Une offre en conseil et en financement durable pour les IMF au moyen d’un fonds : LMDF

Project objective
Support and assist MFIs in their fundraising

Areas of intervention
Latin America, Southeast Asia, Central Asia, Africa

Project manager
Laura Foschi

Key figures in Q1 2019
- 52 MFIs financed in 25 countries
- outstanding loans: €32.1 million
- average loan: €1,422
- 64,0862 microentrepreneurs directly affected, 79% of them women
- 70% of customers in rural areas
- 50% of the MFIs financed receive technical assistance adapted to their needs





Sustainable funding for your MFI

Through the Luxembourg social fund LMDF, ADA offers 2 types of funding for Tier 2 and 3 MFIs located in Africa, Latin America, Southeast and Central Asia. In addition, ADA can provide technical assistance.

Since 1994, ADA has been committed to strengthening the financial inclusion of population groups excluded from the conventional banking sector through tailored financing and technical assistance for microfinance institutions (MFIs), with an emphasis on forging long-term partnerships.
Thanks to a socially responsible investment fund, created by ADA in 2009, the Luxembourg Microfinance and Development Fund (LMDF), ADA has funding solutions for the growing MFIs.

Financial services for MFIs....

ADA offers 2 types of funding for Tier 2 and 3 MFIs located in Africa, Latin America, Southeast and Central Asia:

  1. Senior debt: an amount between USD 0,2 and 1,8 million, granted in local currency, USD or EUR, with a maximum term of 5 years, at the market rate.
  2. Subordinated debt: an amount between USD 0,2 and 1,8 million, granted in local currency, USD or EUR, with a term of between 5 and 7 years, at the market rate.

...combined with non-financial services

Other than offering financial services, ADA can propose:

  • support, listening and follow-up from its team during the entire funding cycle;
  • tailor-made technical assistance program tailored to the needs of MFIs to improve their performance: this programme, called ADA 3T (Tools, Trainings and Technical Assistance) includes, as its name suggests, management tools, various training courses (financial and social performance, risk management, agricultural finance, digital finance, etc.) and technical assistance. Ultimately, this support enables MFIs to achieve their social goals to attract an ever-increasing number of investors.

Discover the ADA 3T offer


LMDF and co-financing

LMDF (Luxembourg Microfinance and Development Fund) is a Luxembourg investment fund established by ADA in 2009, which 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.

ADA has a dedicated team which provides investment advice to LMDF. Its work is, first of all, about identifying MFIs with a strong social and financial performance matching the profile sought by LMDF amongst the small MFIs (Tier II and III). To this purpose, the team undertakes prospecting missions in the field, to meet with MFIs or to attend events (conferences, Investor Fairs, …). If an MFI meets the eligibility criteria, ADA performs a preliminary audit in the field, called due diligence, to check the MFI’s financial figures and to meet with its managers and clients. Once it is back in Luxembourg, ADA submits the application for financing to the LMDF Committee, which decides whether to invest in the MFI through senior or subordinated loans. The time between application and grant varies from 3 to 6 months depending on access to information and compliance with eligibility criteria.

ADA may also 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.

Eligibility criteria for funding

Conditions for funding

Do you think you meet all the eligibility requirements within your MFI? Fill out the funding application form below and send it to:

I fill out the financing request form for MFIs

The 7 steps in the process of obtaining funding

The 7 steps in the process of obtaining funding

"For greater impact with our funding"
Sarah Canetti, Former Head of Investment Department at ADA

Sarah Canetti

"With more than forty microfinance institutions benefiting from funding, in nearly 20 countries, ADA, through the LMDF fund, is a partner of choice for MFIs. Moreover, ADA’s action is not confined to providing funding advice. Indeed, we stay close to our partners and forge our relationship through regular follow-up. Our whole team remains attentive to what you have to say so as to develop long-term partnership with you.

