To support nine of its partner microfinance institutions (MFIs) in adapting to the COVID-19 pandemic, the Togolese government’s Fonds National de la Finance Inclusive (FNFI) is taking the following measures: (1) cutting interest rates on its loans to the MFIs by 1 percentage point; and (2) boosting the management fee that the MFIs receive for
Category: Investment Funds
MICROCAPITAL BRIEF: World Bank Approves $750m Loan to Support 1.5m MSMEs in India as Emergency Response to COVID-19
The World Bank’s Board of Directors recently approved a 19-year loan of USD 750 million, with a 5-year grace period, to create an emergency response program for micro-, small and medium-sized enterprises (MSMEs) in India that “have been severely impacted by the COVID-19 crisis.” The program is meant to provide “immediate liquidity” to
MICROCAPITAL BRIEF: Enygma Ventures Places $1m in Equity in Zambia-based MFI Lupiya, Boosting Digital Financial Services, Especially for Women, Rural Clients
South Africa-based Enygma Ventures recently invested USD 1 million in Zambian microfinance institution (MFI) Lupiya, which serves its customers online rather than at retail branches. Lupiya describes its offerings as “simpler and easier so that people and businesses located across the country even in rural, remote areas can access financial services.” The MFI offers personal loans of up to ZMK 20,000 (USD 1,093) for as long as 12 months, categorized into Collateral Backed Loans, Salary Advance Loans and Scheme Loans. Lupiya also offers
MICROCAPITAL BRIEF: IIV Mikrofinanzfonds Invests $720k in Premier Credit, Refinancing Microfinance Loans in Kenya
Premier Credit Limited, a member of the Kenya-based Premier Group of microfinance institutions (MFIs), recently sold a package of microloan receivables for USD 720,000 to IIV Mikrofinanzfonds, a fund managed by Germany-based Invest in Visions (IIV). The MFI will use the cash to continue its support of micro- and small-scale entrepreneurs in Kenya. Other units of the Premier Group operate
MICROCAPITAL BRIEF: IIV Mikrofinanzfonds Reports Losses Under 3%; Invests $3.4m Refinancing Microfinance Institutions in Mexico, Tajikistan
Microfinance institutions in Mexico and Tajikistan recently sold packages of non-securitized loan claims for MXN 61.3 million (USD 2.66 million) and USD 750,000 and to IIV Mikrofinanzfonds, a fund managed by Germany-based Invest in Visions (IIV). The names of the microlenders have not released.
During the first four months of 2020, the two share classes of IIV Mikrofinanzfonds generated losses of 2.7 percent to 2.9 percent. This
MICROCAPITAL BRIEF: Incofin Loans $1.1m to SAVE, Provider of Rural Microfinance, Agent Banking, Toll-road Payment Services in India
Belgium-based Incofin Investment Management (IM) recently disbursed a senior loan of EUR 1 million (USD 1.1 million) from its fund Incofin CVSO to the Society for Advancement of Village Economy (SAVE), which “plans to utilise the…funding to support its two non-banking financial companies providing rural credit services” in India. SAVE’s other units offer
MICROCAPITAL BRIEF: Zola, EDF Harness Securitization to Expand Solar Energy in Côte d’Ivoire with Support from Credit Agricole CIB, Grameen Credit Agricole Foundation, Societe Generale, AfDB
Credit Agricole CIB (Corporate and Investment Bank), a member of the France-based Credit Agricole Group; the Luxembourg-based Grameen Credit Agricole (GCA) Foundation; and French investment firm NEoT Off-Grid Africa recently launched a securitization vehicle to enable Zola EDF Côte d’Ivoire to increase its sales of solar power systems to households that are not connected to traditional power grids. Zola EDF Côte d’Ivoire, which uses a
MICROCAPITAL BRIEF: Axis, Innpact Launch MIFGA to Facilitate Creation, Management of Impact Investment Funds in Africa
The financial-services groups Axis Fiduciary, which is based in Mauritius, and Innpact, which is based in Luxembourg, recently launched the Mauritius Impact Finance Gateway to Africa (MIFGA) platform to serve as a “turnkey fund management solution” for impact investment vehicles, which Innpact defines as “funds that facilitate investments to drive social and environmental impact alongside financial returns.” The intent of MIFGA is to solve “challenges typically faced by new impact funds:
MICROCAPITAL BRIEF: US International Development Finance Corporation (DFC) Approves $4b “Rapid Response Liquidity Facility” for Microfinance, Other Ongoing Projects Impacted by COVID-19
The government-backed US International Development Finance Corporation (DFC) recently allocated USD 4 billion to a “Rapid Response Liquidity Facility,” through which it will provide additional funding to in-process DFC projects that have been impacted by COVID-19. This financing will go to a range of current DFC clients, including microfinance institutions (MFIs) that are struggling to collect retail loan repayments, infrastructure projects experiencing delays, and hospitality businesses that have experienced “precipitous revenue losses.” The intent is
SPECIAL REPORT: One Size Does Not Fit All – Restructuring for Uncertain Times, from Verdant Capital
This sponsored content was written by Edmund Higenbottam and Patrick Ball, who serve, respectively, as the Managing Director and a Director of Verdant Capital. Verdant Capital is a leading specialist financial advisory firm that operates across Africa.
