Microfinance Guarantee Funds
ACCION International focuses on developing sustainable microfinance institutions (MFIs) capable of attaining scale and reaching hundreds of thousands, if not millions, of clients. To achieve this goal, ACCION is committed to making microfinance an integral part of the financial systems of developing countries.
By providing loan guarantees, ACCION helps to support the growth and development of MFIs that would otherwise lack adequate access to finance their loan portfolio. ACCION extends financial support to global MFIs by providing guarantees through the ACCION Latin America Bridge Fund (LABF) and the ACCION Global Bridge Fund (GBF).
Latin America Bridge Fund
Established in 1984, the LABF is the first-ever loan guarantee fund for microfinance institutions. By providing guarantees, via Standby Letters of Credit, the Fund enables ACCION's partner MFIs located in Latin America and the Caribbean, to access lines of credit from local banks.
Learn more about the LABF >>
Global Bridge FundEstablished in January 1, 2005, the GBF was created to contribute to the global expansion of microfinance through financial assistance to MFIs worldwide. This includes but is not limited to Latin America, the Caribbean, Africa, Eastern Europe, Asia, and other regions of the world where ACCION may expand as part of its strategic mission. Like the LABF, the GBF is a loan guarantee fund. However, the GBF is designed to work on a much more global and flexible scale. The GBF guarantees not only lines of credit and loans but also the issuance by MFIs of fixed-income instruments. The GBF works with ACCION’s partner and affiliate programs as well as other MFIs outside its network.
Learn more about the GBF >>
ACCION has operated guarantee funds for more than two decades. Diverse sources of capital mobilized from investors, prudent stewardship of investor funds, a careful approval process, risk sharing mechanisms, minimization of exchange rate risk, and the reduction of operating costs through affiliation in a network have helped ACCION’s Bridge Funds to endure over time. ACCION has used lessons learned from its decades of experience with the Latin America Bridge Fund to craft the new Global Bridge Fund to better serve an increasingly sophisticated microfinance sector. The Bridge Funds serve as a conduit between socially responsible investors and the MFIs that, without the guarantees, would have limited access to financing from traditional lending institutions or local capital markets. Since the creation of the ACCION Bridge Funds, no investor, in these funds, has experienced a loss in its principal or interest.
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