MICROCAPITAL BRIEF: Seven International Lending Institutions Launch Council on Smallholder Agricultural Finance (CSAF)

The Council on Smallholder Agricultural Finance (CSAF), an alliance focused on creating a sustainable financial market for small agricultural businesses, recently was launched by seven international lending institutions at the 11th Skoll World Forum on social entrepreneurship in Oxford, United Kingdom. CSAF’s founding members are Alterfin, a Belgium-based cooperative that invests in microfinance institutions (MFIs) and fair trade producers’ associations; Oikocredit, a Dutch cooperative investment fund; Rabo Rural Fund, which is part of the Rabobank Foundation of the Netherlands and supports farming cooperatives and small and medium-sized enterprises (SMEs) in developing countries; responsAbility Investments AG, a Swiss-based investor in microfinance and other sectors; Root Capital, a US-based nonprofit social investment fund; Shared Interest Society, a UK-based nonprofit fair trade lender; and Triodos Investment Management, a subsidiary of Netherlands-based Triodos Bank that provides loans to farmer organizations and SMEs in developing countries.

CSAF will focus on the creation of sustainable and transparent financial markets that can support small and growing agricultural businesses in low- and middle-income countries. CSAF will meet regularly for members to exchange learning experiences, develop best practices and create performance standards. The founding institutions reportedly have indicated that additional members that “share their vision” could be added to CSAF in the future.

There is no financial information available for Alterfin. Oikocredit reported total assets of EUR 723 million (USD 960 million) and 854 active investees, of which 598 were MFIs, as of 2012. The Rabobank Foundation reported total assets of EUR 35 million (USD 48 million) as of 2012. ResponsAbility reported total assets under management of approximately USD 2 billion as of March 2014. Root Capital reported total assets of USD 100 million as of 2012. Shared Interest Society reported total assets of GBP 31 million (USD 52 million) as of 2013, and Triodos Investment Management managed 19 funds and had EUR 2.2 billion (USD 2.9 billion) in total assets as of 2012.

By Juan Blanco, Research Associate

About Alterfin

Alterfin is a cooperative society formed in 1994 whose members include financial institutions, social organizations, private companies, and individuals. Its initial shareholders were 11.11.11, an umbrella-organization of Flemish non-governmental organizations (NGOs); eight NGOs and two banks: Mercator Bank, which is owned by Belgian insurance company ING, and Triodos Bank, a Dutch commercial bank with a social mission. Alterfin invests in microfinance institutions (MFIs) and associations of fair trade producers in Africa, Asia, and Latin America. Financial data on the organization is unavailable.

About Oikocredit

Oikocredit is a Dutch cooperative investment fund comprised of church groups, cooperatives and individual investors. Established in 1975, it works in 70 countries, investing mainly in microfinance institutions (MFIs), as well as trade cooperatives, fair trade organizations and small and medium-sized enterprises (SMEs) in the developing world. As of 2012, Oikocredit reported total assets of EUR 723 million (USD 960 million) and 854 active investees, of which 598 were MFIs.

About Rabobank Foundation

The Rabobank Foundation was created in 1973 by Rabobank Group, a bank located in the Netherlands. In the Netherlands, the Foundation focuses on three main themes: health and welfare; sports and recreation; and employment and education. In developing countries, the Foundation focuses on microfinance by providing loans and financial services to microfinance institutions (MFIs). The foundation reported total assets of EUR 35 million (USD 48 million) as of 2012.

About ResposAbility Investments AG

Founded in 2003, responsAbility Investments AG is a Swiss investment company whose products aim to enable investors to earn a financial return while assisting people in emerging markets to access information and services in sectors such as microfinance, small and medium-sized enterprise (SME) financing, fair trade and independent media. ResponsAbility is backed by Swiss financial institutions and a social venture capital company as founders and shareholders including Baumann & Cie, Banquiers, Credit Suisse, Raiffeisen Schweiz, Swiss Re, Bank Vontobel AG as well as George Avenue. As of March 2014, responsAbility reported total assets under management of approximately USD 2 billion.

About Root Capital

Root Capital is a US-based nonprofit social investment fund that was founded in 1999. It provides capital, financial education and market connections to small businesses in the developing world. Root Capital has provided services across 26 countries in Latin America and Africa. As of 2012, Root Capital reported total assets of USD 100 million.

About Shared Interest Society

Shared Interest Society is a nonprofit fair trade lender based in the United Kingdom. It links social investors with fair trade organizations needing finance. In 2013, 8,800 members invested GBP 29 million (USD 48 million) in 62 countries. It reported total assets of GBP 31 million (USD 52 million) as of 2013.

About Triodos Investment Management

Triodos Investment Management is subsidiary of Dutch Triodos Bank that manages funds in a range of areas including financial-sector development in developing countries, renewable energy finance and venture capital. As of 2012, Triodos Investment Management managed 19 funds and had EUR 2.2 billion (USD 2.9 billion) in total assets under management. Combined, these funds provide finance to approximately 100 microfinance institutions (MFIs) in approximately 45 countries.

Sources and Additional Resources

[1] Council on Small Agricultural Finance, “Social Lenders Join Forces to Develop Industry Standards, Best Practices for Smallholder Agricultural Finance,” April 2014, http://www.csaf.net/press/social-lenders-join-forces-to-develop-industry-standards/

MicroCapital Story, April 9, 2014, “responsAbility Investments Lends $4m to Opportunity International Bank of Malawi,” https://www.microcapital.org/microcapital-brief-responsability-investments-lends-4m-to-opportunity-international-bank-of-malawi/

MicroCapital Story, February 3, 2014, “Triodos Investment Management Loans $1m each to Advans Banque Congo, Microfinance Institution (MFI) Vitas Jordan,” https://www.microcapital.org/microcapital-brief-triodos-investment-management-loans-1m-each-to-advans-banque-congo-microfinance-institution-mfi-vitas-jordan/

MicroCapital Story, September 23, 2013, “Ujjivan Financial Services Raises $7.9m from Oikocredit for On-Lending to Microfinance Clients,” https://www.microcapital.org/microcapital-brief-ujjivan-financial-services-raises-7-9m-from-oikocredit-for-on-lending-to-microfinance-clients/

MicroCapital Story, January 22, 2013, “IFC, Global Agriculture and Food Security Program Invest $10m in Root Capital for Farmers in Africa, Latin America,” https://www.microcapital.org/microcapital-brief-ifc-global-agriculture-and-food-security-program-invest-10m-in-root-capital-for-farmers-in-africa-latin-america/

MicroCapital Story, September 9, 2010, “Dutch Microfinance Organization Qredits Receives $38.6 m in Loans From BNG, Rabobank, ING and ABN-AMRO,” https://www.microcapital.org/microcapital-brief-dutch-microfinance-organization-qredits-receives-38-6-m-in-loans-from-bng-rabobank-ing-and-abn-amro/

MicroCapital Universe Profile: Alterfin, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ALTERFIN

MicroCapital Universe Profile: Oikocredit, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Oikocredit

MicroCapital Universe Profile: Rabobank Foundation, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Rabobank+Foundation

MicroCapital Universe Profile: ResposAbility Investments AG, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=responsAbility

MicroCapital Universe Profile: Root Capital, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Root+Capital

MicroCapital Universe Profile: Triodos Investment Management, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Triodos+Investment+Management

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