The Luxembourg Fund Labeling Agency (LuxFLAG), an organization that investigates whether microfinance investment vehicles (MIVs) actually support the microfinance sector, recently awarded its microfinance label to three MIVs for the first time. The Luxembourg Microfinance and Development Fund, an MIV that supports economic development in Africa, Asia and Latin America; the Regional Micro-, Small and Medium-Sized Enterprise (MSME) Fund for Sub-Saharan Africa, a fund that was launched in May 2010 by German bank KfW and the German Ministry for Economic Cooperation and Development (BMZ); and the Incofin Rural Impulse Fund II, which targets rural farm and nonfarm populations, were all verified and approved by LuxFLAG.
LuxFLAG aims to increase the flow of funds for microfinance by assuring investors that MIVs, in fact, invest in the sector. Between January 2010 and April 2011, the number of MIVs that hold the LuxFLAG microfinance label has doubled from eight to sixteen, with assets under management by those funds totaling approximately USD 2.65 billion.
By Julie Moksim, Research Associate
About Luxembourg Fund Labeling Agency (LuxFLAG): LuxFLAG was established in 2006 to promote the raising of capital for microfinance by acting as a recognizable symbol of reputable MIVs. It certifies MIVs based on their direct or indirect investment in the microfinance sector. LuxFLAG only certifies MIVs located in nations with financial supervision on par with countries in the European Union.
About the Luxembourg Microfinance and Development Fund (LMDF): The Luxembourg Microfinance and Development Fund (LMDF) is an investment fund that is committed to the alleviation of poverty in developing countries in Africa, Asia and Latin America. LMDF invests in microfinance institutions and targets investors that are interested in microfinance as a development tool. As of March 2010, the fund reported total assets of EUR 5.4 million (USD 7.9 million).
About the Regional Micro-, Small and Medium-Sized Enterprise (MSME) Fund for Sub-Saharan Africa: The Regional Micro-, Small and Medium-Sized Enterprise (MSME) Investment Fund for Sub-Saharan Africa is an investment fund focused on supporting MSMEs in sub-Saharan Africa. It was launched in May 2010 by Germany’s KfW Entwicklungsbank and the German Ministry for Economic Cooperation and Development (BMZ). The fund seeks to build partnerships between donors, development finance institutions and private investors to support sub-Saharan African microentrepreneurs. It does not report financial information to the Microfinance Information Exchange (MIX), the US-based nonprofit data provider.
About Incofin Rural Impulse Funds (RIF): The Incofin Rural Impulse Funds (RIF) were launched 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. Rural Impulse Fund I has invested EUR 30.8 million (approximately USD 40.6 million) in MFIs across 19 countries as of November 2010. Rural Impulse Fund II has invested EUR 6.53 million (approximately USD 8.63 million) in MFIs across 4 countries as of November 2010.
Sources and Additional Resources:
Luxembourg Fund Labeling Agency (LuxFLAG) Press Release: “Three New Microfinance Investment Vehicles Obtain the LuxFLAG Microfinance Label”, April 2011, http://www.luxflag.com/documents/press_releases/2011/LuxFLAG_Press_Release_April%202011_Labels_EN.pdf
MicroCapital.org Brief, April 1, 2011: Belgium’s Incofin Loans $3.5m to Microfinance Institutions (MFIs) Forus Bank of Russia, CIDRE (Centro de Investigacion y Desarrollo Regional) of Bolivia, https://www.microcapital.org/microcapital-brief-belgium?s-incofin-loans-3-5m-to-microfinance-institutions-mfis-forus-bank-of-russia-cidre-centro-de-investigacion-y-desarrollo-regional-of-bolivia/
MicroCapital.org Brief, December 21, 2011: Netherlands Development Finance Company (FMO) Investing $7m in Regional MSME Investment Fund for Sub-Saharan Africa SA (REGMIFA), https://www.microcapital.org/microcapital-brief-netherlands-development-finance-company-fmo-investing-7m-in-regional-msme-investment-fund-for-sub-saharan-africa-sa-regmifa/
MicroCapital’s Microfinance Universe Profile: Luxembourg Fund Labeling Agency (LuxFLAG)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=LuxFLAG
MicroCapital’s Microfinance Universe Profile: Luxembourg Microfinance and Development Fund
MicroCapital’s Microfinance Universe Profile: Regional Micro-, Small and Medium-Sized Enterprise (MSME) Fund for Sub-Saharan Africa
MicroCapital’s Microfinance Universe Profile: Incofin Rural Impulse Funds (RIF)
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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