MICROCAPITAL BRIEF: Multilateral Investment Fund (MIF) Loans $6m to Peruvian Credit Unions Cooperativa de Ahorro y Crédito Abaco, Fortalecer

The Multilateral Investment Fund (MIF), a member of the US-based Inter-American Development Bank (IDB) Group, has disbursed loans to Peruvian credit unions Cooperativa de Ahorro y Crédito Abaco and Fortalecer to expand financial services via intermediaries, including other credit unions, private firms and non-governmental organizations (NGOs) that provide retail lending to rural clients.

MIF has provided a subordinated loan of USD 5 million to Cooperativa de Ahorro y Crédito Abaco to boost Abaco’s Tier-2 capital and leverage these funds with the goal of accessing approximately USD 20 million in further funding. MIF also will help Abaco obtain additional funding through Music Securities, a Japanese financial broker that operates a crowdfunding platform. Through approximately 36 partners, including NGOs, credit unions and agroprocessing companies, Abaco will seek to reach a total of 13,000 micro- and small-sized enterprises and small-scale farmers in Peru.

Additionally, MIF has loaned USD 1 million to Fortalecer for on-lending to its member credit unions and microfinance institutions, which will provide direct financing to rural micro- and small-sized enterprises. Specifically, the project seeks to broaden financial services for women-led enterprises by providing “long-term” investment capital, management training, technical assistance and increased market access to facilitate job growth and profitability.

Fortalecer was founded in the Peruvian city of Lima in 1998. It has 41 members including 28 NGOs, 11 credit unions and two international partners. Fortalecer reports total assets of PEN 16 million (USD 5.7 million) as of December 2013. Abaco is based in the Peruvian city of Lima and was founded in 1981. As of 2008, Abaco reports total assets of PEN 459 million (USD 145 million). More recent financial data on Abaco is unavailable. Since its inception in 1993, MIF reports having approved 1,600 projects in 19 countries, disbursing approximately USD 100 million per year in grants, equity and loans. As of December 2013, IDB reported total assets of USD 97 billion.

By Meraj Husain, Research Associate

About Multilateral Investment Fund (MIF)

The Multilateral Investment Fund (MIF) is an autonomous fund that was founded in 1993 by the US-based Inter-American Development Bank (IDB). Now a member of the IDB Group, MIF has 39 donating member countries from the Americas, Asia and Europe. Since its inception, MIF reports having approved 1,600 projects in 19 countries, disbursing approximately USD 100 million per year in grants, equity investments and loans.

About Inter-American Development Bank (IDB)

The Inter-American Development Bank (IDB) is a US-based multilateral finance institution that was established in 1959 and operates in Latin America and the Caribbean. IDB works with governments, companies and non-governmental organizations (NGOs) to provide both loans and grants to support small and medium-sized enterprises (SMEs), health, education and other sectors. IDB also provides technical assistance and research in these areas. Its Board of Executives is elected by 48 member countries, 26 of which are located in Latin America and the Caribbean. IDB is headquartered in Washington, DC, with offices also in Japan, France and all 26 member countries in Latin America and the Caribbean. As of December 2013, IDB reported total assets of USD 97 billion.

Sources and Additional Resources

[1] Information submitted to MicroCapital by Inter-American Development Bank (IDB), April 2014.

MicroCapital, March 25, 2014, “Multilateral Investment Fund (MIF) Donates $150k to Caribbean Information & Credit Rating Services CariCRIS of Trinidad and Tobago to Support Small, Medium-sized Enterprises,” https://www.microcapital.org/microcapital-brief-multilateral-investment-fund-mif-donates-150k-to-caribbean-information-credit-rating-services-caricris-of-trinidad-and-tobago-to-support-small-medium-sized-enterprises/

MicroCapital, February 25, 2014, “Inter-American Development Bank (IDB), MasterCard Partner to Support Financial Inclusion Transparency in Latin America, Caribbean,” https://www.microcapital.org/microcapital-brief-inter-american-development-bank-idb-mastercard-partner-to-support-financial-inclusion-transparency-in-latin-america-caribbean/

MicroCapital, May 1, 2013, “Multilateral Investment Fund to Invest $5.8m in Equity in Nxtp Labs of Argentina to Support Technology Start-ups in Latin America,” https://www.microcapital.org/microcapital-brief-multilateral-investment-fund-to-invest-5-8-million-in-equity-in-nxtp-labs-of-argentina-to-support-technology-start-ups-in-latin-america/

MicroCapital, February 22, 2013, “Multilateral Investment Fund (MIF) to Invest $2.5m in Equity in Microfinance Institution Fondesa of the Dominican Republic as it Seeks to Become a Regulated Entity,” https://www.microcapital.org/microcapital-brief-multilateral-investment-fund-mif-to-invest-2-5m-in-equity-in-microfinance-institution-fondesa-of-the-dominican-republic-as-it-seeks-to-become-a-regulated-entity/

MicroCapital, December 18, 2012, “Inter-American Development Bank to Allow Public to Select Programs Seeking to Improve Financial Inclusion for People with Disabilities in Latin America and the Caribbean,” https://www.microcapital.org/microcapital-brief-inter-american-development-bank-to-allow-public-to-select-programs-seeking-to-improve-financial-inclusion-for-people-with-disabilities-in-latin-america-and-the-caribbean/

MicroCapital, January 12, 2011, “Inter-American Development Bank (IDB) Makes $4m in Equity Investments in Solutiones de Microfinanzas SA (Microserfin) of Panama, Banco Procredit Honduras, enConfianza Microfinanceria of Mexic and $3.5m in Loans to Fondo de Desarrollo Regional (Fondesurco) of Peru, IFD Sembrar Sartawi of Bolivia,” https://www.microcapital.org/microcapital-brief-inter-american-development-bank-idb-makes-4m-in-equity-investments-in-solutiones-de-microfinanzas-sa-microserfin-of-panama-banco-procredit-honduras-enconfianza-microfinancie-2/

MicroCapital, September 10, 2009, “News Wire: Japan: Music Securities to Accept Retail Investments in Cambodian Microfinance,” https://www.microcapital.org/news-wire-japan-music-securities-to-accept-retail-investments-in-cambodian-microfinance/

MicroCapital Universe Profile: Multilateral Investment Fund (MIF)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Multilateral+Investment+Fund+%28MIF%29

MicroCapital Universe Profile: Inter-American Development Bank (IDB)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Inter-American+Development+Bank+%28IDB%29

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