To support and to help MFIs in their fundraising
Areas of intervention
Latin America, South-East Asia, Maghreb, South-West Africa
38 MFIs in 17 countries
Outstanding loans in 2016
€ 18 million
Do the MFIs which have applied for funding meet with the conditions of eligibility set by the LMDF? Does the application for funding correspond appropriately to the MFI’s needs? These are just a few of the many questions which ADA’s investments experts have to answer. Finally, looking beyond the strictly financial aspects, we accord particular attention to the governance of the MFI, its operational profile and its risk management.
Sarah Canetti, who is the ADA investments officer, shares her view on the work carried out upstream by her team and the need to provide professional and quality advice to MFIs.
LMDF (Luxembourg Microfinance and Development Fund) is a Luxembourg investment fund established by ADA. Its main aim is to facilitate access to a more responsible form of financing by creating long-term relationships between investors, the MFIs and their clients. The fund is open to Tier 2 and 3 MFIs, as well as to non-banking institutions, private enterprises, cooperatives and NGOs. It guarantees the funding of an MFI for a maximum of five years (this term is renewable) and provides loans up to a maximum of one million EURO. This funding provision opens up new prospects and enables MFIs to aspire to launch long-term projects, whilst at the same time ensuring their financial stability.
If necessary, and according to the needs identified by the investment team, ADA may provide complementary funding so as to directly co-finance certain activities carried out by the MFI. One example of the co-financing is the payment of all, or part, of the costs of the assessments carried out by rating agencies specialised in microfinance.
In March 2017, under the advice of ADA, the Investment Committee of LMDF approved the financing of three new MFIs: