industry Leaders Enables Lending to Underserved Markets

WASHINGTON, July 7 /PRNewswire/ -- MFX Solutions Inc. (MFX), a new company
dedicated to managing global currency risk in the microfinance industry, today
announced the launch of its operations. MFX will, for the first time, be
making modern hedging instruments accessible to microfinance lenders in
developing markets where they need it most. MFX has secured $13 million from
17 investors in its first round of financing, with Omidyar Network providing a
commitment of $9.3 million.

MFX's mission is to help microfinance institutions (MFIs) and investors (MIVs)
analyze, quantify and reduce currency risk, removing a key impediment to the
growth of the sector. It directly addresses the disparity problem MFIs face
when they borrow in dollars or euros and lend in a different local currency.
MFX solves this problem by providing microfinance lenders access to
sophisticated hedging instruments and free, web-based risk management tools
tailored to the microfinance business model. By offsetting lender's risk and
thereby lowering their costs, MFX will unlock hundreds of millions of dollars
in local currency loans to under-served markets. Reducing currency risk can
help the industry move to a more sustainable growth model.

MFX is the result of a three-year collaboration involving more than 30
microfinance organizations from around the world, led by Global Partnerships,
Calmeadow Foundation, ACCION International, Calvert Foundation and MicroRate.
These organizations saw that as microfinance grew and became more integrated
into the formal financial sector, currency risk was posing a greater threat to
its future.

"Currency risk is a growing threat to microfinance institutions and investors
in every part of the world," said Gary Mulhair of Global Partnerships. "Recent
changes in the global economy further underscore the need for an independent
organization like MFX to help reduce currency risk and increase the overall
security of the sector."

The initial investors in MFX are a group of US and European microfinance
funds, networks, and foundations that have pooled resources to make modern
currency risk management tools available to the industry. In addition to the
investment by Omidyar Network, Triodos-Doen and Hivos-Triodos Fund of the
Netherlands have invested $1.5 million, and ACCION International has invested
$1.25 million. Incofin CVSO of Belgium and Calmeadow Foundation of Canada
contributed $500,000 and $320,000 respectively. Additional investors include:
Calvert Foundation, Global Partnerships, ADA (Luxembourg), Grameen Foundation,
Blue Orchard (Switzerland), Mecene/Africap, Microcredit Enterprises,
Grassroots Capital, Unitus and Developing World Markets. Start up grant
funding for MFX totaling $575,000 has been provided by The Ford Foundation,
The Currency Exchange Fund (TCX), The Dutch Development Bank FMO and USAID.

Frank Streppel of Triodos-Doen and Hivos-Triodos Fund said, "MFIs in
developing countries often have to accept hard currency loans to finance their
activities due to lack of local currency loans. This exposes them to
significant risks from currency fluctuation; risk that in many cases is passed
on to the microfinance client. Our investment in MFX allows us to offer more
loans in local currency, which in the end significantly reduces the burden on
the micro-entrepreneur."

Monica Brand, Director of ACCION International's Frontier Investments, added,
"Getting microfinance to scale isn't just about efficiency, it's about
reducing vulnerability at the base of the pyramid. ACCION feels strongly that
helping to catalyze MFX will simultaneously spur healthy industry growth and
lessen the burdens faced by the poor.

Serving Clients and the Industry
To benefit the microfinance industry, MFX will create education programs
designed to help MFI managers analyze the risks they face from a changing
economic environment. This includes the development of easy-to-use web-based
tools, free to the industry at large, that allow MFIs to stress test their
balance sheets under different economic scenarios. Tools will be deployed
through a variety of training platforms in partnership with other microfinance
organizations.

For its hedging clients, MFX will offer currency swap and forward contracts in
high-risk currencies in regions like Sub-Saharan Africa where hedging is
currently unavailable. To date Africa has received only eight percent of all
microfinance lending.

"Omidyar Network is pleased to be among this first group of MFX investors,"
said Matt Bannick, managing partner, Omidyar Network. "Not only will MFX
enable lending to millions of poor people in remote geographies, the company
will also share important information with the broader microfinance community.
Omidyar Network supports and encourages this kind of openness and transparency
across all of the investments that we support."

A Stable Partner for the Industry
MFX will manage its own risk through its investment in and partnership with
TCX, a $500M+ foreign exchange hedge fund sponsored by FMO and backed by the
Dutch government. TCX offers its investors, primarily public sector
development lenders, the ability to hedge exotic currencies where no
commercial hedging is available. MFX is additionally backed by a $20 million
credit guarantee from the U.S. Government's Overseas Private Investment
Corporation (OPIC), allowing it to operate as a AAA counterparty in the
market.

About MFX
Established in October 2008, MFX operates globally, with headquarters in
Washington, D.C. MFX provides hedging and analytical tools to microfinance
lenders to help them manage currency and interest rate risk. Additional
information is available on MFX's website at www.mfxsolutions.com or by
contacting Sonia Muhki at +1 202 527 9947 or sonia@mfxsolutions.com.

SOURCE MFX Solutions Inc.

Sonia Muhki of MFX Solutions Inc., +1-202-527-9947, sonia@mfxsolutions.com