Microfinance Focus Europe, 21 November 2013: An initial deposit was made in the Dutch development bank, FMO’s newest fund for small and medium sized enterprises (SMEs). The fund, titled the SNS FMO SME Finance Fund, was jointly initiated by SNS Impact Investing and FMO.
Zwitzerleven, the Spoorweg pensioenfonds and the Pensioenfonds Openbaar Vervoer made the initial deposit on 20 November, 2013.
FMO’s Finance Fund is unique in that it invests, through local financial institutions, in small and medium enterprises. The local banks supported by the fund aim to invest in SME's in their own region. Potential recipients of loans include entrepreneurs in food and distribution, agribusiness, retail business, production and transportation.
“Local banks are best equipped to judge which socially relevant local companies can use finance,” Director of FMO Investment Management Yvonne Bakkum said. “This approach also has efficiency benefits, as intensive support and control from the bank are required while financing small and medium enterprises with relatively small loans.”
FMO’s Finance Fund has received €100 million in investments for a first close. In Wednesday’s press release, FMO said investments were “expected to increase substantially in 2014.”
“Naturally, the fund expects to realize a healthy financial return. It helps that the management fee and additional costs of the fund are relatively low,” Director of SNS Impact Investing Theo Brouwers said.