Edypme Confianza, a Peruvian microfinance institution (MFI) created in 1997 to provide microfinance services to entrepreneurs and small producers, sold shares worth $405,280 to Incofin. Initially, Confianza was primarily an agriculture lender, but changed its lending practices in 2002 and expanded its portfolio to include urban and individual loans. This MFI had $17 million in total assets, over 17,000 active borrowers, and a loan portfolio of $13.7 million at the close of 2004. Edypme Confianza also reported total equity at $3 million, return on assets (ROA) as 1.3%, return on equity (ROE) as 7.2%, a debt to equity ratio of 465%, and a 6.7% profit margin at the end of 2004. According to an Inter-American Development Bank (IADB) survey based on number of loans outstanding in Latin America, Edypme Confianza was ranked 53rd overall and 12^th within Peru.

Incepted in Belgium in 1992, Incofin invests in MFIs in 16 countries, and in mid-2005 had total assets of $5.6 million. The duration of Incofin’s loans, which are between $120,000 and $600,000, is five years, and the terms offered are “LIBOR plus full cost plus full risk”. Shareholders include both corporations and private individuals and Incofin invests in equity, quasi-equity, debt securities and guarantees. Although Incofin does not provide a return, it has the objective of maintaining the initial value of the shareholders’ investments.

Incofin also provided Nigerian-based Lift Above Poverty Organisation (LAPO) with a $306,000 loan. LAPO is an African NGO established in 1987 with a mission “to promote economic empowerment through financial services on sustainable basis.” In September, 2003 LAPO reported a loan portfolio of $1.2 million and total assets just under $2 million.

Continue reading “Belgian Incofin Makes Over $400,000 Microfinance Investment, Buying Shares in Peruvian Edypme Confianza and Lending over $300,000 Investment in Nigerian Lift Above Poverty Organisation (LAPO)”

Kfw, a German development bank established in 1948 to support small and medium-sized enterprises (SMEs) and start-ups is providing a $5 million loan to the Microfinance Bank of Azerbaijan (MFBA). Kfw, one of the ten largest banks in Germany and a historically strong partner to the microfinance industry, had å¥341 billion in total assets at the close of 2005. Recently, the group participated in a å¥30 million equity financing with the World Bank that established the Southeast Europe Microfinance Fund. See the January 10, 2006 blog for more information on this deal.

MFBA was established in 2002 by four shareholders: European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC), Black Sea Trade and Development Bank (BSTDB) and LFS Financial Systems GmbH (LFS). In December of 2004, KfW became the fifth shareholder. Based upon information released earlier this month, MFBA enjoyed a strong financial performance in 2005. Since inception, the organization has disbursed 18,825 loans, with 9,608 loans disbursed in 2005 alone. Also, MFBA’s credit portfolio nearly tripled in 2005 and reached $17.5 million, 169% greater than portfolio indicators for January 01, 2005. The Bank’s assets grew substantially in 2005, reaching $22.4 million – up from $9.3 million in 2004.

Continue reading “German Development Bank KFW makes $5 Million Microfinance Investment in Microfinance Bank of Azerbaijan”

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 31^st, 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.

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.

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 does not report to the MIX Market, the World Bank’s microfinance information clearinghouse. Further information about their performance is not publicly available.

Established in 1992, Incofin invests in MFIs in 14 countries, and in mid-2005 had total assets of $5.6 million. The duration of Incofin’s loans, which are between $120,000 and $600,000, is five years, and the terms offered are “LIBOR plus full cost plus full risk”. At the end of 2004, Incofin, along with KBC, Boerenbond, VDK Spaarbank, Volksvermogen (Belgian institutional investors) set up the Impulse Microfinance Investment Fund, which had initial capital of å¥5 million. By mid-2005, the fund’s assets were worth $15,413,875. The fund invests between $300,000 and $1.5 million in MFIs, and offers the same terms as Incofin.

ACCIÌãN International announced today that it has received a US$5.8 million grant from the Bill & Melinda Gates Foundation. The grant will be used primarily to develop new partnerships with microfinance institutions and commercial banks in West Africa and India.
Continue reading “Has ACCIÌãN Opened the Gates’ To Microfinance Investing?”

Amidst a rising tide of investment in emerging markets, The International Finance Corporation has agreed to provide a US$2.2 million financing package to Micro Credit Agency Bai Tushum Financial Foundation (BTFF). The investment is being made in the form of a US$1.2 million loan with an option for the IFC to convert a portion of the loan into a US$1 million dollar equity stake in the MFI.
Continue reading “Microcredit Lender Converts on New Debt Investment”

Even if you only drop in for a morning or an afternoon, this is $350 well-spent. To insiders, participants are the usual suspects, but for those who want to meet the players in microfinance investment, this is a timely and convenient event indeed.

