Once an applicant has filled out an inquiry form and we have checked that they meet our basic eligibility criteria, including that the country is one we are able to work in, the next step is securing programmatic approval from our Board of Directors.
The Board decides either to accept a media organisation as an investment candidate or to reject it based on an analysis of its journalistic content, opinions collected from media support organisations and other reliable civil society representatives with local knowledge, site visits by MDIF Board members or staff, interviews with the applicant’s owners and editorial leadership, and a careful review to confirm the company’s independent ownership.
Once approved by the Board, the applicant must prepare a detailed business plan. The process is monitored by MDIF financial experts and consists of several reviews, revisions and re-drafting. If it proves necessary or desirable, MDIF provides support for the candidate in business-plan writing. The business plan consists of two parts: a narrative description of the investment project, including its purpose, process of implementation and expected results; and a detailed financial analysis of the company’s current condition and foreseeable future trends in its business development.
Investment Committee decision
Once the documentation is complete and the business plan is fully developed, the applicant defends its project and business plan in front of an MDIF Investment Committee. The Investment Committee assesses the financial viability of the applicant’s proposal. The Investment Committee has the right to approve or reject a financing request, or send it back to MDIF staff with a request for additional information or clarification. If the Investment Committee approves the application, it decides on the amount, interest rate and conditions of the loan or other financing.
Terms of financing
All MDIF loans and leases are denominated in a currency of MDIF’s choice, principally U.S. Dollars or Euros.
The interest rate on MDIF loans and leases is below commercial interest rates on loans to small- and medium-sized businesses made on comparable terms generally available in the client’s country and will depend on, among other things, the nature of the project and the prevailing interest rates in the client’s country.
To partially offset the high risk of MDIF loans and leases, in addition to paying interest clients may be required to provide MDIF with a warrant. The warrant grants to MDIF an option to purchase a minority equity interest in the client’s company at a later date.