Incofin Investment Management, a private Belgian company that invests in microfinance institutions (MFIs) through six investment funds, recently made debt and equity investments in four MFIs: FINCA Guatemala and FINCA Azerbaijan, both members of US-based FINCA International’s network of MFIs; Lift Above Poverty Organisation (LAPO) of Nigeria; and Association pour la Cooperation avec la Micro Enterprise (ACME) of Haiti.
Through two investment funds, Incofin CVSO and VDK MFI Loan Portfolio, Incofin loaned a total of USD 2.5 million to FINCA Guatemala, a deposit-taking MFI. Incofin CVSO is a “development fund” that makes equity and debt investments in small and medium-sized MFIs. VDK MFI Loan Portfolio was launched in 2007 by Volksdepositokas (VDK) spaarbank, a Belgian savings bank and shareholder in Incofin. As of December 31, 2010, FINCA Guatemala reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 13.3 million, a gross loan portfolio of USD 11.3 million, return on assets (ROA) of 2.2 percent, return on equity (ROE) of 4.56 percent and 28,320 active borrowers. In addition, FINCA Guatemala has USD 1 million in deposits from approximately 30,000 depositors. FINCA International, a global microfinance network based in Washington, DC, USA, serves approximately 700,000 people through subsidiaries in 21 countries. As of 2009, it had total assets of USD 467 million, with an operating profit of USD 742,000.
FINCA Azerbaijan has received a loan of USD 3 million and a local-currency loan of AZN 2.5 million (USD 3 million) through the VDK MFI Loan Portfolio and Incofin Impulse Microfinance Investment Fund. Launched in 2004, the Impulse Microfinance Investment Fund is a partnership between Incofin and four Belgian banks. As of December 31, 2009, FINCA Azerbaijan reported to MIX total assets of USD 88 million, a gross loan portfolio of USD 69 million, ROA of 3.86 percent, ROE of 23.2 percent and 90,500 active borrowers.
In Nigeria, Incofin CVSO and Incofin’s Rural Impulse Fund II each have made local-currency loans worth NRN 150 million (USD 1 million) to LAPO, an MFI that primarily lends to micro-, small and medium-sized enterprises (MSMEs). The Rural Impulse Funds (RIFs I and II) were launched by Incofin to make investments in “commercially-viable” MFIs. As of December 31, 2009, LAPO reported to MIX total assets of USD 51.1 million, a gross loan portfolio of USD 26.8 million, ROA of 8.84 percent, ROE of 40.6 percent and approximately 195,000 borrowers.
Lastly, Incofin CVSO has made a follow-on equity investment of USD 350,000 in ACME. The investment is intended to help recapitalize the MFI’s loan portfolio due to losses sustained in the aftermath of the earthquake in Haiti. As of December 31, 2009, ACME reported to MIX total assets of USD 16.9 million, a gross loan portfolio of USD 13.1 million, ROA of 1.19 percent, ROE of 3.43 percent and approximately 26,500 borrowers.
As of January 31, 2011, Incofin manages six facilities with total outstanding investments of EUR 152 million (USD 206 million). To date, Incofin has invested in 91 MFIs in 38 countries.
By Rohan Trivedi, Research Associate
About FINCA International:
Founded in 1984 by Dr John Hatch, a pioneer of the village banking model, the Foundation for International Community Assistance (FINCA) International is a global microfinance network based in Washington, DC, serving approximately 700,000 people through its subsidiaries in 21 countries. As of 2009, it had total assets of USD 467 million, with an operating profit of USD 742,000.
About FINCA Guatemala:
FINCA Guatemala is a deposit-taking microfinance institution (MFI) that was established in 1998 by FINCA International, a US-based network of MFIs. As of December 31, 2010, FINCA Guatemala reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 13.3 million, a gross loan portfolio of USD 11.3 million, return on assets (ROA) of 2.2 percent, return on equity (ROE) of 4.56 percent and 28,320 active borrowers. In addition, FINCA Guatemala has USD 1 million in deposits from approximately 30,000 depositors.
About FINCA Azerbaijan:
FINCA Azerbaijan, a microfinance institution (MFI) established in 1998, aims to provide financial services to low-income entrepreneurs so they can create jobs, build assets and improve their standard of living. As of December 31, 2009, FINCA Azerbaijan reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 88 million, a gross loan portfolio of USD 69 million, return on assets (ROA) of 3.86 percent, return on equity (ROE) of 23.2 percent and 90,500 active borrowers.
About Lift Above Poverty Organisation (LAPO):
Established in 1987 in Nigeria, LAPO is a microfinance institution that provides savings, investment and loan products intended to address the needs of low-income households. The majority of LAPO’s clients are engaged in micro-, small and medium-sized enterprises (MSMEs). As of December 31, 2009, LAPO reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 51.1 million, a gross loan portfolio of USD 26.8 million, return on assets (ROA) of 8.84 percent, return on equity (ROE) of 40.6 percent and approximately 195,000 borrowers.
About Association pour la Cooperation avec la Micro Enterprise (ACME): Association pour la Cooperation avec la Micro Enterprise (ACME) is a microfinance institution that was established in Port-au-Prince, Haiti, in 1997. ACME provides microloans to individuals in the “medium and lower part of the informal sector.” As of December 31, 2009, ACME reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 16.9 million, a gross loan portfolio of USD 13.1 million, return on assets (ROA) of 1.19 percent, return on equity (ROE) of 3.43 percent and approximately 26,500 borrowers.
