Incofin Investment Management, a Belgium-based manager of microfinance investment funds, and the Norwegian Microfinance Initiative (NMI), a Norway-based corporation that invests in and provides technical support for microfinance institutions (MFIs), recently invested INR 250 million (USD 4.5 million) in Indian non-banking financial company (NBFC) Fusion Microfinance Private Limited. The funds were invested through Incofin’s Rural Impulse Fund II, which invests in rural MFIs, and NMI’s Frontier Fund, which supports emerging MFIs in Sub-Saharan Africa and South Asia. The breakdown of the amounts invested by each fund and the size of the stakes to be taken have not been specified.
Fusion offers life insurance and loans with terms of 1.5 to 2 years in sizes ranging from INR 12,000 (USD 220) to INR 30,000 (USD 551) through a network of 22 branches. As of December 2012, Fusion reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 9.9 million, a gross loan portfolio of USD 9.6 million, and 61,100 active borrowers. The institution reported return on assets (ROA) of 0.57 percent and return on equity of 1.24 percent as of December 2011. It does not accept deposits.
As of 2012, Rural Impulse Fund II has outstanding investments of EUR 59 million (USD 77.3 million) and a fund size of EUR 120 million (USD 173 million). Fund capitalization for the NMI Frontier Fund was NOK 240 million (USD 40 million) as of the same year.
By Nicole Boyd, Research Associate
About Fusion Microfinance Private Limited
Fusion Microfinance Private Limited is a non-banking financial company that was founded in 2010 and offers microfinance services in north-central India. During its first year of existence, Fusion acquired the microfinance division of Aajeevika, an Indian nonprofit. The organization’s vision is “to provide underprivileged women with economic opportunities.” Fusion offers life insurance and microcredit services that consist of loans with terms of 1.5 to 2 years in sizes ranging from INR 12,000 (USD 220) to INR 30,000 (USD 551) through a network of 22 branches. As of December 2012, Fusion reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 9.9 million, a gross loan portfolio of USD 9.6 million, and 61,100 active borrowers. The institution reported return on assets (ROA) of 0.57 percent and return on equity of 1.24 percent as of December 2011. It does not accept deposits.
About Incofin Rural Impulse Funds (RIF)
The Incofin Rural Impulse Funds (RIF) were launched by Incofin Investment Management to invest in rural microfinance institutions (MFIs) that are deemed commercially viable. Rural Impulse Fund I and Rural Impulse Fund II 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 2012, Rural Impulse Fund I has a fund size of EUR 30 million (USD 38 million), while Rural Impulse Fund II a fund size of EUR 120 million (USD 173 million).
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 June 2011, Incofin manages six facilities with total outstanding investments of USD 425 million in approximately 39 countries.
About Norwegian Microfinance Initiative (NMI)
The Norwegian Microfinance Initiative (NMI) is a partnership between the Norwegian public and private sectors that invests in and provides technical support for microfinance institutions (MFIs) in developing countries. The mission of NMI is “to contribute to the empowerment of poor people and to the creation of jobs, wealth, and economic and social sustainability in developing countries by investing in and supporting MFIs.” NMI makes its investments through two investment funds: NMI Global Fund, which supports the expansion of MFIs that already have large and sustainable operations, and NMI Frontier Fund, which supports emerging MFIs in Sub-Saharan Africa and South Asia. As of 2012, fund capitalization was NOK 360 million (USD 60 million) for the Global Fund and NOK 240 million (USD 40 million) for the Frontier Fund.
Sources and Additional Resources:
VCCircle. “Norwegian Microfinance Initiative fund, Incofin-Rural Impulse invest $4.5M in Fusion Microfinance,” http://www.vccircle.com/news/micro-finance/2013/03/04/norwegian-microfinance-initiative-fund-incofin-rural-impulse-invest
MicroCapital. December 18, 2012, “MICROCAPITAL BRIEF: Netherlands Development Finance Company (FMO) Donates $211k to Incofin Investment Management of Belgium to Renew Capacity Development Facility,” https://www.microcapital.org/microcapital-brief-netherlands-development-finance-company-fmo-donates-211k-to-incofin-investment-management-of-belgium-to-renew-capacity-development-facility/
MicroCapital. October 3, 2011, “MICROCAPITAL BRIEF: Indian Microfinance Institution Utkarsh Raises $5m in Equity from Norwegian Microfinance Initiative, Aavishkaar Goodwell, International Financial Corporation,” https://www.microcapital.org/microcapital-brief-indian-microfinance-institution-utkarsh-raises-5m-in-equity-from-norwegian-microfinance-initiative-aavishkaar-goodwell-international-financial-corporation/
MicroCapital Universe Profile: Norwegian Microfinance Initiative (NMI) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Norwegian+Microfinance+Initiative+%28NMI%29
MicroCapital Universe Profile: Fusion Microfinance Private Limited https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Fusion+Microfinance+Private+Limited
MicroCapital Universe Profile: Incofin Rural Impulse Funds (RIFs I and II) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Incofin+Rural+Impulse+Funds+%28RIFs%29
MicroCapital Universe Profile: Incofin Investment Management (Incofin IM) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Incofin+Investment+Management+%28Incofin+IM%29
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