MICROCAPITAL STORY: Incofin Invests USD 4.4m in Microfinance Institutions Seilanithih Limited, Apoyo Integral, and Mibanco

Incofin is a Belgium-based private social investment company that invests in microfinance institutions (MFIs) through loans, equity investments, and guarantees. In addition to its own portfolio, Incofin manages four microfinance funds  – the Impulse Microfinance Investment Fund, the Rural Impulse Fund, VDK MFI Fund, and Volksvermogen. As of April 30, 2009, Incofin had invested EUR 127.8 million (USD 178.5 million) in 65 MFIs across 26 countries. In May, Incofin reported to the CGAP Microfinance Dealbook that it had offered debt products totaling USD 4.375 million to three MFIs – Seilanithih in Cambodia, Apoyo Integral in El Salvador, and Mibanco in Peru.

Incofin, through its own portfolio, has offered USD 375,000 in debt to Seilanithih Limited, a licensed MFI in Cambodia. Seilanithih grew out of three programs administered by CARE Cambodia – the SEILA Project (Social Economic Improvement for Local Agency) and two village banks – and obtained its License for Microfinance Institution from the National Bank of Cambodia in December 2003. According to the MIX Market, the microfinance information clearinghouse, Seilanithih had 4,227 active borrowers at year end 2007, and a gross loan portfolio of USD 3.6 million. By the end of 2008, Incofin had a loan portfolio of EUR 19.1 million (USD 26.7 million), of which 4 percent was invested in Cambodia.

Incofin is portfolio manager, and a shareholder, of the Impulse Microfinance Investment Fund, which focuses on loans and equity to small and medium-sized MFIs. At the end of 2008, this fund had EUR 42.5 million (USD 59.4 million), with EUR 29.8 million (USD 41.6 million) invested. Under the Impulse Microfinance Investment Fund, Incofin has offered Apoyo Integral, an MFI in El Salvador, USD 1 million in debt. An ACCION affiliate, Apoyo had 30,000 active borrowers and a gross loan portfolio of USD 56.9 million at the end of 2008.

Incofin manages the VDK MFI Fund on behalf of VDK spaarbank , the commercial bank that co-founded Incofin and last year decided to further expand its MFI loan portfolio to EUR 75 million (USD 104.8 million).  Representing 38.3 percent of Incofin’s funds, the VDK MFI Fund offers loans to larger, high-quality MFIs. Through the VDK MFI Fund, Incofin has extended a USD 3 million loan to Mibanco, a private bank in Peru that serves small and micro businesses. Mibanco was created in 1998 by taking over the financial operations of the NGO Acción Comunitaria del Perú. According to the MIX Market, Mibanco had 381,000 active borrowers and gross loan portfolio of USD 780 million at the end of 2008. Incofin has a total of EUR 13.5 million (USD 18.9 million) invested in Peru.

Read about previous Incofin investments in this MicroCapital story.

By Jaclyn Berfond, Research Assistant

Additional Resources:

CGAP Microfinance Dealbook

MIX Market: Homepage

Incofin: Homepage

Incofin: Annual Report 2008

Seilanithih: Background

MicroCapital Story: Rural Impulse Fund of Belgium’s Incofin Invests in Asomi, an Indian MFI

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