WHO'S WHO IN MICROFINANCE: Norwegian Microfinance Initiative (NMI)

The Norwegian Microfinance Initiative (NMI) is a strategic partnership between the Norwegian public and private sectors that invests in microfinance institutions (MFIs) in developing countries and provides professional assistance and technical support for these institutions. NMI’s investors have committed NOK 600 million (USD 100 million) for investment. There is an equal amount of public and private investment in the NMI. [1] Investors include Norfund (a development finance institution owned by the Government of Norway) and four private sector partners: Ferd, KLP, DnB NOR, and Storebrand.

Ferd is a private, family owned group established in 1778. As both an industrial and financial group, Ferd manages long-term ownerships of companies while also facilitating national and international investments, including activities in real estate and venture capital. As of December 2007, Ferd’s Annual Report states that its total assets were the EUR 1.47 billion (USD 2.1 billion). It reported return on equity to be -39 percent.[5]

DnB NOR is a Norwegian financial services group established in 2003. Through its 200 Norwegian locations and twelve international branches, DnB NOR provides services in retail, internet banking, pensions and insurances, real estate, and asset management. According to its most recent Annual Report, DnB NOR had NOK 1.83 trillion (USD 327 billion) in total assets as of December 31st 2008. DnB NOR also reported return on equity to be 12.4 percent. [7]

Oslo-based Storebrand group was established in 1767 and provides pensions, life and health insurance, banking and asset management. Storebrand’s 2008 Annual Report states that the group’s total assets to be NOK 382 million (USD 68.2 million). Its return on investment assets was 3 percent. [8]

Kommunal Landspensjonskasse (KLP), is a Norwegian life insurance company that offers pensions, financing and insurance services in both the private and public sectors. According to its 2008 Annual Report, KLP had total assets of NOK 201.9 billion (USD 36.1 billion) with return on assets of 0.4 percent. [6]

NMI will invest through two funds, the NMI Global Fund and the NMI Frontier Fund. The NMI Global Fund invests primarily in Microfinance Investment Vehicles (MIVs) that invest primarily in established MFIs, though a limited number of direct investments in established MFIs will take place. The NMI Global Fund strongly focuses its investments on Africa, Asia, and Latin America, but is not limited to these regions exclusively. The investment size from this fund is between USD 3 million and USD 8 million. The NMI Global Fund is capitalized with NOK 360 million (approximately USD 60 million) and will have initial terms of 10 years.

The NMI Frontier Fund invests primarily in emerging MFIs both directly and through Microfinance Investment Vehicles (MIVs). Targeted MFIs are smaller and frequently newer organizations that are growing rapidly, providing products and services in particularly challenging regions or difficult market segments, or piloting or introducing new or innovative products, services, and distribution channels. The geographic concentration of the Frontier Fund is Sub-Saharan Africa and South Asia. The focus countries for the fund are Cameroon, Ghana, Kenya, Mali, Nigeria, Senegal, Tanzania, Uganda, India, and Pakistan. The Frontier Fund may provide equity, senior, subordinated, or convertible debt to emerging MFIs, with orientation toward equity investments. Investments will average USD 2 million, but can be as large as USD 6 million and as small as USD 1 million. The NMI Frontier Fund is capitalized with NOK 250 million (about USD 40 million) and has an initial term of 10 years. The Frontier Fund will take substantial minority positions and be an active investor. [1]

The NMI Professional Assistance Facility will support NMI Frontier Fund’s investments through training and skills development in areas such as markets and products, management information systems, risk management, financial management, human resources management, and strategic issues. Funding for the NMI Professional Assistance Facility will come through Norad, the development agency of the Government of Norway. [1][3]

Richard Weingarten is the Managing Director of NMI. Mr. Weingarten was most recently the Executive Secretary of the United Nations Capital Development Fund (UNCDF), an independent investment fund affiliated with the United Nations Development Programme. Prior to joining UNCDF, Mr. Weingarten was the Senior Vice-President for Finance and Development at the College Board, a not-for-profit organization in New York City that has more than 3500 colleges and universities as its members. Mr. Weingarten was also a Managing Director of Bear Stearns & Co., Inc. Mr. Weingarten has a B.A. from Yale University and a J.D. from the Antioch School of Law. [1] See a Microcapital.org interview with Mr. Weingarten here.

