MICROCAPITAL STORY: Dexia Micro-Credit Fund of Luxembourg Lends $3m to Microfinance Institution FINSOL, $2m to Microfinance Institution FUNDESER, $1.5m to Microfinance Institution Bai Tushum, and $100k to Microfinance Institution Sodruzhestvo

The Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) reported that Dexia Micro-Credit Fund, a Luxembourg-based fund, issued loans of USD 3 million to FINSOL, a Honduran microfinance institution (MFI); USD 2 million to FUNDESER, a Nicaraguan MFI; USD 1.5 million to the Bai Tushum Financial Foundation (BTFF), a Kyrgyz MFI; and USD 100,000 to the Fund for SME Support Sodruzhestvo, a Russian MFI.

The Dexia Micro-Credit Fund is a commercial investment fund, begun in 1998, that refinances “microfinance institutions specialized in financial services to small companies in emerging markets.” As of February 2007, the fund had total assets of USD 161.8 million, of which USD 108 million was allocated to microfinance. It currently finances approximately 60 MFIs in 25 emerging economies worldwide. The fund is managed by BlueOrchard Finance, a Swiss microfinance investment advisor.

FINSOL, or Financiera Solidaria, is a non-bank financial institution established in Honduras in 1997. As of December 31, 2007, it reported total assets of USD 32.8 million, with a gross loan portfolio of USD 29.3 million and a debt-to-equity ratio of 331.15 percent. The MFI’s active borrowers numbered 24,942. The last available return on assets figure, from December 2006, was 4.26 percent. As for ratings, FINSOL does not report a third party performance evaluation of operations to the MIX Market, the microfinance information clearinghouse.

FUNDESER, Fundación para el Desarrollo Socioeconómico Rural, is a nonprofit founded in 2000 and based in Nicaragua. The organization received a rating of ß+ in a report completed December 2006 by the rating agency MicroRate; this is up from the ß rating it received in December 2005. The most recent financial data available, from year-end 2006, reveals total assets of USD 10.3 million and a gross loan portfolio of USD 8.4 million. FUNDESER’s return on assets was 6.72 percent, and its debt-equity ratio was 520.28 percent. The number of active borrowers was reported as 12,461.

Bai Tushum is a non-bank financial institution established in Kyrgyzstan in 2000. The last available rating for the organization, an A+, was issued in an April 2005 report by the rating agency Microfinanza Rating; this was up from the previous rating of an A in December 2002. The most recent financial data available, from December 2006, includes
USD 15.5 million in total assets, of which USD 10 million constitutes the gross loan portfolio. Bai Tushum’s return on assets was reported as 5.05 percent, and its debt-equity ratio was 199.60 percent. Active borrowers numbered 4,916.

The Fund for SME Support Sodruzhestvo is a Russian non-profit established in 2002. Sodruzhestvo does not report a third party performance evaluation of operations to the MIX Market, the microfinance information clearinghouse. The organization’s most recent financial data, from December 2006, included USD 1.3 million in total assets, of which USD 1.2 million was in its gross loan portfolio. The MFI had a 5.56 percent return on assets and a 0.33 percent debt-equity ratio. Sodruzhestvo also reported serving 138 active borrowers.

By Stephen Son

Additional Resources:

CGAP: “List of Recent Transactions”

MIX Market: Profile for Dexia Micro-Credit Fund

MIX Market: Profile for FINSOL

MIX Market: Profile for FUNDESER

MIX Market: Profile for BTFF

The Rating Fund: Rating Reports

MIX Market: Profile for Sodruzhestvo

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