MICROCAPITAL STORY: ING Review of AXA Group’s Microfinance Activities and AXA World Fund’s Microfinance Investments

The Dutch Bank ING published its updated 2008 study on commercial bank microfinance activity, called “A Billion to Gain? The Next Phase”. A MicroCapital summary of the paper can be read here. MicroCapital is reviewing the microfinance activities of several of large international banks covered in the study, such as the AXA Group.

The AXA Group was the 17^th largest global finance institution by market value in 2007 and financial provider of insurance, savings, retirement, and financial planning. As of 2007, it had over 52 million clients, and revenues of Euro 93.6 billion, and total assets under management of Euro 1.28 trillion.

AXA’s microfinance activities are coordinated by a 4 person Sustainable Development team at the corporate level with sustainable development correspondents within each of its entities. Geographically, AXA focuses on France, Morocco, and India. While it has increasingly concentrated on micro-insurance projects since 2005, AXA also develops funds, provides wholesale loans to microfinance institutions (MFIs), and invests in equity stakes of microfinance organizations.

In 1998, AXA Investment Managers launched the AXA World Fund Development Debt (AWF), which invests in MFIs and development agencies. The AWF gives preference to short-term securities issued by MFIs and mid- to long-term projects promoting sustainable development by supra-national organizations in Latin America. As of 2007, AWF had total assets of USD 23 million, of which 10 percent was committed to microfinance investments.

Regarding actual investments, the AWF supported the USD 80.6 million Global Commercial Microfinance Consortium (GCMC) fund in 2005, contributing USD 3 million. The GCMC provides MFIs worldwide with local currency financing. For more on the GCMC, see the following MicroCapital article.

The AWF was also a founding partner investor in MicroCred along with the International Finance Corporation, Société Générale, and PlaNet Finance. More specifically, AWF committed USD 2.5 million to MicroCred. MicroCred invests in MFIs or banks that provide financial services to low-income entrepreneurs. In addition, at least 60 percent of its investments are in Africa, although it has established four MFIs ( MicroCred Mexico, Senegal, China, and Madagascar).

In France, AXA has invested over USD 7.9 million in MFIs committed to the social and economic integration of the destitute or unemployed. This includes USD 3.1 million to the Société d’Investissement Fance Active (SIFA), USD 3.5 million to the Association pour le Droit à l’Initiative Économique (ADIE), and USD 1.3 million to Habitat et Humanisme. AXA France has also worked with ADIE to develop a co-branded micro-insurance product that is sold along with ADIE microlending products. At the end of 2007, over 60 such policies had been accorded in a regional pilot program. Going forward, this initial offer should be available to ADIE members nationwide in 2008 and to non-ADIE members in following years.

by Jennifer Lee

Additional Resources:

ING Microfinance: “A Billion to Gain? The Next Phase”, by Matthijs Boúúaert, March 2008.

MIX Market: AWF

AXA Group: Home, Microfinance

MicroCapital Story: “Deutsche Bank Leads New Global Commercial Microfinance Consortium, a $75 Million microfinance Investment Fund”, November 7, 2005.

MicroCapital Story: “MicroCred Holding Establishes Microfinance Institutions in China and Senegal, Backed by IFC, AIG, and KfW Bankengruppe”, by Elizabeth Nelson, November 12, 2007.