MICROCAPITAL BRIEF: Nordic Microfinance Initiative (NMI) Raises $105m from DNB, Ferd, IFU, KLP, Norfund for Fund IV for MFIs in Africa, Asia

The Nordic Microfinance Initiative (NMI), a Norway-based public-private partnership that supports microfinance institutions (MFIs) in developing countries, recently debuted its fourth fund with a total of USD 105 million in commitments from the following organizations: Norway’s Den Norske Bank; Norwegian holding company Ferd; Norwegian insurer Kommunal Landspensjonskasse; and two government-backed institutions, the Norwegian Investment Fund for Developing Countries (Norfund) and the Danish Investment Fund for Developing Countries. The new investment vehicle, known as Fund IV, will invest primarily by placing equity in MFIs in Southern Africa, South Asia and Southeast Asia, with a priority for institutions that serve larger proportions of women.

NMI invests debt and equity in MFIs and also provides technical support in an effort “to contribute to the empowerment of poor people and to the creation of jobs, wealth, and economic and social sustainability in developing countries…”. In addition to Fund IV, NMI operates the following investment funds: NMI Global Fund, which was established in 2008 and has assets of USD 60 million deployed in MFIs deemed “large and sustainable;” NMI Frontier Fund, which was created in 2008 and has USD 40 million placed in MFIs operating in Sub-Saharan Africa and South Asia; and NMI Fund III, which was launched in 2013 with investor commitments of USD 95 million to invest in MFIs considered to be financially sustainable or likely to become so in the near future. These three figures for assets under management are current as of mid-2018.

Den Norske Bank is a Norwegian financial services group that was established in 2003. It provides traditional banking, internet banking, pension, insurance, real estate and asset management services. As of December 2017, the bank reports total assets of NOK 2.7 trillion (USD 328 billion), loans to customers of NOK 1.5 trillion (USD 188 billion), customer deposits of NOK 971 billion (USD 118 billion) and 3.3 million active customers. For the calendar year, it reported return on equity (ROE) of 10.8 percent.

Established in 1778, Ferd is a private investment group based in Norway that focuses on equity investments in real estate and financial services. As of December 2017, it reports a portfolio valued at NOK 24.6 billion (USD 3 billion). During 2017 it disbursed NOK 3.1 billion (USD 377 million) in new investments.

The Danish Investment Fund for Developing Countries, which is also known by its Danish acronym IFU, provides advisory services to Danish companies investing in developing countries and directly invests debt and equity in projects intended to enhance economic and social development in Africa, Europe and Latin America. As of December 2017, it reports total assets of DKK 3.4 billion (USD 549 million), outstanding loans totaling DKK 871 million (USD 140 million) and 208 active projects. In 2017, IFU originated 37 new investments totaling DKK 1.3 billion (USD 209 million).

Kommunal Landspensjonskasse is a Norwegian provider of pension, finance and insurance services to individuals, private companies and public organizations. As of December 2017, it reports total assets of NOK 18 billion (USD 2.2 billion) and an outstanding loan portfolio of NOK 16 billion (USD 2 billion).

Norfund, which was created in 1997, provides investment capital, loans and guarantees to businesses in developing countries in sectors such as renewable energy, financial services, agribusiness and SME funding. As of December 2017, it reports total assets of NOK 22.8 billion (USD 2.8 billion) and a loan portfolio of NOK 1.9 billion (USD 235 million). In 2017, Norfund made new commitments of NOK 3.6 billion (USD 438 million) and initiated its 136th project since its inception.

By Nicholas Galimberti

Sources and Additional Resources

Information provided directly to MicroCapital by NMI

DNB annual report
https://2017.dnb.no

Ferd annual report
https://aarsrapport2017.ferd.no/en/

IFU annual report
https://www.ifu.dk/pdf/IFU-AR-2017-7-170418-SAMLET.PDF

KLP annual report
http://english.klp.no/polopoly_fs/1.39998.1526025452!/menu/standard/file/KLP_årsrapport_2017_engelsk.pdf

Norfund annual report
https://www.norfund.no/annual-reports/category1080.html

MICROCAPITAL STORY; June 12, 2008; Norwegian Governmental Agency Norfund Teams with Private Firms Ferd, DnB NOR Bank, Storebrand and Kommunal Landspensjonskasse (KLP) to Establish $117m Norwegian Microfinance Initiative (NMI) fund
https://www.microcapital.org/microcapital-story-the-norwegian-government-teams-with-private-firms-ferd-dnb-nor-bank-storebrand-and-kommunal-landspensjonskasse-klp-to-establish-117m-norwegian-microfinance-initiative-nmi-fu/

MICROCAPITAL BRIEF; April 10, 2014; India-based Satin Creditcare Raises $4.7m in Equity from Norwegian Microfinance Initiative (NMI)
https://www.microcapital.org/microcapital-brief-india-based-satin-creditcare-raises-4-7m-from-norwegian-microfinance-initiative-nmi/

MICROCAPITAL BRIEF; March 19, 2013; Norwegian Investment Fund for Developing Countries (Norfund) Loans $1.4m to NMB Bank Parent for On-lending to SMEs in Zimbabwe
https://www.microcapital.org/microcapital-brief-norwegian-investment-fund-for-developing-countries-norfund-loans-1-4m-to-nmb-bank-parent-for-on-lending-to-smes-in-zimbabwe/

MICROCAPITAL BRIEF; September 19, 2017; Alliance for Microfinance in Myanmar Raises $5m in Equity from BOPA, IFU, Insitor, Asia Impact Investment Fund
https://www.microcapital.org/microcapital-brief-alliance-microfinance-myanmar-raises-5m-equity-bopa-ifu-insitor-asia-impact-investment-fund/