Microfinance

…FOR A BETTER FUTURE

Linking returns with social engagement

These days, microfinance serves as an umbrella term for financial services such as loans, savings accounts and insurance products for people who are not served by commercial banks because they lack collateral to secure loans, have no regular income and live far from urban centres. Microfinance received considerable attention in 2006 when Muhammad Yunus, founder of the Grameen Bank, was awarded the Nobel Peace Prize for his microcredit concept. The basic idea: 

  • Help people to help themselves
  • Access to financial services for all
  • Promote independence, especially among women
  • Develop national financial systems

Retail investors have only been able to start getting involved in this concept in recent years, thanks to the creation of microfinance funds. Invest in Visions is among the trailblazers of microfinance investments in Germany. With our IIV Mikrofinanzfonds, launched in 2011, we pioneered the concept of microfinance funds available to retail investors in Germany.

 

How the IIV Mikrofinanzfonds works

The IIV Mikrofinanzfonds uses investors’ paid-in capital to provide unsecured loans to selected microfinance institutions (MFIs) in developing countries. All partner institutions are selected on the basis of strict financial and social criteria, primarily from the group of established non-banking financial institutions (NBFIs), non-governmental organisations (NGOs) and cooperative banks. The average size of the loans is about EUR 3,1 million; the average tenure is 19 months (as of October 2017).

The institutions use this financing to provide loans to microentrepreneurs and small and medium-sized companies. Typical borrowers include vegetable sellers, dressmakers, cattle farmers and craftspeople who use these loans to buy seed, tools or materials, or to bridge financial bottlenecks, for example due to droughts. The microloans are redeemed after an average of 9–12 months. The microfinance institutions pay back the loans including interest payments to IIV Mikrofinanzfonds and investors receive a moderately rising return from the fund.

More than just financing

The microfinance institutions we work with often provide not just capital and financial services to borrowers but also support, for example in terms of training. The high repayment rate, averaging 98 percent, is impressive proof of the fact that the vast majority of borrowers manage to realise their entrepreneurial potential. Used properly, microfinance can reduce poverty and empower people to improve their standard of living.

Become a part of the microfinance concept and help to make a difference in the world. Never before has it been so easy to combine financial returns with social engagement.

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Further information

Marco And Marlene Ayala, Ecuador
Marco And Marlene Ayala, Ecuador
Marco and Marlene Ayala from Quito make potato and banana chips. They have been in business for 20 years and now have four employees. (…)
Marco And Marlene Ayala, Ecuador
Marco And Marlene Ayala, Ecuador

Marlene took over her grandparents’ business and has expanded it. The chips are marketed under the brand name "Snacks Gabby" and have become very popular since being awarded certification. Thanks to a USD 7,000 loan from the microfinance institute BANCO SOLIDARIO, Marlene and Marco were able to buy a pick-up truck. This means they can now transport the raw materials they need and the finished goods, further aiding expansion. Their business has enabled them to build a house and to ensure that their four children receive proper education and training.

Angélica, El Salvador
Angélica, El Salvador
Angélica makes high-quality jewellery, which she sells to locals and tourists near San Salvador (…)
Angélica, El Salvador
Angélica, El Salvador

Angélica lives close to the capital San Salvador, together with her three children and her mother Doris. In order to support her family, the single mother makes jewellery, which she sells to both locals and tourists. A USD 200 initial loan from the microfinance institute ENLACE enabled Angélica to buy the necessary materials. By selling her creations, she was able to pay back her loan after just six months. Using follow-up loans, she buys new materials as and when she needs them. As a result, she can provide a secure income for the entire family as well as expand her business and improve her standard of living on a long-term basis.

Ada Rosa, Nicaragua
Ada Rosa, Nicaragua
Ada Rosa comes from the province of Matagalpa in northern Nicaragua and has worked in agriculture for 21 years (…)
Ada Rosa, Nicaragua
Ada Rosa, Nicaragua

Ada Rosa comes from the province of Matagalpa in northern Nicaragua and has worked in agriculture for 21 years. When she first started working, she helped her mother but, as the years went by, she took on more and more responsibility and eventually started to grow her own coffee beans. The microfinance institution FIANCIERA FUNDESER helped her launch her business with a USD 370 loan. She used this money to acquire some land and fertiliser. Ada Rosa has been a customer at the microfinance institute for eight years now and regularly uses follow-up loans to further expand her thriving business and production. The small-business entrepreneur employs 10 full-time coffee pickers at harvest time, thus helping people from her local community to improve their lives. In total, Ada Rosa has harvested more than 100 tonnes of coffee and has been able to repay all her loans early.

MRS BADAMTSETSEG, MONGOLia
MRS BADAMTSETSEG, MONGOLia
Mrs Badamtsetseg runs a vegetable business together with her husband and two children. (…)
MRS BADAMTSETSEG, MONGOLia
MRS BADAMTSETSEG, MONGOLia

Mrs Badamtsetseg runs a vegetable business together with her husband and two children. She took out her first loan in March 2013, from XacBank, and used it to expand their premises and the business. This enabled her to create three new jobs. XacBank helped Mrs Badamtsetseg improve her business management skills by giving her microentrepreneur management training. She says: "XacBank greatly supports my company and family. Thanks to the loan, my business was able to grow and I can supply the local community with fresh and healthy food." In the future, she wants to expand her business further, and to operate on a more environmentally friendly and sustainable basis. 

IIV Mikrofinanzfonds

*Retail share class R with a minimum investment of EUR 100; institutional share class I with a minimum investment of EUR 30,000.