Another story coming to us courtesy of the CGAP-MIX Capital Markets Update newsletter. Triodos Fair Share Fund invested USD 1 mm in the Cambodian Entrepreneur Building Ltd. (CEB). The equity investment by Triodos will allow CEB to further grow its portfolio, and to mature the organizational and operational structure, in order to improve the governance of the organization. Triodos Fair Share fund was launched in December 2002 and its goal is to alleviate poverty by providing the opportunity for Dutch people to invest in the microfinance sector in developing countries. Tridos Fair Share fund, reports to MIX market, the microfinance information clearinghouse, as having USD 18,602,516 in Fund Assets, of which USD 16,928,289 are allocated to microfinance investments and USD 1,490,593 is invested in or committed to microfinance investments but not yet disbursed as of 31 December 2005. During the same period, Tridos Fair Share had 13 active microfinance investments with USD 9,471,600 allocated to microfinance investments projected in the following 12 month.
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Global Commercial Microfinance Consortium Delivers Loan to Mongolian Microfinance Institution XacBank
Several deals involving the XacBank, a Mongolian microfinance institution (MFI), were reported in the latest addition of the CGAP-MIX MCM Newsletter. Two of the transactions, one in which shares in the MFI were sold to the Triodos-Doen Foundation and the Triodos Fair Share Fund and another involving a loan from the European Bank for Reconstruction and Development (EBRD), have already been covered by MicroCapital (see additional resources below). The third deal was a 4-year USD4 million loan from the Global Commercial Microfinance Consortium (GCMC).
responsAbility Global Microfinance Fund Loans $750,000 to Microfinance Institution (MFI) Fundacion Nieborowski in Nicaragua
responsAbility Global Microfinance Fund loaned $750,000 to Fundacion Jose Nieborowski, a non-profit established in 1993 to promote development in the province of Boaca, Nicarauga. Fundacion Nieborowski reported a gross loan portfolio of $15.6 million, total assets of $17.7 million, total equity of $4 million, return on assets of 4.21%, and return on equity of 19.4% to the MIX Market. MicroCapital recently reported on the $1 million syndicated loan it received from the Triodos-Doen fudn.
Impulse Microfinance Investment Fund Loans 1 Million Euros to Prizma in Bosnia & Herzegovina
Microfinance Institution (MFI) Prizma received a EUR 1 million (USD $1.02 million) loan from Impulse Microfinance Investment Fund. Prizma is a non-bank financial institution established in 1997, with 5 branch offices and 35 satellite offices across Bosnia & Herzegovina. It reports an outstanding loan portfolio of 20.96 million km (USD $13.57 million), with an average loan balance of $731. It recently received loans totaling EUR 1 million from the Triodos-Doen fund.
FINCA Microfinance Institutions in Azerbaijan, Tajikistan, Georgia, and Armenia Growing Rapidly on the Heels of New Investments
MicroCapital recently reported on a US$750,000 debt investment made by the Triodos-Doen Fund in FINCA Mexico, but recent financial reports from Eastern European and Central Asian FINCA organizations show that the growth of these microfinance institutions is by no means limited by geography. FINCA, which stands for the Foundation for International Community Assistance, is a global network of microfinance institutions that leverage the “Village Banking” methodology, a microfinance program that encourages community responsibility for financial services.
Continue reading “FINCA Microfinance Institutions in Azerbaijan, Tajikistan, Georgia, and Armenia Growing Rapidly on the Heels of New Investments”
AfriCap Microcredit Fund Makes Equity Microfinance Investment Worth Over $600,000 in Micro-lender Socremo in Mozambique
Micro-lender Socremo, Mozambique, has sold shares worth $620,000 to AfriCap Microfinance Fund (AfriCap). Socremo, established in 1998, is one of the largest microfinance providers in Mozambique with a gross loan portfolio of $4.2 million, total assets of $5.4 million, close to 6,000 borrowers, and 420 active savers, as reported in December, 2004. Socremo also reported total equity at $1.9 million, return on assets (ROA) as 1.8%, return on equity (ROE) as 5.0%, a debt to equity ratio of 185%, and a 10% profit margin at the end of 2004.
