FINCA International, a US-based network of microfinance institutions (MFIs) in 21 countries, has established FINCA Microfinance Holdings (FMH) LLC, with USD 74 million from social investors including: USD 35 million from International Finance Corporation (IFC), the private-investment arm of the World Bank Group; USD 15 million from KfW Bankengruppe, a German development bank; EUR 10.5 million (USD 14 million) from Netherlands Development Finance Company (FMO in Dutch), a Dutch public-private partnership (PPP); USD 5 million from the responsAbility Global Microfinance Fund (rAGMF), a microfinance investment vehicle (MIV) managed by responsAbility Social Investments AG of Switzerland; and USD 5 million from Triple Jump, a Dutch investment manager and advisory firm for the microfinance sector.
FMH has been established with the goal of approximately doubling its client base from 700,000 people to 1.5 million. FINCA International President and CEO Rupert Scofield says: “FMH strikes the right balance between attracting the capital needed for expansion and protecting the integrity of our charitable mission, and will allow us to strengthen existing operations, deliver new and improved products and services, and make much more loan capital available to millions more people in need.”
FINCA International will be the majority shareholder in FMH, but the organization’s board will also include representatives from each of the five investors and unspecified “outside members.” A Social Performance Audit Committee will be established at the board level to monitor social indicators, ensure transparency and assist in the development of new products and services.
As of 2009, FINCA International had total assets of USD 467 million, with an operating profit of USD 742,000.
By Rohan Trivedi, Research Associate
About FINCA International:
Founded in 1984 by Dr John Hatch, a pioneer of the village banking model, the Foundation for International Community Assistance (FINCA) International is a global microfinance network based in Washington, DC, serving approximately 700,000 people through its subsidiaries in 21 countries. As of 2009, it had total assets of USD 467 million, with an operating profit of USD 742,000.
About International Finance Corporation (IFC):
A member of the World Bank Group, the International Finance Corporation (IFC) offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries that drive its policies and approve disbursements. As of June 30, 2010, IFC reports net income of USD 1.75 billion, total assets of USD 61 billion, return on assets of 3.1 percent and total investment mobilization of USD 18.4 billion to 528 projects.
About KfW Bankengruppe (KfW Bank Group):
The KfW Bankengruppe (KfW Bank Group) is a German development bank whose objective is to support economic, social and ecological development worldwide. Under the ownership of the Federal Republic and the Länder (16 German states), it offers financial support in the areas of small and medium-sized enterprise, entrepreneurship, environmental protection, housing, infrastructure, education, finance and project and export finance.
About Netherlands Development Finance Company (FMO):
The Netherlands Development Finance Company (FMO) is a Dutch public-private partnership that aims to promote developing international economies. Founded in 1970, FMO aims to encourage development by promoting entrepreneurship. As of 2010, FMO has total assets of EUR 4.3 billion (USD 5.7 billion).
About responsAbility Social Investments AG:
Founded in 2003, responsAbility Social Investments AG is a Swiss investment company whose products aim to enable investors to earn a financial return while assisting people in emerging markets to access information and markets in sectors such as microfinance, small and medium-sized enterprise (SME) financing, fair trade and independent media. According to calculations based on data from the US-based nonprofit Microfinance Information Exchange (MIX) from 2009 and 2010, responsAbility manages approximately USD 800 million in total assets. responsAbility is backed by Swiss financial institutions and a social venture capital company as founders and shareholders including Baumann & Cie, Banquiers, Credit Suisse, Raiffeisen Schweiz, Swiss Re, Bank Vontobel AG as well as George Avenue.
About responsAbility Global Microfinance Fund (rAGMF):
rAGMF is a microfinance investment vehicle (MIV) managed by responsAbility that invests in microfinance institutions (MFIs) and other MIVs, mostly through short- to medium-term debt securities. rAGMF also invests up to 10 percent of its assets in the equity of MFIs. In March 2011, its annual label was renewed by the Luxembourg Fund Labeling Agency (LuxFLAG), an organization that investigates whether investment vehicles actually support the microfinance sector. rAGMF reported to the US-based nonprofit Microfinance Information Exchange (MIX) that it had USD 474 million in fund assets as of 2010.
