The Multilateral Investment Fund (MIF), a member of the US-based IDB (Inter-American Development Bank) Group, reportedly has approved a USD 2.5 million equity investment in El Fondo para el Desarrollo, Inc. (FONDESA), a nonprofit microfinance institution in the Dominican Republic. The investment is intended to help FONDESA acquire status as a regulated microfinance institution under the new name Banco de Ahorro y Crédito FONDESA (BANFONDESA). According to information provided to MicroCapital by FONDESA, becoming a regulated microfinance institution will allow the organization to issue bonds and provide savings, insurance and remittance services. In addition to the equity investment, MIF will provide technical assistance worth up to USD 630,000 to help FONDESA make the transition.
MIF reports that the project is expected to expand access to financial services to nearly 100,000 clients, including rural and low-income populations and women. As of year-end 2011, FONDESA reported to the Microfinance Information Exchange (MIX), the US-based nonprofit data provider, total assets of USD 37.5 million, a gross loan portfolio of USD 34.8 million, 39,900 active borrowers, return on assets (ROA) of 6.56 percent and return on equity (ROE) of 18.5 percent.
By Brian LeBlanc, Research Associate
About El Fondo Para el Desarrollo, Inc. (FONDESA)
El Fondo Para el Desarrollo, Inc. (FONDESA) is a nonprofit microfinance institution operating in the Dominican Republic. Established in 1982, FONDESA provides micro- and small enterprises with credit and technical support services. As of year-end 2011, FONDESA reported to the Microfinance Information Exchange (MIX), the US-based nonprofit data provider, total assets of USD 37.5 million, gross loan portfolio of USD 34.8 million, 39,861 active borrowers, return on assets (ROA) of 6.56 percent and return on equity (ROE) of 18.5 percent. FONDESA does not accept deposits. As of 2013, FONDESA is in the process of applying for status as a regulated institution.
About Multilateral Investment Fund (MIF)
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, Europe and Asia. Since its inception, MIF reports having approved 1,600 projects in 19 countries, disbursing approximately USD 100 million per year in grants, equity and loans.
Sources and Additional Information
Information provided by Juan Lantigua, Director of Institutional Development, FONDESA
Multilateral Investment Fund Press Release, January 9, 2013, http://www5.iadb.org/mif/HOME/News/PressReleases/TabId/467/ArtMID/3819/ArticleID/49/The-MIF-works-to-improve-access-to-microfinance-services-in-rural-areas-of-the-Dominican-Republic.aspx
MicroCapital Universe Profile: Fondo Para el Desarrollo, Inc. (FONDESA) https://www.microcapital.org/microfinanceuniverse/tiki index.php?page=Fondo+Para+el+Desarrollo%2C+Inc.+%28FONDESA%29
MicroCapital Universe Profile: Multilateral Investment Fund (MIF) https://www.microcapital.org/microfinanceuniverse/tiki index.php?page=Multilateral+Investment+Fund+%28MIF%29
MicroCapital.org story, November 5, 2012, “MICROCAPITAL BRIEF: Habitat for Humanity, Citi Foundation, Multilateral Investment Fund (MFI), Unveil The Housing Microfinance: Product Development Toolkit,” https://www.microcapital.org/microcapital-brief-habitat-for-humanity-citi-foundation-multilateral-investment-fund-mif-unveil-the-housing-microfinance-product-development-toolkit/
MicroCapital.org story, August 6, 2012, “MICROCAPITAL BRIEF: Multilateral Investment Fund (MFI) to Place Equity Investment Grant in Microfinance Institution ACME of Haiti,” https://www.microcapital.org/microcapital-brief-multilateral-investment-fund-mif-to-place-equity-investment-grant-in-microfinance-institution-acme-of-haiti/
MicroCapital.org story, February 24, 2012, “MICROCAPITAL BRIEF: Multilateral Investment Fund (MFI) to Support Smart Campaign to Improve Client Protection in Latin America, Caribbean Microfinance Institutions,” https://www.microcapital.org/microcapital-brief-multilateral-investment-fund-mif-to-support-smart-campaign-to-improve-client-protection-in-latin-american-caribbean-microfinance-institutions/
MicroCapital.org Story, October 7, 2008, “MICROCAPITAL STORY: Fondo Para el Desarrallo and the Cisneros Foundation tean up to advance Microfinance in Miches, Dominican Republic,” https://www.microcapital.org/microcapital-story-fondo-para-el-desarrollo-inc-fondesa-and-the-cisneros-foundation-team-up-to-advance-microfinance-in-miches-dominican-republic/
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