In addition to its recent $900,000 investment in FINCA Azerbaijan, responsAbility Global Microfinance Fund loaned over $1 million to microfinance institutions in Eastern Europe. responsAbility, established in 2003 under Luxembourg law, is classified as a private investor and open-ended investment fund. In May 2006, it reported a total fund volume of $57 million and microfinance investments of $53 million.
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Credit Suisse Continues Microfinance Investment As Partner in responsAbility Global Microfinance Fund
Headquartered in
In 2003, Credit Suisse co-founded the responsAbility Global Microfinance Fund along with Raiffeisen Banking Group, Baumann & Cie Banquiers, and the Andromeda Fund. This fund provides investors with a combination of moderate financial returns coupled with social benefits. responsAbility loans between $50,000 and $1.5 million to MFIs for a maximum of 5 years at a rate equal to “LIBOR plus full cost plus full risk.” As of March 31, 2006 the fund’s total assets reached $50 million with over $45 million allocated to microfinance investments. In addition, investment advisory services to the responsAbility Fund are provided by BlueOrchard, IPC/ProCredit, FINCA International, Symbiotics, Opportunity International, and PlaNet Finance.
Additional Resources
1. ING “A Billion to Gain? A study on global financial institutions and microfinance,” February, 2006
2. ResponsAbility
3. MIX Market: “responsAbility”4. MIcrocapital Blog: “Best in Class Just Keeps Getting Better: Swiss responsAbility Microfinance Investment Fund Lends $1,755,095 to German ProCredit Holding.” February 16, 20065. Microcapital Blog: “Microfinance Investment Funds Ranked by Size and Microcredit Allocation” January 13, 20066. Microcapital Blog: “ResponsAbility Global Microfinance Fund Investing More than $7m in 11 Microfinance Institutions in Jordan, Benin, Ecuador, Nicaragua, Bosnia and Herzegovina, and Peru” January 6, 2006
7. Credit Suisse
Dutch Triodos Bank Makes Over $7m in Worldwide Microfinance Investments via Multiple Microcredit Funds
The Triodos-Doen Fund had a very busy year-end. The Dutch microfinance investment fund closed 11 deals totaling just over US$7 million. Opened in 1994 as a joint initiative of the DOEN Foundation, an organization dedicated to sustainable development, and Triodos Bank; the Triodos-Doen Fund had US$34,822,585 in assets under management as of 12/31/04. The fund’s mission is to stimulate sustainable development in a “dynamic, entrepreneurial way.” Investments are focused on microfinance and trade finance for “Fair Trade” or certified organic producers.
Details of all of the latest Triodos-Doen Fund deals are below:
|
MFI |
Region |
Funding |
Vehicle |
|
Latin America |
$ 232,650 |
Equity Shares |
|
|
Alter Modus |
Eastern Europe |
$ 244,800 |
Loan |
|
Latin America |
$ 750,000 |
Loan |
|
|
Fundación José Nieberowski |
Latin America |
$ 1,000,000 |
Syndicated Loan |
|
Latin America |
$ 750,000 |
Loan |
|
|
Latin America |
$ 250,000 |
Convertible Loan |
|
|
Latin America |
$ 600,000 |
Loan |
|
|
Latin America |
å¥ 700,000 |
Syndicated Loan |
|
|
Latin America |
$ 1,000,000 |
Syndicated Loan |
|
|
Africa |
$ 1,390,000 |
Syndicated Loan |
|
|
Asia |
$ 500,000 |
Convertible Loan |
The individual deals were primarily debt financings, including a number of “syndicate loans” funded with partner MFIFs. Among the groups that Triodos-Doen partnered with were two other funds managed by the Dutch development bank: the Hivos-Triodos Fund and the Triodos Fair Share Fund. Though primarily focused in Latin America, Triodos’ microfinance investments had a broad reach, extending to Eastern Europe, Africa, and Asia as well.
Triodos-Doen and Triodos Fair Share Fund also participated in a round of equity financing with Bolivian microfinance institution, FIE S.A.. FIE S.A. is the result of an effort by the Center for the Development of Economic Initiatives. The organization offers both lending and remittance services to support small-scale economic activities of families and people living in poverty. At the end of 2004, FIE S.A. had total assets of US$59,638,363 and generated a return on these assets of 3.02%. Typically, Triodos-Doen attempts to allocate 1/3 of its funds to equity deals such as this and 2/3 to debt financing. Overall, the fund maintains a portfolio of 64 active investments as of 12/31/04, and increased its Net Asset Value by 12% from 2003-2004, according to the fund’s most recent annual report.On the debt side, Triodos-Doen extended a number of loans to Latin American microfinance institutions. FINCA Mexico received a US$750,000 loan. As a member of the Foundation for International Community Assistance network, FINCA Mexico uses the “Village Banking” methodology to provide lending services to entrepreneurial women that often live on less than US$2.00 per day.
