MICROCAPITAL BRIEF: Microfinance Investment Manager BlueOrchard Finance Invests $8m in Armeconombank of Armenia, Hattha Kaksekar Limited of Cambodia and KazMicrofinance of Kazakhstan

BlueOrchard Finance SA, a subsidiary of Switzerland-based commercial microfinance intermediary BlueOrchard, recently reported to MicroCapital the details of three debt investments made during the month of August 2010 to financial institutions Armeconombank of Armenia, Hattha Kaksekar Limited of Cambodia and KazMicrofinance LLC of Kazakhstan. BlueOrchard Finance loaned USD 4 million to Armeconombank, an open joint stock bank, in syndication with the European Bank for Reconstruction and Development, a London-based development financial institution. As of December 31, 2009, Armeconombank reports total assets of AMD 52.2 billion (the equivalent of USD 143 million). Armeconombank does not report to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse.

BlueOrchard Finance loaned USD 2 million to microfinance institution Hattha Kaksekar Limited. As of year-end 2009, Hattha Kaksekar Limited reports to MIX total assets of USD 33.4 million, a gross loan portfolio of USD 31.2 million, a return on assets of 3.45 percent, a return on equity of 16.57 percent and 40,285 active borrowers.

BlueOrchard Finance loaned the equivalent of USD 2 million to KazMicroFinance LLC, a non-bank financial institution. BlueOrchard Finance made this loan in local currency through the Dexia Microcredit Fund (DMCF), a microfinance investment vehicle managed by BlueOrchard Finance. As of year-end 2009, KazMicroFinance reported to MIX total assets of USD 48.2 million, a gross loan portfolio of USD 31.2 million, a return on assets of 3.31 percent, a return on equity of 14.81 percent and 23,963 active borrowers.

By Lindsey Shaughnessy, Research Associate

About BlueOrchard: BlueOrchard is a Switzerland-based, commercial microfinance intermediary that provides loans to microfinance institutions through its subsidiary BlueOrchard Finance S.A. and invests in the equity of microfinance institutions and microfinance network funds through its subsidiary BlueOrchard Investments S.A. BlueOrchard had approximately USD 980 million under management as of June 2009.

About Armeconombank: Armeconombank, founded in 1988, is an open joint stock bank that operates in Armenia. Armeconombank offers loans, savings, credit and personal banking services through 35 branches. As of December 31, 2009, Armeconombank reports total assets of AMD 52.2 billion (the equivalent of USD 143 million). Armeconombank does not report to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse.

About Dexia Microcredit Fund (DMCF): The Dexia Micro-Credit Fund (DMCF) invests in debt instruments issued by microfinance institutions (MFIs), which are retail microlenders. DMCF finances 88 institutions in 33 developing countries in Africa, Asia, Eastern and Central Europe and Latin America. DMCF is managed by BlueOrchard Finance SA. It is also certified by LuxFLAG, an organization that ascertains whether microfinance vehicles actually invest in the microfinance sector.

About the European Bank for Reconstruction and Development (EBRD): The European Bank for Reconstruction and Development (EBRD) is an international finance institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is now owned by 61 countries as well as the European Investment Bank and the European Union. It aims to finance operations that are both commercially viable and assist development in 29 countries in Eastern Europe and Central Asia. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro and small businesses as well as commercial banks and non-bank microfinance institutions (MFIs). As of the end of 2008, EBRD has operating assets worth EUR 5.2 billion, the equivalent of over USD 7 billion. Operating assets for fiscal 2009 are EUR 6.1 billion (USD 8 billion).

About Hattha Kaksekar Limited: Hattha Kaksekar Limited is a microfinance institution (MFI) based in Phnom Penh, Cambodia. It was founded in 1994 by two charitable organizations, the Organisation Canadienne pour la Solidarité et le Développement (OCSD) and Oxfam International. It was transformed into a non-governmental organization (NGO) in 1996 and a private liability company in 2001. Its financial supporters have included Oikocredit, Norfund, Triple Jump, the French Development Agency (AFD), and Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ). As of year-end 2009, Hattha Kaksekar Limited reports to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 33.4 million, a gross loan portfolio of USD 31.2 million, a return on assets of 3.45 percent, a return on equity of 16.57 percent and 40,285 active borrowers.

About KazMicroFinance LLC: KazMicroFinance LLC, founded in 1997, is a non-banking financial institution that offers training and individual and group loans across Kazakhstan. As of year-end 2009, KazMicroFinance reported to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 48.2 million, a gross loan portfolio of USD 31.2 million, a return on assets of 3.31 percent, a return on equity of 14.81 percent and 23,963 active borrowers.

Sources and Additional Resources:

[1] Per data submitted by BlueOrchard to MicroCapital September 2010

MicroCapital’s Microfinance Universe profile: Armeconombank

MicroCapital’s Microfinance Universe profile: BlueOrchard

MicroCapital’s Microfinance Universe profile: Dexia Microcredit Fund (DMCF)

MicroCapital’s Microfinance Universe profile: European Bank for Reconstruction and Development (EBRD)

MicroCapital’s Microfinance Universe profile: Hattha Kaksekar Limited

MicroCapital’s Microfinance Universe profile: KazMicroFinance LLC

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