Belgian microfinance fund manager Incofin Investment Management (Incofin IM) recently loaned USD 1 million to Fundación para el Desarrollo Socioeconómico Rural (FUNDESER), a Nicaraguan nongovernmental organization (NGO), through a fund it manages, the Rural Impulse Fund II. FUNDESER has been an Incofin investee since 2008 and will use the funds to aid individuals in rural regions of Nicaragua, specifically in the agricultural and trade sectors. Incofin will also provide technical assistance and guidance to FUNDESER as it seeks to convert into a regulated financial institution. Although the reason FUNDESER seeks to become a regulated institution has not been disclosed, MFIs sometimes take this step to expand the types of investment they are allowed to accept.
Established as a credit and training program for small-scale farmers, FUNDESER became an NGO in 2000. It offers loans for working capital, home improvement and education through its 18 branches. As of 2011, FUNDESER reports to the US-based Microfinance Information Exchange (MIX) total assets of USD 16.9 million, a gross loan portfolio of USD 12.8 million outstanding with 25,000 active borrowers, return on assets (ROA) of 0.39 percent and return on equity (ROE) of 6 percent. FUNDESER does not accept deposits as of 2012, although it is licensed to do so.
The Incofin Rural Impulse Funds (RIF) were launched by Incofin IM to invest in rural microfinance institutions (MFIs) that are deemed commercially viable. As of June 2011, Incofin manages six facilities with total outstanding investments of USD 425 million in 39 countries. As of October 31, 2011, Rural Impulse Fund II has outstanding investments of EUR 33.1 million (USD 46.0 million) and a fund size of EUR 120 million (USD 173 million).
By Sarah Benali, Research Associate
About Fundación para el Desarrollo Socioeconómico Rural (FUNDESER)
Fundación para el Desarrollo Socioeconómico Rural (FUNDESER) is a nongovernmental organization (NGO) in Managua, Nicaragua. FUNDESER started as a credit and training program for small farming producers before being established as an NGO in 2000. It mainly focuses on helping borrowers in rural regions of Nicaragua offering loans for working capital, home improvement and education. The agricultural sector receives 53 percent of loans disbursed by FUNDESER while 36 percent is directed to the trade sector through 18 branches nationwide. As of 2011, FUNDESER reports to the US-based Microfinance Information Exchange (MIX) total assets of USD 16.9 million, a gross loan portfolio of USD 12.8 million outstanding with 25,000 active borrowers, return on assets (ROA) of 0.39 percent and return on equity (ROE) of 6 percent FUNDESER does not accept deposits as of 2012, although it is licensed to do so. FUNDESER is in the process of becoming a regulated financial institution as of 2012.
About Incofin Rural Impulse Funds (RIFs)
The Incofin Rural Impulse Funds (RIF) were launched by Incofin Investment Management to invest in rural microfinance institutions (MFIs) that are deemed commercially viable. Rural Impulse Fund I and Rural Impulse Fund II target both farm and non-farm populations in small towns and villages. The funds invest primarily through loans, though they make equity investments and guarantees as well. As of 2012, Rural Impulse Fund I has outstanding investments of EUR 31.7 million (USD 41.5 million) and a fund size of EUR 30 million (USD 38 million), while Rural Impulse Fund II has outstanding investments of EUR 59 million (USD 77.3 million) and a fund size of EUR 120 million (USD 173 million).
About Incofin Investment Management (Incofin IM)
Incofin Investment Management is a private Belgian company that develops and manages funds investing in microfinance institutions (MFIs) in developing countries. As of June 2011, Incofin manages six facilities with total outstanding investments of USD 425 million in 39 countries.
Sources and Additional Resources
Incofin Press Release: “Incofin IM supports Fundeser’s professionalization in post-crisis Nicaragua,” December 2012, https://www.incofin.com/en/news/incofin-im-supports-fundesers-professionalization-post-crisis-nicaragua?%20December%202012
MicroCapital.org story: “MICROCAPITAL BRIEF: Microfinance Fund Manager Incofin Receives $1.3m Equity Investment from Gimv of Belgium,” November 24, 2012, https://www.microcapital.org/microcapital-brief-microfinance-fund-manager-incofin-receives-1-3m-equity-investment-from-gimv-of-belgium/
MicroCapital.org story: “MICROCAPITAL BRIEF: ACCION’s Centre for Financial Inclusion Offers Lessons Learned from Nicaraguan Microfinance Crunch, Reiterates Six-Point Agenda For ‘Recalibration of Industry Worldwide,” February 15, 2011, https://www.microcapital.org/microcapital-brief-accions-centre-for-financial-inclusion-offers-lessons-learned-from-nicaraguan-microfinance-crunch-reiterates-six-point-agenda-for-%E2%80%9Crecalibration%E2%80%9D-of-industry-wor/
MicroCapital.org story: “MICROCAPITAL BRIEF: Vice President of the Economic Commission of Nicaragua Urges the Passing of a Microfinance Law in Wake of ‘No Pago’ Movement, Liquidation of Microfinance Institution Banco del Exito’s (Banex),” November 9, 2010, https://www.microcapital.org/microcapital-brief-vice-president-of-the-economic-commission-of-nicaragua-urges-the-passing-of-a-microfinance-law-in-wake-of-no-pago-movement-liquidation-of-microfinance-institution-banco-del-ex/
MicroCapital.org story: “MICROCAPITAL BRIEF: Microfinance Investment Manager BlueOrchard Finance Invests $8m in Caja Municipal de Ahorro y Credito (CMAC) Ica and Crear Arequipa of Peru, Pro Mujer Bolivia and Fundacion para el Desarrollo Socioeconomico Rural (FUNDESER) of Nicaragua,” November 1, 2010, https://www.microcapital.org/microcapital-brief-microfinance-investment-manager-blueorchard-finance-invests-8m-in-caja-municipal-de-ahorro-y-credito-cmac-ica-and-crear-arequipa-of-peru-pro-mujer-bolivia-and-fundacion-para-el/
MicroCapital Universe Profile: Fundación para el Desarrollo Socioeconómico Rural (FUNDESER)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Fundaci%C3%B3n+para+el+Desarrollo+Socioecon%C3%B3mico+Rural+%28FUNDESER%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: Incofin Investment Management (Incofin IM) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Incofin+Investment+Management+%28Incofin+IM%29
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