Effective March 13, with the deposit at the Inter-American Development of an Instrument of Contribution in the amount of $150 million by the United States, the shareholder agreement known as Multilateral Investment Fund II (“MIF II”) entered into effect. The deposit by the U. S. Treasury Department marked the thirteenth deposit by a signatory member country to the agreement dating back to July 2006, and the largest. Other contributions, in the order in which they were effected, have come from Spain, Japan, Mexico, the United Kingdom, Canada, Chile, The Netherlands, Peru, Barbados, Switzerland, Jamaica and Sweden.
The MIF is the Inter-American Development Bank Group’s largest source of grant financing. Since its original establishment in 1993 has earned a reputation as a unique source of innovation for development not just in Latin America and the Caribbean, but around the world.
Cumulatively, the MIF’s Donors Committee has approved more than 1000 projects (both grants and investments) with a total project cost of more than $2.2 billion. MIF projects usually involve partnerships with business groups, nongovernmental organizations and/or public sector agencies and are organized into a variety of clusters, including: remittances, microfinance, small business growth and supply chains, worker and youth skills training, business climate improvement, assistance for clean energy and sustainable tourism initiatives, venture capital and public-private partnerships.
The initial capitalization for the Fund amounted to $1.2 billion. As agreed to in April 2005, when the Donors signed the agreement formally the recapitalization, MIF II contributions will total $500 million. The deposit from the United States brings contributions to MIF II to approximately $390 million, surpassing the 60 percent threshold needed for the agreement to enter into effect.
“I am extremely pleased that MIF will be able to move ahead at full speed,” said IDB President Luis Alberto Moreno. “The MIF II agreement, signed by 38 member countries of the Bank, is a tremendously valuable instrument. The MIF aims to reach a scale capable of changing the lives of millions of people throughout Latin America and the Caribbean.” Added Donald Terry, Manager of the Fund, “We have learned a lot over 14 years of developing and testing new ideas. First, incentives matter: entrepreneurs react to the business environment. Second, financial democracy is essential: microenterprises and small businesses need access to the financial systems. Third, scale is important: successful experiences should be replicated elsewhere. Finally, opportunity matters: MIF II will allow us to broaden efforts to reach the region’s majority, moving people from the margins to the mainstream of economic activity.”
Effective March 13, MIF II replaced MIF I. Five countries that were not members of MIF I signed the new agreement: France, Haiti, Sweden, Switzerland and the United Kingdom.
MIF Deputy Manager