MICROCAPITAL BRIEF: Incofin Loans $2m to Small Enterprise Foundation (SEF) of South Africa from Microfinance Enhancement Facility (MEF)

Belgium-based Incofin Investment Management recently disbursed a loan of USD 2 million to the Small Enterprise Foundation (SEF), a microlender in South Africa, from the Microfinance Enhancement Facility (MEF). According to Kevin Kamemba, Incofin’s Regional Director for Africa, “SEF has enabled thousands of vulnerable women in South Africa to sustainably scale the barriers of unemployment and gender inequality through micro-enterprise loans and capacity building. This resonates with Incofin’s desire to promote inclusive progress, and we are happy to partner with SEF especially during these exceptional times when their clients would need them the most.”

SEF was founded in the South African province of Limpopo in 1992 and has since extended its reach to five additional provinces: Eastern Cape, Gauteng, Kwazulu Natal, Mpumalanga and North West. SEF provides microcredit to groups of women entrepreneurs in rural areas. Although the organization does not offer savings, it provides a “savings mobilisation program” to support clients in meeting their savings goals. SEF also offers financial literacy training and partners with an organization named Intervention with Microfinance for Aids and Gender Equity to provide training on “health and gender empowerment.” As of June 2019, SEF reports total assets of ZAR 603 million (USD 35.3 million). As of November 2019, it reports loans of ZAR 818 million (USD 47.9 million) outstanding to 224,000 active clients.

Incofin is a for-profit firm that was founded in 2001 and seeks “to promote inclusive progress.” As of January 2020, it has 320 investees in 66 countries, mostly working in financial inclusion and agriculture. Incofin’s portfolio is valued at USD 1 billion and comprises the following funds: agRIF, BRS Microfinance Coop Fund, Fairtrade Access Fund, Fonds pour l’Inclusion Financière en République Démocratique Congo (FPM), Incofin CVSO, Invest in Visions, Rural Impulse Fund (RIF) II, Volksvermogen and a loan portfolio of vdk bank.

MEF was established in 2009 by the German government’s KfW Entwicklungsbank and the World Bank Group’s International Finance Corporation. It originally was created to assist microfinance institutions (MFIs) in the wake of the financial downturn that began in 2008. MEF invests debt in the microfinance industry under a mandate to avoid “crowding out much-needed private sector…actors.” As of December 2019, MEF reported total assets of USD 770 million, with a microfinance investment portfolio totaling USD 566 million. During 2019, the fund disbursed 204 loans, averaging USD 2.9 million each, to 133 MFIs in 43 countries.

By Jessica McLeod, Research Associate

Sources and Additional Resources

Incofin press release
http://www.incofin.com/wp content/uploads/Press_Release_MEF_SEF.pdf

Incofin homepage
http://www.incofin.com/

SEF homepage
https://www.sef.co.za/

SEF 2019 financial statements
https://www.sef.co.za/wp-content/uploads/2019/11/SEF_AFS_2019.pdf

MEF homepage
http://www.mef-fund.com/

MEF quarterly factsheet December 2019
http://www.mef-fund.com/downloads/factsheets/2020/MEF_Factsheet_201912.pdf

Previous MicroCapital article on Incofin
https://www.microcapital.org/microcapital-brief-gain-incofin-netherlands-ministry-of-foreign-affairs-building-nutritious-food-financing-facility-n3f-to-invest-in-smes-producing-distributing-foods-in-africa-irish-aid-rocke/

Previous MicroCapital article on SEF
https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-efse-loans-2-6m-in-local-currency-to-visionfund-microfinance-institution-sef-international-to-support-rural-mses-in-armenia/

Previous MicroCapital article on MEF
https://www.microcapital.org/microcapital-brief-ifc-kfw-oeeb-renew-310m-commitments-microfinance-enhancement-facility-mef/

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