About Triple Jump:
Triple Jump was founded in 2006 to support the expansion of microfinance institutions (MFIs) by providing capital and advisory services. As of March 2011, Triple Jump manages five microfinance investment funds, worth a total of approximately USD 300 million. Its investments span 152 MFIs in emerging markets in Latin America, Eastern Europe, Africa and Asia. Triple Jump was established by the NOTS Foundation, a Dutch development organization; Oxfam Novib, a Dutch organization for international cooperation and development; and ASN Bank, a “sustainability-driven” Dutch bank. Its shares are divided among these organizations and Triple Jump’s management team. Triple Jump is comprised of Triple Jump Fund Management (TJFM) and Triple Jump Advisory Services Foundation (TJAS). TJFM provides its clients with four investment options: hard and local currency loans, equity, guarantees and subordinated loans. TJAS is a nongovernmental organization (NGO) that provides consulting services and technical assistance to tier-3 and tier-4 MFIs. The MIVs Triple Jump manages are the Oxfam Novib Fund, ASN-Novib Fund and SNS Institutional Microfinance Fund.
Sources and Additional Resources:
 FINCA Press Release: “FINCA International Launches Socially-Responsible Investment Subsidiary”, http://www.finca.org/site/apps/nlnet/content2.aspx?c=6fIGIXMFJnJ0H&b=6088937&ct=10881409
MicroCapital.org story, June 16, 2011: “MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Provide Local Currency Loans Worth Total of $13m to FINCA Azerbaijan, FINCA Kyrgyzstan to Expand Access to Microfinance”, http://www.microcapital.org/microcapital-brief-ifc-to-provide-local-currency-loans-worth-total-of-13m-to-finca-azerbaijan-finca-kyrgyzstan-to-expand-access-to-microfinance/
MicroCapital.org story, April 20, 2011: “MICROCAPITAL BRIEF: responsAbility Social Investments of Switzerland Loans $15m to FINCA International Subsidiaries in Azerbaijan, Georgia, Kyrgyzstan”, http://www.microcapital.org/microcapital-brief-responsability-social-investments-of-switzerland-loans-15m-to-finca-international-subsidiaries-in-azerbaijan-georgia-kyrgyzstan/
MicroCapital.org story, June 22, 2010: “MICROCAPITAL BRIEF: Triple Jump Disperses Total of $6.5m to Microfinance Banks Procredit Bank of Macedonia, FINCA Azerbaijan, Crezcamos of Colombia and Fundacion Campo of El Salvador”, http://www.microcapital.org/microcapital-brief-triple-jump-disperses-total-of-6-5m-to-microfinance-banks-procredit-bank-of-macedonia-finca-azerbaijan-crezcamos-of-colombia-and-fundacion-campo-of-el-salvador/
MicroCapital.org story, March 6, 2008: “WHO’S WHO IN MICROFINANCE: John Hatch, Foundation for International Community Assistance (FINCA)”, http://www.microcapital.org/whos-who-in-microfinance-john-hatch-foundation-for-international-community-assistance-finca/
MicroCapital.org story, September 21, 2006: “MICROCAPITAL BRIEF: FINCA Capital Fund Receives the Second Tranche of KfW’s $30 Million Microfinance Investment”, http://www.microcapital.org/finca-capital-fund-receives-the-second-tranche-of-kfws-30-million-microfinance-investment/
MicroCapital Universe Profile: FINCA International, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FINCA+International
MicroCapital Universe Profile: International Finance Corporation (IFC), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29
MicroCapital Universe Profile: KfW Bankengruppe (KfW Bank Group), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=KfWBankengruppe+%28KfW+Bank+Group%29
MicroCapital Universe Profile: Netherlands Development Finance Company (FMO), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Netherlands+Development+Finance+Company+%28FMO%29
MicroCapital Universe Profile: responsAbility Social Investments AG, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=responsAbility
MicroCapital Universe Profile: responsAbility Global Microfinance Fund (rAGMF), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=responsAbility+Global+Microfinance+Fund+%28rAGMF%29
MicroCapital Universe Profile: Triple Jump, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Triple+Jump
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