This story comes courtesy of the latest issue of the Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) and the MIX, the microfinance information clearinghouse. The responsAbility Microfinanz-Fonds, a microfinance investment vehicle launched this month, has begun its investment business with two loans of USD 500,000 and USD 344,456 to microfinance institutions (MFIs) PRESTANIC and the Association Al Karama de Micro Credit (Al Karama), respectively. Microfinanz-Fonds is managed by responsAbility Social Investment Services Ltd., a Swiss investment firm founded in 2003 specializing in social investment in the developing world. Now the third microfinance investment fund managed by responsAbility, Microfinanz-Fonds has a loan investment portfolio of USD 27.0 million. The fund’s portfolio is financed by its shareholders, Bank im Bistum Essen, a German cooperative financial institution, and Stadtsparkasse Düsseldorf, a German bank.
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MICROCAPITAL STORY: Belgian Investment Firm Incofin Provides USD 1 Million to Nicaraguan Microfinance Institution Fundación José Nieborowski through Impulse Microfinance Investment Fund
This story comes courtesy from the Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) and the MIX, the microfinance information clearinghouse. The Impulse Microfinance Investment Fund (Impulse), managed by Incofin, a Belgian social investment company, has directed a USD 1 million loan to Fundación José Nieborowski, a Nicaraguan microfinance institution (MFI). The loan investment contributes to the MFI’s gross loan portfolio of USD 20.2 million, increasing its size by roughly 5 percent. Impulse is now the fourth investment vehicle to financially back Fundación José Nieborowski, joining the ranks of MicroVest One, a US-based limited partnership, Oikocredit, a Dutch investment firm, and the Oxfam Novib Fund, a Netherlands philanthropic investment fund.
Georgian Microfinance Institution Constanta Receives Loan from Dutch Triodos-Doen
The CGAP-MCM Newsletter reported that Constanta Foundation, a microfinance institution (MFI) based in Georgia, recently received a USD636,000 loan from Dutch fund Triodos-Doen. The MFI has recently received loans from several other funds including, The Global Commercial Microfinance Consortium (GCMC), the responsAbility Global Microfinance Fund, and Oikocredit. The loan was Triodos-Doen’s first investment in the Georgian microfinance sector.
Continue reading “Georgian Microfinance Institution Constanta Receives Loan from Dutch Triodos-Doen”
Uganda Microfinance Limited Recipient of $240,000 Credit Line from Incofin
Another deal coming to us this month courtesy of the CGAP-MIX Capital Markets MCM Newsletter, Uganda Microfinance Limited (UML) recently received a $240,000 line of credit from Incofin. UML was established in 1997 as a commercial microfinance institution by a local Ugandan and an American citizen. According to year end 2005 data from Microfinance Information eXchange (MIX), it has 31,145 clients who have taken out loans totaling $11.3 million. In addition, it has total assets worth $16.5 million, return on assets of 4%, and a debt to equity ratio of 295%.
Continue reading “Uganda Microfinance Limited Recipient of $240,000 Credit Line from Incofin”Calvert Foundation Invests Another US$1 million in MicroCredit Enterprises LLC to Fund Microfinance Investing
The Calvert Foundation has made a second significant investment in the recently founded MicroCredit Enterprises LLC. It had also invested $3 million at the end of last year (see microcapital blog).
According to the Calvert Foundation’s press release, the funding received by MicroCredit Enterprises was just one of its recent microfinance investments. Others include $250,000 to MI-BOSPO, which provides microloans for Bosnian women; $326,396 to OikoCredit, one of the largest financiers of the Microfinance industry; and $600,000 to the Latin America Challenge Investment Fund, SA (LACIF), which provides loans to Latin American MFIs.
Continue reading “Calvert Foundation Invests Another US$1 million in MicroCredit Enterprises LLC to Fund Microfinance Investing”
Mexican Microfinance Investment Bank Compartamos Will Sell Shares at $0.42 Each, for a Total of $15.25 Million.