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combination of factors is challenging the economic sustainability of financial institutions and other businesses large and small across Africa. Globally, the COVID-19 crisis and associated lockdowns have had the effect of “calling the end of a long bull market” that has run since the credit crisis of 2008. In most African markets, however, the bull market had already ended some years before the pandemic. Instead, in Africa, the pandemic has compounded previously existing difficulties, such as weaker commodity prices, sovereign credit challenges, volatile exchange rates and uncertain public policy regimes. Despite some differences, there are many commonalities among the issues facing traditional banks, microfinance institutions and operating companies. From an investment
MICROCAPITAL BRIEF: Sindhuja Microcredit of India Raises $8.7m in Equity Sale to Carpediem Capital, Nordic Microfinance Initiative
The majority owners of Sindhuja Microcredit, a lender to women in India, recently sold minority shareholdings to Carpediem Capital, an India-based private equity fund manager, and the Nordic Microfinance Initiative (NMI), a public-private partnership based in Norway, for a total of USD 8.7 million. The sizes of the stakes have not been released. Carpediem also invested USD 4 million in Sindhuja in 2019. India’s Vidura Capital served as advisor on the transaction.
The promoters of Sindhuja, Abhisheka Kumar and Malkit Didyala, issued a statement that, “Our customers, self-employed rural women, are the most vulnerable in the COVID–19 world… with their livelihoods under direct threat, this funding will be used to
MICROCAPITAL BRIEF: 40 Funders Commit $75m via World Economic Forum COVID Response Alliance for Social Entrepreneurs
The World Economic Forum, a Switzerland-based nonprofit, recently convened the COVID Response Alliance for Social Entrepreneurs, through which 40 organizations are aligning their efforts to reduce the economic and other impacts of the COVID-19 pandemic. These 40 organizations support 15,000 entrepreneurs who have served a total of 1.5 billion customers in 190 countries by “protecting livelihoods; mitigating millions of tonnes of carbon dioxide; improving access to health, sanitation, education and energy; [and having] driven social inclusion movements for the disabled, homeless or those with refugee status.”
The alliance members have committed a total of USD 75 million in response to the pandemic. In addition, they are working together to assess needs; increase recovery funding; coordinate legal, technological and
MICROCAPITAL BRIEF: Center for the Advancement of Social Entrepreneurship (CASE) Offers Covidcap.com Database of $1t in Cash Relief for Small Businesses Impacted by COVID-19
The US-based Center for the Advancement of Social Entrepreneurship (CASE) recently created a database of funding sources for small businesses needing assistance because of the COVID-19 pandemic. These listings include 550 funding sources in 62 countries offering a total of approximately USD 1 trillion. This funding takes the form of loans and grants and is available to
MICROCAPITAL BRIEF: 9 Microfinance Investment Vehicles Coordinate Response to Effects of Pandemic on MFIs, MSMEs in 80 Countries
The COVID-19 pandemic and efforts to reduce its health impacts have had major negative economic consequences for micro-, small and medium-sized enterprises (MSMEs). These enterprises thus are having difficulty repaying the loans they have outstanding from microfinance institutions (MFIs) and other retail lenders, leading to liquidity challenges for these lenders. In response, nine investors in these lenders, which have an aggregate of USD 15 billion invested in 80 low- and middle-income countries, are working together to support the long-term viability of the retail financial services providers (FSPs).
The nine investors, which manage a range of microfinance investment vehicles (MIVs) and other funds seeking to generate positive social impact, have arrived at a non-binding agreement to
MICROCAPITAL BRIEF: Calvert Impact Capital Opens $15m Credit Line for FINCA, Owner of 20 Microfinance Institutions (MFIs)
Calvert Impact Capital, a US-based NGO, recently opened a five-year credit line of USD 15 million for FINCA Impact Finance to use in support of its 20 microfinance institutions in Africa, the Americas and Eurasia. The funding is available for on-lending to micro- and small enterprises (MSEs) as well as for
MICROCAPITAL BRIEF: Amid Pandemic, Fintechs Pause Some Projects, But Innovate to Care for Customers, Staff
MIX, an NGO based in the US city of Washington, recently surveyed 25 financial technology (fintech) providers and investors regarding their responses to the COVID-19 pandemic. Over the past two months, investment in fintech providers has fallen, as has their revenue, due to lower remittance and lending volumes. The fees that fintechs charge are also down, sometimes at fintechs’ choosing, but sometimes by government decree. Clients have more incentive to use mobile money due to travel restrictions, branch and agent closures, and the potential transmission of germs via cash. However, they have less money to transact. One study found that four in five business owners in Kenya did not
MICROCAPITAL BRIEF: BlackRock Launches $20m Global Impact Fund Investing in Companies Working Toward UN Sustainable Development Goals
BlackRock, an investment management firm based in the US city of New York, recently launched its Global Impact Fund with USD 20 million in assets. The goal of the fund is to generate returns through long-term capital growth as well as income. BlackRock will invest at least
MICROCAPITAL BRIEF: Enda Tamweel, FMO Ink $65m Syndicated Loan for Education, Enterprise, Housing Microfinance in Tunisia with Support from TCX, AATIF, ASN, Microbuild, BlueOrchard
Enda Tamweel, a Tunisian microfinance institution, and the Netherlands Development Finance Company, which is also known by its Dutch acronym FMO, recently finalized a syndicated loan agreement denominated in Tunisian dinars equivalent to EUR 60 million (USD 65 million). Two thirds of the funding will flow to Enda via