MICROCAPITAL BRIEF: Incofin’s Rural Impulse Fund Loans $750k to Bimputh Finance of Sri Lanka for Microfinance

Belgium-based Incofin Investment Management (Incofin IM), a private company that manages funds investing in microfinance institutions (MFIs) and directly invests in companies in developing countries, recently disbursed a loan of USD 750,000, via its Rural Impulse Fund (RIF I), to Bimputh Finance, a Sri Lankan non-banking finance company. It is expected that Bimputh Finance will use the funds to expand its microfinance services in Sri Lanka. It is also anticipated that the funds will enable Bimputh Finance to introduce microhousing and microsavings products to the Sri Lankan market. Mumbai-based TSW Capital Services acted as the sole financial advisor to Bimputh Finance for this deal.

Mr Daya Gamage, the chairman of Bimputh Finance, said that “Bimputh Finance has come a long way since 2007. Going forward we aim to become one of the leading microfinance institutions in Sri Lanka, providing our clients with facilities at the lowest interest rates possible in order to promote and nurture their enterprises. Incofin IM’s value addition to our business comes not just from financing our expansion plans but also from their technical knowledge, guidance and transfer of best practices”[1].

Mr Aditya Bhandari, the regional director of South Asian operations of Incofin IM, added that “our partnership with Bimputh shows our commitment and ability to take a leadership position in identifying strong and likeminded institutions which are focused in providing access to finance to the masses. The Sri Lankan microfinance market is quick evolving and our partnership will enable Bimputh to be ahead in adapting to the global best practices.”

Bimputh Finance reported total assets of LKR 843.1 million (USD 6.5 million), loans and advances to customers of LKR 678.2 million (USD 5.2 million) and customer deposits of LKR 417.9 million (USD 3.2 million) as of March 31, 2013. Incofin IM manages eight facilities with total outstanding investments of EUR 350 million (USD 479 million) as of 2014.

By Alíz Crowley, Research Associate

About Bimputh Finance Public Limited Company (PLC)

Bimputh Finance Public Limited Company PLC was established in 2007 with the aim of increasing the living standards of low-income households in Sri Lanka. The organization initially provided microloans for the cultivation of sugar cane, rice and other crops. In addition to microloans, the organization offers deposits, leasing, pawning and agricultural loans. Since 2012, the organization has been listed on the Colombo Stock Exchange. As of 2014, Bimputh Finance has 15 branches and five service centers in the districts of Ampara, Badulla, Batticoloa, Colombo, Gampaha, Hambantota, Jaffna, Kalutara, Monaragala and Puttlam. As of 2014, the organization is registered as a non-banking financial institution with the Central Bank of Sri Lanka and has 85,000 customers including 28,000 microfinance customers. Bimputh Finance reported total assets of LKR 843.1 million (USD 6.5 million), loans and advances to customers of LKR 678.2 million (USD 5.2 million), and customer deposits of LKR 417.9 million (USD 3.2 million) as of March 31, 2013.

About Incofin Investment Management

Incofin Investment Management is a private Belgian company that develops and manages funds investing in microfinance institutions (MFIs) and companies 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 Incofin Rural Impulse Funds (RIFs I and II)

The Incofin Rural Impulse Funds (RIF) were launched by Incofin Investment Management to invest in rural microfinance institutions (MFIs) that are deemed commercially viable. The two funds include Rural Impulse Fund I and Rural Impulse Fund II. They 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 2013, Rural Impulse Fund I had outstanding investments of EUR 27.8 million (USD 35.6 million) and a fund size of EUR 30 million (USD 38 million), while Rural Impulse Fund II had outstanding investments of EUR 58 million (USD 74.3 million) and a fund size of EUR 120 million (USD 173 million).

Sources and Additional Resources

[1] Press Release sent to MicroCapital by Incofin Investment Management

[2] Bimputh Finance, About Us

[3] Colombo Stock Exchange, Bimputh Finance, Financials

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