Category: Investment Funds

MICROCAPITAL BRIEF: Microfinance Valuations Too High? Too Low? Depends Who You Ask

In the global microfinance industry, the topic of valuation is being debated by investors and representatives of microfinance institutions (MFIs). In an article released by the Financial Chronicle, a Hyderabad-based business news publication, Padmaja Reddy, managing director at Spandana Sphoorty Financial, proposes that MFIs share similar business models with banks and non-banking financial institutions, but are unjustly undervalued. Investors respond that the risks involved in MFI investment are too high. In a related article, The Wall Street Journal, a US-based business newspaper, cites the risks involved in MFI investment. Avnish Bajaj, managing director of Matrix Partners India which has an investment in one of India’s largest microfinance institutions, states, “There are elements of bubble in this sector. Over-lending, lack of processes, excessive geographical concentration and excessive product concentration,” all increase investors’ level of risk. Continue reading

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MICROCAPITAL BRIEF: International Finance Corporation (IFC) Invests $30.5m in Green for Growth Fund, SMEs To Benefit

The International Finance Corporation, a member of the World Bank Group, will reportedly invest EUR 25 million (equivalent to USD 30.5 million) in the Green for Growth Fund, Southeast Europe (GGF), a fund founded in December 2009 that “provides refinancing to financial institutions for on-lending to small and medium-sized enterprises (SMEs) and private households for financing energy efficiency projects.” Continue reading

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MICROCAPITAL BRIEF: Mimoza Enterprises Finance (Mimo) Receives $1.5m Loan from Unitus Incorporated, US Overseas Private Investment Corporation (OPIC) and Citi Microfinance

Mimoza Enterprises Finance (Mimo), an Indian microfinance institution (MFI) with a gross loan portfolio of USD 5.1 million, has received a loan of USD 1.5 million from Unitus Incorporated, an international nonprofit organization that provides funding and consulting services to microfinance institutions. Continue reading

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MICROCAPITAL BRIEF: The Inter-American Development Bank’s (IDB’s) Multilateral Investment Fund (MIF) to Provide $2m to Haitian Emergency Liquidity Program (HELP)

The Inter-American Development Bank (IDB), which reported total assets of USD 6.3 billion as of 2008, plans to provide up to USD 2 million to the Haiti Emergency Liquidity Program (HELP) under the Multilateral Investment Fund (MIF), which was founded in 1993 and reported total disbursements of USD 112 million in 2008. Continue reading

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MICROCAPITAL BRIEF: Oikocredit Lends $1.6m in Local-currency to Five Latin American Microfinance Institutions

Oikocredit, a microfinance investment fund in the Netherlands with assets of USD 665 million, recently loaned USD 1.6 million to five Latin American microfinance institutions (MFIs): Amanecer of Colombia, Coopesparta of Costa Rica, Proempresa of Peru, FINCA Peru and Norandino of Peru. Continue reading

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MICROCAPITAL BRIEF: Oikocredit Loans $1.37m to Seven Microfinance Institutions in Bulgaria, Asia and Africa

Oikocredit, a microfinance investment fund in the Netherlands with assets of USD 665 million, recently loaned USD 1.37 million to seven microfinance institutions (MFI) in Bulgaria, Tajikistan, Benin, the Philippines and Ghana. Continue reading

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MICROCAPITAL BRIEF: BlueOrchard Commits $4m in Debt Capital to Microfinance Projects in Kyrgyzstan, Tajikistan, and Jordan

BlueOrchard Finance, a Swiss asset management company, recently informed MicroCapital that it has provided USD 4 million in loans from two funds it manages, the Dexia Micro Credit Fund and the Microfinance Enhancement Facility, to three Asian microfinance organizations. Frontiers, a microfinance investment vehicle (MIV) in Kyrgyzstan, will receive USD 500,000. The Eskhata Bank in Tajikistan will receive USD 2 million. The Middle East Micro Credit Company (MEMCO) in Jordan will receive USD 1.5 million. Continue reading

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MICROCAPITAL BRIEF: BlueOrchard Finance Invests $6.5m in Latin American Microfinance Institutions

