MICROCAPITAL BRIEF: Incofin’s AgRIF, DWM’s Inclusive Finance Equity Fund II Invest $4m in Crystal, a Georgian Microfinance Institution Focusing on Rural Areas

The Agricultural Rural Impulse Fund (agRIF) together with the Inclusive Finance Equity Fund II recently acquired share capital valued at GEL 9 million (approximately USD 4 million) in Joint Stock Company Microfinance Organization Crystal (Crystal), a Georgian microfinance institution. AgRIF is managed by Incofin Investment Management (Incofin), a Belgium specialist in investing in microfinance institutions (MFIs), and the Inclusive Finance Equity Fund II is managed by the Developing World Markets (DWM), a US-based asset manager and investment bank. While the breakdown of the share purchases between the funds is not being disclosed, DWM’s new shares add to its previously existing stake. Incofin is a new investor in Crystal by virtue of its participation in the capital increase, which it is augmenting with the purchase of additional shares bought from unspecified investors. AgRIF and the Inclusive Finance Equity Fund II will own 38.1 percent and 12.7 percent, respectively, of Crystal following the transactions as well as taking up positions on Crystal’s supervisory board. The funds will be used to expand Crystal’s services in rural areas in Georgia and expand the range of services it offers.

As of August 2015, Crystal had 420 employees working in 30 branches. As of the same date, Crystal reported total assets of USD 48 million, a loan portfolio of USD 39 million and return on assets of 5.84 percent. As of December 2014 Crystal reported return on equity of 26 percent and zero deposits. Incofin reported total assets of EUR 59 million (approximately USD 66 million) and net operating profit of EUR 1.8 million (approximately USD 2 million) as of December 2015. As of December 2014, DWM manages approximately USD 490 million investments in 140 institutions in 40 countries.

By Imke Herholdt, Research Associate

About Joint Stock Company Microfinance Organization Crystal (Crystal)
Crystal is a microfinance institution (MFI) that was established in Tbilisi, Georgia, in 1998. Crystal was started with the aim of reducing poverty by providing financial services to low-income citizens. It received its banking licence in 2006. As of 2015, Crystal offers microfinance services primarily for smallholder agricultural producers and microenterprises that are located in rural areas of the country. As of August 2015, Crystal had 420 employees working in 30 branches. As of the same date, Crystal reported a loan portfolio of USD 39 million, total assets of USD 48 million and return on assets of 5.84 percent. As of December 2014 Crystal reported return on equity of 26 percent and zero deposits.

About Incofin Investment Management (Incofin)
Incofin Investment Management (Incofin IM) is a private, limited liability, Belgian company that develops and manages funds investing in microfinance institutions (MFIs) in developing countries. It focuses on rural microfinance, especially providing financial services for those who are active in the agricultural sector. It manages two funds, Rural Impulse Fund II, with assets under management of USD 135 million and agRIF, with assets under management of USD 112 million as of December 2015. Incofin also provides advisory services to an additional six funds, Incofin CVSO, Impulse Microfinance Investment Fund, Fairtrade Access Fund, Rural Impulse Fund I, VDK Loan Portfolio and Volksvermogen, with total assets under management of USD 478 as of December 2015. Incofin reported total assets of EUR 59 million (approximately USD 66 million) and net operating profit of EUR 1.8 million (approximately USD 2 million) as of December 2015.

About Developing World Markets (DWM)
Developing World Markets (DWM) is a US-based asset manager and investment bank dedicated to making socially positive investments to promote sustainable economic development. It provides both debt and equity investments to microfinance institutions (MFIs) and other socially motivated organizations. As of December 2014, DWM manages approximately USD 490 million investments in 140 institutions in 40 countries.

Sources and Additional Resources
[1] Incofin: Incofin IM and DWM take a joint 51% stake in JSC Microfinance Organization Crystal, Georgia
[2] MicroCapital Universe Profile: Incofin Investment Management
[3] MicroCapital Universe Profile: Developing World Markets (DWM)
[4] MicroCapital Universe Profile: Joint Stock Company Microfinance Organization Crystal
[5] Incofin
[6] Developing World Markets
[7] Crystal
[8] Mix Market: JSC MFO Crystal (formerly Crystal Fund)
[9] Information provided directly by Incofin

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