Microfinance Growth Fund for Latin America and the Caribbean

By Asma Azmi,

Microfinance Focus, March 22, 2010: A new lending facility for microfinance institutions in Latin America and the Caribbean, the Microfinance Growth Fund (MIGRoF) was launched by the Inter-American Development Bank’s Multilateral Investment Fund (FOMIN), the Inter-American Investment Corporation (IIC), the Corporación Andina de Fomento (CAF) and private investor on March 21st in Mexico.

The new facility is expected to provide up to $250 million in medium- and long-term loans to microfinance institutions throughout the region, offering financing in local currency and in U.S. dollars. FOMIN is providing $10 million in equity to the new facility, the IIC will contribute up to $5 million, and CAF will invest up to $10 million. The private partners and investors in MIGROF, besides Banamex, are the Norwegian Microfinance Initiative (NMI), ACCION International, and Blue Orchard. The Overseas Private Investment Corporation (OPIC) of U.S. has pledged $125 million for the fund which will allow it to initiate its lending operations in coming weeks.

Citibank’s subsidiary, Banamex, which is Mexico’s largest private bank recently joined MIGRoF as an investor and partner, will be looking after the fund’s corporate governance. FOMIN and the IIC took a leading role in structuring MIGRoF and defining its lending strategy. They also engineered the competitive process by which Swiss investment management company Blue Orchard Finance S.A. became the new facility’s manager.

The creation of MIGRoF was first announced by U.S. President Barack Obama in April 2009. Speaking at the Fifth Summit of the Americas in Port of Spain, Trinidad, he advanced that OPIC would partner with FOMIN and the IIC to launch a new source of funding for microfinance institutions in response to the reduction in their lending capacity due to the global credit crisis.

“This new facility will not only help restore the lending capacity of microfinance institutions after the impact they felt when they were hit by the global financial crisis”, said IDB President and IIC Chairman Luis Alberto Moreno. “MIGRoF will also fuel the engine of growth in microfinance, boosting economic growth and increasing employment in many countries of the region”.

Related Posts:

• BlueOrchard participates in the launch of new lending facility for microfinance in Cancun
• OPIC Board Approves $125 MN Microfinance Fund for Latin America
• BlueOrchard to manage US microfinance fund for Latin America, Caribbean
• OPIC provides $250 million to OPIC-Citi microfinance fund
• New $15 million credit facility for smaller Microfinance institutions
• OPIC’s microfinance funding to help recovery in ‘dried up’ economies
• OPIC provides $100M for SME lending in Turkey
• OPIC $25 million loan to ProCredit to boost SME lending

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