The Financial Sector Development Program (FSD) Africa, a project funded by the UK’s Department for International Development (DfID), will invest USD 1.8 million over the next four years in the “microinsurance innovation laboratory” to be developed by the Impact Insurance Facility (IIF) of the International Labor Organization (ILO), an agency of the United Nations.

The laboratory is slated to assist five insurance companies and/or distributors in sub-Saharan Africa to develop “innovative micro-insurance products” [1] to increase insurance penetration in the region. The assistance for the insurance companies will consist of supporting changes in organizational structure, capacity building, staff training and the development of business analysis tools. The goal is to provide a safety net for approximately 1 million low-income households by 2020.

Paul Musoke, who serves as the change manager at FSD Africa, said that “unfortunately the insurance sector is in its infancy in most African countries with penetration below 1 percent. FSD Africa is therefore delighted to partner with ILO’s Impact Insurance Facility to promote innovation micro-insurance products targeting low income households across sub-Saharan Africa” [1].

By Kevin van den Brink, Research Associate

About Financial Sector Development Program (FSD) Africa

The Financial Sector Development Program (FSD) Africa was founded in 2012 by the Department for International Development (DFID), the agency of the United Kingdom’s government that is responsible for international development initiatives. With an initial budget of GBP 35 million (USD 50 million) FSD Africa is intended to reduce poverty in sub-Saharan Africa through contributing to efficient financial markets by facilitating that capital flows to projects that show the most potential to reduce poverty, such as renewable energy operations, financial literacy programs and efforts to decrease corruption. FSD Africa is part of the FSD network, which consists of regional FSDs in South Africa and Kenya and national FSDs in Kenya, Mozambique, Nigeria, Rwanda, Tanzania, Uganda and Zambia. This network comprises approximately USD 450 million in collective investment by DFID; The Bill & Melinda Gates Foundation; The Swedish International Development Cooperation; Danish International Development Agency; Foreign Affairs and Trade and Development Canada; The Royal Netherlands Embassy and the World Bank.

About International Labor Organization’s (ILO’s) Impact Insurance Facility (IIF)

Launched in 2008 with a donation of USD 34 million from the US-based Bill & Melinda Gates Foundation, the Impact Insurance Facility (IIF) is housed at the International Labor Organization’s (ILO’s) Social Finance Program. Formerly known as the Microinsurance Innovation Facility, the entity’s goal is to enable the insurance industry, governments and their partners to expand insurance for low-income people with an emphasis on agriculture, health, life and property insurance. As of 2015, it has received funding from donors including Z Zurich Foundation, Munich Re Foundation, the World Bank Group, the United States Agency for International Development and the Australian Agency for International Development in addition to the Bill & Melinda Gates Foundation. ILO is an agency of the United Nations and is located in Geneva, Switzerland.

About International Labor Organization (ILO)

Founded in 1919, the International Labor Organization (ILO) is an agency of the United Nations. The objective of ILO is “to advance opportunities for men and women to obtain productive work in conditions of freedom, equity, security and human dignity”. Headquartered in Switzerland, ILO has proposed a budget plan of USD 797 million for the biennium 2016-2017. The International Labor Office is the permanent secretariat of ILO.

Additional Sources and Resources

[1] FSD Africa, News, “FSD Africa and ILO’s Impact Insurance Facility partner to launch a micro-insurance innovation facility to reach 1 million new insurance clients in sub-Saharan Africa”

MicroCapital Universe Profile: FSD Africa

MicroCapital Universe Profile: IIF

MicroCapital Universe Profile: ILO

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The Overseas Private Investment Corporation (OPIC), a development finance institution backed by the US government, recently invested USD 250 million through a senior debt facility in Bayport Management Limited, Mauritius-based network of microfinance institutions (MFIs) [1].

The loan agreement states that Bayport will use the capital supplied by OPIC to fund growth in Botswana, Colombia, Ghana, Mexico, Mozambique, South Africa, Tanzania, Uganda and Zambia by developing a broader spectrum of financial solutions and a new technology platform.

“We regard the OPIC funding as a way to help more people start businesses, educate themselves and their children, and invest in their futures,” said Stuart Stone, Bayport co-founder and joint CEO. “To us, the funding signifies an endorsement of both Bayport’s strategy and the US’s commitment to empowering developing countries to design their own solutions and growth trajectories.”

As of September 2014, OPIC reported total assets of USD 8.9 billion. As of September 2015, Bayport reported total assets of USD 1 billion, return on assets of 3.5 percent  and return on equity of 17 percent. As of December 2015, BML serves 558,000 customers through 420 branches.

By Kevin van den Brink, Research Associate

About Overseas Private Investment Corporation (OPIC)

The Overseas Private Investment Corporation (OPIC) is an agency of the US government that was established in 1971 as a development finance institution. OPIC works with private-sector firms to identify opportunities in emerging markets and create an enabling environment for private enterprise in developing countries. OPIC provides financing through direct loans as well as guarantees, political risk insurance and investment funds. As of September 2014, OPIC reported total assets of USD 8.9 billion.

About Bayport Management Ltd

Bayport Management Limited  is a holding company that was founded in 2001 in Mauritius. Bayport offers financial services to underbanked and unbanked individuals via subsidiaries in Botswana, Colombia, Ghana, Mozambique, Mexico, South Africa, Tanzania, Uganda and Zambia. As of September 2015, BML reported total assets of USD 1 billion, return on assets of 3.5 percent  and return on equity of 17 percent. As of December 2015, BML serves 558,000 customers through 420 branches.

Sources and Additional Resources

[1] Nasdaq GlobeNewswire, News, “Bayport Management Ltd: OPIC enters into $250 million partnership with Bayport”

MicroCapital Universe Profile: Overseas Private Investment Corporation (OPIC)

MicroCapital Universe Profile: Bayport Management Limited

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Développement international Desjardins (DiD), a Canadian nonprofit supporting the community finance sector in emerging economies, recently joined the “Project integer de nutrition dans les regions de Kedougou et Kolda (PINKK)”, which is aimed at increasing food security for women and children in the Senegalese regions of Kedougou and Kolda. The project was created by the Micronutrient Initiative (MI), a Canada-based nonprofit seeking to reduce malnutrition, and also includes World Vision Senegal, a branch of US-based NGO World Vision International, and Cellule de Lutte contre la Malnutrition (CLM), a Senegal-based nonprofit agency fighting malnutrition.

The five-year project, which has attracted CAD 20 million (USD 14.6 million) in funding from the government of Canada, is intended to increase food security for 165,000 women and children. DiD’s role will be to improve access to financial and related services for women’s groups and small enterprises engaged in producing and processing food with high nutritional value. World Vision Senegal and MI will produce and distribute micronutrient-rich foods. CLM will seek to help local communities integrate nutrition programs into their policies and planning.

Anne Gaboury, the President and CEO of DiD said, “Access to counseling services in business management and access to finance are essential components to the economic empowerment of women; they will be supported by PINKK to improve the living conditions of their households. We are very proud to contribute with our work to the success and sustainability of production activities to be supported by this important project”.

As of December 2014, DiD reported two funds under management with an overall budget of CAN 40 million (USD 29 million). As of the same date, the Desjardins Group, the parent company of DiD, reported approximately CAD 229 billion (USD 166 billion)  in assets. World Vision International raised USD 1 billion in cash and in-kind gifts during 2014 and serves approximately 100 countries as of 2015.

