Debt

New debt investments

The fund added nine new debt investments in MFIs and SME banks to the portfolio in 2015.

Janalakshmi Financial Services Private Limited (JFS – India) is one of the three largest MFIs in India, focusing primarily on the urban poor. JFS is a welcome addition to the portfolio, diversifying the fund’s Indian holdings in terms of regional outreach (northern, central, and southern India; urban, semi-urban, and rural) and target market reached (micro, small, and medium-sized enterprises – MSMEs).

While Janalakshmi primarily lends through group loans, financing SMEs remains a largely untapped market in India. Many SMEs have become too large to receive traditional group loans and still cannot conveniently access credit provided by mainstream financial institutions. JFS intends to use half of the loan provided by Triodos Microfinance Fund to expand its loan offering to SMEs. Its innovations in terms of technology also represent a growing opportunity. By using technology as the foundation of its services, via cloud computing, smart cards and biometric devices, JFS has also become a leader in technology and innovation for financial inclusion in India.

Promerica Group (Panama) holds equity stakes in nine SME banks in developing countries in Central America, in the Caribbean and in Ecuador. The company currently employs over 10,000 people and serves over 1.3 million clients. Promerica operates on the basis of the notion that local context and local people have the greatest impact and that SME lending is necessary as a catalyst for the development of small businesses and the local economy. The loan provided by Triodos Microfinance Fund will be used to expand the investments in the smaller institutions in the portfolio, in order to broaden their scope in the important SME segment.

FINCA DRC (DR Congo) transformed into a regulated financial institution in early 2009. It is the largest African affiliate in the FINCA network. FINCA DRC has the broadest outreach of all MFIs in the country and is predominantly active in urban areas. It serves 120,000 loan clients, of whom 56% are women. The loan from Triodos Microfinance Fund will be used to strengthen the company’s commitment to developing its product offering and increasing its outreach, while staying true to its social mission.

Fortis Microfinance Bank (Nigeria) is a regulated microfinance bank in Nigeria, with 14 branches in Abuja, the country’s capital city. Fortis demonstrates a dedicated commitment to social performance, serving over 56,000 loan clients, of whom 91% are women and 71% are from rural areas. The bank also offers agricultural finance products and is the only microfinance bank to have been granted a mobile payment licence by the Central Bank of Nigeria.

Khan Bank (Mongolia) is one of the largest banks in Mongolia, with a market share of approximately 25%. It provides banking services to an estimated 70% of Mongolian households. Currently, the bank serves over 370,000 loan clients and 820,000 savings clients, who are reached through the bank’s extensive network of 535 branches and sub-branches. This network enables Khan Bank to provide its services even in the most remote areas of Mongolia. The bank has a leading position in the MSME sector, being one of the largest financiers in the country with 46% of its loan portfolio consisting of MSMEs.

Small Enterprise Foundation (SEF - South Africa) was founded in 1992 and is based in the Limpopo province in the north-east of South Africa. SEF is unique in that it provides loans for productive purposes to the poorest women in the region’s villages and countryside. In 2008, it expanded its activities to the Eastern Cape Province, one of the poorest provinces of South Africa. The MFI actively measures its effects and penetration and cooperates with such organisations as the Rural AIDS and Development Action research Programme (RADAR). The Foundation serves close to 130,000 rural clients, of whom 100% are women.

MicroCred China (China) operates MicroCred Nanchong and MicroCred Sichuan, and aims to increase the provision of financial services to MSMEs in China, particularly in the Nanchong and Sichuan regions. Both companies provide the majority of their loans to companies in the trade and service sectors. MicroCred Nanchong is the more mature organisation, serving more than 14,000 clients through its twelve branches, while MicroCred Sichuan serves around 4,000 clients through nine branches. Although small, MicroCred Nanchong and MicroCred Sichuan have managed to establish a positive reputation in the market and with the regulators.

Alliance Finance Company (Sri Lanka) offers leasing, loan and savings products to clients in various sectors, such as agriculture, farming, fishing, manufacturing and trading. In terms of products, 70% of the loan portfolio consists of leasing to SMEs and 10% of microfinance loans, while the rest is spread across hire-purchase, pawning and other loans. The company demonstrates its commitment to supporting financial inclusion and social and environmental sustainability in practical measures. Alliance Finance Company set up a microfinance division two years ago, focusing on providing microfinance services to women. Currently, the company is working towards SMART Certification© 1 and is developing green leasing products, such as leasing low carbon emission-gas toolkits for tuk-tuks (three-wheeled taxi vehicles) and electric vehicles with rooftop solar chargers.

Ipak Yuli Bank (Uzbekistan) is a medium-sized bank that focuses on financing MSMEs and is one of the two leading private commercial banks in Uzbekistan. The bank offers a wide range of banking services, including but not limited to microcredit, SME financing, savings accounts, mobile banking, and money transfers through its 13 branches. The bank serves over 9,000 clients, mainly in the manufacturing, trade and service sectors.

1 Smart Certification© provides an independent, objective seal of confidence that a financial institution is doing everything it can to treat its clients well.

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