MICROCAPITAL STORY: Oikocredit of the Netherlands Loans $10.3m to Microfinance Institutions Opportunity Bank Montenegro, Micro Finance Bank of Azerbaijian (MFBA) and Inicjatywa Mikro of Poland

CGAP (Consultative Group to Assist the Poor) reported in its recent list of transactions that Oikocredit, a Dutch investment fund formed by the World Council of Churches, lent USD 6.2 million to commercial bank Opportunity Bank Montenegro, USD 2.5 million to commercial bank Micro Finance Bank of Azerbaijian (MFBA) and USD 1.6 million to Inicjatywa Mikro, a Polish microfinance institution (MFI).

Oikocredit is a Dutch investment fund established in 1975 by the World Council of Churches. The council’s original purpose in establishing the fund was to provide churches and individuals with an socially responsible alternative investment while serving the interests of the poor. At the end of 2007, Oikocredit had total fund assets of USD 614.5 million with USD 305 million being allocated towards microfinance related investments. Currently, the fund holds 309 active microfinance investments.

Established in 2002 in Montenegro, Opportunity Bank Montenegro is a fully licensed bank of Opportunity International, a microfinance organization and network founded in 1974. Opportunity Bank Montenegro originally began as Microcredit Montenegro (MCM), a non-governmental organization (NGO) established in 1999 to offer microcredit loans across Montenegro. Through the financial aid of the United States Agency for International Development (USAID), a United States foreign government agency that provides worldwide assistance, MCM was able to convert from an NGO to a commercial bank in 2002. The most recent financial data provided by the Microfinance Information eXchange (MIX) shows the bank had total assets of USD 247.1 million and 42,288 active borrowers. The bank’s return on assets was 3.62 percent, and its return on equity was 38.29 percent.

Micro Finance Bank of Azerbaijan (MFBA), formed in 2002, is a joint-stock bank that offers financial services to Micro and Small Enterprises (MSEs). MFBA started in 2002 with a charter capital of approximately USD 13.3 million and recently increased its capital share by approximately USD 10.9 million. According to the 2007 financial data provided by the MIX, MFBA had total assets of USD 133.3 million and a gross loan portfolio of USD 114.5 million. In the most recent data from 2006, MFBA reports its return on assets was 0.2 percent while its return on equity was 1.3 percent. At the end of 2007, MFBA had 49,596 active borrowers.

Inicjatywa Mikro, a Polish microfinance institution established in 1996, was created with the support of Opportunity International, a microfinance organization and network founded in 1974. Inicjatywa Mikro still remains under Opportunity International’s network. The most recent financial data provided by the MIX shows the MFI’s total assets to be USD 7.8 million and its gross loan portfolio to be USD 5.8 million. Its return on assets was 0.89 percent, and its return on equity was 1.32 percent. At the end of 2007, Inicjatywa Mikro had 936 active borrowers.

Additional Resources:

CGAP (Consultative Group to Assist the Poor): Home, List of Recent Transactions – April 2008

Inicjatywa Mikro: Home

Microfinance Bank of Azerbaijian (MFBA): Home, History, 2006 Annual Report, MFBA Shareholders Increase Capital

MIX Market: Profile for Oikocredit

MIX Market: Profile for Opportunity Bank Montenegro

MIX Market: Profile for Micro Finance Bank of Azerbaijan (MFBA)

MIX Market: Profile for Inicjatywa Mikro

Oikocredit: Home, History

Opportunity Bank Montenegro: Home, History

Opportunity International: Home, History

United States Agency for International Development (USAID): Home