Initiated in February 2009 by KfW Entwicklungsbank (“KfW”) and International Finance Corporation (“IFC”), a member of the World Bank Group, Microfinance Enhancement Facility S.A., SICAV-SIF (“MEF”) was setup in February 2009 and has been designed to support the microfinance institutions facing difficulties in securing financing by providing them with much needed financing at a time when investment was in high demand but low supply.
The Fund aims to support economic development and prosperity globally through the provision of additional development finance to micro-enterprises, via qualified financial institutions. In pursuing its development goal, the Fund will observe principles of sustainability and additionality, combining development and market orientations.
Co-managed by four leading private investment managers (BlueOrchard Finance S.A., Cyrano Management S.A., responsAbility Investments AG and Symbiotics SA), the MEF ‘s objective is to ensure that microfinance continues to stimulate growth, create jobs and reduce poverty in emerging markets.
Recognised as an efficient and responsible microfinance debt fund providing stability to the microfinance market, the MEF has an important signalling effect and contributes to the stabilisation of the microfinance sector. In times of uncertainty, a vehicle that can respond quickly and decisively, such as the MEF, can provide a stable source of funding. As a complement to existing sources of funding, the MEF focuses on providing liquidity that the market does not offer. The MEF is a flexible vehicle structured to meet the needs of MFIs, without crowding out private sector initiatives.
As a demand oriented fund, seeking to respond to the needs of the market and of individual MFIs, it opens the possibility to provide financing to more than 100 microfinance institutions in up to 40 countries and to support lending to as many as 60 million low income borrowers in many of the world’s poorest countries.