Effective May 26, 2010, the responsAbility Global Microfinance Fund (rAGMF), which directly invests in microfinance institutions (MFIs) and microfinance investment vehicles (MIVs), will temporarily stop accepting investment. A statement released by responsAbility suggests high liquidity, resulting from steadily high net investment inflows and slowing demand for microfinance credit from MFIs driven by the global economic crisis, as the cause of the stoppage [1].
The temporary suspension, with no stated duration, is being held to reduce the share of liquid assets from 30 percent to 5 to 10 percent of fund volume. Secondarily, responsAbility stated that reducing the liquidity ratio will strengthen returns for the portfolios of current rAGMF investors [1].
While this is an extraordinary move, responsAbility set the tone for “transition and maturity” with statements made by Christian Speckhardt, Chief Information Officer of responsAbility, in February 2010 [2]. Mr Speckhardt stated that he expected MFIs to revert to a “modest growth path,” in line with industry-wide consolidation.
About responsAbility Microfinance Leaders Fund (rAGMF):
The responsibility Global Microfinance Fund (rAGMF) invests in microfinance institutions (MFIs) and microfinance investment vehicles (MIVs), mostly through short to medium-term debt securities. rAGMF also invests up to 10 percent in the equity of MFIs. It is also certified by LuxFLAG as of April 2010.
Additional Resources:
[1] responsAbility: “responsibility Global Microfinance Fund: issuance of fund shares temporarily suspended,” May 5, 2010, http://www.responsability.com/domains%5Cresponsability_ch/data/secure_pdf/100505_ra_medienmitteilung_aussetzung_ausgabe_fondsanteile_en.pdf
[2] Microfinance Focus: “Demand for credit from microfinance institutions to grow 10-15% in 2010: responsAbility,” by Matthew Fuchs, February 18, 2010, http://www.microfinancefocus.com/news/2010/02/18/mfi-demand-for-credit-to-grow-10-15-in-2010-responsability/
MicroCapital’s Microfinance Universe profile: responsAbility Global Microfinance Fund (rAGMF) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=responsAbility+Global+Microfinance+Fund+%28rAGMF%29
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