By Kevin van den Brink, Research Associate

About Développement International Desjardins (DiD)

Développement international Desjardins (DiD) is a Canadian nonprofit corporation that specializes in providing technical support and investment for the community finance sector in Africa, Asia, Central and Eastern Europe, and Latin America and the Caribbean. DiD is a component of the Desjardins Group, a financial cooperative offering banking, insurance, securities and investment services, with approximately CAD 229 billion (USD 166 billion) in assets as of December 2014. DiD has two funds that provide loans and investment capital to microfinance institutions and funds specializing in microfinance, the Partnership Fund and the Desjardins Fund for Inclusive Finance.

DID also organizes the Proxfin network of 30 community finance institutions and operates a network of entrepreneur financial centers (EFCs) in Dar es Salam, Tanzania; Kampala, Uganda; Lusaka, Zambia; and Panama City, Panama; Tunis, Tunisia. The EFCs in Tanzania, Uganda and Zambia accept deposits. The four EFCs claim aggregate assets of CAD 68 million (USD 54 million), a loan portfolio of CAD 53 million (USD 43 million), deposits of CAD 12 million (USD 9 million) and 32,000 clients.

About World Vision Senegal

World Vision Senegal was founded in 1986 as a response to the drought of 1983-84. As of 2015, it is active in six regions: Fatick, Kaffrine, Kolda, Tambacounda, Kedougou and Diourbel. Its 124 projects serve 70,000 children directly and 880,000 individuals indirectly in 61 communities. World Vision Senegal is a branch of US-based microfinance NGO World Vision International, which raised USD 1 billion in cash and in-kind gifts during 2014 and serves approximately 100 countries as of 2015.

About Micronutrient Initiative

The Micronutrient Initiative (MI) was founded in 1992 in Ottawa, Canada with the aim of tackling malnutrition through the distribution of micronutrients in developing countries. The staff of MI includes scientists, nutritionists, and policy and development specialists. In addition to its headquarters in Ottawa, the organization has regional offices in Afghanistan, Bangladesh, Ethiopia, India, Indonesia, Kenya, Nepal, Nigeria and Pakistan. As of December 2014, MI’s total annual expenses were USD 51 million. As of the same date, MI provided approximately 500 million individuals by providing access to micronutrients, such as vitamin A and iodized salt.

Additional sources and resources

[1] Développement International Desjardins (DiD), News, “DID joins a multi-sector partnership to increase food security for women and children in Senegal”

Microcapital Universe Profile: Développement International Desjardins (DiD)

Microcapital Universe Profile: World Vision Senegal

Microcapital Universe Profile: Micronutrient Initiative

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“Current Trends in International Funding for Financial Inclusion;” by M. Soursourian, E. Dashi and E. Dokle; published by CGAP (Consultative Group to Assist the Poor); December 2015; 4 pages; available at: http://www.cgap.org/sites/default/files/Brief-Current-Trends-in-International-Funding-Dec-2015.pdf

This report is based on results from the “2015 Cross-Border Funder Survey”, the latest edition of a series that has been conducted by CGAP (Consultative Group to Assist the Poor) annually since 2008 to evaluate investments that international funders place in the financial inclusion sector. After increasing in previous years, financial inclusion funding remained stable at USD 31 billion in 2014. Of this amount, USD 16 billion was invested in retail-level financial service providers, mainly through debt. Investments in the Middle East and North Africa and digital financial services worldwide have increased. Also, funders stated that financial service providers will remain an important target of investment and that they will increase their investments in payment systems, consumer protection and services in sub-Saharan Africa.

“Inclusive Finance India Report 2015,” M. S. Sriram;, published by Sage Impact, December 2015, 160 pages, available for purchase at: http://www.sagepub.in/books/Book251468?subject=M00&sortBy=defaultPubDate%20desc&fs=1#tabview=title

The Inclusive Finance India Report 2015 is the ninth annual issue in a series published by Sage Impact, an Indian unit of US-based Sage Publications. This issues’ research and discussion centers on “customer and back-end technology solutions” as well as the various parties acting in the financial inclusion landscape, such as microfinance institutions, regional banks, rural banks, cooperative banks and the postal network.

“Progreso: Responsible Finance for Inclusion and Development,” by J. M. Flores Moreno, published by BBVA MicroFinanzas, December 2015, available at: http://progresomicrofinanzas.org/

This fifth issue of BBVA’s legal magazine contains legislative and regulatory news on microfinance in Colombia, Dominican Republic, El Salvador, Paraguay and Peru. In it, Javier M. Flores Moreno, the CEO of the BBVA Microfinance Foundation, analyzes factors that impact poverty. The issue also contains an interview with Ricardo Hausmann, Professor of the Practice of Economic Development at US-based Harvard University, in which he emphasizes the importance of the sharing of knowledge among individuals for a country’s economic and social development. The magazine concludes with two microfinance theses. The first article focuses on behavioral bottlenecks that hinder beneficial savings and how mental accounting can remove these bottlenecks, based on a case study of the BBVA Foundation’s financial education program in El Salvador. The second dissertation uses surveys carried out by the Inter-American Development Bank in Lima, Peru and Mexico City, Mexico, regarding how personal factors such as self-confidence and motivation can affect the amount people save.

By Kevin van den Brink, Research Associate

About Fundación BBVA Microfinanzas

Fundación BBVA Microfinanzas (BBVA Microfinance Foundation) is a Spanish nonprofit organization that was created in May 2007 by BBVA, a Spanish bank that reported total assets of EUR 669 billion (USD 730 billion) as of June 30, 2015. The goal of the foundation is to boost the economic and social development of disadvantaged people through access to productive microfinance. Fundación BBVA Microfinanzas is building a network of microfinance institutions (MFIs), which consists of eight MFIs as of 2014 in: Argentina, Chile, Colombia, Dominican Republic, Panama, Peru and Puerto Rico. As of September 2015, the MFIs reported a total of 504 branches and an outstanding credit portfolio of USD 1 billion serving approximately 1.7 million customers.

About CGAP (Consultative Group to Assist the Poor)

CGAP (Consultative Group to Assist the Poor) is a US-based nonprofit policy and research center dedicated to increasing financial access worldwide. It is supported by approximately 40 development agencies and private foundations in its mission to provide market intelligence, promote standards and offer advisory services to governments, microfinance providers, donors and investors. As of December 2014, CGAP reported donor contributions totaling USD 23 million and operating expenses of USD 22 million. As of the same date, the cash balance across all CGAP trust fund instruments was USD 29 million. CGAP is co-located with the offices of the World Bank Group in Washington DC.

Sources and Additional Resources

[1] Fundacion Microfinanzas BBVA, News, “The Foundation publishes fifth issue of its legal magazine on the microfinance sector”

[2] CGAP Microfinance Gateway, News, “Release of the Inclusive Finance India Report 2015”

[3] CGAP Microfinance Gateway, News, “Current Trends in International Funding for Financial Inclusion”

MicroCapital Universe Profile: Fundacion Microfinanzas BBVA

MicroCapital Universe Profile: CGAP

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Qalaa Holdings, an Egypt-based investment holding company previously named Citadel Capital, recently announced that it will sell its 70-percent ownership in Tanmeyah, an Egypt-based provider of microloans and microinsurance, to Egyptian Financial Group (EFG) Hermes, an investment bank serving the Middle East and North Africa (MENA) region. The transaction, which is pending regulatory authorization, values Tanmeyah at EGP 450 million (USD 57 million).

As of December 2015, Tanmeyah reported EGP 509 million (USD 65 million) in loans outstanding to 108,000 borrowers. Tanmeyah does not accept deposits. As of September 2015, Qalaa Holdings reported total assets of EGP 38 billion (USD 4.8 billion) and total equity of EGP 12.3 billion (USD 1.5 billion). As of December 2014, EFG Hermes reported total assets of EGP 75.7 billion (USD 9.7 billion) and total equity of EGP 9.2 billion (USD 1.2 billion).

By Kevin van den Brink, Research Associate

About Tanmeyah

Tanmeyah is an Egyptian financial services provider that focuses on serving low-income individuals and micro- and small enterprises. As of December 2015, Tanmeyah reported EGP 509 million (USD 65 million) in loans outstanding among 108,000 borrowers, 114 branches and approximately 1500 employees in Egypt. Tanmeyah does not accept deposits.

Sources and Additional Resources

[1] Information provided by Africa Practice to MicroCapital

MicroCapital Universe Profile: Tanmeyah

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Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), a Dutch development bank, recently served as lead arranger and facility agent to finalize a USD 153 million senior secured syndicated loan for Sri Lanka’s Commercial Leasing & Finance (CLC). The loan, of which the first tranche worth USD 109 million was signed on December 18 and the final tranche closed on February 24 and, will have a tenor of 5 years.

FMO provided USD 39.2 million of the funding. The other participants are: (1) Deutsche Investitions-und Entwicklungsgesellschaft GmbH (DEG), a German development bank, in the amount of USD 20 million; (2) the OPEC Fund for International Development (OFID), an Austria-based development finance institution, for USD 20 million; (3) responsAbility Investments AG, a Swiss investment company, for USD 12 million; (4) Finnfund, a Finnish development finance company, for USD 11 million; (5) BlueOrchard Finance, a Switzerland-based commercial manager of microfinance investments, for USD 10.1 million; (6) Oesterreichische Entwicklungsbank AG (OeEB), an Austrian development bank, for USD 10 million; (7) the Société de Promotion et de Participation pour La Coopération Economique (Proparco), a France-based development finance institution, for USD 10 million; (8) Symbiotics, a Swiss provider of for-profit investment mediary and business services, for USD 9 million; (9) the Belgische Investeringsmaatschappij voor Ontwikkelingslanden (BIO), a public-private partnership, for USD 7 million; (10) Oikocredit, a Netherlands-based investment fund, for USD 5 million; and (11) Actiam, a Dutch investment fund manager, for USD 5 million.

In addition to the loan capital, the lenders will provide technical assistance to CLC, comprising “asset and liability management”, “client protection principles” and a “management development program”.

Linda Broekhuizen, FMO’s Chief Investment Officer, said: “It is encouraging to see so much commitment to job creation and economic development, both among the other lenders and CLC.

As of December 2014, CLC reported total assets of SLR 32 billion (USD 229 million) and a total lending portfolio of SLR 27 billion (USD 192 million). It is a unit of LOLC (Lanka Orix Leasing Company) Group. LOLC Group is owned by the Orix Corporation, a Japanese firm with assets of JPY 11 trillion (USD 100 billion).

By Kevin van den Brink, Research Associate

About Commercial Leasing & Finance (CLC)

Based in Sri Lanka, Commercial Leasing & Finance (CLC) offers financial services such as, leasing, fixed deposits, savings, loans, factoring, working capital and Islamic finance. CLC was acquired by Sri Lanka’s LOLC (Lanka Orix Leasing Company) Group in May 2008. LOLC Group is owned by the Orix Corporation, a Japanese firm with assets of JPY 11 trillion (USD 100 billion). As of December 2014, CLC reported total assets of SLR 32 billion (USD 229 million) and a total lending portfolio of SLR 27 billion (USD 192 million).

About FMO

Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO) a development bank that was founded in 1970 by the Dutch government, which owns 51 percent of the institution. Its other stakeholders are commercial banks, trade unions, employers’ associations and individual investors. FMO supports governments and invests in financial institutions, energy and agribusiness operators in developing countries through loans, guarantees and other investment promotion activities, including local-currency investments. As of 2015, FMO reported total assets of EUR 8.4 billion (USD 9.05 billion), total loans EUR 4.2 billion (USD 4.6 billion).

About DEG

Deutsche Investitions-und Entwicklungsgesellschaft GmbH (DEG), a member of KfW Bankengruppe, is a German development finance institution offering project and company financing. DEG provides assistance to sectors including agribusiness, financial institutions and infrastructure and processing industries. As of December 31, 2014, DEG reported total assets of EUR 5.3 billion (USD 5.8 billion), return on assets (ROA) of 3.2 percent and return on equity (ROE) of 8.2 percent.

About OFID

The OPEC Fund for International Development (OFID) is a development finance institution that was established by the member states of OPEC (Organization of the Petroleum Exporting Countries) in 1976 as a collective channel of aid to the developing countries. OFID works in cooperation with developing countries and the international donor community to stimulate economic growth and alleviate poverty in all disadvantaged regions of the world. As of December 2014, OFID reported total assets of USD 7 billion, return on assets (ROA) of 0.57 percent, and return on equity (ROE) of 0.58 percent.

Sources and Additional Resources

MicroCapital Universe Profile: CLC

MicroCapital Universe Profile: FMO

MicroCapital Universe Profile: DEG

MicroCapital Universe Profile: OFID

MicroCapital Universe Profile: Responsibility Investments AG

MicroCapital Universe Profile: Finnfund

MicroCapital Universe Profile: BlueOrchard

MicroCapital Universe Profile: OeEB

MicroCapital Universe Profile: Proparco

MicroCapital Universe Profile: Symbiotics

MicroCapital Universe Profile: BIO

MicroCapital Universe Profile: Oikocredit

MicroCapital Universe Profile: Actiam

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“ADB Report: Asia SME Finance Monitor 2014;” by S. Shinozaki, T. Chaiken, S. Jain, K. Dorofev, C. T. Delos Santos and J. Bautista; published by the Asian Development Bank (ADB); September 2015; 318 pages; available at: http://www.adb.org/sites/default/files/publication/173205/asia-sme-finance-monitor2014.pdf

The authors of the SME Finance Monitor 2014 seek to identify the financial needs that small and medium-sized enterprises (SME) must meet to be able to grow[1].

In the 20 Asian countries assessed, SMEs account for 96 percent of registered firms and employ 62 percent of the labor force. However they only produce 42 percent of economic output. Furthermore, SME bank loans account for 18.7 percent of total bank lending [2] [3].

Hence, the report suggests that policy support is needed for SME finance in low-income and lower middle-income countries, as well as the creation of financial infrastructure in low-income countries. In addition, mobile technology is seen as a way to improve SME financing by lifting lending constraints, such as written documentation and collateral by improving the flow of information between borrower and lender [2][3].

“Voices: An Assessment of the Perceived Risks Facing the Microfinance Sector in the Arab World;” by M. Khaled and S. Tieby; published by the International Finance Corporation (IFC); December 2015; 29 pages; available at: http://www.ifc.org/wps/wcm/connect/703b6a004a7232b29eefdf9c54e94b00/Voices+MF+Sector+in+Arab+World.pdf?MOD=AJPERES

This report assesses 26 factors that can affect MFIs based on a risk rating schedule ranging from 0 to 100 percent, in which 0-25 percent is defined as low, 26-50 percent as middle, 51-75 as high and 76-100 as very high.

