MICROCAPITAL STORY: Inter-American Development Bank (IDB) Multilateral Investment Fund (MIF) to Invest USD 5m in Mexican IGNIA Social Investment Fund in Addition to Previous USD 25m Loan from the IDB’s Opportunities for the Majority Initiative (OM)

The Inter-American Development Bank (IDB) has made a USD 5m equity investment in the IGNIA Social Investment Fund through the Multilateral Investment Fund (MIF) and a USD 205,000 technical cooperation grant. The IGNIA venture capital fund also received a recent USD 25m loan from the IDB’s Opportunities for the Majority Initiative (OM).

The IGNIA Social Investment Fund is a venture capital fund planning to invest around USD 75m in 8-12 Latin American and Caribbean companies that serve individuals making under USD 300 per month. The funds will include the USD 25m loan from the IDB and up to USD 75m in equity, which includes the IDB USD 5m equity investment. The fund will invest in the fields of health care, education, housing and basic utility services. IGNIA plans to exit within twelve years. The new fund is not listed on MIX Market, the Microfinance Information eXchange.

The Multilateral Investment Fund (MIF), the fund making the USD 5m equity investment, was created by the IDB in 1993 to promote small- and micro-enterprise private sector development in Latin America and the Caribbean through equity investments. According to MIX Market, MIF had USD 100m in 19 microfinance investments as of December 31, 2004, and another USD 20m projected for investments within the next year. Further information about MIF and other microfinance investment funds can be found in the MicroCapital Funds Universe,

The Opportunities for the Majority Initiative (OM) is another IDB initiative with the goal of improving private sector development in Latin American and the Caribbean. The OM provides loans and loan guarantees for new initiatives of companies, governments and communities with the goal of improving the employment and participation of those making less than USD 300 per month, as well as improving the quality of goods and services available to those same markets. This fund is also not listed on MIX Market, the Microfinance Information eXchange.

The Inter-American Development Bank (IDB), founded in 1959, is a multilateral institution with 47 member countries. Although the main focus of the organization is to provide funding to development initiatives, the IDB also provides research and consultations in addition to hosting conferences. A list of donors to the IDB can be found in the organization’s 2007 annual report. Please read this previous Microcapital story, to learn more about the IDB’s recent investment in Uruguay. 

IGNIA is a Mexican venture capital firm that “supports the founding and expansion of high growth social enterprises that serve the base of the socio-economic pyramid in Latin America.” The group was founded by Álvaro Rodríguez, chairman of the Accion board of directors and board member of several other MFIs. A list of other investors in INGIA were not available on the website, possibly because other deals have not been finalized. The new USD 75m equity fund is the organization’s first project. IGNIA is not listed on MIX Market, the Microfinance Information exchange, and does not provide further financial data on their website.

By Greg Casey, Research Assistant

Additional Resources:

Inter-American Development Bank: Home

IDB: 2007 Annual Report

IDB: Member Countries

IDB Press Release: IDB fund supports pioneering venture fund in Mexico that targets companies serving the poor

IDB Press Release: IDB partners with IGNIA venture capital fund to address needs of region’s poor

MicroCapital Story, July 14, 2008: Inter-American Development Bank (IDB) Invests $829,300 in Uruguayan Institute for Economic and Social Development (IPRU) for Microfinance for Youth and Women

MicroCapital Story, August 8, 2008: MICROFINANCE EVENT: Inter-American Forum on Microenterprise (FOROMIC) Hosted by the Inter-American Development Bank

IGNIA: Home

IGNIA: Overview

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