MICROCAPITAL STORY: responsAbility Microfinance Leaders Fund (rAMLF) of Luxembourg Lends $500k to Thaneakea Phum (Cambodia) (TPC), $303k to Catalyst Microfinance Investors (CMI), $929k to ASP Financiera (ASP), and $750k to the Foundation for International Community Assistance Azerbaijan (FINCA Azerbaijan)

The Consultative Group to Assist the Poor (CGAP) reports in its list of recent transactions that the responsAbility Microfinance Leaders Fund (rAMLF) financed USD 500,000 in loans to Thaneakea Phum (Cambodia) (TPC) on February 6, 2008, USD 303,092 to Catalyst Microfinance Investors (CMI) on February 7, 2008, USD 929,000 to ASP Financiera (ASP) on February 20, 2008, and USD 750,000 to the Foundation for International Community Assistance Azerbaijan (FINCA Azerbaijan) on February 27, 2008.

Incorporated in Luxembourg, the rAMLF is the second fund created by Switzerland-based responsAbility, an organization aiming to connect the increasing number of social investors with successful microfinance institutions (MFIs) in need of capital. The rAMLF was incepted in 2006, as reported by MicroCapital, and has 44 active microfinance investments totaling USD 118.9 million, as reported by the MIX Market, the microfinance information clearinghouse. The rAMLF, which invests most of its funds in Eastern Europe and Central Asia (53 percent), also reports investments spread across Latin America and The Caribbean (35 percent), Africa (7 percent), and East Asia and the Pacific (5 percent) and the fund’s total assets amount to USD 131.1 million. All figures are as reported on October 31st, 2007. MicroCapital recently reported on rAMLF here.

The Luxembourg Fund Labelling Agency (LuxFLAG), a nonprofit association established in July 2006 to promote capital-raising for quality microfinance investment vehicles (MIVs), awarded the rAMLF its LuxFLAG Microfinance Label which is valid until April 30th, 2009. MicroCapital reported on LuxFLAG here.

responsAbility also runs the responsAbility Global Microfinance Fund (rAGMF) which is similar to the rAMLF, but works on a larger scale with 163 active microfinance investments totaling USD 224.5 million, according to the Monthly Report April 2008. Dedicating most of its funds to loans and debt securities (94 percent), the rAGMF also makes equity investments. The rAGMF reports total fund assets of over USD 250.5 million and is managed by the Credit Suisse Microfinance Fund Management Company according to the Fund Folder available on rAGMF’s web site. For more information on investing in microfinance with Credit Suisse, which is a founding shareholder (page 3) of responsAbility, please refer to their microfinance web site.

LuxFLAG has also given the rAGMF its LuxFLAG Microfinance Label which is valid until April 30th, 2009. MicroCapital recently reported on rAGMF here. The rAGMF’s MIX Market profile can be found here.

TPC, which began providing rural credit programs in 1994, derives its name from “thaneakea phum” which means “village bank” in the Khmer language. TPC maintains 10 branch locations across Cambodia, received its MFI license from the National Bank of Cambodia (NBC) in 2003, and reports 2007 total assets of over USD 15.8 million to the MIX Market. With 73,800 borrowers, 89 percent of whom are women, TPC was rated “B plus” by Planet Rating, a specialized microfinance rating agency established in 1999. The non-bank financial institution has a gross loan portfolio of over USD 12.2 million, return on assets (ROA) of 8.37 percent, and a debt to equity ratio of 305 percent. MicroCapital recently reported on TPC here.

CMI, a private equity fund incorporated in Mauritius, is run by the Association for Social Advancement (ASA) in Bangladesh, an MFI established in 1978 reporting 2006 total assets of USD 355.3 million and over 5.3 million active borrowers, and Sequoia, an international private equity and corporate finance advisory firm founded in 2002 whose assignments have a total transaction value of “close to EUR 4 billion.” CMI actively searches for MFIs, mainly in Asia and Africa, who desire to grow in scale and improve financial performance while, simultaneously, CMI gathers investors interested in the dual financial and social benefits of investing in MFIs. According to the MIX Market, CMI makes 100 percent of its investments, which totaled USD 50 million as of October 2007, in local currencies. A recent MicroCapital article reported on CMI’s microfinance equity sale of USD 125 million in February, the largest of its kind to date, which certainly altered CMI’s financial statistics since they were reported to the MIX Market last year.