Henning Haugerudbraten is the Investment Director of the NMI Frontier Fund. Prior to joining NMI, Mr. Haugerudbraten was with McKinsey & Company in Oslo. He served clients in financial institutions, private equity, and other sectors, focusing on strategic planning, corporate finance, and investment due diligence. Prior to McKinsey, Mr. Haugerudbraten worked for Norway’s central bank on the management of Norway’s sovereign wealth fund, and prior to this as a risk management officer at the World Bank. Mr. Haugerudbraten is a graduate of John Hopkins University’s School of Advanced International Studies (SAIS) and is a CFA charter holder. [1]

Vegard Benterud is the Investment Director of the NMI Global Fund. Prior to joining NMI, Mr. Benterud was with Norfund, the Norwegian Development Finance Institution. He worked in the Financial Institutions and Funds department, focusing on direct microfinance investments and private equity SME funds in Africa and Asia. Prior to Norfund, Mr. Benterud worked for Norges Bank Investment Management (NBIM) as a portfolio manger, managing and trading equity and risk portfolios of Norway’s sovereign wealth fund. Mr. Benterud is a graduate of the Norwegian University of Science and Technology (NTNU) with a degree in Industrial Economics and Technology Management. [1]

Halvor Stenstadvold is chairman of the board at NMI. Mr. Stenstadvold spent a large part of his career with the Federation of Norwegian Industries and Orkla Group. He has been the chair of the Norwegian Broadcasting Corporation, the Research Council of Norway, and the Oslo Stock Exchange, as well as the director of Storebrand ASA. Mr. Stenstadvold studied political science at the University of Oslo and Columbia University

Norfund is a Norwegian development financial institution (DFI) which invests in profitable private enterprises in Africa, Asia, Latin America, and the Balkans. Norfund is owned by the Norwegian Ministry of Foreign Affairs. Norfund has total assets of NOK 5.35 billion (USD 962 million). In 2007, Norfund invested NOK 70 million in two other microfinance institutions, in the BRAC foundation of Bangladesh and in AfriCap Microfinance Investment.

The Norwegian Agency for Development Cooperation (Norad) is a directorate under the Norwegian Ministry of Foreign Affairs (MFA). Norad finances NGOs and does its own research and projects. Norad consists of the Department for Environment and Private Sector Development, the Department of Rights, Agents of Change, and Civil Society, the Department of Social Development and Service Delivery, the Department of Governance and Macroeconomics, the Department for Quality Assurance, the Department of Evaluation, the Information Department, and the Department of Human Resources and Administration. According to the Norad 2008 Results Report, Norwegian Development funds totaled NOK 20 billion (USD 3.57 billion) for 2007, with NOK 1.3 billion (USD 232 million) distributed to NGOs through Norad.

By Kenny Kline, Research Associate

Additional Resources:

[1] Norwegian Microfinance Initiative (NMI)

http://www.nmimicro.no/

[2] Norfund

http://www.norfund.no/

[3] Norad

http://www.norad.no/en/

[4] Microcapital.org, Holmes, Iyanna, “Norwegian Microfinance Initiative (NMI), a JV between the Norwegian Investment Fund for Developing Countries (Norfund) and the Norwegian Agency for Development Cooperation (Norad), Launches NMI Global Fund and NMI Frontier Fund with a $100m Investment”

https://www.microcapital.org/microcapital-story-norwegian-microfinance-in…

[5] Ferd

http://www.ferd.no/lang/en/show.do?page=55;24

[6] KLP

http://www.klp.no/web/klpno.nsf/pages/aboutklp.html

[7] DnB NOR

https://www.dnbnor.com/?LA=EN

[8] Storebrand

http://www.storebrand.no/site/stb.nsf/Enter/forsideenglish.html