MICROCAPITAL BRIEF: BlueOrchard Arranges $20m Loan from Microfinance Enhancement Facility (MEF), BOMF to FINCA Impact Finance

FINCA Impact Finance, a network of microfinance institutions (MFIs) in 20 countries, recently agreed to accept a three-year loan of USD 20 million arranged by BlueOrchard, a commercial impact-investment manager based in Switzerland. The funding is sourced from the BlueOrchard Microfinance Fund (BOMF) and the Microfinance Enhancement Facility (MEF), whose investors include the World Bank Group’s International Finance Corporation and development banks of the German and Austrian governments, Kreditanstalt für Wiederaufbau (KfW) and Oesterreichische Entwicklungsbank (OeEB), respectively. FINCA Impact will use the loan proceeds to manage the liquidity of its MFIs, which provide digital credit, payments, money transfers and insurance to approximately 2 million customers.

BlueOrchard Finance, the manager of BOMF, was founded in 2001 with support from the UN to provide debt and equity investments to MFIs in emerging markets. As of 2017, it reports managing net assets of USD 1.1 billion with investments placed in institutions serving 18.7 million microentrepreneurs.

Since its founding, MEF has disbursed USD 1.5 billion to 160 MFIs benefiting 550,000 clients. Although it originally was created to assist MFIs in the wake of the financial downturn that began in 2008, MEF has since begun offering “regular debt” in addition to “emergency liquidity funding.” However, part of its mandate is to avoid “crowding out much-needed private sector…actors.”

FINCA International, the majority owner of FINCA Impact, is a nonprofit based in the US city of Washington. Founded in 1984, FINCA International targets its services to poor women living in the Americas, sub-Saharan Africa and Eurasia. As of 2017, FINCA International had total revenue of USD 340 million and was serving 2 million clients.

By Michelle Fleming, Research Associate

Sources and Additional Resources

PR Newswire release
https://www.prnewswire.com/news-releases/finca-impact-finance-mef-and-blueorchard-announce-usd-20-million-loan-facility-300724424.html

FINCA Impact homepage
https://www.fincaimpact.com

FINCA International homepage
https://www.finca.org

BlueOrchard homepage
http://www.blueorchard.com

MEF homepage
https://www.mef.net

IFC homepage
https://www.ifc.org

MICROCAPITAL BRIEF: BlueOrchard Loans $4m to VisionFund Myanmar to Expand Microfinance
https://www.microcapital.org/microcapital-brief-blueorchard-loans-4m-visionfund-myanmar-expand-microfinance/

MICROCAPITAL BRIEF: IFC, KfW, OeEB Renew $310m in Commitments to Microfinance Enhancement Facility (MEF)
https://www.microcapital.org/microcapital-brief-ifc-kfw-oeeb-renew-310m-commitments-microfinance-enhancement-facility-mef/

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