Peruvian microfinance institutions Edpyme Proempresa and Edpyme Edyficar both received loans from multiple Triodos Bank funds. Proempresa, with US$12,680,540 in assets as of 12/31/2004, received both a US$600,000 loan from Triodos-Doen, and a loan in Peru’s local currency, the New Sol, from Hivos-Triodos. Proempresa will use these funds to serve its individual clients with competitive advantages in areas such as handicrafts, medicinal plants, and agro-industry. As of year-end 2004, the microfinance institution had generated a 1.95% return on assets. Edyficar, likewise, received a å¥700,000 syndicated loan from Triodos-Doen and the Triodos Fair Share Fund. This money will finance activities for microentrepreneurs in both urban and rural settings. Edyficar had total assets of US$50,361,010 at year-end 2004, and generated a return on assets of 1.90%.
Beyond Latin America, the Triodos-Doen Fund again partnered with Hivos-Triodos to make a US$1,390,000 syndicated loan to K-Rep of Kenya. Originally an intermediary for funding non-governmental organizations, K-Rep became the first commercial bank in Kenya to target low-income clients. With US$35,057,877 in assets, K-Rep generated a return of 3.03% in 2004.
Extending its reach still further, Triodos-Doen also financed a convertible loan for Cambodian Entrepreneur Building Limited (CEB). CEB focuses on entrepreneurial, poor women in both urban and rural areas throughout Cambodia. It had assets of US$4,307,422 in 2004 and generated a return on assets of 2.53%.
Best in Class Just Keeps Getting Better: Swiss responsAbility Microfinance Investment Fund Lends $1,755,095 to German ProCredit Holding.
The responsAbility Global Microfinance Fund, ProCredit’s first private investor, augmented its stake in the holding company with loan of $1,755,095. Information on the duration of the loan is not publicly available.
Swiss-based ResponsAbility Global Microfinance Fund was founded in 2003 by Swiss financial institutions Credit Suisse, which is also the fund manager, Raiffeisen Banking Group, Baumann & Cie Banquiers, and the Andromeda Fund. Investment advisory services to the ResponsAbility Fund are provided by: Alterfin, BlueOrchard Finance, IPC/ProCredit Holding, FINCA International, Symbiotics, Opportunity International, and PlaNet Finance. ResponsAbility loans between $50,000 and $1.5 million to MFIs for a maximum of 5 years at a rate equal to “LIBOR plus full cost plus full risk.” The Fund’s total assets amounted to just over $45 million as of January 2006 with over $43 million allocated to microfinance investments.
Established in 1998 as the leader and main shareholder of the ProCredit Group, which consists of 19 microbanks with microcredit programs in different countries, ProCredit Holding controls its subsidiaries closely, their website stressing investment in training and professional development. The ProCredit group had approximately å¥1.9 billion in total assets and a total loan portfolio of å¥1.3 billion as of October 2005. To date, the 19 microbanks have made about 526,000 loans to microentrepreneurs and small businesses, approximately 90% of which are under å¥10,000 and about 50% of which are below å¥1,000. ProCredit Holding reports its Return on Average Assets as of December 2004 2.4% and its Return on Average Equity as 19.5 %. ProCredit continues to distant itself from the micro-bank pack.
ResponsAbility Global Microfinance Fund Investing More than $7m in 11 Microfinance Institutions in Jordan, Benin, Ecuador, Nicaragua, Bosnia and Herzegovina, and Peru
Swiss-based ResponsAbility Global Microfinance Fund was founded in 2003 by Swiss financial institutions Credit Suisse, which is also the fund manager, Raiffeisen Banking Group, Baumann & Cie Banquiers, and the Andromeda Fund. Investment advisory services to the ResponsAbility Fund are provided by: Alterfin, BlueOrchard Finance, IPC/ProCredit Holding, FINCA International, Symbiotics, Opportunity International, and PlaNet Finance. ResponsAbility loans between $50,000 and $1.5 million to MFIs for a maximum of 5 years at a rate equal to “LIBOR plus full cost plus full risk.” The Fund’s total assets amounted to just over $40 million as of November 30th 2005 with close to $37 million allocated to microfinance investments. For further information on some of ResponsAbility’s past investments please refer to our November 1st blog.
ResponsAbility made a å¥1.4 million equity investment into German-based international development holding company ProCredit Holding. Established in 1998 as the leader and main shareholder of the ProCredit Group, which consists of 19 microbanks with microcredit programs in different countries, ProCredit Holding controls its subsidiaries closely, their website stressing investment in training and professional development. The ProCredit group had approximately å¥1.9 billion in total assets and a total loan portfolio of å¥1.3 billion as of October 2005. To date, the 19 microbanks have made about 526,000 loans to microentrepreneurs and small businesses, approximately 90% of which are under å¥10,000 and about 50% of which are below å¥1,000. ProCredit Holding reports its Return on Average Assets as of December 2004 2.4% and its Return on Average Equity as 19.5 %.