In addition to the funding and beyond the follow-up, we can offer technical assistance tailored to our partners, whenever a need is felt. 75% of the MFIs funded benefit from this personal support and this strengthening of capacity that we define together. This is in essence our wish and our vision: to give the institutions both the financial and technical means to act.

Our activities are thus concentrated in four main regions of the world: Africa, Latin America, Southeast Asia and Central Asia. This diversification is a strength and a chance. It demonstrates our success and ambition as well as our capacity. ADA, with LMDF, supported by the Luxembourg government, uses the expertise of one of the leading financial markets in the world to support socially responsible MFIs, leading actors in fighting poverty and in favour of financial inclusion."

Olivia Fechner rond

A word from our investment managers

December, 2018
Olivia Fechner, Investment Manager at ADA, was expatriated to Nairobi, Kenya, for an initial period of 18 months to develop the East Africa portfolio. At the halfway point, it is time to make a first assessment.

Why this expatriation to Kenya?
I was seconded to Nairobi to develop the LMDF portfolio in East Africa. This is a region in which ADA has historically had fewer partners than in West Africa. In terms of investment services, we have been seeking for several years to develop partnerships in East Africa but have always faced many challenges (volatility of currencies impacting financing costs, competition from other funds, etc.). Being there allows me to be closer to the large MFIs we were already working with, but above all to get closer to our core target, the small Tier 3 MFIs. Since my arrival, I have been able to meet many Tier 3 MFIs that did not know ADA and that I did not know neither.

Half the week, I am based at AMFI, the Kenyan microfinance association. I don't work directly on projects with them, but they provide me with a lot of advice and guidance on the sector, especially when I go to visit a new MFI. Following my arrival, a first contact was established between AMFI and our MFI technical support department at ADA to discuss possible projects to be implemented.

What do you think is the advantage of being there?
Being in Nairobi allows me to meet the funders more often, in the sense that it is a hub for rating agencies, investment funds and donors. There are also informal networking events organised by Nairobi-based funders to facilitate the exchange of information.

The partners also know that there is a referent person on site. Often, they call me on my local number to find out the progress of their funding request. I have the image of a close and available person, I am a real added value for them.

I regularly attend conferences organised in the sector to develop my network. I have already participated in two conferences since I have been in Nairobi: one on agricultural value chains and another on financing Micro and Small Enterprises.

Finally, East Africa is full of opportunities with the development of mobile banking. I use it myself on a daily basis, it gives me a much more concrete perception of the MFI environment.

8 months later, are there already any significant results?
Since the prospecting and analysis process is long, the results of my mission will be more concrete in 2019.

However, some results are already being felt. In Uganda, for example, an MFI for which I did the due diligence in August was disbursed and another due diligence is planned for January 2019. I had also met with the Uganda Professional Microfinance Association, which was interested in training with ADA. I had transferred the contact to our technical assistance unit to organise Microfact training and risk management training.

In Kenya, I have already had the opportunity to meet several small T3 MFIs that I did not know before coming and who provided me with all their information, including the MFI Factsheet Microfinance, a reporting document that analyses an MFI's financial and social performance data. Most of these MFIs are not yet part of AMFI. Given their size, they do not yet have access to international financing and are not regulated. Some of them have already been presented to the investment team, which should lead to due diligence in 2019. While they do not all meet our criteria to date, my objective is also to build long-term partnerships with them. Talking with these MFIs that I was not aware of before I arrived in Kenya gives me a better overview of the sector.

We are also exploring new countries; in Madagascar, we are in discussion with several MFIs. This allowed us to propose to the LMDF fund to open this country for new investments. The fund should give its opinion on this subject at the beginning of January 2019 and a positive decision would allow us to plan due diligence with Malagasy MFIs at the beginning of the year.

Outside the East African zone, I continued to disburse loans to Ghana, as an extension of my mission of several months in that country earlier this year. We have two new partners in Ghana.

