MICROCAPITAL BRIEF: Rural Impulse Fund II, MicroVest II, ASN-Novib Fund Purchase 45% Stake In Arnur Credit Microfinance Institution of Kazakhstan

Rural Impulse Fund II, a Belgian microfinance investment vehicle managed by Incofin Investment Management; MicroVest II, a US-based equity fund managed by MicroVest Capital Management, and ASN-Novib fund, a Dutch microfinance investment vehicle managed by Triple Jump, have taken stakes totaling 45 – percent ownership in Arnur Credit, a microfinance institution (MFI) based in Kazakhstan. The breakdown of the shareholding among the three investors has not been disclosed. The remaining shares of the MFI are owned by Kazakh credit association ORDA Credit. The new investors will actively participate in Arnur Credit’s activities with the goal of maintaining its focus on the rural and agricultural sectors by joining the board of directors. All of the investors have been lending to Arnur Credit for at least two years.

Arnur Credit, which was established in 2001, operates 38 branches in South Kazakhstan and has plans to open branches in the districts of Almaty, Kyzylorda and Zhambyl. It offers five loan products to clients: agricultural loans, group loans, entrepreneurial loans, express loans and consumer loans.

According to 2010 data reported to the Us-based nonprofit Microfinance Information Exchange (MIX), Arnur Credit held a gross loan portfolio of USD 6.1 million disbursed to approximately 3,180 borrowers. It also reported total assets of USD 7.5 million, return on assets of 2.23 percent and return on equity of 6.13 percent.

By Charlotte Newman, Research Associate

About Arnur Credit
Arnur Credit is a microfinance institution (MFI) that provides microcredit in Kazakhstan. As of December 31, 2010, Arnur Credit reported to the US-based nonprofit Microfinance Information Exchange (MIX) USD 7.5 million in assets, a gross loan portfolio of USD 6.1 million, return on assets (ROA) of 2.23 percent, return on equity (ROE) of 6.13 percent and approximately 3,180 active borrowers.

About Incofin Rural Impulse Funds (RIFs I and II)
The Incofin Rural Impulse Funds (RIF) were launched by Incofin Investment Management to invest in rural microfinance institutions (MFIs) that are deemed commercially viable. The two funds include Rural Impulse Fund I and Rural Impulse Fund II. They target both farm and non-farm populations in small towns and villages. The funds invest primarily through loans, though they make equity investments and guarantees as well. As of October 31, 2011, Rural Impulse Fund I has outstanding investments of EUR 25.7 million (USD 35.9 million) and a fund size of EUR 30 million (USD 38 million), while Rural Impulse Fund II has outstanding investments of EUR 33.1 million (USD 46.0 million) and a fund size of EUR 120 million (USD 173 million).

About MicroVest II
MicroVest II is an equity fund that invests in microfinance institutions in emerging markets. MicroVest II closed in February 2010 with USD 60 million in commitments. The fund will serve as a capital intermediary between investors and financial institutions that serve the poor. Lead investors in the fund include International Finance Corporation and Kinnevick New Ventures AB, a venture capital fund. MicroVest II is managed by MicroVest Capital Management, a for-profit organization in the US capital Washington, D.C.

About ASN-Novib Fund
The ASN-Novib Fund was created in 1999 by ASN-Bank (a Dutch ethical bank) and Oxfam Novib. The ASN-Novib Fund invests in microfinance institutions, savings and credit co-operatives, banks and investment funds that provide credit to small-scale entrepreneurs that are deemed to have proven management capacity. The fund is managed by Triple Jump Fund Management of the Netherlands. The fund lends mostly in USD and EUR currencies, though it also makes loans in local currency. Loan amounts range from EUR 500,000 to EUR 5 million, and have market interest rates.

About Triple Jump
Triple Jump was founded in 2006 to support the expansion of microfinance institutions (MFIs) through the provision of capital and advisory services. Triple Jump was established by the NOTS Foundation, a Dutch development organization; Oxfam Novib, a Dutch organization for international cooperation and development; and ASN Bank, a “sustainability-driven” Dutch bank. Its shares are divided among these organizations and Triple Jump’s management team. Triple Jump is comprised of Triple Jump Fund Management (TJFM) and Triple Jump Advisory Services (TJAS). TJFM provides its clients with four investment options: hard and local currency loans, equity, guarantees and subordinated loans. TJAS is an independent foundation that provides consulting services and technical assistance to tier-3 and tier-4 MFIs. Triple Jump manages five microfinance investment funds, with total assets approximately equivalent to USD 300 million as of March 31, 2011. Its investments span 132 MFIs in 52 emerging markets in Latin America, Eastern Europe, Africa and Asia.

About Incofin Investment Management
Incofin Investment Management is a private Belgian company that develops and manages funds investing in microfinance institutions (MFIs) in developing countries. As of June 2011, Incofin manages six facilities with total outstanding investments of USD 425 million in 39 countries.

About MicroVest Capital Management
Launched in 2004 with USD 15 million, MicroVest is a family of funds that invest in microfinance institutions (MFIs) in emerging markets. MicroVest is headquartered in Washington, DC, and was founded by CARE, MEDA and the Seed Capital Development Fund. As of June 2010, MicroVest reported a combined MFI gross loan portfolio of USD 3.1 billion.

Sources and Additional Resources:

Incofin: Press Release: “Rural Impulse Fund II, MicroVest II-A, LP and ASN-Novib Microcredit Fund Take a Stake in Arnur Credit,” http://www.incofin.com/en/news/rural-impulse-fund-ii-microvest-ii-lp-and-asn-novib-microcredit-fund-take-stake-arnur-credit

MicroCapital.org story, January 17, 2012, “MICROCAPITAL BRIEF: responsAbility Invests $2.3m in Microfinance Institutions Arnur Credit of Kazakhstan, FINCA Armenia, FinDev of Azerbaijan,” https://www.microcapital.org/microcapital-brief-responsability-invests-2-3m-in-microfinance-institutions-arnur-credit-of-kazakhstan-finca-armenia-findev-of-azerbaijan/

MicroCapital.org story, June 15, 2011, “MICROCAPITAL BRIEF: Triodos Invests in Microfinance Institutions (MFIs) KixiCredito of Angola, Advans Ghana, Arnur Credit of Kazakhstan, Belarusian Bank for Small Business, Kompanion of Kyrgystan,” https://www.microcapital.org/microcapital-brief-triodos-invests-in-microfinance-institutions-mfis-kixicredito-of-angola-advans-ghana-arnur-credit-of-kazakhstan-belarusian-bank-for-small-business-kompanion-of-kyrgyzstan/

MicroCapital Universe Profile: Arnur Credit

MicroCapital Universe Profile: Incofin Rural Impulse Funds (RIFs I and II)

MicroCapital Universe Profile: MicroVest II

MicroCapital Universe Profile: ASN-Novib Fund

MictroCapital Universe Profile: Triple Jump

MicroCapital Universe Profile: Incofin Investment Management

MicroCapital Universe Profile: MicroVest Capital Management

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