MICROCAPITAL BRIEF: Incofin Investment Management’s Rural Impulse Fund (RIF) Acquires 15% Equity Stake in Financiera El Comercio (FIELCO) From Accion Gateway Fund

Rural Impulse Fund II (RIF II), which is managed by Belgian microfinance fund manager Incofin Investment Management (Incofin IM), recently announced that it has acquired a 15.3-percent stake in Financiera El Comercio (FIELCO), a microfinance institution focused on rural and agricultural markets in Paraguay. RIF II purchased these shares from Accion Gateway Fund, which is managed by US-based nonprofit Accion, for an undisclosed amount. FIELCO expects to use Incofin IM’s expertise in international microfinance to “strengthen its governance, focus on social performance and overall structure” [1] in order to expand its rural microfinance lending programs in Paraguay.

Financiera El Comercio (FIELCO), according to the US-based nonprofit Microfinance Information Exchange (MIX), has 59 branches across Paraguay, and 70 percent of its clients live in rural sectors. As of 2012, it reported total assets of USD 163 million, a gross loan portfolio of USD 127 million, 92,900 active borrowers, deposits of USD 101 million and 42,100 depositors. It also reported return on assets (ROA) of 2.29 percent and return on equity of 14.6 percent as of the same year. Incofin IM manages eight facilities with total outstanding investments of EUR 350 million (USD 479 million) in approximately 39 countries as of 2014. Rural Impulse Fund II (RIF II) has outstanding investments of EUR 58 million (USD 74.3 million) and a fund size of EUR 120 million (USD 173 million) as of 2013.

By Juan Blanco, Research Associate

About Financiera El Comercio

Financiera El Comercio (FIELCO), was established in Paraguay in 1976 as a limited, joint stock company operating as a lending institution. It operates a network of 59 branches and service centers across Paraguay, serving approximately 127,000 clients with a total of 1,000 employees. It offers loan products and savings with approximately 70% of its clients living in rural areas. According to the US-based nonprofit Microfinance Information Exchange (MIX), it reported total assets of USD 163 millions, a gross loan portfolio of USD 127 million, 92,900 active borrowers, deposits of USD 101 million and 42,100 depositors as of 2012. It also reported return on assets (ROA) of 2.29 percent and return on equity of 14.6 percent as of the same year.

About Incofin Investment Management

Incofin Investment Management is a private Belgian company that develops and manages funds investing in microfinance institutions (MFIs) in developing countries. It manages eight facilities with total outstanding investments of EUR 350 million (USD 479 million) in approximately 39 countries as of 2014.

Sources and Additional Resources

[1] Incofin Investment Management, “Rural Impulse Fund II takes significant equity stake in Financiera El Comercio, the most rural MFI in Paraguay,” April 7, 2014, https://www.incofin.com/en/news/rural-impulse-fund-ii-takes-significant-equity-stake-financiera-el-comercio-most-rural-mfi

MicroCapital Story, April 7, 2014, “Kenya Women’s Finance Trust (KWFT) Receives $16m in Equity Investments from Incofin’s Rural Impulse Fund II (RIF II), Norwegian Microfinance Initiative (NMI) Fund III, NMI Frontier Fund,” https://www.microcapital.org/microcapital-brief-kenya-womens-finance-trust-kwft-receives-16m-in-equity-investments-from-incofins-rural-impulse-fund-ii-rif-ii-norwegian-microfinance-initiative-nmi-fund-i/

MicroCapital Story, March 11, 2014, “Incofin’s Rural Impulse Fund II, Norwegian Microfinance Initiative (NMI) Frontier Fund, Invest $4.5m in Fusion Microfinance of India,” https://www.microcapital.org/microcapital-brief-incofins-rural-impulse-fund-ii-norwegian-microfinance-initiative-nmi-frontier-fund-invest-4-5m-in-fusion-microfinance-of-india/

MicroCapital Story, June 16, 2012, “responsAbility Loans $3.3m to Microfinance Institutions D-Miro of Ecuador, Fielco of Paraguay, Nueva Vision of Peru,” https://www.microcapital.org/microcapital-brief-responsability-loans-3-3m-to-microfinance-institutions-d-miro-of-ecuador-fielco-of-paraguay-nueva-vision-of-peru/

MicroCapital Story, April 15, 2011, “International Finance Corporation (IFC) Loans $30m to Banco Regional of Paraguay to Improve Access to Financial Services for Small and Medium-Sized Enterprises (SMEs),” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-loans-30m-to-banco-regional-of-paraguay-to-improve-access-to-financial-services-for-small-and-medium-sized-enterprises-smes/

MicroCapital Universe Profile: Financiera El Comercio (FIELCO), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Fielco

MicroCapital Universe Profile: Incofin Investment Managament (Incofin IM), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Incofin+Investment+Management+%28Incofin+IM%29

MicroCapital Universe Profile: Incofin Rural Impulse Funds (RIFs), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Incofin+Rural+Impulse+Funds+%28RIFs%29

MicroCapital Universe Profile: Accion International, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Accion

MicroCapital Universe Profile: Accion Gateway Fund, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ACCION+Gateway+Fund%2C+LLC

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