MICROCAPITAL STORY: Launched in July 2006, the Luxembourg Fund Labelling Agency (LuxFLAG) has Awarded its Microfinance Label to Five Microfinance Investment Vehicles (MIVs) and Attained Listing on the Centrale de Communications Luxembourg (CCLux) Database

Earlier this year, the Centrale de Communications Luxembourg (CCLux), a subsidiary of the Luxembourg Stock Exchange, began listing the Luxembourg Fund Labelling Agency (LuxFLAG) Microfinance Label as a searchable classification on its online Consultation Portal. For users of CCLux, this means that they can now quickly and easily identify microfinance investment vehicles (MIVs) which have been approved by LuxFLAG.

Additionally, a press release posted by MicroCapital on Monday announcing the awarding of the LuxFLAG Microfinance Label to two new MIVs—Dual Return – Vision Microfinance Fund (Dual Return) and responsAbility SICAV (Lux)—and the renewal of the label for three others: Dexia Micro-Credit Fund (DMCF), the European Fund for Southeast Europe (EFSE), and responsAbility Global Microfinance Fund (rAGMF). These five funds comprise the entire stable of MIVs whom have obtained the label since LuxFLAG’s establishment in July 2006.

A simple search performed by the author of this article through the CCLux Consultation Portal, limiting only for the LuxFLAG Microfinance Label, retrieved 44 results. The high number, in comparison with five total funds receiving labels, is a result of the multiple compartments contained within the funds. Additionally, each compartment often contains more than one class of shares. Finally, some funds are listed in multiple currencies. This is visualized (with exception to the currencies) through LuxFLAG’s List of MIVs.

LuxFLAG is a nonprofit organization aiming to promote microfinance in general, and the capitalization of MIVs specifically, by the awarding of a LuxFLAG Microfinance Label to funds which:

are “subject to supervision equivalent to that in the European Union member states;
have a microfinance portfolio corresponding to at least 50 percent of the MIV’s total assets;
have at least 25 percent of its microfinance portfolio invested in MFIs rated by a microfinance rating agency recognized by LuxFLAG;
and have a commercial objective.”

According to a previous MicroCapital article, LuxFLAG was initially conceived at the 2005 Luxembourg Round Table for MicroFinance (LRTMF). MIVs interested in obtaining a LuxFLAG Microfinance Label may refer to the Listing Procedure. Financial information for the organization was not available.

Established in April 1995, CCLux serves as a central facilitator for information exchange regarding Luxembourg-registered investment funds by aiding in both the collection and dissemination of industry data. The searchable online Consultation Portal is just one of several products and services offered by CCLux. Financial information was not available.

Additional information can be obtained by contacting Christian Descoups of the Luxembourg Stock Exchange by e-mail (cde@bourse.lu) or by phone at +352 47 79 36 272.

By Anthony Busch, Research Assistant

Additional Resources:

Centrale de Communications Luxembourg: Home, Key Dates, Products & Services

Dexia: Home, Dexia Micro-Credit Fund

European Fund for Southeast Europe: Home

Luxembourg Fund Labelling Agency: Home, Who We Are, Listing Procedure, List of MIVs, “LuxFLAG Classification for Microfinance Funds Now Available via CCLux”, by Christian Descoups, January 17, 2008

Luxembourg Round Table for MicroFinance: Home

Luxembourg Stock Exchange: Home

MicroCapital press release, May 26, 2008: “LuxFlag Grants Label to Vision Microfinance and responsAbility Microfinance Investment Vehicles”

MicroCapital article, August 3, 2006: “Raise a Glass for Transparency! Launching of Luxembourg Fund Labeling Agency Important Milestone in Microfinance Investment”

responsAbility: Home, responsAbility Global Microfinance Fund

Vision Microfinance: Home, Dual Return – Vision Microfinance Fund