Overall, the share of the LMDF portfolio financing Africa increased to 23% in 2018, from 17% at the end of 2017. Similarly, we now have four partners in East Africa, compared to only one last year. These results are not only due to my presence in Kenya, but reflect the efforts of the entire investment team to increase the share of financing disbursed to African MFIs.

Can you tell us more about your feelings?
I am delighted to be here and I find it very interesting to be closer to MFIs. For example, if an MFI in Uganda tells me that its portfolio is deteriorating because the rains are late, then I can see it in concrete terms. Living in the same environment allows me to better understand the difficulties faced by our partners and to make a more relevant analysis during due diligence. I realise that the small institutions I visited did not know ADA. My presence in Kenya is therefore positive for the image of our NGO.


Providing advice and sustainable financing for MFIs

Through a social investment fund, ADA has financing solutions that microfinance institutions (MFI) need to ensure their growth. For ADA, financial support from an institution is part of a long-term partnership complemented by a technical assistance program.

Discover the beneficiaries of the investment

Read more

July 2019

The portfolio in a few figures - First quarter 2019

52 MFIs advised by ADA and financed by LMDF in 25 countries:

  • Latin America (58% presence)
    Mexico (SOFIPA), El Salvador (Optima, Padecom), Nicaragua (Fundeser, Fundenuse, Micrédito), Guatemala (ADICLA, ADISA, Fundap, Reficom), Honduras (AMC, FAMA, IDH, Pilarh), Haïti (ACME, Finca HT), Peru (EDPYME Alternativa, Arariwa, CrediFlorida, Norandino, Prisma), Ecuador (COAC 4 de Octubre, Faces, Insotec), Colombia (ECLOF, Finamiga), Argentina (FIE, OMLA, ProMujer).
  • Asia (17% presence)
    Cambodia (Maxima), East Timor (Moris Razik), Indonesia (Komida), Kyrgyzstan (Bailyk Finance, Oxus Kyrgyzstan, Salym, Trust Union), Kazakhstan (Bereke), Tajikistan (Furuz, Oxuxs Tajikistan).
  • Africa (25% presence)
    (ASUSU), Benin (Comuba, Pebco), Burkina Faso (ACEP BF), Côte d'Ivoire (PAMF CI), Morocco (AMSSF), Kenya (Letshego), Ghana (Sinapi Aba, Baobab), South Africa (SEF), Uganda (EBO, UMF), Sierra Leone (LAPO SL, ACTB S&L).

Outstanding loans: €32.1 million

Breakdown by subcontinent

February 2018

ADA is supporting ACEP Burkina Faso!

After a strong collaboration with ACEP group on risk management through technical assistance, ADA, through the investment fund LMDF, financially supported ACEP Burkina in February with a double operation of a 300K EUR subordinated loan and a 450K EUR senior loan. The subordinate loan aims to reinforce equity of ACEP Burkina in order to support its fast growth, while the senior loan aims to finance its portfolio growth needs.

Among the 25 poorest countries in the world and with an average age of 17 years old, Burkina Faso is a country with a very high rate of unemployment, especially among its youth. Most of the jobs held by the working population are informal and this population is often the target of a great number of MFIs in the form of cooperatives or associations that serve them by offering financial services in a more or less professional way.

In this panorama, ACEP Burkina stands as a professional MFI serving formal or informal SMEs by a specialized and dedicated methodology based on higher amounts and one flexible credit product especially dedicated to SMEs. ACEP Burkina belong to an international network of MFIs operating in five African countries: Senegal, Cameroon, Madagascar, Niger and Burkina Faso and led by ACEP International. ACEP’s philosophy is to solely target SMEs with the purpose to contribute to local economic development through creation of jobs, above all for young people, and boosting local production with a high value added.

31, January, 2019

Due diligence in Uganda

Olivia Fechner, our Nairobi-based Investment Officer, was in due diligence with EFC Uganda, a microfinance institution in Kampala focused on micro and small enterprises and missing middle.

Olivia EFC
ACEP Burkina Faso

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