IDB-backed fund creates tangible social impact in Latin America and the Caribbean
- In excess of US$300 million disbursed to 400,000 micro-entrepreneurs across 13 countries; more than 60% women and over 40% rural clients reached
- Over its lifetime, the private debt fund reached its target size of US$150 million funded by public and private investors
- The Fund achieved a net IRR of 5.84% in USD
The Microfinance Growth Fund has provided financing to 400,000 micro-entrepreneurs in 13 countries since 2010, a milestone which marks a significant contribution to the rise in supply of finance in the Latin and Central American region after the 2008 financial crisis.
The Microfinance Growth Fund (MiGroF), managed by Swiss-based impact investment manager BlueOrchard Finance, was created in March 2010 to restore the lending capacity of microfinance institutions (MFIs) in Latin and Central America following the 2008 international financial crisis, and to increase the supply of finance for micro, small and medium businesses. The Fund’s investors included the Multilateral Investment Fund (MIF), IDB Invest (members of the Inter-American Development Bank, IDB Group), US-based Overseas Private Investment Corporation (OPIC), Citibanamex, CAF Development Bank of Latin America, Norwegian Microfinance Initiative, Accion International, as well as other private sector investors. BlueOrchard was selected as the fund manager out of 17 applicants bidding for this mandate.
By investing across 13 countries in MFIs reaching 400,000 micro-entrepreneurs – mostly female and rural clients – MiGroF made a significant contribution to the supply of finance and the expansion of credit to small- and medium-sized enterprises in the Latin and Central American region from 2010-2017. At its peak, the Fund reached 43 MFIs of all sizes, and invested in middle and lower income countries, providing senior loans in as many as 10 currencies.
“The social impact enabled by MiGroF is another key milestone in our continued effort to reduce poverty and share prosperity across the emerging world. We are very proud to have achieved both considerable social impact and attractive financial returns for the fund’s investors,” said Peter A. Fanconi, BlueOrchard’s Chairman of the Board.
“It is encouraging to see how this effort --spearheaded by the FOMIN and IDB Invest in the aftermath of the financial crisis-- was able to achieve its objectives of providing liquidity and funds for growth to facilitate lending to micro and small enterprises throughout Latin America, boosting economic growth and increasing employment in many countries of the region," said Tomas Miller of the IDB’s Multilateral Investment Fund.
“MiGroF’s commitment to the microfinance industry in Latin America, at times when the sector experienced liquidity challenges, has been remarkable. We are delighted to report that the fund’s original objectives to expand access to finance in the region have exceeded expectations”, said Bob Annibale, Global Director of Citi Inclusive Finance and MiGroF’s Chairman of the Board.
“Entrepreneurs, particularly female entrepreneurs, are a vital economic engine in emerging markets around the world. When we empower women, we empower their families, their communities and their local economies,” said Ray Washburne, OPIC President and CEO. “This success of this project speaks to the power of microfinance to reach underserved communities around the world, such as women, and OPIC is committed to supporting the world’s women.”
About BlueOrchard Finance
BlueOrchard is a leading global impact investment manager. The firm is dedicated to fostering inclusive and climate-smart growth, while providing attractive returns for investors. BlueOrchard was founded in 2001, by initiative of the UN, as the world’s first commercial manager of microfinance debt investments. Today, BlueOrchard provides investors around the world with premium investment solutions, including credit, private equity, and sustainable infrastructure. Being an expert in innovative blended finance mandates, the firm is a trusted partner of leading global development finance institutions. With a major global presence and offices on four continents, BlueOrchard has invested to date more than USD 4,7bn across 70 emerging and frontier markets, enabling tangible social impact. BlueOrchard is a licensed Swiss asset manager authorized by FINMA. Its Luxembourg entity is a licensed alternative investment fund manager (AIFM) authorized by CSSF. For additional information, please visit: www.blueorchard.com.
About the MIF
The Multilateral Investment Fund serves as an IDBG innovation laboratory to promote development through the private sector by identifying, supporting, testing and piloting new solutions to development challenges and seeking to create opportunities for the poor and vulnerable populations in the LAC region. To fulfill its role, the MIF engages and inspires the private sector and works with the public sector when needed.
About IDB Invest
IDB Invest, a member of the Inter-American Development Bank (IDB) Group, is a multilateral development bank committed to supporting the private sector in Latin America and the Caribbean. It finances sustainable enterprises and projects to achieve financial results that maximize economic, social and environmental development for the region. With a current portfolio of $11.2 billion under management and 330 clients in 23 countries, IDB Invest works across sectors to provide innovative financial solutions and advisory services that meet the evolving demands of its clients. As of November 2017, IDB Invest is the trade name of the Inter-American Investment Corporation. www.idbinvest.org