ASP is listed as a non-bank financial institution in Mexico by the MIX Market and was established in 2001. In 2007, the MFI reached nearly 9,000 borrowers, 60 percent of whom were women, and reported a total loan portfolio of USD 12.1 million. Planet Rating gave ASP a “C” rating in May of 2007. ASP reports total assets of USD 14.3 million, a debt to equity ratio of 461 percent, and return on assets (ROA) of 2.28 percent.

FINCA Azerbaijan will complete ten years of work in the country on June 28, 2008 and launched a new web site (http://www.fincaazerbaijan.com/) on May 8th. Through a press release on the same day, Country Director Jeff Flowers announced that FINCA Azerbaijan has reached 80,000 clients and a loan portfolio of over USD 55 million. Founded in 1998 with support from the United States Agency for International Development (USAID), a US government agency extending “assistance to countries recovering from disaster, trying to escape poverty, and engaging in democratic reforms,” FINCA Azerbaijan’s stated mission is to provide Azerbaijan’s lowest-income entrepreneurs with financial services including loans ranging from USD 50 to USD 50,000. According to the MIX Market, the non-bank financial institution reported return on assets (ROA) in 2007 of 5.31 percent, an operational self-sufficiency (OSS) ratio of 120.8 percent, and a debt to equity ratio of 432 percent. FINCA Azerbaijan was most recently audited in 2006 by RSM Top-Audit of Russia—the report is available here. MicroCapital recently reported on FINCA Azerbaijan here.

By Anthony Busch, Research Assistant

Additional Resources:

ASP Financiera: Home, MIX Market Profile

Association for Social Advancement: Home, MIX Market Profile

Catalyst Microfinance Investors: Home, MIX Market Profile

Consultative Group to Assist the Poor: Home, List of Recent Transactions

Credit Suisse: Home, Microfinance

FINCA Azerbaijan: Home, Press Release, History, Mission, Products and Services, MIX Market Profile

Foundation for International Community Assistance: Home

The Global Microfinance Investment Congress: Home, “Investment Fund Strategies in Competitive Markets – Workshop 3”, PowerPoint Presentation by Christian Speckhardt, January 22, 2008

Luxembourg Fund Labelling Agency: Home, Who We Are, Listing Procedure, List of MIVs

MicroCapital article, February 15, 2008: “ASA International Secures $125m in Largest Microfinance Equity Commitment to Date”

MicroCapital article, December 6, 2007: “Eastern Europe Microfinance Institution LOKMicro Receives Over $6m in Loans from responsAbility Mikrofinanz-Fonds, responsAbility Microfinance Leaders Fund and VDK MFI Loan Portfolio”

MicroCapital article, February 8, 2007: “Luxembourg Fund Labeling Agency Luxflag Grants Microfinance Labels to Dexia Micro-Credit Fund, European Fund for Southeast Europe and responsAbility Micro-Credit Fund”

MicroCapital article, March 18, 2008: “Luxembourg-based responsAbility Global Microfinance Fund Loans $3m to FINCA Kyrgyzstan”

MicroCapital article, October 15, 2007: “responsAbility Global Microfinance Fund of Switzerland Lends $500k to Microfinance Institution Thaneakea Phum (Cambodia) LTD and $4m to Microfinance Institution PRASAC MFI LTD”

MicroCapital article, December 4, 2006: “ResponsAbility of Switzerland Launches ResponsAbility Microfinance Leaders Fund”

MicroCapital article, April 23, 2007: “Switzerland-based Symbiotics Intermediates a USD 3 mn Loan from Microfinance Loan Obligations to Foundation for International Community Assistance (FINCA) Azerbaijan”

MIX Market: Home, responsAbility Microfinance Leaders Fund

National Bank of Cambodia: Home

Planet Rating: Home, Who Are We?

responsAbility: Home, Contact