MICROCAPITAL STORY: Swiss ResponsAbility Microfinanz-Fonds Begins Microfinance Investing and Loans USD 500,000 and USD 344,456 Respectively to PRESTANIC in Latin America and Al Karama in Middle East

This story comes courtesy of the latest issue of the Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) and the MIX, the microfinance information clearinghouse. The responsAbility Microfinanz-Fonds, a microfinance investment vehicle launched this month, has begun its investment business with two loans of USD 500,000 and USD 344,456 to microfinance institutions (MFIs) PRESTANIC and the Association Al Karama de Micro Credit (Al Karama), respectively. Microfinanz-Fonds is managed by responsAbility Social Investment Services Ltd., a Swiss investment firm founded in 2003 specializing in social investment in the developing world. Now the third microfinance investment fund managed by responsAbility, Microfinanz-Fonds has a loan investment portfolio of USD 27.0 million. The fund’s portfolio is financed by its shareholders, Bank im Bistum Essen, a German cooperative financial institution, and Stadtsparkasse Düsseldorf, a German bank.

The Microfinanz-Fonds loan to PRESTANIC, a Nicaraguan MFI, will increase PRESTANIC’s gross loan portfolio of USD 11.0 million by 4.5 percent (see “Financial Data”). Founded in 1991 by the Council of Protestant Churches of Nicaragua (CEPAD), PRESTANIC received its legal status to operate independently in November 1999. The MIX reports that Oikocredit, a Netherlands social investment firm, has been PRESTANIC’s most extensive financial backer. As of this past year, PRESTANIC has 9,219 active borrowers, the average loan size being USD 1,198 (see “Outreach & Impact”). PRESTANIC experiences a 4.3 percent return on assets and a 16.3 percent return on equity. The responsAbility Global Microfinance Fund, another responsAbility managed fund, loaned USD 600,000 to PRESTANIC also this year.

The USD 344,456 loan to Al Karama, a MFI based in Morocco, expands the institution’s USD 1.7 million gross loan portfolio by 19.8 percent (see “Financial Data”). The MFI was founded in 1999 as a non-profit; and has since then maintained USAID, the Arab Gulf Programme for the United Nations Development Organizations (AGFUND), and Morocco’s Ministere des Finances as its primary sources of funding. Operating in the Middle East and North Africa, as well as being a partner of the Sanabel Microfinance Network of Arab Countries, Al Karama reaches 8,071 active borrowers, with average loan balances of USD 216 (see “Outreach & Impact”). As of 2005, the MFI’s return on assets stood at 14.0 percent and return on equity at 18.3 percent (see “Financial Data”). Earlier this year, Al Karama received a USD 155,700 loan from the responsAbility Global Microfinance Fund.