The survey respondents, all of whom operate in the Middle East or North Africa,  do not perceive any of the risk factors as very high. Moreover, 22 of the 26 factors are rated at or below 50 percent. The following four factors are perceived as high risk: (i) general external risks, those beyond the control of microfinance providers, (ii) security concerns, the risks of deteriorations in law and order; (iii) over-indebtedness, the risk from customers borrowing beyond the capacity to repay; and (iv) macroeconomic risk, the risk of being affected by trends in the wider economy [4].

The survey was written in collaboration with Sanabel, an Egypt-based nonprofit network of microfinance institutions in Arab countries [4]. The report is intended to launch a periodic series of similar studies.

“Putting Responsible Investment Principles Into Practice;” by L. De Canniere; published by Incofin Investment Management (IM); November 2015; 40 pages; available at: https://www.incofin.com/sites/default/files/attachments/newsitems/SP%20Report%20Incofin%20IM%202015%20web.pdf

Incofin Investment Management (IM), a Belgium-based manager of microfinance investment funds, recently published its “Social Performance Management Report 2015”, a document that describes how the organization incorporates on social and financial performance into its investment decisions [5].

Incofin IM refers to its investment approach as “double bottom line”, meaning that financial and social performance are equally important. To measure the social performance of MFIs, Incofin IM developed a tool called ECHOS, built on 5 dimensions: (i) Environment, corporate social responsibility and impact; (ii) Customer service; (iii) Human resources; (iv) Outreach and access; and (v) Social mission management. MFIs that the tool gives a score below a certain level will not be funded by Incofin IM [5]. Results from the implementation of the ECHOS method show a positive correlation between financial and social performance.

In addition to the investment approach, the report shows the progress Incofin IM has made with regard to the Principles for Investors in Inclusive Finance (PIIF), of which it was one of the founding signatories in 2011. The seven principles are: (i) “Expanding the range of financial services available to low-income people”; (ii) “Integrating client protection into all their policies and practices”; (iii) “Treating investees fairly, with clear and balanced contracts, and dispute resolution procedures”; (iv) “Integration of ESG factors into policies and reporting”; (v) “Promoting transparency in all operations”; (vi) “Pursuing balanced long-term returns that reflect the interests of clients, retail providers and end investors”; (vii) “Work together to develop common investor standards on inclusive finance”.

By Kevin van den Brink, Research Associate

Sources and Additional Resources

[1] Talk Vietnam, News, “ADB Report: SMEs need finance to grow”

[2] ADB, Publications, “ADB Financial Report 2014”

[3] ADB, Publications, “Asia SME Finance Monitor”

[4] IFC, News, “New IFC Report Examines Challenges to Microfinance in the Arab World”

[5] Incofin IM, Publications, “Incofin IM: Putting Responsible Investment Principles Into Practice”

MicroCapital Universe Profile: ADB

MicroCapital Universe Profile: International Finance Corporation (IFC)

MicroCapital Universe Profile: Sanabel

MicroCapital Universe Profile: Incofin Investment Management (IM)

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Prudential Financial Incorporated, a US-based financial services company, recently announced a three- to five-year investment of USD 350 million in life insurance companies in African countries such as Ghana, Kenya and Nigeria. The investment will be managed by LeapFrog Investments, a for-profit private equity fund that is based in Mauritius and has invested heavily in microinsurance [1].

Charles Lowrey, the CEO of Prudential’s international business, said, “The investment expands Prudential’s footprint into Africa, a continent that we believe offers tremendous potential for growth over the long term [1].”

Dr. Andrew Kuper, the founder and CEO of LeapFrog Investments, said, “The global insurance industry is looking for ways to close the protection gap for millions of people in emerging markets. This partnership will help address that need, while tapping some of the world’s highest growth markets. […] By enabling LeapFrog to pursue larger and more established assets than via our private equity funds, this partnership also diversifies our capabilities as an alternative investment group [1].”

As of December 2014, Prudential Financial reported total assets of USD 770 billion and net annual income of USD 1.4 billion. As of January 2016, LeapFrog Investments reported a total fund size of approximately USD 1 billion.

By Kevin van den Brink, Research Associate

About Prudential Financial Incorporated

Founded in 1875 in the US city of Newark, New Jersey, Prudential Financial Incorporated is a holding company whose subsidiaries provide insurance, investment management, and other financial products and services to both retail and institutional customers in 31 countries. As of December 2014, the company reported total assets of USD 770 billion and net annual income of USD 1.4 billion.

About LeapFrog Investments

LeapFrog Investments, which was founded in 2007 by Dr. Andrew Kuper and Dr. Jim Roth, is a for-profit private equity fund aimed at earning large returns by investing in and otherwise supporting financial services for the un- and underbanked. LeapFrog’s investors include Accion, the Calvert Foundation, the European Investment Bank, Flagstone Reinsurance, German development organization Kreditanstalt für Wiederaufbau (KfW), the International Finance Corporation (IFC), the Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), the Omidyar Network, Overseas Private Investment Corporation (OPIC), Prudential Financial Incorporated, the Soros Economic Development Fund. LeapFrog team members have also committed USD 1 million of their personal money to the fund. Based in Mauritius, the fund focuses on ventures in Africa and Asia. As of January 2016, LeapFrog Investments reported a total fund size of approximately USD 1 billion.

Sources and Additional Resources

[1] LeapFrog Investments, News, “Prudential Financial and LeapFrog launch partnership in Africa”

MicroCapital Universe Profile: Prudential Financial Incorporated

MicroCapital Universe Profile: LeapFrog Investments

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Leapfrog Investments, a for-profit private equity fund that invests in microinsurance and is based in Mauritius, recently acquired a majority stake in UT Life Insurance, a Ghana-based insurance company, for an undisclosed price. Through this collaboration, UT Life hopes to reach 1 million people by 2020 [1].

Doug Lacey, partner at LeapFrog Investments, said, “We were attracted by UT’s unwavering commitment to Ghana’s mass-market. UT Life is exceptionally well positioned to grow, to prosper and to help millions to make the most of their lives. We’re backing that potential [1].”

Kwaku Yeboah-Asuamah, CEO of UT Life, said, “Our vision is to be the most innovative and affordable life insurer for the consumer mass market in Ghana. We believe our partnership with LeapFrog will give wings to our growth plans and enable us to benefit from LeapFrog’s rich insurance expertise and knowledge [1].”

As of January 2016, LeapFrog Investments reported a total fund size of approximately USD 1 billion. Financial data on UT Life are not available.

By Kevin van den Brink, Research Associate

About LeapFrog Investments

LeapFrog Investments, which was founded in 2007 by Dr. Andrew Kuper and Dr. Jim Roth, is a for-profit private equity fund investing in and otherwise supporting financial services for the un- and underbanked. LeapFrog’s investors include Accion, the Calvert Foundation, the European Investment Bank, Flagstone Reinsurance, German development organization Kreditanstalt für Wiederaufbau (KfW), the International Finance Corporation (IFC), the Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), the Omidyar Network, Overseas Private Investment Corporation (OPIC), Prudential Financial Incorporated, the Soros Economic Development Fund. LeapFrog team members have also committed USD 1 million of their personal money to the fund. Based in Mauritius, the fund focuses on ventures in Africa and Asia. As of January 2016, LeapFrog Investments reported a total fund size of approximately USD 1 billion.

About UT Life Insurance Company Limited

UT Life Insurance Limited was founded as a wholly owned subsidiary of CDH Insurance Company Limited in 2005 with the name CDH Life Assurance Company Limited. In 2010, the subsidiary was acquired by UT Holdings and renamed as UT Life Insurance Limited. The company provides retail and corporate insurance products, such as for life insurance, education expenses, group term, loan protection, keyman insurance and mortgage protection. In 2016, Mauritius-based LeapFrog Investments acquired a majority stake in the firm. Financial data on UT Life are not available.

Sources and Additional Resources

[1] News Ghana, Business and Investments, “LeapFrogs Acquires Majority Shares in UT Life Insurance”

MicroCapital Universe Profile: LeapFrog Investments

MicroCapital Universe Profile: UT Life Insurance Company Limited

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The Overseas Private Investment Corporation (OPIC), a development finance institution backed by the US government, recently invested USD 200 million in equity in Leapfrog Investments, a for-profit private equity fund based in Mauritius. LeapFrog Investments will utilize the funding to invest in healthcare companies in Africa and Asia.

Dr Andrew Kuper, the Founder and CEO of LeapFrog Investments, said, “OPIC’s vision and capital are a magnet for other leading institutions, revealing how to invest in companies that reach billions of underserved consumers. The greatest financial and social opportunity of our era is to serve these real needs, tapping vast new markets, and achieving profit with purpose.”

As of September 2014, OPIC reported total assets of USD 8.9 billion. As of January 2016, LeapFrog Investments reported a total fund size of approximately USD 1 billion, with most of its placements in microinsurance.

By Kevin van den Brink, Research Associate

About LeapFrog Investments

LeapFrog Investments, which was founded in 2007 by Dr. Andrew Kuper and Dr. Jim Roth, is a for-profit private equity fund investing in and otherwise supporting financial services for the un- and underbanked. LeapFrog’s investors include US-based NGO Accion, the Calvert Foundation, the European Investment Bank, Flagstone Reinsurance, German development organization Kreditanstalt für Wiederaufbau (KfW), the World Bank Group’s International Finance Corporation (IFC), Dutch Development Bank Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), the Omidyar Network, the Overseas Private Investment Corporation (OPIC), Prudential Financial Incorporated and the Soros Economic Development Fund. LeapFrog team members have also committed USD 1 million of their personal money to the fund. Based in Mauritius, the fund focuses on ventures in Africa and Asia. As of January 2016, LeapFrog Investments reported a total fund size of approximately USD 1 billion.

About Overseas Private Investment Corporation (OPIC)

The Overseas Private Investment Corporation (OPIC) is an agency of the US government that was established in 1971 as a development finance institution. OPIC works with private-sector firms to identify opportunities in emerging markets and create an enabling environment for private enterprise in developing countries. OPIC provides financing through direct loans as well as guarantees, political risk insurance and investment funds. As of September 2014, OPIC reported total assets of USD 8.9 billion.

Sources and Additional Resources

[1] LeapFrog Investments, News, “OPIC commits up to $200m to LeapFrog Investments”

MicroCapital Universe Profile: LeapFrog Investments

MicroCapital Universe Profile: Overseas Private Investment Corporation (OPIC)

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Bank Negara Indonesia (BNI), a state-owned bank in Indonesia, recently signed an agreement with Perbarindo, an Indonesian association of rural banks, to support the government-backed microloan program Kredit Usaha Rakyat (KUR) channeling “subsidized loans” to micro- small and medium-sized enterprises.

Darmadi Sutanto, BNI’s retail business director, said “We consider rural banks as strategic partners in accelerating the disbursement of KUR loans to business owners across the country, especially those in the microsegment. We channeled IDR 3.2 trillion (USD 2.4 billion) of linkage loans as of last year, with disbursement through rural banks contributing 52 percent to the total amount.”

As of December 2015, BNI reported total assets of IDR 508 trillion (USD 39 billion), return on assets (ROA) of 3.50 percent and return on equity (ROE) of 23.6 percent. As of the same date, it reported IDR 270 billion (USD 21 billion) in total loans outstanding. Perbarindo has approximately 1,640 member banks.

By Kevin van den Brink, Research Associate

About Bank Negara Indonesia (BNI)

Bank Negara Indonesia, which is backed by the government of Indonesia, was established on July 5, 1946, to serve as the country’s central bank. After distributing the first official currency of Indonesia, the bank was transformed into a development bank in 1949 and then a commercial bank in 1955. As of December 2015, BNI reported total assets of IDR 508 trillion (USD 39 billion), return on assets (ROA) of 3.50 percent and return on equity (ROE) of 23.6 percent. As of the same date, it reported IDR 270 billion (USD 21 billion) in total loans outstanding. Perbarindo has approximately 1,640 member banks.

Sources and Additional Resources

[1] The Jakarta Post, News, “Economy in brief: BNI, rural banks team up for microloans”

MicroCapital Universe Profile: Bank Negara Indonesia (BNI)

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Event Name: Microinsurance Learning Sessions: Microinsurance Business Models for Africa

Event Dates: April 6-7, 2016

Event Location: The Leopard Beach Resort & Spa, Diani, Kenya

Event Summary: The topics of the conference include: (1) “Successes and challenges in microinsurance”; (2) “Client value”; (3) “Health microinsurance”; (4) “Agriculture microinsurance”; (5) “Distribution strategy and business modelling”; (6) “Consumer education”.

About the Organizers: The Munich Re Foundation was established in 2005 by Munich Re, a German reinsurance company. The foundation aims to find innovative solutions to problems of population growth, globalization, wealth inequality and the environment. Munich Re has EUR 254 billion (USD 350 billion) in total assets as of December 31, 2013. No financial information has been disclosed for Munich Re Foundation.

Launched in 2008 with a donation of USD 34 million from the US-based Bill & Melinda Gates Foundation, the Impact Insurance Facility (IIF) is housed at the International Labor Organization’s (ILO’s) Social Finance Program. Formerly known as the Microinsurance Innovation Facility, the entity’s goal is to enable the insurance industry, governments and their partners to expand insurance for low-income people with an emphasis on agriculture, health, life and property insurance. As of 2015, it has received funding from donors including Z Zurich Foundation, Munich Re Foundation, the World Bank Group, the United States Agency for International Development and the Australian Agency for International Development in addition to the Bill & Melinda Gates Foundation. ILO is an agency of the United Nations and is located in Geneva, Switzerland.

AB consultants is a Kenya-based microinsurance service provider that aims at increasing penetration of microinsurance in Kenya and other developing countries. The services it provides are strategy development, grant sourcing & development, market research, actuarial services, training, consumer education & awareness and blue print development.

The conference is being facilitated by the Kenya Insurance Regulatory Authority and supported by The Centre for Financial Regulation and Inclusion (Cenfri), Making Finance Work for Africa (MFW4A), and Micro Insurance Network.

Event Website: http://www.munichre-foundation.org/home/Microinsurance/Learning_Sessions/2016-Kenya.html

Cost: Registration for the event costs USD 320, and accommodations may be booked for USD 100 per night.

For additional information, you may contact Rita Kawira of AB Consultants Secretariat by phone at +254 792 294 018 or by email at info[at]abconsultants.co.ke

By Kevin van den Brink, Research Associate

Sources and Additional Resources

[1] Microinsurance Learning Sessions: Microinsurance Business Models for Africa

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The Green for Growth Fund Southeast Europe (GGF), a Germany-based fund that invests in energy efficiency and renewable energy, recently announced that it has agreed to disburse a senior loan of EUR 2 million (USD 2.2 million) to ICS Total Leasing & Finance S.A. (TLF), a Moldova-based non-banking financial institution. TLF is owned for 25 percent by Netherlands-based Emerging Europe Leasing and Finance B.V. and for 75 percent by Netherlands-based Nederlandsche FInancieringsmaatschappij voor Ontwikkelingslanden (FMO).

The funding, which is to be paired with support from GGF’s Technical Assistance Facility, is aimed at enabling TLF to provide energy efficiency solutions, such as improvements of housing envelopes and the replacement of outdated machinery and equipment for small and medium-sized enterprises (SMEs). These improvements are projected to result in energy savings of approximately 16,600 Megawatt-hours and carbon dioxide emission reductions of 3,600 tons annually.

Angela Gladei, The General Director of TLF, said: “Bearing in mind that Moldova depends on imported energy resources and, at the same time, given the strong negative impact the traditional energy sector has on the climate change, Total Leasing and Finance sees the future in the energy efficiency products. Therefore, by contracting the facility dedicated to financing EE technologies, our aim is to adhere to the best practices in this sector and encourage our customers to implement energy efficient measures.”

As of December 2013, GGF reported total assets of EUR 242 million (USD 326 million), a gross loan portfolio of EUR 170 million (USD 229 million) and a an annual profit of EUR 430,000 (USD 579,000). As of December 2015, TLF’s authorized capital totals MDL 39 million (USD 19.4 million), and the firm reported a gross loan portfolio of EUR 20.4 million (USD 23 million).

By Kevin van den Brink, Research Associate

About the Green for Growth Fund Southeast Europe (GGF)

The Germany-based Green for Growth Fund, Southeast Europe (GGF) focuses on extending the use of renewable energy sources and enhancing energy efficiency in Southeast Europe. GGF finances and refinances energy efficiency initiatives and invests in small to medium-scale renewable energy projects. This includes offering technical support and funding to local financial institutions to fund end-users. GGF was established in 2009 by Germany’s Kreditanstalt für Wiederaufbau (KfW) and the Luxembourg-based European Investment Bank (EIB) with the financial support of the EU’s European Commission, the German Federal Ministry for Economic Cooperation and Development (also known by its German acronym BMZ), and the European Bank for Reconstruction and Development (EBRD). As of 2014, GGF operates in 13 countries: Albania, Armenia, Azerbaijan, Bosnia and Herzegovina, Croatia, FYR Macedonia, Georgia, Kosovo, Moldova, Montenegro, Serbia, Turkey and Ukraine. As of December 2013, GGF reported total assets of EUR 242 million (USD 326 million), a gross loan portfolio of EUR 170 million (USD 229 million) and a an annual profit of EUR 430,000 (USD 579,000).

About ICS Total Leasing & Finance S.A. (TLF)

TLF was founded in 2006 by Netherlands-based Emerging Europe Leasing and Finance (EELF) and the Dutch development bank Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden (FMO) to provide loan financing to both enterprises as well as individuals in Moldova. In addition to domestic sources, TLF has received funds from seven foreign financial institutions, namely Deutsche Investitions- und Entwicklungsgesellschaft (DEG); FMO; Oikocredit and Black Sea Trade and Development Bank (BSTDB); European Bank for Reconstruction and Development (EBRD); EELF; and responsAbility. Furthermore, TLF obtained funding through collaborations with a number of lenders in Moldova. As of December 2015, TLF’s authorized capital totals MDL 39 million (USD 19.4 million), and it reports a gross loan portfolio of EUR 20.4 million (USD 23 million). As of April 2016, TLF is owned for 25 percent by EELF and for 75 percent by FMO.

Sources and Additional Resources

[1] GGF, News, “GGF Partners With Total Leasing Finance to Support Energy Efficiency Investments in Moldova”

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Investisseurs & Partenaires (I&P), a France-based family of investment funds that supports “socially responsible” entrepreneurs in Sub-Saharan Africa, recently announced the inauguration of its third fund, Teranga Capital (TC). TC is a Senegal-based private-equity fund that will focus on “small growing businesses” with financing needs between EUR 75,000 (USD 85,000) and EUR 300,000 (USD 341.000). The fund’s starting capital is EUR 5 million (USD 5.7 million). In addition to the capital, TC will provide coaching with regard to sales and marketing, accounting, and other areas.

Olivier Furdelle, the founder and director of TC, said: “We bring [a …] solution specifically designed to answer the needs of Senegalese SMEs [small and medium enterprises], in terms of financing but also in terms of strategic and managerial support.”

Jean-Michel Severino, the President of I&P, said: “With Teranga, the I&P offers a smaller and complementary investment range, that perfectly matches the financing needs of small businesses. This […] model, which will span across 10 African countries over the next decade, aims to support an emerging network of dynamic and local enterprises in sub-Saharan Africa”.

I&P has sponsored Teranga Capital as part of its I&P Développement 2 (IPDEV2) project, which seeks to incubate a network of 10 African investment funds that targets small businesses. As of October 2015, IPDEV2 closed EUR 9.5 million (USD 10.8 million) in both equity as well as grants. As of March 2016, TC’s fund totals EUR 5 million (USD 5.7 million).

By Kevin van den Brink, Research Associate

About Teranga Capital

Teranga Capital is a Senegal-based private-equity fund that was founded in March 2016. As of the same date, the fund’s total capital is EUR 5 million (USD 5.7 million). The fund focuses on financing small growing businesses with financing needs between EUR 75,000 and EUR 300,000. It is sponsored by Investisseurs & Partenaires, le Fonds Souverain d’Investissements Strategiques (FONSIS), la Sonatel, Askia Assurances and individual investors from Senegal.

About Investisseurs & Partenaires (I&P):

Investisseurs & Partenaires (I&P) was established in France in 2002 as a family of investment funds that supports “socially responsible” entrepreneurs in Sub-Saharan Africa. It is made up of four for-profit financial vehicles, I&P Developpment (IPDEV), I&P Développement 2 (IPDEV2), I&P Afrique et Entrepreneurs (IPAE), I&P Africa Infrastructure (IPAI), in addition it has partnerships with sector-specific actors. IPDEV1 started in 2002 and has been fully invested with a fund size of EUR 11 million (USD 12.5 million). IPDEV2 started in 2015 and has closed its first round of investment, totaling EUR 9.5 million (USD 10.8 million) in October 2015, the fund aims at closing a second round of funding, totaling EUR 10.5 million (USD 12 million) in 2016. IPAE started in 2012 and has a total fund size of EUR 54 million (USD 61.5 million). IPAI started in 2016 and has a target fund size of EUR 100-150 million (USD 113-170) and is expected to close its first round of investments in 2016, totaling an undisclosed amount. Finally, I&P set up partnerships with sector-specific actors, they aim at raising a total of EUR 54.5 (USD 62 million).

Sources and Additional Resources

[1] JeuneAfrique, News, “Senegal: Teranga Capital Officialise Son Lancement Avec 5 millions d’euros”

MicroCapital Universe Profile: Teranga Capital

MicroCapital Universe Profile: Investisseurs & Partenaires (I&P)

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The Small and Medium Enterprises Development Agency of Sierra Leone (SMESL), which was established by that nation’s parliament in 2015 [2], recently announced it will provide loans at interest rates below 10 percent per year without a collateral requirement, in an effort to strengthen small and medium-sized enterprises in the country.

In addition, SMESL announced the “Local Content Agency Act”, which seeks to strengthen the connection between foreign organizations and the local economy. It also requires investors to meet certain operational targets, such as developing worker skills and improving technology. According to Ernest Bai Koroma, the president of SMESL: “it will also ensure that Sierra Leoneans have a fair and transparent opportunity to compete for the delivery of local materials and other goods and services under a preferential price sensitive procurement system without compromising timeliness, quality, safety and other standards”.

By Kevin van den Brink, Research Associate

Sources and Additional Resources

[1] AllAfrica, News, “Sierra Leone: SME Development Agency Would Provide Loans at a Single Digit Interest Rate”

[2] Parliament of Sierra Leone, Press Release, “Parliament Enacts Sierra Leone Small and Medium Enterprises Development Agency Act 2015”

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Pending regulatory approval, VisionFund International, a US-based affiliate of the Christian humanitarian organization World Vision International, recently agreed to purchase a majority stake in Opportunity International’s (OI’s) microfinance institution (MFI) in the Democratic Republic of Congo (DRC). OI, a US-based microfinance NGO, retains a 20-percent stake and one seat on the board.

VisionFund plans for the MFI to provide small loans for better sanitation, nutrition, education and medical services. The initial region of focus will be the Kinshasa area.

As of 2015, VisionFund has a loan portfolio of USD 474 million outstanding to approximately 1 million borrowers, mostly women. Founded in 1971, Opportunity International is a nonprofit organization that provides loans, savings, insurance and training to 12 million individuals in 28 countries in Africa, Asia, Europe and Latin America. World Vision raised USD 1 billion in cash and in-kind gifts during 2014 and serves approximately 100 countries as of 2015.

By Kevin van den Brink, Research Associate

About VisionFund International

VisionFund International, a US-based nonprofit organization, offers financial services to families living in poverty in the developing world through a network of microfinance institutions in 32 countries in Asia, Africa, Latin America and the Caribbean, the Middle East and Eastern Europe. Its services include small loans and business training and support. VisionFund is part of US-based World Vision, a Christian relief, development and advocacy organization. As of 2015, VisionFund has a loan portfolio of USD 474 million outstanding to approximately 1 million borrowers.

About Opportunity International

Founded in 1971, Opportunity International is a nonprofit organization that provides loans, savings, insurance and training to 12 million individuals in 28 countries in Africa, Asia, Europe and Latin America. Based in the US city of Chicago, Opportunity International also has administrative offices in Australia, Canada, Germany, Hong Kong, Singapore, Switzerland and the UK. As of December 2014, Opportunity International reported total assets of USD 59 million and contributions and grants of USD 4 million.

About World Vision International

World Vision is a US-based Christian humanitarian organization dedicated to working with children, families and their communities to “reach their full potential” by tackling the causes of poverty and injustice. World Vision serves poor people regardless of religion, race, ethnicity or gender. The organization operates microfinance institutions through its subsidiary VisionFund International. World Vision raised USD 1 billion in cash and in-kind gifts during 2014 and serves approximately 100 countries as of 2015.

Sources and Additional Resources

[1] Information provided to MicroCapital by VisionFund International

MicroCapital Universe Profile: VisionFund International

MicroCapital Universe Profile: Opportunity International

MicroCapital Universe Profile: World Vision International

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Equitas Holdings Limited, an Indian microfinance lender, recently opened its primary market sale. The initial public offering generated INR 7.2 billion (USD 108 million) in newly issued shares. Furthermore, it had already acquired INR 6.5 billion (USD 98 million) from anchor investors ahead of the IPO.

Total demand for the IPO was INR 260 billion (USD 3.9 billion), 17 times the amount of shares on offer. The IPO was oversubscribed 57 times in the high net worth individual category, 15 times in the institutional investor segment, and 1.3 times in the retail category. The valuation of Equitas at the IPO price of INR 110 (USD 1.65) was 1.7 times its estimated 2017 book value, which is lower than peers such as SKS Microfinance (3.3) and Cholamandalam Investment (3.8).

Before the IPO, foreign institutional investors (FIIs) owned 93 percent of Equitas. During the primary market period, the reserve bank of India did not allow them to participate due to a ceiling of 49 percent on FII ownership of publicly traded firms. After the IPO, FII shareholding in Equitas stands at 35 percent. Foreign investors that sold their shares in the IPO were Aavishkaar, Aquarius Investments, CreditAccess Asia, Helion Venture Partners, India Financial Inclusion Fund, International Finance Corporation, Lumen Investment Holdings, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden, Sequoia Capital and Westbridge Ventures. For example, CreditAccess Asia generated proceeds of EUR 25 million (USD 28 million) from the IPO sale.

During the first day of secondary market trading, shares exceeded the issue price of INR 110 per share, with a high of INR 147 and a low of INR 134. In total INR 23 billion (USD 350 million) of stock changed hands on the National Stock Exchange and Bombay Stock Exchange.

Equitas plans to use the IPO proceeds to enhance the capital base of its microfinance, vehicle finance and housing finance units. Furthermore, it will seek to merge the units as part of a transformation from a microfinance lender to a small finance bank which it may do under the license it got from the RBI on September 26, 2015 [4].

As of March 2016, Equitas reported total assets of INR 40.1 billion (USD 600 million) and 2.7 million clients. As of the same date, it reported an annual profit of INR 10.6 billion (USD 160 million). As of March 2015, Equitas reported return on assets of 3.64 percent and return on equity of 19.84 percent.

By Kevin van den Brink, Research Associate

About Equitas Holdings Limited

Equitas Micro Finance is a microfinance institution (MFI), that was created in December 2007 and got a small banking license from the Reserve Bank of India in September 2015, is based in Chennai, India. The objective of the company is to make credit available at a “reasonable” cost and in a transparent manner to the underbanked population of India. Equitas is active in seven states and union territories in India: Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Puducherry, Rajasthan and Tamil Nadu. Equitas Micro Finance is a unit of Equitas Holdings, which also controls Equitas Vehicle Finance and Equitas Housing Finance. On the 5th of April 2016, Equitas Holdings raised INR 22 billion (USD 330 million) through an IPO. As of March 2016, Equitas reported total assets of INR 40.1 billion (USD 600 million) and a total client base of 2.7 million users for its microfinance business. As of the same date, it reported a profit of INR 10.6 billion (USD 160 million).

Sources and Additional Resources

[1] Chittorgarh, IPO List, “Equitas Holdings Limited IPO Detail”,

[2] SmartInvestor, Market News, “On its first day, Equitas stock settles 23% above listing price”

[3] Livemint, News, “Equitas to launch IPO on 5 April”

[4] MicroCapital, Brief, “Reserve Bank of India (RBI) Awards Small Bank Finance Licenses to 10 Microfinance Institutions (MFIs)”

MicroCapital Universe Profile: Equitas Holdings Limited

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Accion, a US-based nonprofit providing microfinance services in 32 countries, recently announced that it will invest an undisclosed amount of money in Aire, a UK-based startup focused on credit score data analytics. The investment is being made through Accion’s Venture Lab, a USD 10 million initiative that funds startups focusing on expanding financial access to the underserved.

Aire evaluates characteristics such as the consumer’s profession, education and financial knowledge to aid banks in assessing his or her creditworthiness.

Accion CEO and President Michael Schlein said: “Around the world, millions of people cannot access the credit that they need to launch businesses, buy homes, or build better lives. In many cases, this isn’t because they have bad credit history, but rather because they have no credit history. By providing an alternative to traditional credit scoring, Aire helps to extend financial services to more people who need them.”

As of March 2015, Accion, in association with its partner MFIs, has an aggregated loan portfolio of USD 7.54 billion serving approximately 5.33 million borrowers.

By Kevin van den Brink, Research Associate

About Accion

Accion is a private, US-based nonprofit organization with the mission of alleviating poverty by offering financial products such as microenterprise loans and business training. Accion was founded in 1961 and issued its first microloan in 1973 in Brazil. Accion’s partner microfinance institutions provide loans to men and women entrepreneurs through 64 microfinance institutions (MFIs) in 32 countries in Africa, the Americas and Asia. As of March 2015, Accion, in association with its partner MFIs, have an aggregated loan portfolio of USD 7.54 billion serving approximately 5.33 million borrowers. As of December 2013, Accion reported total assets of USD 351 million.

About Aire

Founded in 2014 in London, Aire uses a “machine learning algorithm” to assess data provided by applicants to create credit scores. The system considers data types such as educational level, profession and financial knowledge. As of April 2016, Aire is backed by White Star Capital, SparkLabs Global Ventures, Techstars and Accion Venture Labs.

Sources and Additional Resources

[1] Accion Venture Labs, Press Releases, “Accion Venture Lab to Empower Additional Creditworthy Consumers through Investment in Aire”

MicroCapital Universe Profile: Accion

MicroCapital Universe Profile: Aire

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Ujjivan Financial Services, an Indian provider of microloans and life insurance, recently conducted its initial public offering (IPO), generating INR 3.6 billion (USD 54 million) from the sale of newly issued shares. In addition, it locked in INR 2.7 billion (USD 41 million) in new funds from unidentified anchor investors ahead of the IPO [1].

The issuance of 30 million shares was oversubscribed approximately 41 times. The valuation of Ujjivan at the IPO price of INR 210 (USD 3.16) was 1.6 its estimated 2017 book value, roughly the ratio of Equitas (1.7), the Indian microfinance lender that went public in April 2016 [1] [2].

The IPO lowers foreign shareholding in Ujjivan to approximately 45 percent from 77 percent, bringing the firm in line with the Reserve Bank of India’s (RBIs) guideline that foreign institutional investor ownership not exceeding 49 percent for publicly traded firms. Foreign investors that sold their shares in the IPO were Elevar Equity, India Financial Inclusion Fund, International Finance Corporation, Mauritius Unitus Corporation, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden, Sarva Capital, Wolfensohn Capital Partners and Women’s World Banking Capital Partners.

Ujjivan plans to use the IPO proceeds to complete its transformation into a small finance bank during the first quarter of 2017 under the license it got from RBI on September 26, 2015 [3].

As of March 2015, Ujjivan served approximately 2.2 million customers through 470 branches across 209 districts. As of the same date, Ujjivan reported total assets of INR 39.4 billion (USD 592 million), return on assets of 2.8 percent, return on equity of 16.4 percent and a gross loan portfolio of INR 32.7 billion (USD 491 million).

By Kevin van den Brink, Research Associate

About Ujjivan Financial Services

Ujjivan Financial Services is a microfinance institution (MFI) based in Bangalore, India, that offers loans and insurance products. It was founded in 2004 and focuses on low-income women in urban and semi-urban areas. Its products include business loans, educational loans, emergency loans and life insurance. As of March 2015, Ujjivan served approximately 2.2 million customers through 470 branches across 209 districts. As of the same date, Ujjivan reported total assets of INR 39.4 billion (USD 592 million), return on assets of 2.8 percent, return on equity of 16.4 percent and a gross loan portfolio of INR 32.7 (USD 491 million). In May 2016, Ujjivan Financial Services went public, raising USD 95 million in new capital.

Sources and Additional Resources

[1] Economic Times, News, “Ujjivan Financial Services IPO Stages Stellar Show Subcribed 40.57”

[2] MicroCapital, News, “Indian Microfinance Lender Equitas Holdings Goes Public, Raising 330m”

[3] MicroCapital, News, “Reserve Bank of India (RBI) Awards Small Finance Bank Licences to 10 Microfinance Institutions (MFIs)”

MicroCapital Universe Profile: Ujjivan Financial Services

MicroCapital Universe Profile: Elevar Equity

MicroCapital Universe Profile: International Finance Corporation

MicroCapital Universe Profile: Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO) Development Bank

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IFMR Capital, an affiliate of the Chennai-based nonprofit Institute of Financial Management and Research (IFMR), recently structured the first capital market transaction for the Micro Units Development & Refinance Agency (MUDRA) Bank, an Indian public-sector financial institution that provides subsidized loans and other services to microfinance institutions (MFIs) and non-banking financial institutions (NBFCs).

The 1.5-year securitization transaction, called Mjolnir, enabled MUDRA to invest INR 500 million (USD 7.5 million) in the A-rated senior tranche of a securitized portfolio of microloans issued by Janalakshmi Financial Services (JFS), a Bangalore-based microfinance institution (MFI) that offers lending and insurance services to low-income Indian households primarily in urban areas. Furthermore, IFMR Capital invested INR 16.3 million (USD 240,000) in the subordinated junior tranche.

Kshama Fernandes, Managing Director & CEO of IFMR Capital, said “Going forward, with the benefit of MUDRA’s rating and support in capital market structures, these NBFCs’ ability to provide last mile support to small borrowers / [Micro-, Small and Medium-sized Enterprises] MSMEs through sustainable financing structures will receive further impetus.”

As of May 2016, IFMR Capital has completed 18 securitization transactions with JFS worth a total of INR 20 billion (USD 300 million). As of 2015, IFMR Capital reported INR 11.8 billion in total assets (USD 177 million). As of the same date it reported return on assets of 4.9 percent and return on equity of 22.1 percent. As of 2015, JFS reported total assets of USD 796 million, a gross loan portfolio of USD 605 million outstanding to 2.3 million borrowers, return on assets of 2.3 percent and return on equity of 10.7 percent. The MFI does not accept deposits.

By Kevin van den Brink, Research Associate

About Micro Units Development and Refinance Agency (MUDRA) Bank

The Micro Units Development and Refinance Agency Bank (MUDRA) is a public-sector financial institution in India that places investments such as subsidized loans in microfinance institutions (MFI) and non-banking financial institutions in the country. As of April 2015, the bank was functioning as a non-banking financial subsidiary of the Small Industries Development Bank of India (SIDBI), a development finance institution based in Lucknow, India, that focuses on lending to MFIs in the country. MUDRA was launched with initial capital of INR 230 billion (approximately USD 3.46 billion).

About Janalakshmi Financial Services

Janalakshmi Financial Services is a microfinance institution (MFI) located in Bangalore, India. It is focused primarily on offering loans and microinsurance to low-income populations in urban areas of India. As of 2015, Janalakshmi reported total assets of USD 796 million, a gross loan portfolio of USD 605 million outstanding to 2.3 million borrowers, return on assets of 2.3 percent and return on equity of 10.7 percent. The MFI does not accept deposits.

About IFMR Capital

IFMR Capital, a subsidiary of IFMR Trust, is an Indian non-banking financial company that aims to provide liquidity and debt capital to the microfinance industry and other sectors that serve low-income households. IFMR Trust is an affiliate of the Institute for Financial Management and Research (IFMR), a nonprofit research and educational institution in India. As of 2015, IFMR Capital reported INR 11.8 (USD 177 million) billion in total assets. As of the same date it reported return on assets of 4.9 percent and return on equity of 22.1 percent.

Sources and Additional Resources

[1] Business Standard, News, “IFMR Capital Initiates First Capital Market Transaction for MUDRA”

MicroCapital Universe Profile: Micro Units Development and Refinance Agency (MUDRA) Bank

MicroCapital Universe Profile: Janalakshmi Financial Services

MicroCapital Universe Profile: Institute of Financial Management and Research Capital

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