MICROCAPITAL STORY: Incofin of Luxembourg Lends $2m to Guatemalan Microfinance Institution (MFI) FUNDEA, $1m to Bolivian MFI FADES, and $300k to Ghanaian MFI Sinapi Aba Trust

The Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) reported that Incofin, a Luxembourg-based social investment company, has issued loans of USD 2 million to Guatemalan microfinance institution (MFI) FUNDEA, USD 1 million to Bolivian MFI FADES, and USD 300,000 to Ghanaian MFI Sinapi Aba Trust.

The FUNDEA and FADES loans were issued under the auspices of Incofin’s Rural Impulse Fund, which requires borrowing institutions to conduct some of their business in rural areas. The fund was established as a SICAV (a European collective investment scheme) in 2007 and had USD 38 million in assets as of last September.

Incofin was founded in 1992 as a limited liability co-operative company with social objectives, investing primarily in sustainable MFIs. It has 19 active investments in Latin America, Africa, Eastern Europe, and Central Asia. As of year-end 2006, it had assets of USD 10.6 million, of which USD 10.2 million was allocated to microfinance.

FUNDEA (Fundación para el Desarrollo Empresarial y Agrícola) is a non-governmental organization founded in 1997 in Guatemala that makes micro-loans to small and medium enterprises and the agricultural sector. As of year-end 2006, it had USD 10.0 million in assets, with a gross loan portfolio of USD 8.3 million. Its return on assets was 10.53 percent and its debt-equity ratio was 30.91 percent. Active borrowers numbered more than 12,000. FUNDEA does not report a third-party evaluation of its operations to the MIX Market, the microfinance information clearinghouse.

FADES (Fundación para Alternativas de Desarrollo) was founded in 1986 in Bolivia and provides micro-loans to enterprises that have no access to financial services. As of year-end 2006, its assets totaled USD 25.3 million, of which USD 20.0 million constituted its gross loan portfolio. Its return on assets was 2.31 percent and its debt-equity ratio was 302.10 percent. FADES had more than 20,000 active borrowers and was given a B rating by the Planet Rating agency in July 2006.

Sinapi Aba Trust is a non-governmental organization established in 1994 and registered in Ghana as a company limited by guarantee to support of the poor through microfinance and business training. It is a member of the Opportunity International Network, a worldwide Christian organization dedicated to development through microfinance. As of 2006 (performance chart), its loan book was worth USD 19.2 million (GHC 169.5 billion) and clients numbered more than 51,000. Sinapi Aba does not report a third-party evaluation of its operations to the MIX Market.

By Stephen Son

Additional Resources:

CGAP: List of Recent Transactions, Mar-Apr 2008

MIX Market: Profile for Rural Impulse Fund; Profile for Incofin; Profile for FUNDEA; Profile for FADES

Oanda: FX Converter

Sinapi Aba Trust: Achievements

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