Incofin is a social investment company based out of Antwerp, Belgium that specializes in microfinance investment in developing countries. Its two core activities are direct investments in microfinance through loans, stock participations and guarantees; and fund management. In this capacity, Incofin currently manages Impulse Microfinance Investment Fund, the first private Belgian commercial microfinance investment fund, and the microfinance investments of Volksvermogen, a Belgian investment fund.
Incofin announces the creation of a new investment fund to target rural microfinance institutions (MFIs), the Rural Impulse Fund (RIF). Specifically, as fund advisor, Incofin will guide the RIF to make equity and debt investments in rural MFIs (see IFC’s RIF summary). The RIF aims to increase the supply of rural microfinance by extending commercial funding and strengthening the financial structure of MFIs which have both successfully provided financial services to rural poor and been financially sustainable. “Rural MFIs will be selected on the basis of a methodology, measuring the presence of the MFIs’ points of sales in rural areas. RIF will invest in financially sustainable MFIs, which, moreover, outperform in terms of outreach and social performance,” says
Loïc De Cannière, Managing Director of Incofin, explains why the RIF approach will be efficacious. “Rural MFIs target both farm and non-farm population in small towns and villages. They provide adapted microfinance products to rural poor, enabling them to break out of the vicious circle of poverty. The rationale of the Fund’s investment policy is based on two observations: (i) Rural areas in poor countries remain underserved by MFIs, although the majority of the world’s poor live in rural areas and (ii) the majority of existing mainstream microfinance funds mainly target urban MFIs.”
RIF will invest 25% of its total assets in Africa, Caribbean and Pacific nations. Latin America and Central Asia will also be beneficiaries of the new program, according to an Incofin press release (see entire press release below).
At present, RIF’s total assets stand at USD 38 million. This includes an equity tranche of USD 9 million, a mezzanine tranche of USD 10 million and a senior debt tranche of USD 19 million, all of which have been fully subscribed as of the Fund’s closing. The RIF investor base is 50% public and 50% private. The subscribers to the equity tranche and to the mezzanine tranche include both development finance institutions (the Belgian Investment Company for Developing Countries (BIO), the European Investment Bank (the financing institution of the EU) (EIB), the Netherlands Development Finance Company (FMO), the International Finance Corporation (IFC) and a group of private investors (KBC Private Equity, Incofin, MRBB, Volksvermogen, CERA, BRS). The RIF’s senior debt tranche has been subscribed by private investors from Germany, the US and Belgium.
Incofin was founded in 1992 and is currently a co-operative company (with limited liability) with social objectives (see Incofin profile at MIXMarket.org). As a private investor, it has active microfinance investments in the following countries: Argentina, Azerbaijan, Bosnia, Bolivia, Cambodia, Ecuador, El Salvador, Ethiopia, Georgia, Guinea, Kazakhstan, Kenya, Kosovo, Montenegro, Nicaragua, Nigeria, Peru, Tajikistan, Tanzania, Uganda. (For detailed structure and performance information for each region, see MIXMarket Incofin profile; for further information on the investments in each country, see Incofin portfolio). Incofin’s fund assets are USD 10.6 million, with USD 10.16 million of that sum allocated to microfinance investments. Investment amounts vary between USD 136,000 and USD 1.4 million (see Fund Instruments information in MIXMarket Incofin profile).
–Chryssa Rask, MicroCapital Writer
Additional Resources:
Incofin Portfolio: investments by country
Incofin Press Release: Successful Closing of Rural Impulse Fund, supporting rural microfinance; see below for full text
IFC: Summary of Proposed Investment: Rural Impulse Fund
The Mix Market: Incofin Profile
Incofin Press Release: Successful Closing of Rural Impulse Fund, supporting rural microfinance
Incofin, a specialised microfinance investment manager with Head Office in Antwerp, Belgium, is proud to announce that “Rural impulse Fund” (RIF), a new microfinance investment fund, that will target rural microfinance institutions (MFIs) has been successfully closed in Luxembourg on
“The objective of RIF is to contribute to the alleviation of poverty in rural areas by making equity and debt investments in rural MFIs”, says Loïc De Cannière, Managing Director of Incofin. “Rural MFIs target both farm and non-farm population in small towns and villages. They provide adapted microfinance products to rural poor, enabling them to break out of the vicious circle of poverty. The rationale of the Fund’s investment policy is based on two observations: (i) Rural areas in poor countries remain underserved by MFIs, although the majority of the world’s poor live in rural areas and (ii) the majority of existing mainstream microfinance funds mainly target urban MFIs.”
The Fund will lead the way in closing the gap in the supply of rural microfinance by extending commercial funding and strengthening the financial structure of those MFIs, which have proven to be successful in providing financial services to rural poor, while being financially sustainable.
“Rural MFIs will be selected on the basis of a methodology, measuring the presence of the MFIs’ points of sales in rural areas. RIF will invest in financially sustainable MFIs, which, moreover, outperform in terms of outreach and social performance”, says
RIF will invest 25% of its total assets in ACP Countries (the Africa, Caribbean and Pacific Group of States). Other target regions include Latin America and Central Asia.
The Fund’s total assets amount to 38 Million USD, comprising an equity tranche of 9 million USD, a mezzanine tranche of 10 million USD and a senior debt tranche of 19 million USD. These tranches have been fully subscribed as per the Fund’s closing.
RIF is a unique example of private-public partnership, having a well balanced investor base, 50% coming from public and 50% from private sources. The subscribers to the equity tranche and to the mezzanine tranche include both development finance institutions (the Belgian Investment Company for Developing Countries (BIO), the European Investment Bank (EIB), the Netherlands Development Finance Company (FMO), the International Finance Corporation (IFC) and a group of private investors (KBC Private Equity, Incofin, MRBB, Volksvermogen, CERA, BRS). The Fund’s senior debt tranche has been subscribed by private investors from Germany, the US and Belgium.
This new investment vehicle has been developed and promoted by Incofin, which also acts as fund advisor to the Fund. Incofin has achieved a substantial growth over the last years. Today Incofin manages 4 microfinance funds, with combined total assets of 150 million USD. The portfolio managed by Incofin is of excellent quality, combining a good financial and social return.
RIF has been incorporated as a specialized Luxembourg investment vehicle (SICAV-FIS) and has been licensed by the Luxembourg financial regulator. RIF is a closed-end fund with a 10-year lifetime.
Further Information
Loïc De Cannière
Managing Director
Incofin
Antwerp
Belgium
T
E-mail : loic.de.canniere@incofin.be
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