by the MicroCapital Team -

SPECIAL REPORT: European Microfinance Week Closes, Looking to Future of Financial Inclusion: Wooing Regulators, Women Leveraging Loans by Factor of 5, Investor Collaboration, New Customers for MFIs

Claudio European Microfinance PlatformGonzalez-Vega, a board member of Spain’s BBVA Microfinance Foundation, spoke of the huge impact of the COVID-19 pandemic at the closing plenary of European Microfinance Week, with life expectancy falling and an estimated 115 million people being pushed into extreme poverty. Despite the difficulties for microfinance institutions (MFIs), he said they may soon find a larger, very appropriate market for their services, given that many of these newly poor people have business experience. Dr Gonzalez-Vega argued that the “pandemic will make microfinance more important,” as – given MFIs’ “intimate knowledge of clients – the role of microfinance will be appreciated in a new light.”

Dina Pons of Belgium’s Incofin Investment Management agreed that microfinance clients have gotten

by the MicroCapital Team -

SPECIAL REPORT: Financial Inclusion for Forcibly Displaced Persons (FDPs) – Part 2: Regulatory Barriers, Segmenting Needs

(This European Microfinance Platformis the companion feature to an earlier piece on a European Microfinance Week conversation on serving refugees.)

Swati Mehta Dhawan of Germany’s Catholic University of Eichstätt-Ingolstadt argued for building up legal frameworks to allow forcibly displaced persons (FDPs) to escape “infinite limbo” by accessing documentation for identification purposes, working legally and integrating with host populations. She offered the example of a person displaced to Kenya, who has been there for 15 years without being allowed to work. Hans-Martin Zademach, also of Catholic University, noted many are “stuck in survival mode,” more in need of a reliable income source than methods for managing money.

However, Ms Dhawan explained that FDPs’ needs for financial services often increase as years go by. A common trajectory is

by Kate Finster -

MICROCAPITAL BRIEF: Bank-Genie, Cufa to Distribute BanqIn Digital Banking Platform to 23 Credit Unions in Rural Myanmar

Bank-Genie, a Singapore-based financial technology (fintech) firm, recently partnered with Cufa, an Australia-based NGO, to deploy Bank-Genie’s BanqIn platform in Cufa partner credit unions. The BanqIn platform will house the credit unions’ customer datasets,

by the MicroCapital Team -

SPECIAL REPORT: Lessons, Tools for the Pandemic from Prior Microfinance Crises

Deborah European Microfinance PlatformDrake of Accion’s CFI opened a European Microfinance Week session on crises in microfinance by noting that the effect of COVID-19 on the financial inclusion industry “is a different crisis because it is global.” In past crises, which were centered on a single economy, microfinance investors had sufficient capacity to inject into stronger institutions to help them survive. The global nature of the current downturn, however, may exceed the capacity of investors to sustain “worthy” financial services providers (FSPs) in certain markets. “There is inevitable

by Kate Finster -

MICROCAPITAL BRIEF: COFIDES Launches $145m Huruma Fund to Deliver Microfinance to 45k Farmers on 4 Continents

Compañia Española de Financiación del Desarrollo (COFIDES), a development finance institution controlled by the Spanish government, recently launched the Huruma Fund, an investment vehicle with commitments of EUR 120 million (USD 145 million) to assist rural farmers in Asia, sub-Saharan Africa, and Latin America and the Caribbean via a range of intermediaries. Seventy percent of Huruma’s portfolio will be deployed via

by Kate Finster -

MICROCAPITAL BRIEF: The Currency Exchange Fund (TCX) Raises $200m in Equity from EU, IFC, KfW, PROPARCO to Manage FX Risk for Microfinance, Other Impact Investments

The Currency Exchange Fund (TCX) recently raised a total of USD 200 million in equity financing that it will use to lower the foreign-exchange risk of third-party impact investments in developing nations. TCX hedges emerging-market currencies to support investments

by Kate Finster -

MICROCAPITAL BRIEF: AFD Loans $356m to IFAD to Assist Rural Farmers in Developing Sustainable Agriculture, Accessing Microfinance, Fighting Hunger, Responding to Climate Change, Enduring COVID-19 Pandemic

Agence Française de Développement (AFD), the overseas development agency of the French government, recently loaned EUR 300 million (USD 356 million) to the UN’s International Fund for Agricultural Development (IFAD) to assist small-scale rural farmers in developing nations. The funds are intended for managing natural resources,

by the MicroCapital Team -

SPECIAL REPORT: Local Market Data, Resilience During Pandemic, Securitization, Land Title Systems Enable Housing Microfinance, Micro-mortgages

During European Microfinance PlatformEuropean Microfinance Week 2020, Maria Claudia Rojas of the Netherlands’ Triple Jump described her firm’s experience managing the MicroBuild Fund it created with US-based Habitat for Humanity in 2012. Compared with Triple Jump’s portfolio as a whole, MicroBuild has maintained higher asset quality, and that margin of superiority has doubled during the COVID-19 pandemic.

