MICROCAPITAL BRIEF: Nestlé Dominican Republic, Multilateral Investment Fund, Asociación Dominicana para el Desarrollo de la Mujer (ADOPEM) to Develop Microfranchise Distribution Project in the Dominican Republic

The Multilateral Investment Fund (MIF), a member of the US-based Inter-American Development Bank (IDB), recently announced that it has partnered with Asociación Dominicana para el Desarrollo de la Mujer (ADOPEM), a microfinance institution (MFI) in the Dominican Republic, and Nestlé Dominican Republic, a unit of the Switzerland-based multinational food and beverage company, to develop a project that will give low-income women in the country an opportunity to operate micro-franchises to distribute Nestlé products in their communities [1]. The project will be a part of the “Economic empowerment of low-income populations through integration into inclusive microfranchise-based social distribution networks,” an initiative of MIF. The total cost of the project is expected to be USD 1.1 million, of which Nestlé will provide USD 450,000, MIF will contribute USD 400,000 and the remaining USD 250,000 will be provided by ADOPEM Bank.

MIF was equipped with USD 1.2 billion at its inception in 1993 and, as of 2014, it had mobilized an additional USD 1.9 billion from its partners. From 1993 through December 2013, MIF reports having approved 1,800 projects in approximately 20 countries.

As of year-end 2013, ADOPEM reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 105 million, a gross loan portfolio of USD 83 million, approximately 177,900 borrowers and deposits of USD 45.5 million from 269,000 clients. It reported return on assets (ROA) of 5.91 percent and return on equity (ROE) of 24.99 percent.

Nestlé has a market capitalization of USD 230 billion and total assets of USD 118 billion as of 2013.

By Nisha Koul, Research Associate

About Multilateral Investment Fund: 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. MIF was equipped with USD 1.2 billion at its inception and, as of 2014, it had mobilized an additional USD 1.9 billion from its partners. From 1993 through December 2013, MIF reports having approved 1,800 projects in approximately 20 countries.

About Asociación Dominicana para el Desarrollo de la Mujer (ADOPEM): Established in 1982, Asociación Dominicana para el Desarrollo de la Mujer (ADOPEM) is a microfinance institution based in the Dominican Republic. It provides financial products and services including microloans, savings and insurance products. It also provides non-financial services such as enterprise skill development and financial literacy education. As of year-end 2013, ADOPEM reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 105 million, a gross loan portfolio of USD 83 million, approximately 177,900 borrowers and deposits of USD 45.5 million from 269,000 clients. It reported return on assets (ROA) of 5.91 percent and return on equity (ROE) of 24.99 percent.

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 nongovernmental 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] Multilateral Investment Fund, IDB signs agreement with ADOPEM and NESTLÉ to develop microfranchises

MicroCapital Story, May 2014, Multilateral Investment Fund (MIF) Allocates $5.3m to Test, Develop Social Impact Bond Market in Latin America, Caribbean

MicroCapital Story, October 2013, Asociación Dominicana para el Desarrollo de la Mujer (ADOPEM) of the Dominican Republic Lends $1.6m to 728 Micro-, Small, Medium-Sized Enterprises (MSMEs)

MicroCapital Universe Profile, Multilateral Investment Fund

MicroCapital Universe Profile, Asociación Dominicana para el Desarrollo de la Mujer (ADOPEM)

MicroCapital Universe Profile, Inter-American Development Bank (IDB)

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