SPECIAL REPORT: European Microfinance Platform (e-MFP) Announces Finalists for Fifth European Microfinance Award for Environmental Products: ESAF Investments of India, Kompanion of Kyrgyzstan, XacBank of Mongolia

The European Microfinance Platform (e-MFP), a Luxembourg-based network of approximately 130 microfinance organizations and individuals, has announced that there are three finalists for the Fifth European Microfinance Award, which is themed “Microfinance and the Environment” for 2014[1]. The selected institutions are ESAF Microfinance and Investments Limited (EMFIL), a non-banking financial institution that was established by the Evangelical Social Action Forum (ESAF) in 1995 in the Indian state of Kerala; Kompanion Financial Group (Kompanion), a community development financial institution in Kyrgyzstan; and XacBank, a community development bank in Mongolia. The organizations are competing for a prize of EUR 100,000 (USD 128,000) to be awarded during European Microfinance Week, an annual set of working group meetings and conference sessions that begins on November 12, 2014.

EMFIL was selected as a finalist for its “Clean Energy for the Poor”[1] initiative that provides loans for “solar energy solutions, efficient cook stoves, and water filters”[1] to poor people living in rural areas of India. Since 2008, EMFIL has funded 60,000 such products via microfinance. Kompanion was selected based on its “Pasture Land Management Training”[1] initiative, which includes a loan program linked to training in “grazing land management and preservation”[1]. Since 2011, 24,000 farmers have participated in the program. XacBank was selected for its “Eco Product Program”[1], which facilitates the purchase of environmentally friendly and “energy efficient heating and insulation products”[1] via microcredit. The program is targeted to poor people living in the city of Ulaanbaatar in traditional nomadic yurts called “ger”. Since 2010, 150,000 products were purchased under this program.

Mr Romain Schneider, Luxembourg’s Minister of Development Cooperation, said that “environmental changes disproportionately affect the poorest people in developing countries, and this year’s finalists show how microfinance institutions can improve the livelihoods of their clients, help build more resilient communities, and contribute to a more sustainable environment. The objective of the award – to support and encourage innovative thinking in the sector – remains as important as ever”[1].

The European Microfinance Award was launched in 2005 as a biannual event, but is now held annually. It is jointly organized by Luxembourg Development Cooperation, a government agency that seeks to aid health, microfinance and vocational training initiatives in the developing world; the Luxembourg Ministry of Finance; e-MFP; and Inclusive Finance Network Luxembourg, a non-profit initiative that supports sustainable development through financial inclusion, in cooperation with the European Investment Bank (EIB), the long-term lending bank of the European Union. Twenty-six institutions from 19 countries submitted applications for this year’s award.

By Alíz Crowley, Research Associate

About European Microfinance Platform (e-MFP)

Founded in 2006, the European Microfinance Platform (e-MFP) is a network of approximately 130 microfinance organizations and individuals that aims to promote information exchange and other forms of cooperation among European microfinance actors working in developing countries. The membership includes financial institutions, government agencies, NGOs, consultancies and universities.

About ESAF Microfinance and Investment Limited (EMFIL)

Established in 1992 in the Indian state of Kerala, ESAF Microfinance and Investment Private Limited (EMFIL) is a non-banking financial institution that is promoted by the Evangelical Social Action Forum (ESAF), an NGO engaged in promoting self-help groups (SHGs), microfinance and other community development initiatives. It operates in the states of Chhattisgarh, Delhi, Kerala, Madhya Pradesh, Maharashtra and Tamil Nadu. As of March 2013, EMFIL reported total assets of USD 93 million, a gross loan portfolio of USD 77.7 million, approximately 384,000 borrowers, return on assets (ROA) of 1.95 percent and return on equity (ROE) of 11.31 percent. EMFIL does not accept deposits.

About Kompanion Financial Group

Kompanion Financial Group Microfinance Closed Joint Stock Company was established in Kyrgyzstan in 2004 through the consolidation of five microcredit agencies affiliated with Mercy Corps, a nonprofit economic development and aid organization based in the United States. Kompanion describes itself as a “community development financial institution that seeks to combine conservation and development goals.” As of June 30, 2014, Kompanion reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 102.3 million, a gross loan portfolio of USD 81.2 million, return on assets (ROA) of 1.35 percent, return on equity (ROE) of 9.14 percent and 112,800 active borrowers. The institution does not accept deposits.

About XacBank

XacBank is a community development institution that was founded in 1998 and aims to grow into a commercial financial institution “by providing inclusive and value-adding financial services to the citizens and expatriates, institutions and enterprises of Mongolia, while maintaining its leadership in the global microfinance industry.” XacBank is a subsidiary of TenGer Financial Group, which also includes XacLeasing, XacSecurity, TenGer Solutions and TenGer Insurance. As of 2014, XacBank has 92 branches and service outlets in Mongolia. As of December 31, 2013, XacBank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 1.1 billion, a gross loan portfolio of USD 635 million, approximately 80,100 borrowers, total deposits of USD 385 million and approximately 463,200 depositors. As of 2013, XacBank reported return on assets of 1.70 percent and return on equity of 22.09 percent.

Sources and Additional Resources

[1] European Microfinance Platform, Press Release: Announcing the Finalists for the 5thEuropean Microfinance Award: Microfinance and the Environment

[2] Business Wire, Innovative Program Launched in India to Finance Clean Micro Energy Technologies

[3] XacBank, Eco Product distribution Program Stakeholder Feedback Round

MicroCapital, Additional Special Features Relating to European Microfinance Week

MicroCapital, August 14, 2014, India’s ESAF Microfinance and Investment Issues $7.8m In Non-Convertible Debentures (NCDs) to Triodos

MicroCapital, July 2, 2014, European Bank for Reconstruction and Development (EBRD) Likely to Loan Mongolian XacBank $5m for On-lending to Micro-, Small, Medium-Sized Enterprises (MSMEs); $10m for Sustainable Energy

MicroCapital, June 11, 2014, Opportunity Bank Serbia; MDO Arvand of Tajikistan; Bai Tushum, Kompanion of Kyrgyzstan Receive Smart Campaign Client Protection Certification

MicroCapital, April 8, 2014, European Microfinance Platform (e-MFP) Announces Fifth Microfinance Award of $132k for Environmental Initiatives

MicroCapital Universe Profile: European Microfinance Platform (e-MFP)

MicroCapital Universe Profile: ESAF Microfinance and Investment Limited (EMFIL)

MicroCapital Universe Profile: Kompanion Financial Group Microfinance Closed Joint Stock Company