If you are committed to building microfinance as a safe investment class, then bring your friends with you.

Symbiotics, a new Swiss professional services firm catering to microfinance investors and fund managers, summarizes the investment funds landscape beautifully:

“Over fifty global and regional microfinance investment vehicles exist today, and at least as much local ones have been identified. All are expected to grown significantly in the coming few years. Foreign investment in microfinance totals over a billion dollars, and is growing rapidly (supply is expected to double in 2005 and double again by 2008).

Continue reading “Symbiotics Tells Story of Microfinance Investment Funds in Less Than 150 Words”

The World Bank Group’s private sector arm, the International Finance Corporation (IFC) will invest å¥20 million in mezzanine “B” shares with a 10-year maturity and å¥10 million in senior “A” shares with a seven-year maturity, in the soon to be established European Fund for Southeast Europe (EFSE), which will eventually lend to banks and microfinance institutions (MFIs). The IFC’s stake is approximately 21% of the fund’s initial capitalization of å¥142 million. To reach its target of a å¥500 million capitalization within five years, EFSE expects to attract capital from multilateral and private institutional investors via multiple closings in the future. EFSE is expected to be the largest microfinance fund in Southeast Europe.
Continue reading “World Bank Investing å¥30m of Equity in Microfinance Together with German Development Bank KfW to Establish “Southeast Europe Microfinance Fund” with an Expected Final Capitalization of å¥500m”

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 1^st 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”

The Inter-American Development Bank (IADB) has approved financing, which includes a $500,000 loan and a $150,000 grant, for microfinance institution (MFI) Pro Mujer Mexico (PMM), which is a part of the New York City administered transnational wholesale microfinance network Pro Mujer International. The new funding will allow PMM to extend microcredit to Central Mexico, where microfinance services are not well-established. The MFI will subsequently make initial loans between $50 and $150 to both rural and urban women microentrepreneurs. PMM is a relatively young institution established in 2002, which had a $1.2 million loan portfolio and over 10,000 active borrowers at year end 2004.
Continue reading “Inter-American Development Bank Investing and Granting $650,000 to Microfinance Institution Pro Mujer Mexico”

Finance Salone Ltd., a Sierra Leonean non-profit microfinance institution (MFI), is expected to receive a $700,000 loan from the Microfinance Investment and Technical Assistance Facility (MITAF). Established in 2001, Finance Salone had total assets of $646,000 and a gross loan portfolio of $526,000 at year end 2004, reaching over 8,000 borrowers nationally. MIX Market, the World Bank information clearing house on microfinance, recognizes only two MFIs in Sierra Leone. Although further information is not publicly available, MIX also reports that Finance Salone had been expected to transform into a “foreign-owned for-profit” company in 2004.
Continue reading “Sierra Leonean Microfinance Investment and Technical Assistance Facility to Loan $700,000 to Finance Salone for Microcredit”

Belgium investment company Incofin has invested å¥250,000 in Ecuadorian microfinance institution (MFI) Fundación ESPOIR, while Incofin’s Impulse Microfinance Investment Fund has invested å¥1 million in FINCA Kosovo, and å¥500,000 into Peruvian MFI EDPYME Confianza.
Continue reading “Belgian Investment Company Incofin Invests Over å¥1.5 Million in Three Microfinance Institutions (Fundación ESPOIR, FINCA Kosovo, EDPYME Confianza)”

The World Bank Group’s private sector arm, the International Finance Corporation (IFC), bought a 10% stake in Tameer, a fledgling Pakistani microfinance bank. Established in 1956 to promote private sector investment in developing countries, the IFC (based in Washington D.C.), had over $26 billion in total assets and a total committed loan portfolio of $19.3 billion as of the end of June this year.
Continue reading “International Finance Corporation Makes $1m Equity Investment in Pakistani Tameer Microfinance Bank”

The East African Development Bank (EADB) is floating a $10.8 million bond with a seven-year tenure to raise funds for its projects in Uganda, which often require local currency, microfinance in particular. Established in 1980, the EADB provides financial services in its member states of Kenya, Uganda, and Tanzania, and had total assets of $190.3 million at year end 2003—the latest information available.
Continue reading “East African Development Bank Floats $10.8 Million Bond for Partial Investment in Ugandan Microfinance”