MicroVest Capital Management, a global microfinance intermediary that provides capital to growing microfinance institutions (MFIs) in emerging markets, has completed two first-time investments in two Latin American MFIs. MicroVest made its first local currency loan of 2.4 million Peruvian Soles (USD 750,000 equivalent) to PRISMA, the second largest unregulated MFI in Peru, and two weeks later structured a USD 750,000 loan with Calvert Social Investment Foundation to FUNBODEM, an unregulated MFI operating in Santa Cruz, Bolivia.
PRISMA, also known as Asociación Benefica Prisma, is a non-governmental organization (NGO) founded in 1986 that helps Peruvian poor achieve sustainable economic and social development through microfinance. “Financial data” on PRISMA’s MIX Market profile reveals as of December 31, 2006, total assets were USD 4.8 million with a return on assets of -0.13% and a return on equity of -0.23%. According to MicroVest’s press release, PRISMA’s total loan portfolio recently exceeded USD 5 million and the MicroVest loan will help PRISMA achieve an overall growth of 35% in 2007. Most recent “outreach and impact” data for PRISMA shows over 15,000 active borrowers of which 74% are women.
In addition to the loan to PRISMA, MicroVest structured a syndicated loan with Calvert Social Investment Foundation, a non-profit institution dedicated to community investment, to finance continued growth operations for Bolivia’s Fundación Boliviana para el Desarrollo de la Mujer (FUNBODEM). A syndicated loan is a large loan in which multiple lenders work together to provide funds for a borrower. In this case MicroVest and Calvert Social Investment Foundation structured a syndicated loan with two “slices.” Calvert Social Investment Foundation’s USD 250,000 contribution will be senior to MicroVest’s USD 500,000 contribution meaning Calvert will receive repayment prior to MicroVest. “Financial data” on FUNBODEM’s MIX Market profile reveals as of December 31, 2006, total assets were USD 5.7 million with a return on assets of 5.47% and return on equity of 14.25%. MicroVest’s press release indicates the MFI is growing and its gross loan portfolio now exceeds USD 6 million with an outreach of over 6,000 clients. FUNBODEM plans to maintain annual client growth of 20% for the next three years.
The syndicated loan to FUNBODEM is not the first from MicroVest and Calvert Social Investment Foundation, earlier this summer the two organizations announced a USD 1.5 million loan to Ghana-based MFI, Sinapi Aba Trust.
According to their respective MIX Market profiles, MicroVest has total fund assets over USD 24 million and Calvert Social Investment Foundation has total fund assets over USD 106 million of which USD 27 million are allocated to microfinance.
-Steven Craig
Additional Resources:
Microvest: http://www.microvestfund.com
The MIX Market: http://www.mixmarket.org/
Calvert Foundation: http://www.calvertfoundation.org
MicroCapital.org, July 11, 2007: MICROCAPITAL STORY: The Calvert Foundation, in Partnership with Microvest, Announce their USD 1.5 million Loan to Ghana Based Microfinance Institution Sinapi Aba Trust
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[…] MicroCapital.org Article, September 20, 2007, “MicroVest Finances Microfinance Growth in Latin America with Debt Investment in PRISMA and FUNBODEM”, https://www.microcapital.org/microcapital-story-microvest-finances-microfinance-growth-in-latin-ameri… […]