MICROCAPITAL BRIEF: Netherlands’ FMO Lending $5m to First MicroFinance Bank-Afghanistan to Support MSMEs

The Netherlands Development Finance Company, a government-backed institution also known by its Dutch acronym FMO, recently announced it will loan the local-currency equivalent of USD 5 million to The First MicroFinance Bank-Afghanistan (FMFB-A), which is owned by the Aga Khan Agency for Microfinance (AKAM), a unit of Switzerland-based Aga Khan Development Network (AKDN) that provides microfinance services across ten different countries [1, 6]. Established in 2004, FMFB-A seeks to alleviate poverty and promote economic development “through the provision of sustainable financial services to the poor and underserved.” As of 2016, FMFB-A, which is organized as a limited-liability company, reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 158 million, a gross loan portfolio of USD 74 million outstanding to 57,000 borrowers, deposits of USD 93 million held for 131,000 customers, return on assets of 1.05 percent and return on equity of 6.3 percent [3, 4, 5].

FMO is disbursing the loan from the Massif investment vehicle, which is funded by the Dutch government and “focuses on small businesses and micro-entrepreneurs, women and youth entrepreneurs, as well as supporting innovations in inclusive business.” Massif has a net portfolio of EUR 430 million as of 2016 [2].

The vision of FMO is to help abolish extreme poverty, increase equality and support measures that reduce climate change. It has total assets of EUR 8.5 billion (USD 9.5 billion) and profit before taxes of EUR 219 million (USD 245 million) for the year 2016 [2].

By Matthew O’Neill, Research Associate

Sources and Additional Resources:

[1] Information provided directly to MicroCapital by FMO

[2] MICROCAPITAL BRIEF: Netherlands’ FMO Lending $7.5m to ASA Pakistan for Microloans, Financial Education for 50k Women:
https://www.microcapital.org/microcapital-brief-netherlands-fmo-lending-7-5m-asa-pakistan-microloans-financial-education-50k-women/

[3] MICROCAPITAL BRIEF: International Finance Corporation (IFC) Signs Agreement with First MicroFinanceBank Afghanistan (FMFB), Part of Aga Khan Development Network (AKDN), to Strengthen Capacity to Introduce Housing Microfinance:
https://www.microcapital.org/microcapital-story-international-finance-corporation-ifc-signs-agreement-with-first-microfinancebank-afghanistan-fmfb-part-of-aga-khan-development-network-akdn-to-strengthen-capacity-to-intr/

[4] MIX Profile, FMFB-A:
https://www.themix.org/mixmarket/profiles/fmfb-afg

[5] About FMFB-A:
http://fmfb.com.af/about-us/about-fmfb-afghanistan/

[6] About AKAM:
http://www.akdn.org/our-agencies/aga-khan-agency-microfinance/who-we-are-0

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