About Incofin Investment Management (Incofin IM):
Incofin Investment Management is a private Belgian company that develops and manages funds investing in microfinance institutions (MFIs) in developing countries. As of January 31, 2011, Incofin manages six facilities with total outstanding investments of EUR 152 million (USD 206 million). To date, Incofin has invested in 91 MFIs in 38 countries.
About Incofin VDK MFI Loan Portfolio:
The Incofin VDK MFI Loan Portfolio was launched in 2007 by Volksdepositokas (VDK) spaarbank, a Belgian savings bank that is also one of Incofin’s shareholders. VDK spaarbank earmarked EUR 75 million (USD 110 million) for the fund and appointed Incofin to act as mediator for the facility. The fund invests in large microfinance institutions (MFIs) that are deemed “high-quality”. As of January 31, 2011, the VDK MFI Loan Portfolio has outstanding investments of EUR 42 million (USD 57 million) in 12 countries.
About Incofin Rural Impulse Funds (RIFs):
The Incofin Rural Impulse Funds (RIF) were launched by Incofin Investment Management to invest in rural microfinance institutions (MFIs) that are deemed commercially viable. The two funds include Rural Impulse Fund I and Rural Impulse Fund II. They target both farm and non-farm populations in small towns and villages. The funds invest primarily through loans, though they make equity investments and guarantees as well. As of January 31, 2011, Rural Impulse Fund I has outstanding investments of USD 34 million in 20 countries, while Rural Impulse Fund II has outstanding investments of EUR 10 million (USD 13.6 million) in 6 countries.
About Incofin Impulse Microfinance Investment Fund:
The Incofin Impulse Microfinance Investment Fund was launched in 2004 by Incofin and four other Belgian financial groups: KBC Bank Volksvermogen, a holding group; Boerenbond, an association of agricultural entrepreneurs; and Volksdepositokas (VDK) Spaarbank, a savings bank. The fund invests in microfinance institutions (MFIs) through loans and debt securities. The fund is managed by Incofin Investment Mangement, which specializes in microfinance investment. As of January 31, 2011, Incofin CVSO has outstanding investments of EUR 40.5 million (USD 55 million) in 18 countries.
About Incofin CVSO:
Incofin CVSO is an investment fund that makes equity and debt investment in small and medium-sized microfinance institutions (MFIs). The fund is managed by Incofin Investment Management and is incorporated in Belgium. As of January 31, 2011, Incofin CVSO has outstanding investments of EUR 26 million (USD 35 million) in 25 countries.
Sources and Additional Resources:
[1] Incofin Newsletter: Submitted by Incofin to MicroCapital, July, 2011.
MicroCapital.org story, June 30, 2011: “MICROCAPITAL BRIEF: ImpactAssets Includes 22 Microfinance-Focused Fund Managers in List of Top 50 Impact Investors”, https://www.microcapital.org/microcapital-brief-impactassets-includes-22-microfinance-focused-fund-managers-in-list-of-top-50-impact-investors/
MicroCapital.org story, June 27, 2011: “MICROCAPITAL BRIEF: Incofin VDK MFI Loan Portfolio Loans $5m to Mongolian Microfinance Institution XacBank”, https://www.microcapital.org/microcapital-brief-incofin-vdk-mfi-loan-portfolio-loans-5m-to-mongolian-microfinance-institution-xacbank/
MicroCapital.org story, June 2, 2011: “MICROCAPITAL BRIEF: PROPARCO, Storebrand Invest $15m in Incofin’s Microfinance Investment Vehicle Rural Impulse Fund II”, https://www.microcapital.org/microcapital-brief-proparco-storebrand-invest-15m-in-incofin’s-microfinance-investment-vehicle-rural-impulse-fund-ii/
MicroCapital.org story, August 4, 2009: “PRESS RELEASE: Incofin Makes Equity Investment of $750,000 in Haitian Microfinance Institution ACME”, https://www.microcapital.org/press-release-incofin-makes-equity-investment-of-750000-in-haitian-microfinance-institution-acme/
MicroCapital Universe Profile: FINCA International, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FINCA+International
MicroCapital Universe Profile: FINCA Guatemala, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FINCA+Guatemala
MicroCapital Universe Profile: FINCA Azerbaijan, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FINCA+Azerbaijan
MicroCapital Universe Profile: Lift Above Poverty Organisation (LAPO), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Lift+Above+Poverty+Organisation+%28LAPO%29
MicroCapital Universe Profile: Association pour la Cooperation avec la Micro Enterprise (ACME), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Association+pour+la+Cooperation+avec+la+Micro+Enterprise+%28ACME%29
MicroCapital Universe Profile: Incofin Investment Management (Incofin IM), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Incofin+Investment+Management+%28Incofin+IM%29
MicroCapital Universe Profile: Incofin VDK MFI Loan Portfolio, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Incofin+VDK+MFI+Loan+Portfolio
MicroCapital Universe Profile: Incofin Rural Impulse Funds (RIFs), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Incofin+Rural+Impulse+Funds+%28RIFs%29
MicroCapital Universe Profile: Incofin Impulse Microfinance Investment Fund, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Incofin+Impulse+Microfinance+Investment+Fund
MicroCapital Universe Profile: Incofin CVSO, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Incofin+CVSO
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