The Foundation for International Community Assistance (FINCA) International received approximately USD 200 million to launch its new subsidiary, FINCA Microfinance Holding LLC (FMH). FINCA International President and CEO Rupert Scofield says that the new capital will be fundamental in the expansion of services to new areas, the creation of efficiencies that will lower costs for borrowers and the development of new services such as savings accounts and insurance products [1].
FMH has raised the following commitments, which are to be accessed over a three-year period: USD 35 million from World Bank Group member International Finance Corporation (IFC), USD 15 million from German development bank KfW Bankengruppe, USD 14 million from Dutch development bank Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO) and USD 5 million each from Swiss microfinance investment vehicle responsAbility Global Microfinance Fund and Triple Jump, an investment manager and advisor [2].
In order to preserve control of the organization’s mission, FINCA International will retain 66 percent of the shares of FMH. The identities of any other owners have not been released. A Social Performance Audit Committee of the Board of FMN has been established to further ensure that the focus remains on FINCA clients rather than on maximizing profits. FINCA’s employees and board members will not be allowed to invest in FMH shares. In the 2010 fiscal year, FINCA International served approximately 760,000 clients through its subsidiaries in 21 countries [1] [2].
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 microfinance network based in Washington, DC, that provides financial services to poor families through a network of locally managed institutions. FINCA targets its services to poor women living in the Americas, sub-Saharan Africa and Eurasia. In the 2010 fiscal year, FINCA International served approximately 760,000 clients through its subsidiaries in 21 countries. As of 2010, it had total assets of USD 496 million, with an operating profit of USD 10 million. In December of 2011, FINCA launched a subsidiary, FINCA Microfinance Holding LLC, with funding from the International Finance Corporation (IFC), KfW Bankengruppe, Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO), responsAbility, and Triple Jump.
About 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 and reports a net income of USD 1.58 billion, total assets of USD 68.5 billion, return on assets of 2.4 percent and total investment mobilization of USD 12.2 billion to 518 projects.
About KfW Bankengruppe
The KfW Bankengruppe (KfW Bank Group) is a German development bank whose objective is to support economic, social and ecological development worldwide. Owned by the Federal Republic and the Länder (federal states), it offers financial support in the areas of small and medium-sized enterprise, entrepreneurship, environmental protection, housing, infrastructure, education, finance, and development cooperation. In 2010 KfW Bankengruppe invested approximately USD 7.4 billion in the promotion for developing and transition countries.
About FMO
The Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO) is a public-private development bank that supports financial institutions and governments through “loans, participations, guarantees and other investment promotion activities.” It was founded in 1970 by the “Dutch government, private sector, employers and employee organizations.” It has access to government funds and therefore can take higher risks with their investments including long-term finance. It also specializes in local-currency finance. In 2010 FMO gave approximately USD 3.3 million in loans.
About rAGMF
The responsAbility Global Microfinance Fund (rAGMF) is a microfinance investment vehicle (MIV) managed by responsAbility Social Investments 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 April 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) fund assets of USD 532 million in 2011.
About Triple Jump
Triple Jump was founded in 2006 to support the expansion of microfinance institutions (MFIs) through the provision of capital and advisory services. 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 (TJAS). TJFM provides its clients with four investment options: hard and local currency loans, equity, guarantees and subordinated loans. TJAS is an independent foundation that provides consulting services and technical assistance to tier-3 and tier-4 MFIs. Triple Jump manages five microfinance investment funds, with total assets approximately equivalent to USD 300 million as of March 31, 2011. Its investments span 132 MFIs in 52 emerging markets in Latin America, Eastern Europe, Africa and Asia.
By Charlotte Newman, Research Associate
Sources and Additional Resources:
[1] FINCA: “FINCA International Launches Socially-Responsible Investment Subsidiary”
http://www.finca.org/site/apps/nlnet/content2.aspx?c=6fIGIXMFJnJ0H&b=6088937&ct=10881409
[2] FINCA: “FINCA International and Partners Activate Final Funding for New Socially-Responsible Investment Subsidiary” http://www.finca.org/site/apps/nlnet/content2.aspx?c=6fIGIXMFJnJ0H&b=6088937&ct=11588009
MicroCapital.org story, June 24, 2011, “FINCA International Announces Launch of FINCA Microfinance Holding With Investments of $74m from IFC, KfW, FMO, responsibility, Triple Jump,”
https://www.microcapital.org/microcapital-brief-finca-international-announces-launch-of-finca-microfinance-holdings-with-investments-of-74m-from-ifc-kfw-fmo-responsability-triple-jump/
MicroCapital Universe Profile: FINCA International
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FINCA+International
MicroCapital Universe Profile: IFC
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29
MicroCapital Universe Profile: KfW Bankengruppe
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=KfWBankengruppe+%28KfW+Bank+Group%29
MicroCapital Universe Profile: FMO
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Nederlandse+Financierings-Maatschappijvoor+Ontwikkelingslanden+N.V.+%28Netherlands+Development+Finance+Company%2C+FMO%29
MicroCapital Universe Profile: Triple Jump
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Triple+Jump
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