MICROCAPITAL BRIEF: Microfinance Enhancement Facility (MEF) Raises $25m via German Bank Gemeinschaftsbank für Leihen und Schenken (GLS)

Gemeinschaftsbank für Leihen und Schenken (GLS), a German bank that focuses on investing in social and ecological projects, has received USD 25 million from unspecified private investors to contribute to the Microfinance Enhancement Facility (MEF), a Luxembourg-based fund that aims to support the growth of microfinance institutions active in the trade, service and agriculture sectors in developing countries by providing them with refinancing liquidity. The capital injection is expected to fund 7,000 loans to MSEs.

Since its inception in February 2009 through June 2013, MEF has financed 212,000 loans totaling USD 768 million. As of December 2013, MEF had total assets of USD 503 million. MEF was founded by the IFC and KfW Entwicklungsbank.

As of 2013, GLS had total assets of EUR 3.2 billion (USD 4 billion), deposits of EUR 2.8 billion (USD 3.5 billion), a gross loan portfolio of EUR 1.7 billion (USD 2.1 billion) and total customers of 165,000.

By Simon Pfanner, Research Associate

About Microfinance Enhancement Fund

Created in February 2009 by the International Finance Corporation (IFC), the private-investment arm of the US-based World Bank Group, and the German development bank Kreditanstalt für Wiederaufbau (KfW) Entwicklungsbank, the Microfinance Enhancement Facility (MEF) aims to support the growth of microfinance institutions by providing them with refinancing liquidity. Co-managed by BlueOrchard Finance SA, Cyrano Management SA and responsAbility Investments AG, the fund has a target size of USD 500 million. Since its inception in February 2009 through June 2013, MEF has financed 212,000 loans totaling USD 768 million. As of December 2013, MEF had total assets of USD 503 million.

About Gemeinschaftsbank für Leihen und Schenken (GLS)

Gemeinschaftsbank für Leihen und Schenken (GLS) was established in 1974 by Wilhelm Ernst Barkhoff and Gisela Reuther under an “ethical” model that focuses on investing in social and ecological projects. Among other efforts, the bank finances sustainable energy programs, housing programs for low-income people, and the operations and capital needs of small and medium-sized enterprises (SMEs). As of 2013, GLS had total assets of EUR 3.2 billion (USD 4 billion), deposits of EUR 2.8 billion (USD 3.5 billion), a loan portfolio of EUR 1.7 billion (USD 2.1 billion) and total customers of 165,000.

Sources and Additional Resources

[1] Microfinance Enhancement Facility Press Release, GLS Bank secures USD 25 million of private investments in the Microfinance Enhancement Facility

MicroCapital, December 31, 2013, Deutsche Bank Secures $75m for Microfinance Enhancement Facility for On-lending to Micro-, Small Enterprises

MicroCapital, February 7, 2012, DemirBank of Azerbaijan to Borrow $8m from Microfinance Enhancement Facility, Co-Managed by responsAbility

MicroCapital Universe Profile: Microfinance Enhancement Facility

MicroCapital Universe Profile: Gemeinschaftsbank für Leihen und Schenken (GLS)

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