MICROCAPITAL BRIEF: REGMIFA Invests $13m in Microfinance Institutions (MFIs) Sinapi Aba Trust and First Allied Savings and Loans of Ghana, Kenya Women Finance Trust, Faulu Kenya, FINCA Tanzania, Programme d'Appui aux Mutuelles d'Epargne et de Credit au Senegal (PAMECAS)

The Regional MSME Investment Fund for Sub-Saharan Africa SA, SICAV-SIF (REGMIFA), a Luxembourg-based fund that seeks to invest in micro-, small and medium sized enterprises (MSMEs) in Africa, has announced investments totaling USD 13.5 million in microfinance institutions (MFIs) Sinapi Aba Trust and First Allied Savings and Loans of Ghana; Kenya Women Finance Trust; Faulu Kenya; FINCA Tanzania, an affiliate of FINCA International, a microfinance network serving 700,000 people through subsidiaries in 21 countries; and Programme d’Appui aux Mutuelles d’Epargne et de Credit au Senegal (PAMECAS). No breakdown of the funding by MFI is available. In order to make the loans in local currencies to avoid borrower exposure to exchange rate volatility, REGMIFA partnered with The Currency Exchange Fund (TCX), a fund based in the Netherlands that offers local-currency hedging products. REGMIFA has also expressed interest in lending to MFIs in Nigeria and Cameroon. Financial details on REGMIFA are unavailable.

About the Regional MSME Investment Fund for Sub-Saharan Africa, SICAV-SIF (REGMIFA): The Regional MSME Investment Fund for Sub-Saharan Africa, SICAV-SIF (REGMIFA) is an investment fund focused on supporting micro-, small and medium-sized enterprises (MSMEs) in Sub-Saharan Africa. It was launched in May 2010 by KfW and the German Ministry for Economic Cooperation and Development (BMZ) and is organized as a Societe d’Investissement A Capital Variable (SICAV). REGMIFA seeks to build partnerships between donors, development finance institutions and private investors to support Sub-Saharan African microentrepreneurs. REGMIFA does not report financial information to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse.

About Sinapi Aba Trust: Sinapi Aba Trust (SAT) is a non-governmental microfinance institution in Kumasi, Ghana. SAT is an autonomous, private non-governmental organization (NGO) registered on May 30th, 1994. SAT seeks to provide microfinance services to entrepreneurs operating micro- and small enterprises in Ghana. SAT is an implementing partner of the Opportunity International Network, which has microfinance operations in 20 countries and is a member of the US-based Grameen Foundation. As of December 2009, SAT reports to the Microfinance Information Exchange (MIX) USD 23 million in assets, 88,220 active borrowers, a gross loan portfolio of USD 15 million, return on assets (ROA) of 3.18 percent and return on equity (ROE) of 9.52 percent.

About First Allied Savings and Loans: First Allied Savings and Loans Limited (FASL) is a deposit-taking microfinance institution (MFI) that was incorporated in Ghana in 1995. FASL was established to provide savings and credit opportunities to micro- and small businesses. As of 2009, FASL reports a gross loan portfolio of USD 16.8 million, total assets of USD 35.9 million and 16,400 active borrowers, return on assets (ROA) of 2.92 percent and return on equity (ROE) of 16.58 percent.

About Kenya Women Finance Trust: The Kenya Women Finance Trust (KWFT) was established in 1982 and provides microfinance services exclusively to female clients. KWFT received a license to conduct deposits nationwide in 2010. According to the Microfinance Information Exchange, the MIX Market, the microfinance information clearinghouse, as of 2009 KWFT has a gross loan portfolio of USD 134.2 million, total assets of USD 194.5 million, 334,188 borrowers, return on assets (ROA) of 5.24 percent and return on equity (ROE) of 28.04 percent.

About Faulu Kenya: Faulu Kenya was founded in 1992 as a pilot microlending program of Food for the Hungry International (FHI), a relief and development organization based in the US. In 1999 it spun off into a limited liability company 70 percent owned by FHI. According to the Microfinance Information Exchange (MIX), by year-end 2008, Faulu Kenya had USD 47.7 million in total assets, a gross loan portfolio of USD 37.6 million, 91,105 active borrowers, return on assets (ROA) of -1.11 percent and return on equity (ROE) of -7.08 percent.

About FINCA Tanzania: FINCA Tanzania is an affiliate of FINCA International, a microfinance network serving 700,000 people through subsidiaries in 21 countries. As of 2009, FINCA Tanzania reports to the Microfinance Information Exchange (MIX) USD 10 million in assets, a gross loan portfolio of USD 7.2 million, 41,253 active borrowers, return on assets (ROA) of 8.8 percent and return on equity (ROE) of 126.9 percent.

About FINCA International: The Foundation for International Community Assistance (FINCA) International is a global microfinance network serving over 700,000 people through its subsidiaries in 21 countries. As of 2008, it has total assets of USD 450 million, with an operating profit of USD 8.6 million.

About the Currency Exchange Fund (TCX): TCX, a currency-hedging fund created in 2007, offers swaps and forwards to institutional investors in emerging market currencies. In a currency forward, two parties agree to exchange future payments in different currencies at an exchange rate that reflects expected future interest rates associated with the two currencies. A swap occurs when two parties exchange equal value loans in two different currencies with interest rates reflecting anticipated currency movement and institutional credit quality. TCX has raised USD 590 million, including roughly USD 89 million from the Dutch government as of April 2010. TCX plans to hedge three to six times the amount invested with a minimum investment of USD 5 million. TCX was designed to manage only emerging market foreign exchange and interest rate risk, accepting no default risk. As a result, use of TCX is limited to institutional investors, a requirement effectively disqualifying MFIs from direct contact. These MFIs must deal with financial intermediaries to access the services of TCX.

By Diana Baide, Research Assistant

[1] REGMIFA. Press Release: “REGMIFA Announces Disbursement of First Loans.” 19 November 2010

http://www.regmifa.com/news/press-releases/disbursement-of-first-loans

MicroCapital’s Microfinance Universe profile: REGMIFA

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Regional+MSME+Investment+Fund+for+Sub-Saharan+Africa+SICAV-SIF+(REGMIFA)

MicroCapital’s Microfinance Universe profile: Sinapi Aba Trust

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Sinapi+Aba+Trust

MicroCapital’s Microfinance Universe profile: First Allied Savings and Loans

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=First+Allied+Savings+and+Loans+Limited+(FASL)

MicroCapital’s Microfinance Universe profile: Kenya Women Finance Trust

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Kenya+Women+Finance+Trust+%28KWFT%29

MicroCapital’s Microfinance Universe profile: Faulu Kenya