MICROCAPITAL BRIEF: DEG, FMO, Triodos to Invest Debt in Promerica of Nicaragua

Two microfinance investment vehicles, Triodos Microfinance Fund and Triodos Fair Share Fund, recently made a debt investment of unspecified amount in Promerica Financial Corporation (Promerica Group), a commercial bank based in Nicaragua. Triodos Investment Management, a subsidiary of Triodos Bank of the Netherlands, manages both funds. Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), the Dutch development bank; and Deutsche Investitions-und Entwicklungsgesellschaft (DEG), a German development bank, also participated in the investment with unspecified amounts of debt finance.

David Harleman, senior investment officer at Triodos Investment Management, stated that “small businesses are the main source of job creation in emerging markets and subsequently contribute to local development and social cohesion. In addition, a higher employment rate can lead to a better quality of life […] therefore, small-medium enterprise (SME) lending is necessary to stimulating this sector and thus facilitating local entrepreneurship”[1].

Promerica Group was founded in 1991 to provide financial services to the commercial and agricultural sectors of Nicaragua and now also serves Costa Rica, Ecuador, El Salvador and Guatemala. Promerica Group’s subsidiary banks serve approximately 1.3 million clients and approximately total 10,000 employees. As of December 2014, Promerica reported total assets of USD 2 billion, a loan portfolio of USD 2 billion, deposits of USD 1.6 billion, return on assets (ROA) of 1.9 percent and return on equity (ROE) of 21.2 percent.

By Jared Deveau, Research Associate

About Triodos Microfinance Fund

Triodos Microfinance Fund is a microfinance investment vehicle that mobilizes capital for microfinance institutions (MFIs). The organization invests 80 percent of its portfolio in established microfinance institutions (MFIs) and 20 percent in start-up institutions. The fund allocates approximately 30 percent of its holdings to equity and 70 percent to loans and debt securities. The fund gives institutional investors based in Belgium, Denmark, Luxembourg, the Netherlands, and the United Kingdom an opportunity to provide loans and equity to MFIs in Latin America, Africa, Asia and Eastern Europe. As of 2014, Triodos Microfinance Fund reported total assets of EUR 197.6 million (USD 232.9 million).

About Triodos Fair Share Fund

Triodos Fair Share Fund (TFSF) is a closed mutual fund managed by Triodos Bank, a fully licensed independent bank with branch offices in Belgium, the Netherlands, Spain and the United Kingdom. The fund was established in 2002 and it is held by private Dutch investors. It gives retail investors an opportunity to invest in microfinance institutions (MFIs) in developing countries and in Central and Eastern Europe. The fund’s main lines of business include loans and equity investments. As of December 2014, the fund reported total assets of EUR 251 million (USD 281 million).

About Triodos Investment Management

Triodos Investment Management, a wholly owned subsidiary of Triodos Bank of the Netherlands, manages funds in a range of sectors including financial sector development in developing countries, renewable energy finance and venture capital. As of 2014, Triodos Investment Management had EUR 2.4 billion (USD 3 billion) in total assets under management. The organization financed 112 microfinance institutions in 45 countries in 2014.

About Promerica Group

Founded in 1991, Promerica Group is a commercial bank in Nicaragua. Promerica created the holding company Promerica Financial Corporation that holds equity in 9 institutions in Costa Rica, Ecuador, El Salvador and Guatemala. Promerica Group’s subsidiary banks serve approximately 1.3 million clients and employ approximately 10,000 staff members. As of December 2014, the organization reported total assets of approximately USD 2 billion, a loan portfolio of USD 2 billion, deposits of 1.6 billion, return on assets (ROA) of 1.9 percent and return on equity (ROE) of 21.2 percent.

Sources and Additional Resources

[1] Triodos Bank, A Greater Impact with Promerica, https://www.triodos.com/en/investment-management/who-we-are/news/newsletter-emerging-markets/Promerica/

[2] Banpro Grupo Promerica, Historia, https://www.banpro.com.ni/qs_Historia.asp

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at: https://www.microcapital.org/products-page/

Similar Posts: