FINCA International and Deutsche Bank have secured total capital commitments of $21.2m for the FINCA Microfinance Fund BV, the single microfinance network sub-debt deal. The fund aims to bring a new pool of investors to the microfinance industry.
The offering will provide FINCA affiliates in the Democratic Republic of Congo, Mexico, Armenia, Azerbaijan, Kyrgyzstan, Georgia and Tajikistan the financial flexibility to on-lend an estimated $100m in additional loan capital. Through the facility and based on its average network-wide loan size of $503, the seven FINCA affiliates will be positioned to provide an estimated 150,000 additional microloans each year to some of the world’s lowest-income entrepreneurs.
Rupert Scofield, president and CEO of FINCA International, said: “This new financial facility represents an important breakthrough for both FINCA and the microfinance industry.
“As we approach the year of our 25th anniversary, it opens an exciting new chapter for FINCA, allowing us to further expand our outreach to lower-income entrepreneurs, while at the same time broadening the universe of investors for the microfinance community as a whole.”
Gary Hattem, managing director of community development finance group at Deutsche Bank, said: “FINCA International’s long term performance and commitment to a sustainable and socially-responsible microfinance sector aligns closely with Deutsche Bank’s own strategy and commitment to the sector.
“This fund demonstrates the attractiveness of that model to investors who have confidence in providing capital to the poor for self employment where strong management models have delivered continuing social impact and sound financial performance.”
