by the MicroCapital Team - Investment Funds, Key Players -

Deutsche Bank Leads New Global Commercial Microfinance Consortium, a $75 Million Microfinance Investment Fund

Just recently, a group of private and public sector institutional investors and economic development agencies launched the U.S. based Global Commercial Microfinance Consortium, a $75 Million microfinance investment fund that will provide microfinance institutions (MFIs) worldwide local currency financing for up to 5 years. The fund’s capitalization is comprised of $15 million in equity and $60 million in debt, 25% of which has been guaranteed by the U.S. Agency for International Development (USAID). Close to $30 million has already been committed to MFIs with operations in Kosovo, Peru, Nicaragua, Azerbaijan, Colombia, Pakistan, Mozambique, and India.

Investors include Merrill Lynch, AXA Group, HP, and the Calvert Social Investment Foundation. For a full list of investors visit: “Leading Institutions Investors and Development Agencies Launch the Global Commercial Microfinance Consortium.” Deutsche Bank, a full global financial services company with å¥972 billion in assets, led the arrangements to establish the fund and also facilitated its sale.

This Consortium is “microcapital” at its best. First, expert management by Deutsche Bank’s long-established and well-respected microfinance unit provides the leadership. Second, the investor group mixes mainstream investment banks, rational development agencies, and flagship social investment foundations. Third, the role of government as guarantor uses your tax dollars to support (not execute) for-profit, private innovation. Fourth, the fund investment in MFIs is well-diversified across countries, regions and types of MFIs.

With such leadership and innovation, we might one day soon establish a secure asset class for the investing public.

Additional Resources

1) Main article discussed in entry, Thames Techwire: “Group Unveils å¥63 Million ‘Micro-Entrepreneur’ Fund.”
2) “Leading Institutional Investors and Development Agencies Launch the Global Commercial Microfinance Consortium.”
3) “Global Commercial Microfinance Consortium.”
4) U.S. Agency for International Development (USAID) Press Release: “USAID, Private-Sector Partners Create Global Fund for Small Entrepreneurs and Low-Income Families: Agency Provides $15 Million Credit Guarantee to Fund Aimed at Alleviating Poverty."

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