ResponsAbility also made the following debt investments in microfinance institutions (MFIs):
Continue reading “ResponsAbility Global Microfinance Fund Investing More than $7m in 11 Microfinance Institutions in Jordan, Benin, Ecuador, Nicaragua, Bosnia and Herzegovina, and Peru”
ResponsAbility Global Microfinance Fund Makes Microfinance Investments Totaling $4.7 Million into Multiple Microfinance Institutions
Recently, the ResponsAbility Global Microfinance Fund invested: $2 million into ProCredit Georgia, $1.5 million into Ecuadorian Banco Solidario, $500,000 into FINCA Georgia, $500,000 into Sinapi ABA Trust in Ghana, and $200,000 into Fondo de Desarrollo in Nicaragua. (Last week we also reported on another investment by ResponsAbility; please refer to the blog dated October 28, 2005 for more information on the fund).
ProCredit
Banco Solidario
FINCA
The Sinapi ABA Trust (SAT) in
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) MicroCapital Blog: “FINCA Kyrgyzstan Receives $500,000 Microfinance Investment from Swiss ResponsAbility Fund.”
3) “ResponsAbility: Welcome to ResponsAbility.”
4) “ProCredit Holding: ProCredit Institutions.”
5) “ProCredit Bank History.”
6) “Balance Sheet (June 2005).”
7) MIX Market: “Banco Solidario: General Information.”
8) “Sinapi ABA Trust.”
9) MIX Market: “FDL: General Information.”
10) MIX Market: “FDL: Financial Data.”
11) “FINCA International: Where We Work.”
12) MicroCapital Blog: “Microfinance Networks (wholesale transnational): Defined and Listed.”
Microfinance Networks (wholesale transnational): Defined and Listed
Microfinance “networks” facilitate financial services to the poor by offering support to lower-level partners. The term “network” refers to the main organization and its partner organizations as a whole. The diversity of network structures makes a precise definition difficult, and herein we only define and list what we call “wholesale networks” defined as transnational, not national or regional, partnerships.
Adding to the challenge of a clean definition, some organizations such as ACCION and Credit and Savings for the Hard-Core Poor (CASHPOR) simultaneously exist as individual institutions as well as a network of secondary partners.
Unfortunately, much of the confusion about networks is self-imposed. Donors prefer to give to actual micro-lenders “where the rubber hits the road”, not supporting organizations. Networks at times present the aggregate micro-banking activities of their partners with the implication that they themselves actually provide microfinance services. Another opaque outcome generated by the counter-incentives inherent to donation-driven “development aid”.
Twenty-one second-tier networks are listed below. Fourteen of those are based in North America, one in South America, one in Asia, one in
“Networks” can be grouped broadly in four ways: 1) Degree to which they provide technical support, 2) Extent of ownership over partners (0-100%), 3) whether they invest in partners through loans or equity (or both), and 4) amount of donor cash inflow (private or public) to secondary partners (p. 8).
Microfinance networks are either involved only within the microfinance industry and/or in multi-sector development. The World Savings Bank Institute (WSBI) focuses on microfinance and business development services for instance, while Catholic Relief Services “works in microfinance, community health, education, and emergency response among other development sectors.” (p. 4). With the exception of ShoreCap International, a subsidiary of Shore Bank in
Numerous subcategories further clarify distinctions between networks—this information appears in the article, “What is a Network? The Diversity of Networks in Microfinance Today.” Broadly speaking however, “NGOs, cooperatives, non-bank financial institutions, MFIs, and banks,” may all be part of a network. While some of these organizations were simply strengthened by higher-level partners, many were formed by them. Mennonite Economic Development Associates (MEDA) for example, both supports existing institutions and creates others.
Due to the diverse roles different networks play, microfinance institutions may belong to multiple networks such as SHARE Microfinance, Ltd. of
WHOLESALE TRANSNATIONAL MICROFINANCE NETWORKS:
ACCION, US
Catholic Relief Service (CRS), US
Developpement International Desjardins (DID), Canada
Finca International (FINCA), US
Freedom from Hunger (FFH), US
Mennonite Economic Development Associates (MEDA), Canada
Opportunity International, US
Pro Mujer, US
Save the Children, US
ShoreCap International, US
Unitus, US
Women’s World Banking (WWB), US
World Council of Credit Unions (WOCCU), US
World Vision, US
International Network of Alternative Financial Institutions (INAFI), Costa Rica
Credit and Savings for the Hard-Core Poor (CASHPOR), Malaysia
Banking with the Poor Network (B.W.T.P.), Australia
Ecumenical Church Loan Fund International (ECLOF), Switzerland
PlaNet Finance, France
Microfinance Centre for Eastern Europe and the New Independent States, Poland
World Savings Bank Institute (WSBI), Belgium