Merrill Lynch Community Development Company Invests $10 Million to Provide a Boost to International Microfinancing Through Calvert Foundation

In an effort to mainstream microfinance and community investing, Merrill Lynch Community Development Company (MLCDC) has invested $10 million in Calvert Foundation’s Community Investment Note, a fixed income investment product that allows individual and institutional investors to support economically disadvantaged communities around the world. The investment will be targeted to provide particular support to women entrepreneurs in developing countries, where microloans as little as $100 can enable impoverished women to start their own businesses and work their way up the economic ladder.

The initiative was designated as a Clinton Global Initiative at its Annual Meeting this week in New York, where heads of state, business executives, heads of nonprofit organizations and foundations, and scholars are meeting to discuss energy and climate change, global health, education, and poverty.

Currently, Calvert Community Investment Notes have $160 million in investment capital outstanding to a wide and growing range of affordable housing, small businesses in low-income areas, and microenterprises.

The MLCDC investment will provide financing to approximately twenty microfinance organizations that are expected to provide microloans to more than 25,000 women entrepreneurs around the world. Organizations such as Adhikar in India, Lift Above Poverty Organisation (LAPO) in Nigeria, Kenya Women Finance Trust (KWFT) in Kenya, Pro Mujer of Bolivia and Mexico, and Women’s World Banking in Colombia, through a combination of microfinance, business training and healthcare support, will enable the regions’ poorest women to build livelihoods for themselves and futures for their families.

Merrill Lynch President and Chief Operating Officer Gregory J. Fleming said: "This investment is part of our firm's commitment to help improve the lives of women and their families which is essential to the growth of sustainable economies in the developing world."

"We are delighted by this opportunity to deepen our relationship with Merrill Lynch, which has been an investment world leader in recognizing the growing importance of community investing,” said Calvert Foundation president and chief executive officer Shari Berenbach.

Access to financial services is critical in these targeted regions where economic and social stagnation of women and girls occur. According to the United Nations Development Program, a mere four percent of the population in rural Africa has access to bank accounts and only one percent has obtained loans or other forms of credit from formal financial institutions. Women are the large majority of microfinance loan borrowers, with extremely high repayment rates.

Doña Auxiliadora Soza is a single mother of five children who had the terrible experience of having her first business fail. However, with an initial $250 loan from FUNDESER in Nicaragua, she was able to grow a business, initially selling cheese on the outskirts of the Diriamba market, then adding new products such as makeup and clothing. Following an excellent track record of ten loans and a strategy of saving while investing, today she owns a prosperous store and holds a loan of $1,600. Doña Auxiliadora Soza is well towards her goal for all her children to be successful professionals. She paid for the schooling of all five of her children, now 30, 26, 22, 20 and 19 years old. The two eldest are professionals and the others are students in college.

Last year Merrill Lynch and Calvert Foundation entered into an agreement in US investments to offer the Community Investment Notes for sale to Merrill Lynch clients who are interested in creating new economic opportunities in underserved communities in the U.S. and abroad, resulting in over $1.5 million being put to work in communities in the initial months of Note sales. As part of this 2007 commitment, Merrill Lynch invests alongside its clients by matching up to ten percent of the Community Investment Notes sold by its advisors in the form of risk protection built into the Notes, providing security to their own investors in the unlikely event of a loss.

"Merrill Lynch cares deeply about its investors and their assets,” said Merrill Lynch Community Development Company president Terri Ludwig. "This arrangement allows us to support both our investors and their commitment to fighting poverty through community investment.”

If current industry growth patterns continue, more investors will be adding community investments such as the Community Investment Note to their portfolios. According to the Social Investment Forum, community investment assets in the U.S. have grown six fold the last 12 years and reached $25 billion in 2007.

ABOUT CALVERT FOUNDATION

For over 12 years, Calvert Social Investment Foundation, a nonprofit 501(c)(3) organization, has worked to make community investment a safe and logical option for all investors seeking to make a positive social impact. To make community investment accessible to a wider audience, Calvert Foundation has removed critical barriers by creating investment products that blend both financial and social returns. With more than $200 million in assets, Calvert Foundation focuses on using investment capital, rather than conventional philanthropy, to create a sustainable, scalable model that enables nonprofit organizations, microfinance institutions and social enterprises to address critical social problems. For more information, see www.calvertfoundation.org.

ABOUT MERRILL LYNCH COMMUNITY DEVELOPMENT COMPANY

Capital for this program was financed by the Merrill Lynch Community Development Company (MLCDC), which provides financing solutions and support to underserved communities. Leveraging Merrill Lynch’s intellectual and financial capital, MLCDC establishes strategic partnerships with community leaders to develop projects that benefit low- and moderate-income areas and individuals. While its activities are national in scope, MLCDC concentrates its efforts in communities in California, New Jersey, New York and Utah.

Merrill Lynch established MLCDC in 2001 as a community development investment bank to conduct business on behalf of Merrill Lynch’s two domestic banks. In addition to providing financial products and services to address important community development issues, MLCDC’s work fulfills the banks’ community reinvestment goals under the Federal Community Reinvestment Act (CRA).

MLCDC looks for lending, investment and program development opportunities and seeks collaborative partnerships with governmental and quasi-governmental entities, non-profit and for-profit intermediaries and other financial institutions in a broad range of community development activities. For more information, please visit http://www.ml.com/?id=7695_8134_13653_71392

Editor’s Note: Calvert Foundation is a separate entity from Calvert Group Ltd. and its products should not be confused with any Calvert Group-sponsored investment product. In order to avoid confusion and be consistent when referring to Calvert Foundation in print news stories, always use "Calvert Foundation” as opposed to "Calvert” in headlines and subheads.