In its Microfinance Capital Markets Update, CGAP (Consultative Group to Assist the Poor) reports that responsAbility Global Microfinance Fund has recently made investments in microfinance institutions (MFIs) in Peru and Cambodia. Two Peruvian institutions EDPYME Confianza and EDPYME Alternativa received USD 1 million and USD 1.2 million respectively. Cambodian institutions Hattha Kaksekar Limited (HKL) and Cambodia Rural Economic Development Initiatives for Transformation (CREDIT) each received USD 1 million.
ResponsAbility is a Luxembourg-based investment fund that specializes in microfinance institutions and small business enterprises. Established in 2003, this commercial fund is managed by Credit Suisse, a global financial service company, headquartered in Zurich, which provides investment banking, private banking and asset management. According to responsAbility’s Monthly Report (April 2008), the fund’s total assets summed USD 250.5 million with USD 224.5 million invested in microfinance and fair trade. The fund’s return on assets was 7.7 percent for the 2007 fiscal year.
Confianza, based in Peru, was originally a branch of the non-governmental organization SEPAR founded in 1993, which implemented a credit program to promote economic activity amongst rural women. In 1998, Confianza became a regulated MFI as EDPYME Confianza. According to MIX Market, as of December 2007, it has 47,558 active borrowers and total assets of USD 77.6 million. EDPYME Confianza has a debt-equity ratio of 572.73 percent and a return on assets of 3.07 percent. In November 2007, MicroRate, a microfinance rating agency, gave EDPYME Confianza a B+.
Established in 2001, EDPYME Alternativa provides financial services to micro-enterprises in the northern and eastern regions of Peru. According to its MIX Market profile, EDPYME Alternativa has 17,290 active borrowers, USD 14.3 million in total assets and a debt-equity ratio of 605.34 percent. Additionally, EDPYME Alternativa has a 0.61 percent return on assets and received a B by French rating agency Planet Rating in July 2006.
HKL is a non-bank financial institution that was established in 1996. With 23,253 active borrowers and 333 savers, HKL provides loans in rural and urban areas of Cambodia. According to MIX Market, as of December 2007, HKL had total assets of USD 16.4 million, a debt-equity ratio of 448.45 percent and a return on assets of 5.53 percent. In 2007, rating agency Microfinanza gave HKL a BBB+.
CREDIT was launched by the World Relief Corporation in 2000 and became a licensed MFI in 2004. In 12 offices throughout Cambodia, CREDIT has 18,273 active borrowers and 17,935 savers. It reported to MIX Market total assets of USD 10.9 million and a debt-equity ratio of 229.37 percent as of December 2007. CREDIT’s return on assets was cited as 5.97 percent while its return on equity was 16.62 percent. In 2005, rating agency Micro-Credit Ratings International Limited (M-CRIL) gave CREDIT a B+ rating, and in August 2007 rating agency Planet Rating gave CREDIT a B.
By Sarah Knapp, Research Assistant
Additional Resources
Consultative Group to Assist the Poor (CGAP): Microfinance Capital Markets Update
CGAP: List of Recent Transactions
EDPYME Alternativa: Planet Rating
Hattha Kaksekar Ltd.: Microfinanza
MIX Market: Alternativa, Confianza, CREDIT, HKL
Monthly Report, responsAbility: April 2008
responsAbility Global Microfinance Fund
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