MEET THE BOSS: Sebastien Duquet, Managing Director of PlaNIS (PlaNet Investment Services), a member of the PlaNet Finance Group

Sébastien Duquet is the Managing Director of PlaNIS (PlaNet Investment Services), a member of the PlaNet Finance Group.

MicroCapital: What is your background?

SD: Until recently, I was the Managing Director of PlaNet Finance, where I have worked since 2002. Previously, I was an auditor for Andersen and Ernst & Young for ten years, and I also worked for two years at HSBC bank.

MC: Please describe PlaNet Investment Services.

SD: PlaNIS is one of the entities of PlaNet Finance Group, the international NGO. The concept is that PlaNIS acts as a bridge between international funds and microfinance institutions (MFIs). As you know, there are around one hundred microfinance investment vehicles (MIVs) in the microfinance sector. Some of those MIVs do not have a contact base with MFIs. The concept of PlaNIS is to help these international funds to finance MFIs. We help them by providing due diligence, by structuring deals and by monitoring the investments realized. Our goal is to facilitate the link between MIVs and MFIs. We are a team of ten permanent staff, and we manage a portfolio of USD 160 million with 75 active MFIs. In the last two years we have financed more or less one hundred MFIs.

MC: What is the working relationship between the NGO PlaNet Finance and PlaNIS?

SD: Thanks to PlaNet Finance network, and based on the knowledge we have built in many countries, we are able to provide close monitoring of portfolios and MIVs in many countries. Beyond the ten employees of PlaNIS, we leverage the 700 employees all over the world working for PlaNet Finance, providing us a very important advantage. In this way, we are unique: able to use our field presence to receive proper information on MFIs and the sector in many countries. Being part of PlaNet Finance group is definitely an asset in that sense. At the same time, we are very careful to avoid any potential conflict of interest with other entities of the PlaNet Finance group.

MC: Please describe the three services you offer: debt financing, currency hedging and private equity financing.

SD: Today we are mostly active in debt or fixed-income transactions, mainly with responsAbility, a Swiss asset management company dedicated to microfinance and also independent media. When it comes to hedging, we are working on a project called MICROFIX. The idea is to provide MFIs with hedging solutions to manage currency risk. Our partnership in this area is with TCX (The Currency Exchange Fund), a large Holland-based currency fund. Though it is currently still in the pilot phase, we expect that within a semester MICROFIX will become active. Finally, we are not currently advising any equity funds, but we are considering partnering with some. The idea is not for PlaNIS to have many partners but to partner with leading funds (such as TCX for currency or responsAbility for fixed income). We take our time to select the best partner.

MC: Please describe in greater detail your relationship with TCX.

SD: We aim to help TCX (and some traditional international commercial banks) provide MFIs with currency hedging solutions by facilitating the links between TCX and MFIs, reducing the transaction costs for TCX and trading desks of international banks to allow lower-size swaps of about USD 1.5 million.

MC: Please describe the relationship with responsAbility.

SD: We are one of responsAbility’s investment partners. We have organized a team of ten experts that are split among regional investment offices to monitor the microfinance sector and maintain relationships with MFIs in need of financing. So we source MFIs on behalf of responsAbility. Then we have a team dedicated to research and analysis that provides quality risk analysis on selected MFIs and that advises responsAbility on investments using our scoring methodology, which is validated by our internal credit committee. We also offer a dedicated team in what we call GPS (Global Portfolio Support). It is a specialized structure that monitors the risk of the portfolio through monthly reports to our fund partners. In sum, what we do for responsAbility, and for the other fund we advise, is source MFI investment, analyze credit risk and monitor the risk. We have been working with responsAbility for the last four years.

MC: What is the scale of your advisory business?

SD: We have structured about 250 credit lines to MFIs, and so we have financed 100 MFIs in the last four years. And those MFIs are split among all continents. PlaNIS is among very few to have financed MFIs in Africa, which we did using PlaNet Finance’s fund called MicroFund. It is a small fund, worth only USD 1.2 million. We finance around 20 small MFIs each year with the Microfund. Since MicroFund is our organization’s own equity, we are able to take on more risk than other commercial funds to invest in MFIs in countries like Ivory Coast, Cameroon, Ghana, Senegal, Morocco etc. where other funds are unable to go.

MC: In what regions are PlaNIS most active?

SD: We are quite active in Eastern Europe, Central Asia and Latin America. In Latin America, the microfinance sector has faced some difficulties in the last two years, especially in Mexico. Though we have reduced our exposure to Latin American countries for the last two years, due to difficulties in the microfinance sector there, we now believe that the situation has improved, and we plan to increase our financing. There has been a booming market in Eastern Europe and Central Asia for the last two decades, but we expect to see a slowdown of growth in comparison to past years. Finally, we for sure expect to see growth in Asian countries like the Philippines, Laos, India and others.

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