NEW YORK -- TIAA-CREF, the leading provider of retirement savings products and services in the academic, medical and cultural fields, today announced the creation of a $100 million Global Microfinance Investment Program (GMIP) to invest in selected Microfinance Institutions (MFI's) worldwide. Concurrently, TIAA-CREF also announced GMIP's first investment - a $43 million private equity stake in ProCredit Holding AG, one of the world's leading microfinance companies.

"We subscribe to the view that microfinance investing can contribute to a double bottom line," said Ed Grzybowski, TIAA-CREF's Chief Investment Officer. "GMIP, and this investment in ProCredit, gives us an opportunity to seek competitive returns through socially responsible investments that we believe have a low correlation to traditional equity and fixed income markets."

GMIP is part of TIAA-CREF's recently formed Social and Community Investing Department, which develops new socially oriented products, oversees the screening methodology of social screened funds, formulates policies around key social issues and manages community investment programs. GMIP is expected to invest $100 million over the next four years in a range of investment structures, asset classes and risk levels through MFI's.

"TIAA-CREF listens to its participants," said Scott Budde, Managing Director, head of the Social and Community Investment Department and manager of GMIP. "Our recent participant survey showed significant interest in proactive social investing and a desire to promote human rights and economic development. We believe GMIP and investments in microfinance institutions like ProCredit are an important step in that direction."

"GMIP found ProCredit an attractive investment opportunity because it has been one of the leading institutions in bringing a commercial approach to microfinance," said Budde. "They have a solid, profitable, and rapidly-growing business model with strong focus on economic development in emerging economies, including operations in post-conflict countries in Africa."

"In TIAA-CREF, we have found a strong private partner, who shares our long-term commitment to having a development impact with commercially-oriented microfinance banks," said CP Zeitinger, Chairman of ProCredit Holding Supervisory Board. "The capital provided by TIAA-CREF will help us to expand in Africa, Latin America and Eastern Europe, providing responsible banking services to many more low income families and small businesses. ProCredit is a fast growing, profitable institution and we had many options for raising capital but felt that TIAA-CREF was the best capital source."

The funding source for GMIP and the ProCredit investment is assets invested in TIAA Traditional, a guaranteed fixed annuity account with nearly $160 billion and 2.3 million investors. The largest portion of TIAA-CREF's ProCredit investment will be in newly issued shares of ProCredit Holding while the remainder will be in shares purchased from the International Finance Corporation, the largest multilateral provider of financing for private enterprise in developing countries. IFC will retain a significant minority shareholding in ProCredit Holdings AG, and continue to support the growth and development of the ProCredit Group.

About TIAA-CREF

TIAA-CREF is a national financial services organization with more than $380 billion in combined assets under management (6/30/06) and the leading provider of retirement services in the academic, research, medical and cultural fields. Further information can be found at www.tiaa-cref.org.

About ProCredit Holding AG

ProCredit Holding is the parent company of the global group of microfinance banks, collectively known as the ProCredit group. The 18 microfinance banks in as many countries are located in Eastern Europe, Latin America and Africa. By end of July 2006 the group of banks had a combined outstanding loan portfolio of €1.9 billion comprised of some 670,000 loans, 95% of which are for amounts of less than €10,000, issued to micro entrepreneurs and small businesses. At the same time, the group's deposit base amounts to roughly €1.5 billion held in just over 1.8 million accounts. 80% of which are for amounts less than € 100.
(Note: Monetary denominations above are expressed in Euros)

ProCredit Holding was set up in 1998 (under its former name, "IMI") with the objective of enabling small and micro entrepreneurs in developing countries and transition economies to gain access to financial services. Specifically, ProCredit's aim is to create and manage commercially sustainable financial institutions designed explicitly to serve these target groups - whose banking needs are so often neglected, and whose economic potential is so often underestimated. Further information can be found at www.procredit-holding.com

About the International Finance Corporation

The International Finance Corporation, based in Washington DC, is a leading investor in microfinance institutions. The IFC's mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit www.ifc.org.

TIAA-CREF

TIAA-CREF

TIAA-CREF is a national financial services organization with more than $380 billion in combined assets under management (6/30/06) and the leading provider of retirement services in the academic, research, medical and cultural fields.

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