Compartamos was founded in 1990 to provide microfinance services to the Mexican population as employment generated by microenterprises outpaced job growth in the formal economy. It became “fully functional and self-sufficient in 1997,” and is now a Non Banking Financial Institution (Sociedad Financiera de Objeto Limitado). Compartamos is a member of the ACCION International and Microfinance Networks. Investors include the Accion Gateway Fund, the International Finance Corporation, Oikocredit, ProFund International, S.A., the Triodos Fair Share Fund and the Triodos-Doen Foundation. Annual figures last updated December 31st, 2004 on the MIX Market, an information clearinghouse for microfinance recognized as the standard by MicroCapital, stated Total Assets of $125,140,019, and a Gross Loan Portfolio of $101,023,790 distributed among of 309,637 Active Borrowers. Compartamos does not offer savings accounts. For the same 2003-2004 period the company posted a Debt / Equity Ratio of 154.63%, an ROA of 18.2% and Profit Margins of 40.44%. Further details about the deal are not publicly available.
Microfinance Investment Funds Ranked by Size and Microcredit Allocation
|
FUND NAME Ranked by $ Size of Fund |
SIZE OF FUND $USD |
FUNDS ALLOCATED TO MICROFINANCE $USD |
ROI |
|
1. Oikocredit World Partnership Investments |
304,662,000 |
80,764,000 |
2% |
|
2. ProCredit Holding Aktiengesellschaft |
110,918,700 |
89,181,767 |
5-6.5% |
|
3. Calvert Community Investment Notes |
80,000,000 |
20,000,000 |
3% |
|
4. Dexia Microcredit Fund |
51,669,512 |
46,334,570 |
5.5-7.5% |
|
5. Blue Orchard Microfinance Securities |
40,069,833 |
38,000,000 |
4.55-8.8% |
|
6. ASN-Novib Fonds |
28,421,190 |
9,473,730 |
1.20% |
|
7. AXA World Funds |
23,073,410 |
1,481,556 |
5.10% |
|
8. MicroVest I, LP: Equity |
not available |
not available |
7-9% |
|
9. MicrovestI, LP: Subordinated Debt |
not available |
not available |
4.5-6% |
|
10. mPower Investment Program |
not available |
not available |
0-3% |
|
11. Impulse Microfinance Investment Fund |
15,413,875 |
15,413,875 |
4% |
|
12 Triodos Fair Share Fund |
14,583,596 |
6,983,086 |
2-4% |
|
13. Accion Investments in Microfinance |
12,969,985 |
12,512,329 |
8-10% |
|
14. responsAbility Global Microfinance Fund |
11,449,977 |
11,449,977 |
3.56% |
|
15. ALTERFIN |
11,084,244 |
3,628,790 |
6% |
|
16. Partners for the Common Good |
7,095,500 |
300,000 |
3% |
|
17. Latin American Bridge Fund |
5,340,505 |
1,450,000 |
0-2.875% |
|
18. CRESUD |
2,483,480 |
1,490,088 |
2.75% |
|
19. Global Bridge Fund |
1,691,000 |
not available |
0-2.875% |
Microfinance Investment Funds Ranked by Microcredit Allocation
|
FUND NAME |
SIZE OF FUND $USD |
FUNDS ALLOCATED TO MICROFINANCE $USD |
ROI |
|
1. ProCredit Holding Aktiengesellschaft |
110,918,700 |
89,181,767 |
5-6.5% |
|
2. Oikocredit World Partnership Investments |
304,662,000 |
80,764,000 |
2% |
|
3. Dexia Microcredit Fund |
51,669,512 |
46,334,570 |
5.5-7.5% |
|
4. Blue Orchard Microfinance Securities |
40,069,833 |
38,000,000 |
4.55-8.8% |
|
5. Calvert Community Investment Notes |
80,000,000 |
20,000,000 |
3% |
|
6. Impulse Microfinance Investment Fund |
15,413,875 |
15,413,875 |
4% |
|
7. Accion Investments in Microfinance |
12,969,985 |
12,512,329 |
8-10% |
|
8. responsAbility Global Microfinance Fund |
11,449,977 |
11,449,977 |
3.56% |
|
9. ASN-Novib Fonds |
28,421,190 |
9,473,730 |
1.20% |
|
10. Triodos Fair Share Fund |
14,583,596 |
6,983,086 |
2-4% |
|
11. ALTERFIN |
11,084,244 |
3,628,790 |
6% |
|
12. CRESUD |
2,483,480 |
1,490,088 |
2.75% |
|
13. AXA World Funds |
23,073,410 |
1,481,556 |
5.10% |
|
5,340,505 |
1,450,000 |
0-2.875% |
|
|
15. Partners for the Common Good |
7,095,500 |
300,000 |
3% |
|
16. Global Bridge Fund |
