Press release: FINCA Impact Finance, MEF and BlueOrchard Announce USD 20 Million Loan Facility
Monday, October 8, 2018
FINCA Impact Finance (FIF), a global provider of financial services, announced today that it has entered into a joint USD 20 million loan facility with the BlueOrchard Microfinance Fund (BOMF) and Microfinance Enhancement Facility S.A., SICAV-SIF (MEF). Blue Orchard Finance, Ltd. a pioneering impact investment manager, arranged the facility on behalf of the lenders.
The three-year revolving loan facility will enhance FIF’s ability to manage liquidity throughout its network of 20 banks and microfinance institutions (MFIs) and leverage the resources of MEF, an innovative provider of impact capital, and BOMF, the world’s first and largest commercial microfinance investment fund.
This facility, along with previously-announced loans from Oikocredit and OPIC, confirm global investor interest in FINCA Impact Finance. The banks and microfinance institutions that comprise the FIF network offer nearly two million customers around the world a wide range of products, including digital credit, payments, money transfers and insurance. FIF concluded 2017 by achieving a notable financial turnaround driven by the momentum of new investments in fintech, the transformation of its business model and increased cost discipline. FIF returned to profitability with $10.9 million in net income, 4.7% ROE, more than $361 million in deposits and a 27% year-on-year increase in its customer base.
According to FINCA Impact Finance Global CFO Roman Hingorani: “This latest credit facility is another tangible sign of the strength of FINCA Impact Finance as a stand-alone network as well as a vote of confidence in our future. FIF operates in some of the most challenging markets in the world and this additional liquidity is crucial to giving us the financial flexibility to manage our growing portfolio.”
BlueOrchard Finance CEO Patrick Scheurle added: “This facility is a very positive opportunity for BlueOrchard Microfinance Fund and for MEF. BlueOrchard and the funds we manage and advise, share key values with FIF when it comes to advancing the cause of financial inclusion. We’re proud of our long partnership with FIF and its affiliates and are pleased to see it continue through this facility.”
Initiated in February 2009 by KfW Entwicklungsbank (KfW) and International Finance Corporation (IFC), a member of the World Bank Group, MEF was established to support those microfinance institutions facing difficulties in securing financing by providing them with much-needed financing at times when investment is in high demand but in low supply.
BOMF is the first and largest commercial microfinance fund in the world. For 20 years, BOMF has been fostering inclusive growth in emerging and frontier markets, providing access to financial and related services to over 20 million low-income individuals and households.
All three institutions are dedicated to achieving positive social impacts while employing commercial principles that result in sustainable financial returns. This USD 20 million facility marks a new milestone in their partnership.
Photo courtesy of Sudipto Sarkar.