Compañia Española de Financiación del Desarrollo (COFIDES), a development finance institution controlled by the Spanish government, recently launched the Huruma Fund, an investment vehicle with commitments of EUR 120 million (USD 145 million) to assist rural farmers in Asia, sub-Saharan Africa, and Latin America and the Caribbean via a range of intermediaries. Seventy percent of Huruma’s portfolio will be deployed via microfinance institutions and banks, and the remainder is intended to reach farmers via agricultural organizations, such as cooperatives and small and medium-sized value-chain actors.
“The Huruma Fund is an example of how public-private partnerships can help bridge market gaps and reach the base of the pyramid in ways which otherwise would not be viable, improving the lives of people with innovative solutions,” said COFIDES Chairman José Luis Curbelo. Mr Curbelo added that the project “will enable 45,000 farmers to overcome poverty and will contribute to achieving the [UN’s] Sustainable Development Goals. Under the current uncertainty caused by the pandemic, impact investing is going to be even more important to ensure no one is left behind during the crisis.”
The commitments to Huruma include EUR 20 million (USD 24 million) from Agencia Española de Cooperación Internacional para el Desarrollo (AECID), Spain’s international development cooperation agency; EUR 1 million (USD 1.2 million) from COFIDES; and first-loss funding of EUR 10 million (USD 12 million) from the EU. Spain’s CaixaBank raised an additional EUR 89 million (USD 107 million) for the fund from multiple private investors. Gawa Capital, also of Spain, is managing Huruma. In support of its direct investments, the fund has an additional EUR 10 million (USD 12 million) available for technical assistance on how to reach the target populations.
COFIDES is controlled by three entities of the Spanish government. Its other shareholders are three Spanish banks and the Development Bank of Latin America, which is based in Venezuela and also known by its Spanish acronym CAF. COFIDES manages funding from the EU, the UN Green Climate Fund and the following entities owned by the Spanish government: Fondo para Inversiones en el Exterior (FIEX), Fondo para Operaciones de Inversión en el Exterior de la Pequeña y Mediana Empresa (FONPYME) and El Fondo para la Promoción del Desarrollo (FONPRODE). As of the close of its 2019 fiscal year, COFIDES managed assets totaling EUR 1.1 billion (USD 1.3 billion).
Gawa Capital Partners is an investment advisory company specializing in microfinance. It was founded in 2009 by Agustin Victoria and Luca Torre. Most of the firm’s investments range in size from EUR 1 million (USD 1.2 million) to EUR 3.5 million (USD 4.4 million). As of 2020, the four funds it advises, Gawa Microfinance Fund, Global Financial Inclusion Fund, Huruma Fund and Magallanes Impacto Fondo de Inversión Libre hold aggregate assets valued at EUR 196 million (USD 237 million).
By Kate Finster, Research Associate
Sources and Additional Resources
Direct contact with COFIDES
COFIDES profile on the Huruma Fund
https://www.cofides.es/en/our-work/success-stories/fondo-huruma
CaixaBank homepage
https://www.caixabank.es/
AECID homepage
https://www.aecid.es/EN/aecid/
Gawa Capital homepage
https://www.gawacapital.com/
COFIDES 2019 report
https://www.cofides.es/sites/default/files/biblioteca/2020-07/activity-sustainability-report-cofides-2019-english.pdf
COFIDES profile on FONPRODE
https://www.cofides.es/en/financing/financial-instruments/fonprode
COFIDES profile on FIEX
https://www.cofides.es/en/financing/financial-instruments/fund-foreign-investment-fiex
COFIDES profile on FONPYME
https://www.cofides.es/en/financing/financial-instruments/fund-sme-foreign-investment-operations-fonpyme
Previous MicroCapital article on Gawa Capital
https://www.microcapital.org/microcapital-brief-fusion-microfinance-india-raises-12m-equity-creation-investments-oikocredit-gawa-capital/
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