“The European Investment Bank is supporting the development of improved access to finance by poor rural communities around the world. We look forward to working with our partner to increase the presence of microfinance institutions in more remote areas through the pioneering Rural Impulse Fund II” said Plutarchos Sakellaris, European Investment Bank Vice President responsible for Africa, Caribbean and Pacific operations.
“A majority of the world’s poorest live in rural areas and are not served by MFIs. Providing financial services to the rural poor has been one of the challenging areas of development finance. IFC is happy to support Rural Impulse Fund II to address this shortfall”, said Jyrki Koskelo, International Finance Corporation Vice President for Global Industries.
“The Rural Impulse Fund II combines funding from public development finance institutions with sources from private investors. This increases the potential impact of the fund. At the same time the long-standing expertise of KfW and the other public investors in microfinance meets the objective of private investors to invest their capital in both a profitable and a socially beneficial way,” said Helmut von Glasenapp, Vice President and Head of KfW Brussels office.
Laurent Ledoux, Head of Public Banking for BNP Paribas Fortis said: “Investing into Incofin IM’s Rural Impulse Fund II represents for BNP Fortis an important first step into microfinance. Through this social and responsible investment in a Belgian company with an international scope, we contribute to the development of financial services in developing countries. It complements similar microfinance actions we are initiating in Belgium and those initiated long ago by BNP Paribas in France and abroad. As a bank, we have the responsibility to help people who have limited access to financial services”.
Vincenzo Volpe, Head of Investment Management of Polaris SGR said: “Following a comprehensive analysis of a universe of 90 funds, deemed the best in the microfinance sector, and a thorough due diligence process, “Microfinanza 1” has shortlisted 5 specialized investment managers and 9 funds. Incofin’s Rural Impulse Fund II, and its courageous and challenging focus on remote and rural areas, shall play an important role in extending microfinance outreach to individuals that otherwise would totally lack access to credit and a chance to step out of poverty.”
“We do not consider this as charity but as a solid investment in what we hope will be a better world tomorrow. The returns of such solid and ethical investment will automatically flow back to our organization, in the form of training and support for our activists. We hope other trade union organizations will follow and take up their responsibilities “, said Mr. Marc De Wilde, president of the trade union ACV-CSC Metea.
The Rural Impulse Fund II follows the ground breaking achievements of the Rural Impulse Fund I, the world’s first microfinance facility to specialise in commercially viable rural microfinance institutions. Rural Impulse Fund I achieved its planned deal flow in half the expected time, reflecting the strong demand for rural microfinance and has now made investments with 24 institutions across 18 countries with a customer base of 1.5 million clients.
Eligible microfinance institutions must be in developing countries and with at least a 30% presence in rural areas. The fund will invest in a range of microfinance intermediaries, including NGOs, credit unions, microfinance banks and institutions targeting small businesses.
Rural Impulse Fund II aims to become the worldwide reference for rural microfinance and will invest in institutions in Africa, Latin America, Central Asia, the Caribbean, Central and Eastern Europe, India and South East Asia. Partner institutions have already been identified in Zambia, Brazil and India. The fund will adopt a similar business model to the predecessor fund and include both private and public investors.
Rural microfinance activities are challenged by seasonality, high administration costs of small loans and limited resources. Rural Impulse Fund II will mitigate these factors by a careful selection of experienced and successful institutions active in both rural and urban areas and directly encourage activity outside economically active and densely populated urban districts.
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