BlueOrchard Finance, a Swiss asset management company, recently invested USD 6.5 million from its Dexia MicroCredit Fund (DMCF) in three Latin American microfinance institutions (MFIs): Forjadores of Mexico, Women’s World Banking (WWB) Popayan of Colombia and D-Miro of Ecuador. Continue reading

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MICROCAPITAL BRIEF: African Development Bank, Four Other International Finance Institutions Launch $600m African Capitalization Fund

The African Development Bank (AfDB) and four development finance institutions recently launched an African Capitalization Fund (the “Fund”), which will be structured as a private equity fund. The other financial institutions involved are the European Investment Bank, the International Finance Corporation (IFC), the OPEC Fund for International Development (OFID) and Abu Dhabi Fund for Development (ADFD). The Fund will be managed by the IFC’s Asset Management Company and will invest in private sector commercial banks. Continue reading

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MICROCAPITAL BRIEF: Oikocredit Invests $6.8m in Local-currency Loans in Three Indian Microfinance Institutions

Oikocredit, a microfinance investment fund in the Netherlands with assets of USD 665 million, recently loaned INR 315 million (USD 6.8 million) to three Indian microfinance institutions (MFIs): Cashpor, SMILE and Grameen FSPL (Grameen Koota). Continue reading

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MICROCAPITAL BRIEF: Bai Tushum & Partners and Mol Bulak, Two Microfinance Organizations, Launch Revival Foundation for Devastated Regions of Kyrgyzstan

Bai Tushum & Partners and Mol Bulak, two microfinance organizations from Kyrgyzstan, along with the domestic law firm Kalikova & Associates, have established the ‘Revival Foundation’ to provide financial assistance to the southern regions of Kyrgyzstan affected by the recent riots. The foundation will serve residents of the cities of Osh and Jalabad and surrounding areas with financial aid and interest-free loans. Continue reading

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MICROCAPITAL BRIEF: KfW Entwicklungsbank (KfW) and Norwegian Microfinance Initiative (NMI) Commit Total of $11.6m to Goodwell West Africa to be Invested in Microfinance Sector in Ghana and Nigeria

Goodwell West Africa, a branch of Goodwell Investments, a business development company based in the Netherlands, has received commitments of EUR 8 million (USD 9.7 million) from KfW Entwicklungsbank (KfW), a German development bank, and EUR 1.6 million (USD 1.9 million) from Norwegian Microfinance Initiative (NMI), a strategic partnership between the Norwegian public and private sectors that invests in and provides support for microfinance institutions (MFIs) in developing countries. The funds will be invested in established MFIs as well as emerging MFIs in Ghana and Nigeria. Continue reading

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MICROCAPITAL BRIEF: CGAP Releases Guide for Microfinance Funders “Performance-Based Agreements: Incorporating Performance-Based Elements into Standard Loan and Grant Agreements”

CGAP (Consultative Group to Assist the Poor), an independent policy and research center housed at the World Bank Group, recently published a technical guide entitled “Performance-Based Agreements: Incorporating Performance-Based Elements into Standard Loan and Grant Agreements”. Continue reading

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MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Invest $10m in Bancamia, a Microfinance Bank in Colombia

The International Finance Corporation (IFC), a member of the World Bank Group working to alleviate poverty through loan and debt securities, equity investments and guarantees, will invest USD 10 million in Bancamia, a microfinance bank in Colombia [1]. The goal of the investment is to support the expansion of the Colombian microfinance sector, thereby helping to increase access to financial services for microenterpreneurs in the country. Continue reading

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SPECIAL REPORT: Evaluating the Current Mindset of Investors Globally and Their Attitude to Microfinance as an Asset Class – Observations by Microfinance Investors at the Global Microfinance Investment Conference

“Raising Capital: Evaluating the Current Mindset of Investors Globally and Their Attitude to Microfinance as an Asset Class” was a panel discussion topic at the recent Global Microfinance Investment Conference which was held in New York. The conference was attended by a variety of participants in the microfinance sector: microfinance investors, representatives of microfinance institutions (MFIs), bankers, lawyers and researchers. Continue reading

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