Community Development Venture Capital Alliance

Fondo Capital Activo de Bolivia LLC (FCA Bolivia)
Main Offices: Ed. Eduardo Abaroa, Planta Baja, Sanchez
Lima, esq. Belisario Salinas, La Paz, Bolivia
Website: www.seaf.com/bolivia
Email: johnbays@aol.com

Fund Manager: Small Enterprise Assistance Funds (SEAF)

Key Personnel: John Bays, Director General

Established: 1999

Total Committed Capital: US $8.6 million

Amount Invested: US $4.2 million (49%)

Shareholders:
Multilateral Investment Fund (MIF) (administered by the Inter-American Development Bank)
Corporacion Andina de Fomento (CAF)
Small Enterprise Assistance Funds (SEAF)
L.A.I Finance N.V.
Fundacion para Desarrollo Sostenible (FUNDES), Bolivia
FUNDA Pro, Bolivia

Geographic Focus: The Fund will invest in businesses in La Paz, Cochabamba, Santa Cruz and throughout Bolivia.

Background
Like other SEAF funds, the purpose of Fondo Captial Activo de Bolivia LLC (FCA Bolivia) is to provide primarily equity and quasi-equity financing, in combination with business assistance, to small-scale Bolivian enterprises (SMEs). SEAF has been pleased with the quality of potential Bolivian investments and the entrepreneurial spirit of Bolivian business owners. Investments are made in combination with a management training and technical assistance component in order to enhance the business performance of the Fund's investments and to help meet its developmental objectives. The Fund actively assists its portfolio companies in implementing appropriate improvements in management techniques and practices, especially relating to financial control, cost accounting, quality control, and marketing. In addition, the Fund Manager's investment officers are actively engaged in implementing business strategy and in following-up with advice rendered by outside experts. Business support programs are sponsored not only by the Fund, but also by other international and local agencies.

Social Mission
By providing affordable financing to private sector SMEs in underserved markets, the Fund seeks to build the capacity of SMEs to expand production, access new technology, improve competitiveness, reach wider markets, increase profits, and achieve long-term commercial sustainability. By supplementing investments with technical assistance, SEAF aims to help develop business and management skills, improve corporate governance and transparency, and formalize legal structures, business structures, and tax reporting. The development of a vibrant and sustainable SME sector will help to generate new employment, export revenues, and government tax revenues; stimulate economic growth; promote free markets; improve social welfare; and contribute to political stability in developing countries. The Fund also seeks to provide examples of successful private enterprises to entrepreneurs and investors, help SMEs establish new customer and banking relationships with the formal banking sector, create a culture of equity investment, institutionalize investment methods and structures, and help to develop the country's overall financial sector. Consistent with the foregoing, SEAF will also seek to promote regional and international trade among small businesses in Bolivia.

Investment Information
While the Fund pursues a strategy of flexible and opportunistic portfolio development, the following are priority industries: Agro-food industry, including non-traditional agriculture for export; light industries for export; businesses supporting the housing industry; essential business services, such as printing; businesses assisting the protection or rehabilitation of the environment; and other businesses assisting the socio-economic progress of Bolivia and its people. The Fund also places special emphasis on companies that are export-oriented and those with strong growth prospects. The Fund will not invest in enterprises engaged in the following activities: banking, insurance, and financial services; speculative investment activities such as real estate or commodities trading; production or sale of tobacco products or hard alcohol; arms manufacturing or other military-related activities; operation of casinos or other gambling-related activities; operation of abortion clinics; or activities harmful to the environment. The average size of the Fund's investments will be approximately US $200,000 to $800,000. The Fund will invest in existing locally-owned SMEs employing from 10 to 1000 persons and having annual revenues, prior to investment, ranging between US $100,000 and US $1,000,000. The Fund has no co-investment preferences.