MICROCAPITAL BRIEF: EDPYME Alternativa of Peru Borrows $5m from Huruma Fund to Provide Farmers with Asset Finance

Huruma Fund, a Spain-based vehicle supporting rural financial services providers in low- and moderate-income countries, recently lent EUR 4 million (USD 5 million) to Entidad de Desarrollo a la Pequeña y Micro Empresa (EDPYME) Alternativa, a microfinance institution (MFI) in Peru that serves rural populations. The goal of the investment is to assist small-scale farmers through increased outreach and new products focused on farmers’ needs.

Alternativa was founded in 1992 and plans to use the new funds to issue 8,600 loans to farmers, some for fixed assets, with repayment terms as long as five years. The MFI served 43,000 clients – 44 percent of whom are women – during 2020. It finished the year with assets of PEN 197 million (USD 51 million), having generated return on assets of 0.04 percent and return on equity of 0.25 percent.

The goal of Huruma is to improve financial access for small-scale farmers in Africa, Asia, Latin America and the Caribbean. The fund is led by Spain’s Compañia Española de Financiación del Desarrollo (COFIDES), a government-backed development finance institution. Gawa Capital Partners, a private firm also based in Spain, serves as the fund’s investment advisor. Huruma has a volume of EUR 120 million (USD 140 million), of which three quarters is from private investors.

Gawa is a Spain-based impact fund manager. Founded in 2009 by Agustin Victoria and Luca Torre, the firm aims to “improve the life of low-income communities by promoting investment in social enterprises.” As of 2022, Gawa advises four impact investment funds with a total value of EUR 195 million (USD 221 million). Gawa launched three of those funds, Gawa Microfinance Fund, Global Financial Inclusion Fund and Huruma Fund.

COFIDES is controlled by three entities of the Spanish government. Its other shareholders are three Spanish banks and the CAF Development Bank of Latin America, which is based in Venezuela and was formerly known as Corporacion Andina de Fomento. COFIDES manages funding from the EU, the UN Green Climate Fund and the following entities owned by the government of Spain: Fondo para Inversiones en el Exterior (FIEX), Fondo para Operaciones de Inversión en el Exterior de la Pequeña y Mediana Empresa (FONPYME) and Fondo para la Promoción del Desarrollo (FONPRODE). As of the close of its 2020 fiscal year, COFIDES managed assets totaling EUR 1.1 billion (USD 1.3 billion).

Sources and Additional Resources

Direct contact with COFIDES

Alternativa homepage
http://www.alternativa.com.pe/

More news from MicroCapital on Huruma
https://www.microcapital.org/?s=huruma

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