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Yes! I want to support microfinance and empower people to work their way out of poverty.
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| Microfinance Equity FundsACCION Gateway Fund
The ACCION Gateway Fund enables ACCION to invest in emerging partner institutions. The fund currently holds shares in MFIs in Bolivia, Colombia, El Salvador, Haiti, India, Mexico, Panama, Paraguay, Peru and Venezuela. During 2006, consonant with our efforts to secondary market activity through strategic sales of small shares in maturing institutions, Gateway sold 9% of its shares in SogeSol in Haiti to a private investment fund. Gateway retains 10% of SogeSol's shares.
In addition, nine years ago, ACCION invested in a young, emerging microfinance institution in Mexico, Banco Compartamos, taking an 18.5% share through the ACCION Gateway Fund. In April 2007, Compartamos issued an IPO through a secondary offering of its capital stock, which ultimately valued the company at more than $1.5 billion. ACCION sold half its holding upon settlement, earmarking the proceeds for the creation of a strategic reserve, new product development, staff training, launching new strategic initiatives, and increasing its investments in other microfinance institutions in emerging markets. The IPO demonstrated financial market recognition of Banco Compartamos's institution building and its outstanding position in the Mexican market, and validated the crucial role that the capital markets can play in scaling microfinance.
Through the Gateway Fund, ACCION has also strengthened its governance activities and instituted formal investment supervision with the objectives of monitoring growth and adding value to MFIs.
Frontier Investments Group (FIG)
ACCION's Frontier Investments Group is a double bottom line, venture equity fund focused on achieving social change through market means. FIG manages the Global Microfinance Innovation Fund, established in June 2006 as a wholly-owned special purpose investment vehicle. Through the GMI, FIG invests in new technologies and disruptive business models that can powerfully enhance the way financial services are delivered to the poor. In alignment with ACCION’s strategic mission of creating sustainable solutions to address poverty, Frontier Investments builds upon the success microfinance has achieved in “banking the unbanked” and looks for the next generation of innovations that will radically enhance efficiency, and expand the reach and scope of financial services.
Frontier Investments invests in innovative technologies, products and business models that have game-changing potential in financial service delivery at the base of the economic pyramid. Our investment thesis revolves around catalyzing four key sectors that make up what ACCION calls the "new business model" for microfinance:
Technology: Scalable platforms that enhance the efficiency and expand functionality of paper and people intensive processes (e.g. core banking systems, switches, etc.). Distribution Channels: Mobile banking, ATMs, cards and point of sale devices, and other “branchless banking” payment systems that bring the product to the customer. Risk Management: Credit scoring, credit bureaus and other systematic approaches to evaluating client’s credit worthiness to deepen reach. Financial Products & Services: Housing, microinsurance, remittances and other financial products for the poor, beyond microcredit.
A first investment in PRBC, Pay Rent, Build Credit, Inc., of Annapolis, MD – an alternative credit bureau that uses non-traditional data, like rent, utility and phone payments – was authorized in November 2006 and funded in January of 2007. Since then FIG has committed over $6 million in investments in: MFX Solutions, an industry-backed initiative to mitigate foreign exchange risk; United Villages, a technology-enabled distributor that provides rural people with access to locally relevant products and services; ParaLife, a Swiss microinsurance holding company; and LeapFrog Investments, a $100 million microinsurance investment fund headquartered in Mauritius. Gateway Microfinance Investment Vehicle Fund (GMIV)Created in 2007, the GMIV has a broad mandate to develop the microfinance industry. Its objectives include catalyzing the formation of equity vehicles for products and services related to ACCION's core mission, leveraging our capital to expand our geographic reach, and contributing to ACCION’s goal of supporting emerging social investment fund managers.
GMIV's portfolio includes the AfriCap Microfinance Fund. An investment fund co-founded by ACCION and Calmeadow, a Canadian microfinance institution, AfriCap aims to underwrite Africa's emerging microfinance sector by both investing in selected microlending institutions and financing technical assistance for those institutions. GMIV has also invested in Lok Capital, LLC, a fund that pioneers equity investments in Indian microfinance institutions.
Return to ACCION Global Investments page.
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