MICROCAPITAL STORY: Luxembourg Fund Labelling Agency (LuxFLAG) Grants Label to Belgian Microfinance Investment Company Incofin’s Rural Impulse Fund (RIF)

Nonprofit Luxembourg Fund Labelling Agency (LuxFLAG) has granted its label to the
Rural Impulse Fund SA, SICAV-FIS (RIF). The LuxFLAG label indicates that RIF, which invests in microfinance institutions (MFIs) in rural areas, is truly investing in microfinance activities. The label was initiated to provide increased assurance to investors that commercial microfinance investment vehicle’s (MIVs) were committed to delivering microfinance services. The criterion for the label identifies MIV’s that must:

  • be subject to supervision by a national regulator
  • have a microfinance portfolio corresponding to at least 50 percent of total assets
  • have at least 25 percent of its microfinance portfolio invested in MFIs rated by a microfinance rating agency recognized by LuxFLAG

LuxFLAG has granted its label to five other funds as reported by MicroCapital here. As of June 30th 2008, the labeled MIV’s held assets under management totaling USD 1.3 billion.

LuxFLAG was launched in 2006 by its Charter Members: Luxembourg Stock Exchange, European Investment Fund (EIF), Association of the Luxembourg Fund Industry (ALFI), Luxembourg Bankers’ Association (ABBL), Financial Technology Transfer Agency (ATTF), Appui au Développement Autonome (ADA), Luxembourg’s Ministry of Finance and Ministry of Foreign Affairs.

The LuxFLAG label is listed on the Consultation Portal of the Centrale de Communications Luxembourg (CCLux), a subsidiary of the Luxembourg Stock Exchange. Further financial information on LuxFLAG is not available.

The Rural Impulse Fund SA SICAV-FIS (RIF) was initiated in 2007 by Incofin, a Belgian microfinance investment company as reported by MicroCapital here. According to the 2007 Luxembourg laws on Specialised Investment Funds, “SICAV” denotes a variable capital investment company and “FIS” a specialized investment fund. RIF is a microfinance investment fund that acts as a MIV by making debt and equity investments in MFIs in rural areas of developing countries. RIF uses an extensive list of criteria to choose rural MFIs.

The fund is advised by Incofin and operates under the administration of Kredietrust Luxembourg (KTL), the asset management subsidiary of European bank Kredietbank Luxembourg (KBL). Its main corporate investors are the European Investment Bank, Dutch Nederlandse Financierings Maatschappij voor Ontwikkelingslanden (FMO), the International Finance Corporation (IFC), and Belgian Investment Company for Developing Countries (BIO) as well as private Belgian companies Volksvermogen, MRRB and CERA. According to a MicroCapital article of December 2007, RIF’s investor base is 50 percent public and 50 percent private. According to a presentation by Incofin’s Managing Director Loïc De Cannière, in March 2008, the fund totaled USD 38 million. MicroCapital reported on RIF’s 2007 investment in Latin American microfinance here.

By Sarah Knapp, Research Assistant

Additional Resources:

Incofin: 2008 Presentation, RIF criteria,

International Finance Corporation (IFC)

Kredietrust Luxembourg

LuxFLAG: Charter Members, Listing Procedure, Press Release

MicroCapital: Incofin Announces Creation of Rural Impulse Fund, Launching of Luxembourg Fund Labelling Agency, LuxFLAG Awards Label to Five MIVs, Rural Impulse Fund Lends to Latin American Microfinance Institution Espoir

Nederlandse Financierings Maatschappij voor Ontwikkelingslanden

Similar Posts: