MICROCAPITAL BRIEF: Incofin VDK MFI Loan Portfolio Loans $5m to Mongolian Microfinance Institution XacBank

Incofin Investment Management (Incofin), a Belgian fund manager that invests in microfinance, recently reported to MicroCapital that it loaned USD 5 million from the Incofin VDK MFI Loan Portfolio to XacBank, a community development microfinance institution (MFI) in Mongolia. Incofin VDK MFI Loan Portfolio is a microfinance investment vehicle that was launched in 2007 by Volksdepositokas (VDK) spaarbank, a Belgian savings bank and shareholder in Incofin.

XacBank aims to provide “inclusive and value adding financial services to the citizens and expatriates, institutions and enterprises of Mongolia, while maintaining its leadership in the global microfinance industry.” According to Incofin, XabBank’s mobile service and franchise models are expected to enable the bank to increase rural outreach significantly. As of 2010, XacBank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 380 million, a gross loan portfolio of USD 264 million, approximately 75,700 borrowers, a return on assets (ROE) of 0.43 percent and return on equity (ROE) of 5.29 percent. As of June 2011, Incofin has invested a total of EUR 182 million (USD 261 million) in 101 MFIs in 39 countries through six funds.

By Carol Kim, Research Associate

About Incofin Investment Management (Incofin): Incofin is a Belgian fund manager that invests in microfinance institutions (MFIs). Incofin Investment funds, especially Rural Impulse Funds I and II, focus on investing in institutions providing financial services to people in underserved areas. Incofin manages a total of six funds including Impulse Microfinance Investment Fund, VDK MFI Loan Portfolio and Volksvermogen.  As of June 2011, Incofin has invested a total of EUR 182 million (USD 261 million) in 101 MFIs in 39 countries.

About Incofin VDK MFI Loan Portfolio: Incofin VDK MFI Loan Portfolio was launched in 2007 by Volksdepositokas (VDK) spaarbank, a Belgian savings bank and shareholder in Incofin. At that time VDK earmarked EUR 75 million (USD 110 million) for the fund and appointed Incofin to manage the facility. The fund invests in larger microfinance institutions (MFIs) that are deemed high-quality. Incofin is a cooperative company (with limited liability) that invests in MFIs and manages six funds that invest in microfinance.

About XacBank: XacBank is a community development microfinance institution (MFI) founded in 1998 that aims to become a commercial financial institution “ providing inclusive and value adding financial services to the citizens and expatriates, institutions and enterprises of Mongolia, while maintaining its leadership in the global microfinance industry.” XacBank is a subsidiary of TenGer Financial Group, a regional family of companies that also include XacLeasing, XacSecurity, TenGer Solutions and TenGer Insurance. As of 2010, XacBank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 380 million, a gross loan portfolio of USD 264 million, approximately 75,700 borrowers, a return on assets (ROE) of 0.43 percent and return on equity (ROE) of 5.29 percent.

Sources and Additional Resources:

Incofin Newsletter sent to MicroCapital, June 2011

MicroCapital.org: “MICROCAPITAL BRIEF: Belgium’s Incofin Loans $3.5m to Microfinance Institutions (MFIs) Forus Bank of Russia, CIDRE (Centro de Investigación y Desarrollo Regional) of Bolivia”, April 1, 2011, http://www.microcapital.org/microcapital-brief-belgium’s-incofin-loans-3-5m-to-microfinance-institutions-mfis-forus-bank-of-russia-cidre-centro-de-investigacion-y-desarrollo-regional-of-bolivia/

MicroCapital.org: “MICROCAPITAL BRIEF: Belgian Incofin Loans $1.5m to TenGer Financial Group of Mongolia”, February 11, 2011, http://www.microcapital.org/microcapital-brief-belgian-incofin-loans-1-5m-to-tenger-financial-group-of-mongolia-2/

MicroCapital’s Universe Profile: Incofin Investment Management (Incofin), http://www.microcapital.org/microfinanceuniverse/tiki-

MicroCapital’s Universe Profile: Incofin VDK MFI Loan Portfolio, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Incofin+VDK+MFI+Loan+Portfolio

MicroCapital’s Universe Profile: XacBank, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=XacBank

Browse the MicroCapital Universe and add your entry to the wiki at http://www.microcapital.org/microfinanceuniverse/

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