Lucie Astier Such of the French government’s AFD explained her agency’s role in providing technical assistance, loans and data to support housing finance in developing countries. Part of this effort involves connecting households and microfinance institutions (MFIs) with reputable builders and suppliers of construction materials. One tool for this purpose is

by the MicroCapital Team -

SPECIAL REPORT: Danone, Incofin, Water.org: WASH Sector is Already Investible

During European Microfinance Platformone of the Friday sessions of European Microfinance Week 2020, Dina Pons of Belgium-based Incofin Investment Management explained a partnership with France-based food company Danone through which the organizations are building a 10-year equity fund to invest in expanding access to clean water in developing countries. Since 2007, the Danone Communities arm of Danone – mostly funded by its employees – has invested in access to drinking water on a proof-of-concept basis. Now Danone believes the sector has matured from the incubation stage to the investible stage. The company selected Incofin to help it invest in proven models, with a technical assistance component and monitoring of factors such as affordability, limiting plastic usage and

by the MicroCapital Team -

SPECIAL REPORT: e-MFP Publishes Taking Shelter: Housing Finance for the World’s Poor

From European Microfinance Platformthe European Microfinance Platform (e-MFP): While the 2020 European Microfinance Award spotlights the importance of savings, e-MFP takes the opportunity to look back to the 2017 Award and revisit the importance of housing. Even more than savings, housing is one of those parts of microfinance that has been around for decades, yet which remains relegated to niche status. And yet, like savings, housing finance holds out the promise of real-world improvements for millions of poor households while simultaneously expanding the opportunities for financial service providers (FSPs).

That is why, in partnership with Practical Action Publishing, e-MFP is publishing its

by the MicroCapital Team -

SPECIAL REPORT: European Microfinance Week Action Group Meeting: Investors Not Incentivizing MFIs Sufficiently re Measuring Social Performance

DuringEuropean Microfinance Platform today’s opening sessions of European Microfinance Week, e-MFP’s Investor Action Group met to discuss social performance measurement within microfinance institutions (MFIs). Calum Scott of US-based NGO Opportunity International described his organization’s efforts to work with MFIs to measure client outcomes. He specified that Opportunity generally does not seek to measure client impact, as that has proven too resource-intensive for its purposes. However, he argued that, “The pandemic doesn’t make outcomes data less important. If anything it makes it more important to know if and how your products are helping clients.” Of Opportunity’s partners, 95 percent use

by Kate Finster -

MICROCAPITAL BRIEF: Charm Impact Raises $360k in Equity to Expand Lending for Solar Energy in West Africa, India

Charm Impact, a UK-based lender to renewable-energy firms in developing countries, recently raised GBP 274,000 (USD 360,000) in equity financing through the UK-based crowdfunding platform Crowdcube. Charm plans to use the funds to scale up its operations

by Nathan Kiplagat -

MICROCAPITAL BRIEF: Stanbic IBTC of Nigeria to Borrow $75m from CDC Group for On-lending in Sectors with Significant SME Supply Chains

The CDC Group, a development finance institution owned by the UK government’s Department for International Development, recently agreed to lend

by Nathan Kiplagat -

MICROCAPITAL BRIEF: BlueOrchard Raises $140m for “COVID-19 Emerging and Frontier Markets MSME Support Fund” from Schroders, Japan, UK, US

BlueOrchard Impact Investment Managers, a member of the UK-based Schroders Group, recently partnered with Schroders and three development finance institutions to launch an initiative to fund lenders serving micro-, small and medium-sized enterprises (MSMEs) in developing countries that have been disrupted by the COVID-19 pandemic. The group of investors, which has committed a total of

by Romil Pandey -

MICROFINANCE PAPER WRAP-UP: “Private Asset Impact Fund Report 2020;” by Basile Quartier, Brendan Mackinnon, Ramkumar Narayanan; Published by Symbiotics

This survey reports on private asset impact funds (PAIFs), which are defined as those that have most “of their non-cash asset [base] allocated both to private debt and/or private equity instruments and to emerging and frontier markets, with a development impact bias.” When referring to impact, Symbiotics focuses on the

by the MicroCapital Team -

SPECIAL REPORT: Student Lending for Tertiary Education: Omtrix Offers Lessons Learned from 10 Years of HEFF

The OmtrixThe Higher Education Finance Fund (HEFF) was implemented in seven Latin American countries with the objective of improving access to tertiary education for motivated yet socially disadvantaged young people. It was promoted by Omtrix, Inc., a consulting and fund man­agement company based in Costa Rica. HEFF’s equity investors were the German development bank KfW, the Norwegian Investment Fund for Developing Countries (Norfund), the Swiss Investment Fund for Emerging Markets, the Luxembourg Finance and Development Fund, Corporación Andina de Fomento, Omtrix and the Calvert Social Investment Foundation.

HEFF was premised on the idea that student loans are an intrinsically viable product for financial institutions (FIs) with social objectives. The experience of HEFF confirmed the validity of this notion, provided that

by Romil Pandey -

MICROCAPITAL BRIEF: Canada’s Desjardins Group Launches Aequitas Fund with $38m to Advance UN Sustainable Development Goals Including Gender Equity, Climate Change Readiness

The Canadian cooperative Desjardins Group recently invested CAD 50 million (USD 37.9 million) to create the Aequitas fund, a private investment fund aimed at achieving gender equality, advancing climate change solutions and meeting other UN Sustainable Development Goals (SDGs). The fund will promote financial inclusion through provision of

by Kate Finster -

MICROCAPITAL EVENT: World Finance Conference; August 3-6, 2021; NOW VIRTUAL

Originally planned as an in-person event at the University of Agder, Kristiansand, Norway, this online program will cover the following themes: Sustainable Finance, Investments, Corporate Governance and Accounting. The papers that have been accepted for presentation cover