by the MicroCapital Team - Deals, Eastern Europe and Central Asia, Investment Funds, Key Players, Transparency -

The Swiss ResponsAbility Fund, Oikocredit, and MicroVest Make $5.8 Million Microfinance Investment in Fund Opportunity Russia

Fund Opportunity Russia (FORA), “the largest non-bank microfinance organization in Russia,” recently received a $2 million loan from the Swiss ResponsAbility Fund, $1.8 million from Netherlands based Oikocredit, and $2 million from U.S. MicroVest. FORA’s total assets were $16.39 million as of December 2004 and it was founded by Opportunity International Network, a US non-profit “network.” Opportunity has 48 member MFIs that post a combined total loan portfolio of $241.55 million. FORA is therefore larger than the average Opportunity member with a total loan portfolio to microentrepreneurs of approximately $15.28 million. Founded by Swiss financial service companies Credit Suisse, Raiffeisen Banking Group, Baumann & Cie Banquiers, and the Andromeda Fund, the Swiss based ResponsAbility Fund seeks investment opportunities with both financial returns and social benefits. The fund’s assets in April 2005 were about $11.44 million. The ResponsAbility Fund typically provides loans from $50,000 to $1.5 million for a maximum of five years and at a rate equal to “LIBOR plus full cost plus full risk” to MFIs.

FORA’s second investor, Oikocredit, is an investment fund seeking “social investment opportunities in the South”. Oikocredit’s assets were at $304.66 million at the beginning of 2005, and it provides loans at a minimum of $50,000 and a maximum of $5 million to microfinance institutions (MFIs) for a maximum of ten years. Its “near market rates are equal to LIBOR plus partial cost plus partial risk.”

The third investor into FORA, MicroVest, is an investment firm that provides debt and equity capital to MFIs. With total fund assets at $14.4 million as of July 2005, MicroVest’s loans go from $500,000 to $3 million for a maximum of 30 years. No guarantees are required and its rate terms are “LIBOR plus partial cost plus partial risk, or LIBOR plus full cost plus full risk.”

Additional Resources

1) Consultative Group to Assist the Poor (CGAP): “Microfinance Capital Markets Update” is the best source for monthly updates on debt and equity deals in microfinance.
2) MIX Market: “FORA: Financial Data.”
3) MIX Market: “FORA: General Information.”
4) MIX Market: “ResponsAbility Fund: Fund Description.”
5) MIX Market: “ResponsAbility Fund: Fund Instruments.”
6) “Oikocredit: About Us.”
7) MIX Market: “Oikocredit: Fund Instruments.”
8) MIX Market: “Oikocredit: Fund Description.”
9) MIX Market: “MicroVest I: Fund Description.”
10) MIX Market: “MicroVest I: Fund Instruments.”
11) MicroCapital Blog: “Microfinance Networks (wholesale transnational): Defined and Listed.”
12) “Opportunity International Network: What We Do.”
13) “2004 Annual Report: Opportunity International.”
14) “ResponsAbility: Founding Institutions.”

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