MICROCAPITAL BRIEF: Microinvest of Moldova, FINCA Armenia Borrowing $10m from Invest in Visions for Microfinance

Agents for Impact (AFI), a Germany-based impact investing company, recently informed MicroCapital that it is issuing the following loans on behalf of Germany’s Invest in Visions (IIV): EUR 7 million (USD 8 million) in two tranches to Microinvest of Moldova and USD 2.5 million to FINCA Armenia, a unit of US-based FINCA Impact Finance. AFI has disbursed the entire loan to FINCA Armenia and the majority of the loan to Microinvest, with the remainder to be issued in December 2021. AFI aims to bring together investors to make progress toward the UN Sustainable Development Goals.

Microinvest, which is majority-held by the Balkan Financial Sector Equity Fund, offers collateral-based and collateral-free loans ranging in size from approximately USD 110 to USD 315,000 for business, agriculture, housing, vehicles and consumption. The lender has a portfolio of USD 164 million outstanding to 44,000 clients, of whom two thirds live in rural areas and 41 percent are women as of 2021.

FINCA Armenia offers loans – digitally and in-person – for small business, agriculture and solar equipment. It serves about 21,000 men and 12,000 women with a portfolio of USD 43 million as of December 2020. FINCA Impact Finance is for-profit entity partially held by the US-based NGO FINCA International, which was launched in 1984 as the Foundation for International Community Assistance (FINCA International). FINCA Impact Finance comprises 20 banks and microfinance institutions delivering savings, loans and other services to 2.6 million customers in Africa, Eurasia and Latin America. Among its programs is FINCA Ventures, which has eight investments as of 2021 in the form of “patient capital and technical assistance to early-stage social enterprises to support innovation in energy, water/sanitation/hygiene, education, health, agriculture and fintech [financial technology].”

Launched in 2006, IIV manages “investments in sustainable agriculture, social enterprises and social impact lending.” The firm created its primary product, IIV Mikrofinanzfonds, in 2011 to invest in micro-, small and medium-sized enterprises via intermediaries in developing countries. It does this mainly via “small and medium-sized MFIs, particularly in rural areas.” The minimum investment in the fund is EUR 100 (USD 113). As of April 2022, IIV Mikrofinanzfonds has a volume of EUR 889 million (USD 934 million).

AFI, which was founded in 2018 and is headquartered in Frankfurt, does not disclose the volume of its operations.

Sources and Additional Resources

Direct contact with AFI

Microinvest homepage
https://microinvest.md/

FINCA Impact Finance profile on FINCA Armenia
https://www.fincaimpact.com/network/

FINCA International homepage
https://finca.org/

UN Sustainable Development Goals
https://www.un.org/sustainabledevelopment/

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