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
Simone Uccheddu

Key figures in Q2 2020
- 54 MFIs financed in 25 countries
- outstanding loans: €28.1 million
- average loan: €1,345
- 63,259 microentrepreneurs directly affected, 68% of them women
- 70% of rural customers
- 75% of the MFIs financed receive technical assistance adapted to their needs

Partner

LMDF

Contact

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;
  • technical assistance, management tools, various training courses (financial and social performance, risk management, agricultural finance, digital finance, etc.).

(The offer is only applicable to certain geographical areas)

 


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


The funding application form

 

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"
Laura Foschi, Executive Director at ADA

Laura Foschi

"With more than 50 microfinance institutions financed in 25 countries, ADA, through the LMDF Fund, becomes a relevant partner of choice for MFIs. It should be noted that ADA’s role is not limited to the provision of financial resources. We are committed to our partners and build our relationship through continuous monitoring. Our team remains at your entire disposal to jointly implement long-term actions.

IIn addition to financing and monitoring, we can and want to offer tailor-made technical assistance to our partners when the need arises. 75% of the MFIs we fund benefit from this personalized support and/or capacity building that we define together. All our will and vision is focused on providing institutions with the necessary means (financial or technical) to act.

We operate in four major regions: Africa, Latin America, Southeast Asia and Central Asia. This diversification is a strength and an opportunity. It demonstrates our success, our aspirations and our capabilities. ADA, with LMDF and the support of the Government of Luxembourg, uses the experience of one of the world’s leading financial centres to support socially responsible MFIs, which are the main actors in the fight against poverty, and for financial inclusion."


The portfolio - 2nd quarter 2020

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

  • Latin America (48% presence)
    Mexico (SOFIPA, Avanza Solido, Conserva), El Salvador (Padecom), Nicaragua (Fundeser, Fundenuse, Micrédito), Guatemala (ADICLA, ADISA, Reficom), Honduras (AMC, IDH, Pilarh), Haïti (ACME, Finca Haïti), Peru (Norandino, Prisma, Alternativa MF, Arariwa), Ecuador (COAC 4 de Octubre, Faces, Insotec), Colombia (ECLOF, Finamiga), Argentina (Ilumina, OMLA, ProMujer).
  • Asia (26% presence)
    Timor-Leste (Moris Razik), Indonesia (Komida), Kyrgyzstan (Bailyk Finance, Oxus Kyrgyzstan, Salym, Trust Union), Kazakhstan (Arnur, Bereke), Tajikistan (Furuz, Oxus Tajikistan), Myanmar (Advans Myanmar, Alliance Myanmar)
  • Africa (28% presence)
    Benin (Comuba, Pebco), Burkina Faso (ACEP BF), Morocco (AMS SF), Kenya (Bimas, M-Kopa), Ghana (Sinapi Aba, Baobab), South Africa (SEF), Uganda (EBO, EFC Uganda, UMF, Tugende), Sierra Leone (LAPO SL, ACTB S&L), Madagascar (SIPEM)

Outstanding loans: €28.1 million


Portraits
Prisma

What is the use of microcredit? The case of the Mishkiyaquillo community

ADA has followed a community that has benefited from ADA's support through LMDF funding.

Read more
News

September 2, 2020

First due diligence in Kenya for ADA in Covid's time

Olivia Fechner, our Investment Officer based in Kenya, has just completed her first Covid due diligence with the MFI Yehu Microfinance Ltd in Mombassa, in the usual sanitary conditions: wearing a mask for her and the whole team of the MFI as well as for most of the clients. The due diligence paid particular attention to the MFI's management of the crisis, especially in terms of human resources, team management, adaptation to the restrictions put in place by the government (curfew), the closure of Mombassa and the impact on clients and repayments.

About Yehu Microfinance Ltd
Yehu Enterprises Support Services (YESS) was established in 1998 as a project of Choice Humanitarian Kenya, a US-based international NGO. Initially set up to mobilise its members' savings, the demand for credit quickly became apparent and in 2000 YESS started its credit activities. Its growth led the organisation to become independent from Choice Humanitarian Kenya and to transform itself into an independent NGO in 2006. In April 2016, YESS was transformed into a limited liability company, Yehu Microfinance Ltd. The NGO remains the majority shareholder with 88% of the shares.

Yehu concentrates its operations in the coastal area of Kenya, an area much less served by the microfinance sector in Kenya.

Yehu Microfinance Ltd. is characterised by the pursuit of a strong social impact. Through a group methodology, Yehu targets women (96% of clients) living in rural areas (70% of clients) and offers loans with an average amount of EUR 312. Its credits are associated with a range of financial education and business management training courses.

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