MICROCAPITAL BRIEF: Incofin, Triodos Invest in Microfinance Institution (MFI) Arvand of Tajikistan

Belgium-based Incofin Investment Management (Incofin), a private company that manages funds investing in microfinance institutions (MFIs), and Netherlands-based Triodos Investment Management (Triodos), the subsidiary of Triodos Bank that manages funds in “energy and climate, emerging markets, arts and culture and sustainable real estate”[2], jointly acquired a 36-percent equity stake in Microcredit Deposit-Taking Organization Arvand (Arvand), an MFI that operates in and around Dushanbe, the capital of Tajikistan as well as in the country’s Sughd region. Incofin executed its investment via its Rural Impulse Fund II, and Triodos invested through the Triodos Microfinance Fund (TMF) and the Triodos Fair Share Fund (TFSF). Neither the portion of the shares taken by each entity nor the price they paid has been disclosed.

The aim of the investments is to assist in the expansion of Arvand as well as to help diversify its current product offerings. Incofin and Triodos will also provide technical assistance and capacity building services for Arvand. Additionally, Incofin and Triodos will be represented in Arvand’s board of directors.

Mr Ulugbek Khusanov, the Chairperson of the Board of Directors of Arvand said that “[…] with this investment, Arvand increases not only the capital base, but also attracts international experience and expertise[ …]”[1]. Mr Edwin Zimmermann, Incofin’s private equity manager added that “we are pleased […] to support the organization [Arvand] in its mission to improve the livelihood of population in Tajikistan through the delivery of suitable microfinance products and services”[1]. Mr Caspar Sprokel, Triodos’s manager said that “this is an exciting first equity investment for Triodos Investment Management in Central Asia. We are very much looking forward to be part of Arvand’s continuing journey to expand its outreach, especially in the rural areas of Tajikistan, and to further diversify its financial services”[1].

Arvand reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 25 million, a gross loan portfolio of USD 20.7 million, deposits of USD 2.9 million, approximately 2,500 depositors with 19,400 active borrowers, return on assets (ROA) of 4.49 percent and return on equity (ROE) of 29.7 percent as of December 2012. Incofin managed eight facilities with total outstanding investments of EUR 350 million (USD 479 million) in approximately 39 countries as of 2014. As of 2013, Triodos Investment Management managed 18 funds and had EUR 2.5 billion (USD 3.2 billion) in total assets under management.

Alíz Crowley, Research Associate

About Microcredit Deposit-Taking Organizaition (MDO) Arvand

Microcredit Deposit-Taking Organizaition (MDO) Arvand (Arvand) is a microfinance institution that was established in Tajikistan in 2002 by ACDI/VOCA (Agricultural Cooperative Development International/ Volunteers in Overseas Cooperative Assistance), a US-based nonprofit that promotes economic opportunity through cooperatives, enterprises and communities. Arvand was set up to provide microcredit to low-income individuals in Tajikistan. In addition to microcredit, Arvand provides deposit and microleasing services. As of December 2012, Arvand reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 25 million, a gross loan portfolio of USD 20.7 million, deposits of USD 2.9 million, approximately 2,500 depositors with 19,400 active borrowers, return on assets (ROA) of 4.49 percent and return on equity (ROE) of 29.7 percent.

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.

About Triodos Investment Management

Triodos Investment Management is subsidiary of the Netherlands’ Triodos Bank that manages funds in a range of areas including financial-sector development in developing countries, renewable energy finance and venture capital. As of 2013, Triodos Investment Management managed 18 funds and had EUR 2.5 billion (USD 3.2 billion) in total assets under management. Combined, these funds provide finance to approximately 100 microfinance institutions (MFIs) in approximately 45 countries.

Sources and Additional Resources

[1] Press Release Provided to MicroCapital by Incofin Investment Management, September 4, 2014

[2] Triodos Website, Who we are

[3] Incofin Investment Management, Rural Impulse Fund II

[4] Triodos Investment Management, Triodos Microfinance Fund

[5] Triodos Investment Management, Triodos Fair Share Fund

MicroCapital, August 14, 2014, India’s ESAF Microfinance and Investment Issues $7.8m In Non-Convertible Debentures (NCDs) to Triodos

MicroCapital, August 5, 2014, Incofin Investment Management Launches ProPulse Fund for Private Institutional Investors to Access Microfinance Institutions in Emerging Economies

MicroCapital, June 11, 2014, Opportunity Bank Serbia; MDO Arvand of Tajikistan; Bai Tushum, Kompanion of Kyrgyzstan Receive Smart Campaign Client Protection Certification

MicroCapital Universe Profile: Microcredit Deposit-Taking Organizaition (MDO) Arvand

MicroCapital Universe Profile: Incofin Investment Management

MicroCapital Universe Profile: Triodos Investment Management

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