Impulse and RIF I & II subsidy

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BIO subsidizes a € 200,000 Technical Assistance contribution to Incofin IM to support portfolio companies of Impulse Fund and Rural Impulse Fund I & II. The technical assistance aims at capacity building and transfer of know-how for RIF, RIF II and Impulse portfolio companies in order to generate value-added in the areas of operational, strategic, financial, managerial, organizational developments ; rural innovations (product design and outreach methodologies) ; and social performance and governance best practices.

Since 2005 BIO cooperates with Incofin Investment Management (Incofin IM), a fund manager with approximately €300m assets under management, specialized in investing in microfinance institutions in developing countries. Incofin IM has extensive experience in financial and social analysis and management of venture capital investments in microfinance institutions in emerging markets around the globe. The first investment under the cooperation agreement between BIO and Incofin IM was a € 2 million senior loan to the microfinance institution fund Impulse in 2005. After full reimbursement of this first loan in 2011, a new participation was agreed of € 2 million in 2012. BIO participated in the launch of RIF I in 2007 and again in RIF II in 2010 for USD 3.5 million and € 5 million respectively.

BIO’s TA contribution will focus on funding interventions sourced and initiated by Incofin IM in the following areas:

- Improvement of the overall development of MFIs on operational, strategic, financial, managerial, organizational areas: MFIs face challenges with operational, strategic, financial, managerial, organizational or other issues. Depending on the maturity of the MFI, there are several typical areas of potential interventions to support the development of the institution. The typical TA focus is on Early Stage MFIs or MFIs in transformation. The type of intervention will be based on the specific needs of each MFI.

- Promotion of innovation in rural microfinance and introduction of best practices to MFIs with regard to product design and outreach methodologies for rural areas: In the case of TA interventions aiming at promoting rural microfinance innovation, focus will be on: (i) Product design of financial products that serve special types of clients, which manage risks and adapt to long production cycles of farming activities (e.g. agricultural loan adapted to the prevailing cash flow patterns in agriculture) in order to support financial inclusion with scale and replication potential; and (ii) Distribution channels that can serve difficult-to-reach populations in a cost effective way, (e.g. mobile banking).

- Promotion and introduction of best practices to MFIs in terms of social performance management and governance: Promotion of sound practices regarding Good Corporate Governance and the introduction of best practices in SPM to MFIs which will mainly be focused on: (i) Financial literacy as MFIs must be able to offer a variety of products and services adapted to their customers’ demands as well as respond to client requests promptly; and (ii) Client protection principles as it is important that MFIs apply good client protection that commit them to protect the customers’ rights regarding transparency, respectful treatment, and appropriate assessment of client’s indebtedness capacity.

Read more on BIO’s investments in Impulse and RIF I and RIF II.


  • Investment amount (€):

    EUR 200,000

  • Contract signature :

    2014

  • Nature of intervention :

    Technical assistance subsidy

  • Development impacts :

    • 1 — Improvement of the overall development of MFIs on operational, strategic, financial, managerial, organizational areas.
    • 2 — Promotion of innovation and introduction of best practices to MFIs with regard to product design and outreach methodologies for rural areas.
    • 3 — Promotion and introduction of best practices to MFIs in terms of social performance management and governance.

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