1,691,000 |
not available |
0-2.875% |
|
17. MicroVest I, LP: Equity |
not available |
not available |
7-9% |
|
18. Microvest I, LP: Subordinated Debt |
not available |
not available |
4.5-6% |
|
19. mPower Investment Program |
not available |
not available |
0-3% |
Wall Street Journal Features Microfinance Investment as “A New Way to Do Well by Doing Good”
Microfinance investment as a stand-alone category made headlines in today’s Wall Street Journal. While this article probably represents the culmination of a break-out year for microfinance investment, we still have a lot of work to do. The Journal describes the investment options as “small change”.
Quoting from the WSJ
Small Change
Here is a sampling of microfinance investment vehicles. Several Web sites, such as www.mixmarket.org and www.microcapital.org, also list a number of investments.
|
INVESTMENT |
MINIMUM |
COMMENT |
|
Calvert Foundation Community Investment Notes www.calvertfoundation.org |
$1,000 |
Investors can earmark the notes to be invested in microfinance initiatives. Notes can earn up to 3%, depending on the note term. |
|
Oikocredit USA Global Community Note www.oikocredit.org |
$1,000 |
The capital raised from the notes is used to help finance various microlenders. Investors can choose returns of up to 2%. |
|
MicroVest I Fund www.microvestfund.com |
$100,000. Only available to accredited investors. |
Fund makes both debt and equity investments in microlenders. Equity partners can expect to earn 7% to 9% annualized returns, while debt investors might earn 4.5% to 6%. |
|
Accion Investments www.accion.org |
$250,000. Only available to accredited investors. |
Makes equity investments in microlenders and expects to generate about 8% to 10% annual returns. |
|
Grameen Foundation USA Growth Guarantees www.gfusa.org |
$1 million minimum letter of credit. |
Guarantors do not contribute any money or get an upfront charitable deduction. Instead, they provide letters of credit which help guarantee loans by the lenders in developing countries. |
Four Groups Syndicate a $35 million Fund for African Microfinance Investment
Four organizations have joined forces to create a $35 million syndicate fund for microfinance investment in Africa. The fund will loan money to African microfinance institutions (MFIs), and by coordinating lending, seek to lend more efficiently.
The contributors are no strangers to microfinance investment. Most significantly, the Dutch social investment society OikoCredit is one of the world leaders in microfinance investment with a loan portfolio of E60 million. Also on board is Stromme Microfinance, a Norwegian Christian charity that has funded NGOs and churches since 1976. Less information is available on the other two contributors. Jitegemee Trust, which was created as a joint venture between the Kenyan and Dutch governments, is dedicated to providing aid to arid regions. The European Union and Kenyan government fund the Micro Enterprise Support Programme Trust (MESP). The MESP provides monetary and institutional support for MFIs. But it appears to be typical of quasi-governmental agencies that try to do everything from making loans to developing products to providing technical assistance to public policy.
The syndicate will be based in
In addition, the syndicate will consider loan applications from MFIs throughout
Additional Resources
1) Consultative Group to Assist the Poor (CGAP): “Microfinance Capital Markets Update” is the best source for monthly updates on debt and equity deals in microfinance.
2) “Group Raises Sh2.6bn to Fund Small Business”
3) “Overview of the Outreach and Financial Performance of Microfinance Institutions in Africa”
4) Microfinance Information Exchange