AfriCap, which was incorporated in Mauritius in 2001, with an operational base in Dakar, Senegal, is a $15 million equity investment fund dedicated to the microfinance industry in Africa. The fund is designed to provide venture capital and active governance to a select number of emerging African microfinance institutions (MFIs) that are committed to commercial viability. As of July 2004, AfriCap reported total fund assets of $13.3 million and funds allocated to microfinance investments of $3.2 million. Additional Resources1) “AfriCap Microfinance Fund”
2) MIX Market: “AfriCap.”
3) Microcapital Blog, Dutch Triodos Family of Funds (Triodos-Doen, Triodos Private Fair Share, Hivos-Triodos) Makes Microfinance Investments Worth Over $6.7 Million in Loans to Seven Microcredit Institutions Worldwide, December 9, 2005
4) MIX Market: “SOCREMO – Banco de Microfinan̤as de Mo̤ambique.”
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% |
$4.5 Million Microfinance Investment into Azerbaijan Micro Finance Bank Helps Establish Credit Line
The Azerbaijan Micro Finance Bank (AMFB) recently received a $3 million loan from the Black Sea Trade and Development Bank and a $1.5 million loan from the Triodos-Doen Foundation to be used as credit lines for small businesses. Established in 2002 by the European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC), Black Sea Trade and Development Bank, and German LFS Financial Systems GmbH, AMFB provides financial services to micro and small business within the country. The bank’s typical microloans are between $400 and $10,000 for a maximum of 9 months. In June 2005, the Azerbaijan Microfinance Association reported that AMFB had a total loan portfolio of more than $11.4 million. It is the only one of the 45 commercial banks in Azerbaijan that focuses on microfinance services.
AMFB’s investor, the Black Sea Trade and Development Bank, is an “international financial institution” created in 1998 by the governments of
Another AMFB investor, The Triodos-Doen Foundation, founded by Dutch Triodos Bank and the Doen Foundation in 1994, provides loans ranging from $200,000 to $1 million for a maximum of five years to microfinance institutions (MFIs). The terms offered to MFIs are “Libor plus full cost plus full risk” and the “interest rate must be sufficient to cover potential devaluation against the Euro plus to cover costs of 8%.” The fund’s total assets stand at $34.822 million; $30.643 million of which has been allocated to microfinance investment.
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) “Social and Economic Background of Azerbaijan.”
3) “Micro Finance Bank of Azerbaijan: Overview.”
4) “Micro Finance Bank of Azerbaijan: Mission.”
5) “Qualisteam: Black Sea Trade and Development Bank.”
6) Black Sea Trade and Development Bank (BSTDB) Press Release: “Black Sea Trade and Development Bank.”
7) MIX Market: “Triodos-Doen Foundation: Fund Instruments.”
8) MIX Market: “Triodos-Doen Foundation: Fund Description.”
9) “Black Sea Trade and Development Bank: A New Financial Player in the Balkans.”
10) “Microfinance in Azerbaijan.”
Indian Microfinance at Long Last Attracting the Attention of Venture Capitalists
India, one of the most developed microfinance markets in the world, may have finally received long-awaited recognition. Venture capital has come to Indian microfinance, supporting the commercialization of the industry by providing much-needed capital. The joint venture is led by the American investment company Gray Ghost and the Dutch Hivos-Triodos Fund. To skirt India’s notorious red tape, the partners transformed an existing Indian microfinance institution into Bellwether, intended to be a source of financing for India’s most innovative microfinance institutions. The fund is capitalized at $10 million, and will address small and medium-sized institutions, which are considered less able to attract finance from the regular financial sector, relative to larger microfinance institutions.The mission of the fund is to promote the commercialization of microfinance through targeted investments and will seek out microfinance institutions that are or want to be commercially sustainable. A board and committee to advise on investments will together institutionalize Bellwether’s involvement with the chosen microfinance institutions. As the CEO of an upcoming microfinance institution spends more than 60% of his or her time fundraising, such an influx of funds will no doubt improve the availability and quality of microfinance services.
Additional Resources
1) Main article discussed in entry, Microfinance Information Exchange (MIX): "Hivos-Triodos Fund Starts the First Venture Capital Fund in India."
2) Bellwether Microfinance Fund