MICROCAPITAL BRIEF: IIV Mikrofinanzfonds Loans $2m to FINCA Tajikistan for Microfinance

German investment research firm Agents for Impact recently advised Germany-based Invest in Visions (IIV) on its disbursement of a loan in the amount of USD 2 million to FINCA Tajikistan, a microfinance institution (MFI) affiliated with the US-based for-profit FINCA Impact Finance. The investment, which was channeled through the fund IIV Mikrofinanzfonds, is meant to support FINCA Tajikistan’s borrowers in recovering from the economic impacts of the COVID-19 pandemic as well as boosting Tajikistan’s levels of foreign direct investment, remittances and international trade.

FINCA Tajikistan was founded in 2003 and seeks to reduce poverty by offering group and individual loans for purposes such as agriculture and small and medium-sized enterprise (SME). As of 2021, FINCA Tajikistan serves approximately 25,000 entrepreneurs.

FINCA Impact Finance is partially held by the US-based NGO FINCA International, which was launched in 1984 as the Foundation for International Community Assistance (FINCA). FINCA Impact Finance comprises 20 banks and microfinance institutions delivering savings, loans and other services to 2.6 million customers in Africa, Eurasia and Latin America. Among its programs is FINCA Ventures, which has eight investments as of 2021 in the form of “patient capital and technical assistance to early-stage social enterprises to support innovation in energy, water/sanitation/hygiene, education, health, agriculture and fintech [financial technology].”

Launched in 2006, IIV manages “investments in sustainable agriculture, social enterprises and social impact lending.” The firm created IIV Mikrofinanzfonds in 2011 to invest in micro-, small and medium-sized enterprises via intermediaries in developing countries. It does this mainly via “small and medium-sized MFIs, particularly in rural areas.” The minimum investment in the fund is EUR 100 (USD 109). During 2020, the sub-funds of IIV Mikrofinanzfonds generated gains of 0.92 percent and 1.32 percent. As of May 2021, the volume of the IIV Mikrofinanzfonds totaled EUR 781 million (USD 938 million), supporting 570,000 borrowers with an average loan size of USD 1,163. Of these borrowers, 52 percent are women, and 19 percent work in agriculture.

Headquartered in Frankfurt, AFI aims to bring together investors to make progress toward the UN Sustainable Development Goals. Financial information on the firm has not been disclosed.

By Sophie Fiala, Research Associate

Sources and Additional Resources

Direct Contact with AFI

FINCA Tajikistan homepage
https://finca.tj/

FINCA International
https://finca.org/

FINCA Impact homepage
https://www.fincaimpact.com/

FINCA Tajikistan June 2021 report
https://finca.tj/wp-content/uploads/sites/7/2021/07/FINCA-Tajikistan-Financial-Results-June-2021.pdf

Invest in Visions homepage
https://www.investinvisions.com/

Invest in Visions 2020 report
https://www.investinvisions.com/media/iiv_impact_report_2020.pdf

UN Sustainable Development Goals
https://sdgs.un.org/goals

Previous MicroCapital article on IIV Mikrofinanzfonds
https://www.microcapital.org/microcapital-brief-invest-in-visions-iiv-mikrofinanzfonds-lends-12m-to-bayport-for-payroll-lending-in-colombia/

Previous MicroCapital article on FINCA Impact Finance
https://www.microcapital.org/microcapital-brief-finca-expands-microfinance-fintech-in-uganda-azerbaijan-kyrgyzstan/