MICROCAPITAL BRIEF: FMO Investing $15m in Equity in Sanad Fund for MSME for On-lending in the Middle East, North Africa

Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), a Dutch development bank, recently announced that it will place equity of USD 15 million in the debt sub-fund of the Sanad Fund for MSME (Micro-, Small and Medium-sized Enterprise), which disburses “medium- and long-term” loans to financial institutions that serve MSMEs in the Middle East and North Africa. FMO is disbursing the funds from the MASSIF Fund, which FMO manages on behalf of the Dutch Ministry of Foreign Affairs with the goal of increasing inclusive finance within Africa. As of 2016, the MASSIF Fund reported total assets of EUR 797 million (USD 850 million) and 180 active portfolio companies.

Sanad, which is named for the Arabic word meaning “support,” was founded in 2011 and is domiciled in Luxembourg. It is an initiative of German development bank Kreditanstalt für Wiederaufbau (KfW) and is funded by KfW, Germany’s GLS Bank and the EU as well as development finance institutions of the Austrian, German and Swiss governments. Sanad invests in Algeria, Egypt, Iraq, Jordan, Lebanon, Morocco, the Palestinian Territories, Tunisia and Yemen with an emphasis on Egypt and Tunisia. As of 2016, the fund has raised total investor commitments of USD 186 million. It is advised by Germany’s Finance in Motion, which manages assets valued at EUR 1.6 billion (USD 1.7 billion) as of 2017.

FMO was founded in 1970 by the Dutch government, which owns 51 percent of the institution. Its other stakeholders are commercial banks, trade unions, employers’ associations and individual investors. FMO supports governments and invests in financial institutions, energy firms and agribusiness operators in developing countries through loans, guarantees and other investment promotion activities, including local-currency investments. As of 2015, FMO reported total assets of EUR 8.4 billion (USD 9.05 billion).

By Phoebe Rorke, Research Associate

Sources and Additional Resources

FMO:
Dutch Investment in Micro Entrepreneurs in MENA

Project Details – Sanad Fund for MSME – One of two
FMO Invests in Sanad Fund for MSME

Project Details – Sanad Fund for MSME – Two of two
FMO Invests in Sanad Fund for MSME

MASSIF
MASSIF Fund

Sanad:
Sanad Fund for MSME

MicroCapital:
Sanad Fund for MSME Lends $1.5m for Women’s Enterprises in Palestine via Microfinance Institution Asala

FMO Loans $29m to El Salvador’s Fedecredito for On-lending to Cooperatives, Bosnia and Herzegovina’s Partner Mikrokreditna Fondacija for Agricultural Microenterprises

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