MICROCAPITAL STORY: Symbiotics Partners with Luxembourg Labelling Agency (LuxFLAG) and Spins Off Luxembourg Consulting Arm to Innpact Sàrl

Symbiotics SA, the Geneva-based investment advisor and information resource for the microfinance industry, has announced a collaboration with the Luxembourg Fund Labelling Agency (LuxFLAG). In an unrelated event, Symbiotics spins-off its Luxembourg consulting arm into an independent company, Innpact Sàrl.

Launched in 2005, Symbiotics offers market information and ratings, structured finance expertise and technical assistance for fund managers, and investment brokerage, monitoring and servicing. The company has over 15 funds using their information, advisory and management services to reach out to over 100 MFIs in emerging economies.

In the first piece of news, Symbiotics and the Luxembourg Fund Labelling Agency (LuxFLAG) announced a collaboration in the publication of a new reference webpage on LuxFLAG accredited Microfinance Investment Vehicles (MIVs). The joint project aims to increase transparency in the microfinance market and provide information for investors, MIVs, and microfinance institutions (MFIs).

LuxFLAG is a non-profit association that aims to promote capital investment in microfinance by awarding a recognizable label to eligible MIVs. LuxFLAG was created in July 2006 by seven founding partners, known as the Charter Members, that include the Luxembourg Stock Exchange, European Investment Fund (EIF), Association of the Luxembourg Fund Industry (ALFI), Luxembourg Bankers’ Association (ABBL), Financial Technology Transfer Agency (ATTF), Appui au Developpement Autonome (ADA), and the Luxembourg Ministry of Finance and Ministry of Foreign Affairs.

The LuxFLAG Microfinance Label verifies for investors that an MIV actually invests in the microfinance sector, either directly through loans to MFIs or indirectly through investments in other MIVS. To date, seven MIVs have received the LuxFLAG label, including funds from BlueOrchard, Vision Microfinance, the European Fund for Southeast Europe, responsAbility, and the Rural Impulse Fund. Read more about LuxFLAG’s most recent label in this MicroCapital story.

The new reference webpage, which appears on both the Symbiotics and LuxFLAG websites, provides information on the total assets and microfinance portfolio of each of the labeled MIVs. The collaboration is viewed as beneficial to both parties; LuxFLAG will benefit from continuously updated data gathered by Symbiotics’ analysts and Symbiotics will benefit from a new distribution channel. No information was provided on whether the partnership was commercial in nature, with LuxFLAG paying for subscription to the Symbiotics Data Feed Service, or simply mutually beneficial.

In separate news, the Luxembourg-based consulting arm of Symbiotics was bought out in the creation of Innpact Sàrl, a consulting firm focusing on the establishment of MIVs. The management buy-out occurs after a two-year collaboration between Symbiotics and Innpact founders Patrick Goodman and Arnaud Gillin, during which the partners consulted on industry projects such as MIFA (Microfinance Initiative for Asia), REGMIFA (Regional MSME Investment Fund for Sub-Saharan Africa) and the MEF (Microfinance Enhancement Facility). The spin-off is viewed as a way for both Innpact and Symbiotics to focus on their core activities.

By Jaclyn Berfond, Research Assistant

Additional Resources:

Symbiotics News: Symbiotics and LuxFLAG Collaborate on MIV Information

Symbiotics News: INNPACT, a new independent responsible finance consulting company in Luxembourg

Symbiotics: April 2009 Corporate Newsletter

LuxFLAG: Homepage

MicroCapital Story: Luxembourg Fund Labelling Agency (LuxFLAG) Grants Label to Belgian Microfinance Investment Company Incofin’s Rural Impulse Fund (RIF)