Alternative investment fund; according to the German Capital Investment Code (KAGB), an umbrella term for all closed funds. In addition, AIFs include open-ended, regulated non-UCITS investment vehicles such as open-ended real estate funds, open-ended special funds (Spezialfonds) and microfinance funds.


Assets under management



In the microfinance context, commercialisation of MFIs refers to these institutions’ ability to offer an additional target group a full range of banking services.

Credit guarantee

Credit guarantees, or collateral, are supposed to protect the beneficiary (lender) from the financial consequences of the risk that a borrower cannot service its loans in full or in a timely manner. Collateral can include savings or tangible assets, among others. Due to a lack of collateral, microentrepreneurs in developing and emerging countries cannot usually obtain loans from traditional commercial banks.


Exclusion criteria

In the context of sustainable investing, exclusion or negative criteria are criteria that prohibit certain investments, for example, in certain companies or sectors.


Group loans

A special type of microlending in microfinance. Several individuals form a group and together obtain a loan. The members vouch for each other and support each other in implementing their business ideas. The group also makes joint decisions regarding the inclusion of additional members. Accordingly, trust is a critical factor in group lending. The social pressure which the group exerts on each individual frequently plays a key role in the high repayment rates.


Informal sector

In many cases, the informal sector is the result of excessive bureaucratisation in developing and emerging countries. Typically, companies in the informal sector are not registered and therefore pay no taxes. Entry barriers are low and the sector is frequently characterised by self-employment, low yet labour-intensive production, the use of domestic resources and a lack of access to organised markets and traditional loans.

Investment criteria

Key factors that determine where a fund may invest; in sustainability investing, for example, these include ecological, social and ethical criteria.



A very small company that almost only exists in the informal sector. Microenterprises have fewer than 5 employees and usually represent a family’s only source of income. They can serve as a stepping stone in building larger, safer and more stable businesses and can include small kiosks, carpenter’s workshops and sewing rooms.


Microfinance targets microentrepreneurs, usually individuals who have turned a business idea into their own microbusiness. Businesses with up to 4 employees qualify as microenterprises. Due to their lack of collateral, microentrepreneurs only have very limited access to the traditional financial market.


Provision of financial services to low-income and poor customers without financial collateral. At present, microloans dominate this service offering, which also includes savings accounts, payment transactions and insurance products.

Microfinance institutions (MFIs)

Financial institutions that primarily offer microfinance services. They strive to reach low-income households with a growing range of financial services and to finance small businesses. The term covers banks as well as other regulated nonbank financial institutions (NBFIs), savings and credit cooperatives as well as non-profit organisations. MFIs can be divided into different tiers.


Microloans, which microentrepreneurs obtain from an MFI, are a key aspect of microfinance. It is the most common type of microfinance.



Net asset value

NGO (non-governmental organisation)

No uniform definition. Generally, this term refers to organisations that operate without the mandate or formal legitimation to represent the general public. Many NGOs are founded by private initiatives and are independent from the state. Many MFIs start out as NGOs before their commercialisation. Private investments play a key role for NGOs which frequently only have limited access to funds.


OECD countries

The OECD (Organisation for Economic Co-operation and Development) has 34 member countries around the world. Most OECD members are countries with high per-capita incomes that qualify as developed economies.


Partner financial institution (PFI)

Partner financial institutions can include different types of financial institutions, such as commercial banks, specialised banks such as MFIs, as well as investment funds. Invest in Visions has several PFIs in each investment country and provides them with funds for direct distribution to SMEs in the respective developing or emerging country.

Portfolio at risk

Key metric for qualitative assessments in the microfinance area. It factors in all overdue loans and usually also restructured loans. Their number is then put in relation to the current total portfolio to measure total portfolio quality.



A measure used in the context of sustainable investment approaches to filter out suitable investments based on certain predefined exclusion criteria.

Selection criteria

Criteria used to select companies, i.e. environmental, social and ethical investment policy requirements.


Small and medium-sized enterprises, although there is no universal definition of this type of company. SMEs are often defined as companies with at least 5 and at most 250 employees, including in developing and emerging countries. These companies are the key drivers of economic and social development as well as the major employer in these countries.

Social impact investing

Impact investments generate financial gains as well as benefits for society and/or the environment. As such, they offer investors dual returns.

SRI (socially responsible investment)

See sustainable investing

Sustainable Development Goals (SDGs)

The Sustainable Development Goals (SDGs) are a collection of 17 global goals set by the United Nations General Assembly in 2015 for the year 2030. They serve as policy objectives aimed at ensuring sustainable economic, social and environmental development.

Sustainable investing

Umbrella term for sustainable, ethical and responsible, social and ecologically sound investments.


Traditional capital market

The traditional capital or financial market links up lenders and borrowers. The financial market’s economic importance is based primarily on its ability to provide long-term funds – both equity and debt capital – to investors. In return, capital providers obtain a yield. In developing and emerging countries, the traditional capital market comprises the sources of financing that were already available prior to the introduction of microfinance, such as commercial banks. This market is not available to all market participants, often because of lacking incentives for capital providers.